Form of Share Certificate
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                                HSBC Holdings plc

     (incorporated with limited liability in England: Registered No.617987)

                                SHARE CERTIFICATE

  .................................... of ....................................

   THIS IS TO CERTIFY THAT the above-named is/are the Registered Holder(s) of

       ..........................................(.....................)

  Non-cumulative Dollar-denominated Preference Shares, Series [ ] of U.S. $0.01

       each fully paid in HSBC Holdings plc (the "Company") subject to the

             Memorandum and Articles of Association of the Company.

Signed on behalf of HSBC Holdings plc by ______________ and ______________ this
day of ____________, 20__,



   ________________________                          ________________________

This certificate must be surrendered before any transfer of all or any of the
shares comprised herein can be registered or a new certificate issued in
exchange. The common form of transfer is accepted.

All correspondence with reference to this holding should be addressed to the
Company Secretary, HSBC Holdings plc, 8 Canada Square, London E14 5HQ, England.

<PAGE>
                                     - 2 -

                      (endorsed on Certificate and Warrant)

                              TERMS AND CONDITIONS

The terms of, and the rights and limitations attaching to, the non-cumulative
dollar-denominated preference shares, Series [ ] of US$ 0.01 each (the "Series [
] dollar preference shares") of HSBC Holdings plc (the "Company") are contained
in the Company's Articles of Association (the "Articles") and in resolutions of
a duly constituted Committee of the Board of Directors of the Company passed on
[ and ], 20 [ ] (together the "Terms of Issue"). Copies of the Terms of Issue
are available for inspection at the registered office of the Company. The
statements set out in these Terms and Conditions only represent summaries of and
are subject to the detailed provisions of the Terms of Issue, which set out the
terms of, and the rights and limitations attaching to, the Series [ ] dollar
preference shares. The holders of the Series [ ] dollar preference shares are
entitled to the benefit of, are subject to and are deemed to have notice of, all
the provisions of the Terms of Issue.

1.       Status, Form and Title

         The Series [ ] dollar preference shares rank pari passu inter se with
         any other dollar preference shares of $0.01 nominal value each, any
         pounds sterling-denominated preference shares of (pound)0.01 nominal
         value each and any euro-denominated preference shares of (euro)0.01
         nominal value each in the Company's capital and with all other shares
         that rank equal to the sterling, euro or dollar preference shares.

         The Series [ ] dollar preference shares will initially be issued in the
         form of a share warrant to bearer (the "Warrant"). Title to the Warrant
         will pass by delivery. Title to Series [ ] dollar preference shares in
         registered form (the "Registered Preference Shares") will pass by
         transfer and registration in accordance with the Articles. The Articles
         provide, inter alia, that Registered Preference Shares shall be
         transferred by instrument in writing in the usual common form or any
         other form which the Directors may approve, executed by or on behalf of
         the transferor. The Directors may, in their absolute discretion,
         decline to register any instrument of transfer unless the instrument of
         transfer is in respect of only Series [ ] dollar preference shares, is
         duly stamped (if so required), is in favour of a single transferee or
         not more than four joint transferees and is deposited at the place in
         the UK where the register of members of Series [ ] dollar preference
         shares is kept, accompanied by the relevant Share Certificate. Each
         registration of transfer of Registered Preference Shares will be
         effected upon entry of the name of the transferee in the register of
         members in respect of the Registered Preference Shares, without payment
         of any fee (but subject to payment of any taxes, stamp duties or other
         governmental charges payable in connection therewith).

2.       Dividends

         The Series [ ] dollar preference shares confer on the holders thereof
         the right to receive in priority to any other class of shares in the
         capital of the Company for the time being (other than any other dollar
         preference shares of $0.01 nominal value each, pounds
         sterling-denominated preference shares of (pound)0.01 nominal value
         each and any euro-denominated preference shares of (euro)0.01 nominal
         value each and any other shares that rank equal with or in priority to
         the sterling, euro or dollar preference shares) (subject as mentioned
         in paragraph 7 below) a non-cumulative preferential dividend in US
         dollars payable out of the distributable profits of the Company
         initially in the amount of US$ [ ] per Series [ ] dollar preference
         share annually (subject to adjustment as described below), paid on [ ],
         [ ], [ ] and [ ] in each year (each a "Dividend Payment Date") in
         respect of the [quarter] ("A dividend period") then ended, but so that
         the first dividend period shall begin on the date of the first issue of
         the Series [ ] dollar preference shares and end on [ ] ,20[ ].

