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Issuer: An ELI is usually linked to the stocks of certain companies. However, don't confuse these companies with the issuer of the product. It is the issuer, rather than the underlying companies, which is obligated to pay the specified amount of cash or deliver the specified amount of stocks according to the product terms. When you buy an ELI, you will be relying on the credit worthiness of the issuer. You have no rights under the term of the ELIs against the underlying companies. In the worst case scenario, you could lose all of your investment if the issuer defaults.

Sometimes, issuer of an ELI may also play different roles, such as the arranger, the market agent and the calculation agent of the ELI. Conflicts of interest may arise from the different roles played by the issuer, its subsidiaries and affiliates in connection with the ELI.

Guarantor: The presence of a guarantor guaranteeing the payment and delivery obligations of the issuer can provide an additional layer of protection to you. A guarantor is a third party (e.g. the holding company of the issuer) which agrees to pay such amount of cash or deliver such amount of stocks to you according to the terms of the guarantee in the event the issuer defaults in its payment or delivery obligation.