What is the difference between a “Category R” and a “Category N” CBBC?

The difference between these two categories of CBBCs is where the call price or level of the CBBC is set.

(a) A “Category N” CBBC refers to a CBBC where its call price or level is equal to its strike price or level, under which you will not receive any cash payment after the occurrence of a mandatory call event and will lose your entire investment.

(b) A “Category R” CBBC refers to a CBBC where its call price or level is different from its strike price or level, and you may receive a residual cash payment (called "residual value") upon the occurrence of a mandatory call event. However, in the worst case, you will not receive any residual value and will lose your entire investment.