What can drive the outcome?
Record every underlying, the basket rule and whether the worst performer determines repayment. More names or different sectors can change the risk profile.
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FCN risk
PRACTICAL TERM-SHEET REVIEW
FCN risk
checklist.
Before assessing a Fixed Coupon Note, capture the terms that determine how the coupon, downside exposure and repayment mechanics work together.
Use the final term sheet: this checklist supports a structured product review. It is not a suitability assessment, recommendation or prediction of outcome.
THE CHECKLIST
Seven terms that shape
the risk.
Each item is a prompt to verify the product mechanics in the final documentation. The relevance and weighting of a term depend on the complete product and the professional review being performed.
Where is downside measured?
Confirm the reference level used when a loss condition applies. A final level below strike may determine the size of a cash or physical-settlement outcome.
What activates the condition?
Check the barrier level, whether it is monitored continuously or only on stated dates, and the exact condition that links it to principal repayment.
When are levels tested?
Note valuation, observation and final dates; any memory, coupon-condition or autocall rules; and the treatment of market disruption or non-trading days.
Who owes the payments?
An FCN is an obligation of its issuer. Review the issuer named in the terms and the product documentation’s issuer-credit-risk disclosures.
Cash, shares or another outcome?
Confirm whether loss settlement is in cash or physical delivery, the conversion formula and any provisions that can affect the amount received.
How can the note end or change?
Capture tenor, coupon dates, call or early-redemption conditions, maturity mechanics and any provisions affecting liquidity before maturity.
MAKE THE REVIEW REPEATABLE
Record the
whole structure.
A headline coupon does not describe the full product. A useful review keeps the terms, the observed risk drivers and the scenario assumptions together in one record.
Use the final term sheet and clearly label any indicative inputs or assumptions.
Describe how the basket, threshold and settlement rules work together without treating a scenario as a forecast.
NEXT STEP
From terms to
a clearer review.
FCN Risk Lab helps regulated financial advisers and representatives document product terms, surface explainable risk drivers and monitor a product through its lifecycle.
Need the foundations first?
Read the practical guide to Fixed Coupon Notes for an introduction to coupons, barriers, strikes and payoff mechanics. For a term-by-term reference, see Fixed Coupon Note terms explained.
FCN Risk Lab provides product-risk analytics only. It does not provide financial advice, determine suitability, establish fair value or recommend a transaction.