         The amount of dividends payable on the Series [ ] dollar preference
         shares for each dividend period will be computed based upon the amount
         paid up or credited as paid up on each share of the Series [ ] dollar
         preference shares by annualizing the applicable dividend amount or rate
         and dividing by the number of dividend periods in a year, except that
         the amount of dividends payable for any period shorter or longer than a
         full dividend period will be computed on the basis of a 360-day year of
         30-day months and the actual number of days elapsed in that period.

         If, on any Dividend Payment Date, the distributable profits of the
         Company are, in the opinion of the Board of Directors of the Company,
         insufficient to enable payment in full of dividends on the Series [ ]
         dollar preference shares and of any other dividends payable on the same
         date on any other shares ranking, as to dividends, on a parity with the
         Series [ ] dollar preference shares, then such dividends shall not be
         payable in full and the Company will be required, to the extent of
         distributable profits (if any) (after payment in full, or the setting
         aside of a sum required for payment in full, of all dividends payable
         on any shares ranking in priority to the Series [ ] dollar preference
         shares), to pay dividends on the Series [ ] dollar preference shares
         and such other shares pro rata to the amount of cash dividend then
         owing in respect of them (together with arrears, if any, of cumulative
         dividends on shares ranking equal in the right to dividends with the
         Series [ ] dollar preference shares).

         If in the opinion of the Board of Directors of the Company the payment
         of any dividend on the Series [ ] dollar preference shares would breach
         applicable capital adequacy requirements of the Financial Services
         Authority (the "FSA"), then such dividends shall not be payable.

         If a dividend, or any part thereof, is not paid on a Dividend Payment
         Date, then holders of Series [ ] dollar preference shares shall have no
         claim relating to such non-payment, or to any interest thereon, whether
         or not dividends on the Series [ ] dollar preference shares are paid
         for any future dividend period.

         If the dividend payable on the Series [ ] dollar preference shares has
         not been paid in full on the most recent Dividend Payment Date (or if a
         sum has not been set aside to provide for such payment in full), the
         Company may not redeem or purchase any other share capital of the
         Company ranking pari passu with or after the Series [ ] dollar
         preference shares, and may not contribute money to any sinking fund for
         any such redemption or purchase, until such time as dividends have been
         paid in full (or a sum shall have been set aside for such payment in
         full) on the Series [ ] dollar preference shares in respect of
         successive dividend periods together aggregating not less than [ ].)

         If the dividend payable on the Series [ ] dollar preference shares has
         not been paid in full on the most recent Dividend Payment Date (or if a
         sum has not been set aside to provide for such payment in full), no
         dividends or other distribution will be declared or paid on any other
         share capital of the Company ranking, as to dividends, after the Series
         [ ] dollar preference shares for any period unless full dividends have
         been or contemporaneously are paid, or a sum sufficient for the payment
         thereof set aside for such payment, on the Series [ ] dollar preference
         shares in respect of successive dividend period together aggregating
         not less than [ ].

         Except as provided herein, the holders of the Series [ ] dollar
         preference shares carry no right to participate in the profits of the
         Company. Dividends declared but not yet paid do not bear interest.

3.       Return of Capital

         In the event of a winding up of the Company (but not on a redemption,
         reduction or purchase by the Company of any of its share capital) the
         holders of the Series [ ] dollar preference shares at the time in issue
         will be entitled to receive in U.S. dollars out of the assets of the
         Company available for distribution to shareholders, pari passu with the
         holders of any other shares of the Company ranking, as regards
         repayment of capital, pari passu with the Series [ ] dollar preference
         shares and before any distribution of assets is made to holders of any
         class of shares of the Company ranking after the Series [ ] dollar
         preference shares as regards repayment of capital, a sum equal to the
         amount paid up or credited as paid up on each Series [ ] dollar
         preference share (being US$ [ ]) [together with a premium of US$ [ ] on
         each Series [ ] dollar preference share] plus an amount equal to
         accrued and unpaid dividends for the dividend period commencing prior
         to the commencement of the winding up but ending after such date, to
         the extent such dividend would otherwise (but for the winding up) have
         been payable ("liquidating distributions"), provided that sufficient
         assets exist to make such distribution having satisfied any amounts
         payable to the holders of shares ranking in priority to the dollar
         preference shares as regards the repayment of capital. If upon any
         return of capital in a winding up, the amounts payable with respect to
         the Series [ ] dollar preference shares and any other shares of the
         Company ranking as to any such distribution on a parity with the Series
         [ ] dollar preference shares are not paid in full, the holders of the
         Series [ ] dollar preference shares and of such other shares will share
         rateably in any such distribution of assets of the Company in
         proportion to the full respective amounts to which they are entitled.
         After payment of the full amount of the liquidating distribution to
         which they are entitled, the holders of the Series [ ] dollar
         preference shares will have no right or claim to any of the remaining
         assets of the Company and will not be entitled to any further
         participation or return of capital in a winding up.

4.       [Redemption and] Purchase

         [(a)     Optional Redemption by the Company

                  The Company shall be entitled, subject to the provisions of
                  applicable law, to redeem all, but not part only, of the
                  Series [ ] dollar preference shares by giving to the holders
                  of the Series [ ] dollar preference shares to be redeemed not
                  less than 30 days' nor more than 60 days' prior notice in
                  writing (a "Notice of Redemption") of a redemption date
                  ("Redemption Date") which falls no earlier than [ ], [20 ].
                  Any such redemption shall be made at the aggregate of the
                  nominal value thereof and any premium credited as paid up on
                  such share together in each case with accrued and unpaid
                  dividends on the Series [ ] dollar preference shares to be
                  redeemed in respect of the period from the Dividend Payment
                  Date last preceding the Redemption Date to the Redemption
                  Date.

                  Each Notice of Redemption will specify (i) the Redemption
                  Date, (ii) the particular Series [ ] dollar preference shares
                  to be redeemed, (iii) the redemption price (specifying the
                  amount of accrued and unpaid dividends to be included therein)
                  and (iv) the place or places at which documents of title in
                  respect of such Series [ ] dollar preference shares are to be
                  presented for redemption and payment of the redemption moneys
                  is to be effected. No defect in the Notice of Redemption or in
                  the giving thereof will affect the validity of the redemption
                  proceedings.

                  Payments in respect of the amount due on redemption of a
                  Registered Preference Share represented by certificates
                  ("Certificates") shall be made by US dollar cheque drawn on a
                  bank in London or in the City of New York or upon the request
                  of the holder or joint holders not later than the date
                  specified for the purpose in the Notice of Redemption by
                  transfer to a US dollar account maintained by the payee with a
                  bank in London or in the City of New York. Such payments will
                  be made against presentation and surrender of the relative
                  Certificate at the office of the paying agent specified in the
                  Notice of Redemption.

                  Payments in respect of the amount due on redemption of a
                  Series [ ] dollar preference share represented by a Warrant
                  ("Bearer Share") shall be made by US dollar cheque drawn on a
                  bank in London or in the City of New York or upon the request
                  of the holder not later than the date specified for the
                  purpose in the Notice of Redemption by transfer to a US dollar
                  account maintained by the payee with a bank in London or in
                  the City of New York. Such payments will be made against
                  presentation and surrender of the Warrant at the office of the
                  paying agent specified in the Notice of Redemption.

                  All payments in respect of redemption moneys will in all
                  respects be subject to any applicable fiscal or other laws.

                  As from the relevant Redemption Date the dividend on the
                  Series [ ] dollar preference shares due for redemption shall
                  cease to accrue except on any such Series [ ] dollar
                  preference share in respect of which, upon the due surrender
                  of the Certificate or, as the case may be, the Warrant payment
                  of the redemption moneys due on such Redemption Date shall be
                  improperly withheld or refused, in which case such dividend,
                  at the rate then applicable, shall be deemed to have continued
                  and shall accordingly continue to accrue from the relevant
                  Redemption Date to the date of payment of such redemption
                  moneys. Such Series [ ] dollar preference share shall not be
                  treated as having been redeemed until the redemption moneys in
                  question together with the accrued dividend thereon shall have
                  been paid.

                  If the due date for the payment of the redemption moneys on
                  any Series [ ] dollar preference share is not a Dollar
                  Business Day (as defined in paragraph 5 below) then payment of
                  such moneys will be made on the next succeeding day which is a
                  Dollar Business Day and without any interest or other payment
                  in respect of any such delay.

                  The receipt of the holder for the time being of any Registered
                  Preference Share (or in the case of joint holders the receipt
                  of any of them) and the receipt of the person delivering any
                  Warrant to the place or one of the places specified in the
                  Notice of Redemption in respect of the moneys payable on
                  redemption on such Registered Preference Share or, as the case
                  may be, such Bearer Share shall constitute an absolute
                  discharge to the Company in respect thereof.]

                  (b)      Purchases

                  Subject to applicable law (including, without limitation, the
                  Companies Act 1985 and U.S. Federal securities laws) and
                  applicable regulations of the FSA in its capacity as the
                  United Kingdom Listing Authority, the Company may at any time
                  purchase outstanding Series [ ] dollar preference shares in
                  the open market, by tender or by private agreement in each
                  case upon such terms as the Directors of the Company shall
                  determine.

                  (c)      FSA Consent

                  No [redemption or] repurchase of any Series [ ] dollar
                  preference shares will be made by the Company without the
                  prior consent of the FSA.

5.       Payments

         Dividends on the Series [ ] dollar preference shares will be payable,
         in the case of Bearer Shares, to the holder of such Bearer Shares in
         accordance with the provisions of the Warrant and, in the case of
         Registered Preference Shares, to the record holders thereof as they
         appear on the register for such Series [ ] dollar preference shares on
         such record dates, which will be between 15 and 60 days prior to the
         relevant Dividend Payment Dates, as will be fixed by the Board of
         Directors of the Company or an authorized committee thereof. Subject to
         any applicable fiscal or other laws or regulations, payments of
         dividends on Bearer Shares will be made by dollar cheque drawn on a
         bank in London or in the City of New York and on Registered Preference
         Shares will be made by dollar cheque drawn on a bank in London or in
         the City of New York and mailed to the record holder thereof at such
         holder's address as it appears on the register for the Series [ ]
         dollar preference shares.

         If any Dividend Payment Date is not a day on which commercial banks and
         foreign exchange markets settle payments in US dollars and are open for
         general business in London and in the City of New York (a "Dollar
         Business Day"), then payment of the dividend will be made on the next
         succeeding day which is a Dollar Business Day, without any interest or
         other payment in respect of any such delay.

6.       Voting Rights

         [Holders of the Series [ ] dollar preference shares shall have the
         right to attend, speak and vote on all matters at general meetings of
         the Company if the Company shall have failed to pay in full the
         dividend which is (or, but for any provision of paragraph 2 above,
         would be) on the Series [ ] dollar preference shares in the last [ ]
         periods for which dividends were payable.]

         Whenever entitled to vote at a general meeting of shareholders, each
         holder of Series [ ] dollar preference shares present in person shall
         have one vote on a show of hands, and on a poll each such holder
         present in person or by proxy shall have one vote for every [ ] Series
         [ ] dollar preference share held by him.

         The Company will send to each holder of Series [ ] dollar preference
         shares all notices of general meetings of the Company and a copy of
         every circular or other like document sent by the Company to holders of
         ordinary shares of the Company. Each such notice will include a
         statement setting forth (i) the date of such meeting, (ii) a
         description of any resolution to be proposed for adoption at such
         meeting on which such holders are entitled to vote and (iii)
         instructions for the delivery of proxies. A holder of Series [ ] dollar
         preference shares who is not registered with an address in the United
         Kingdom and who has not supplied to the Company an address within the
         United Kingdom for the purpose of the giving of notices is not entitled
         to receive such documents from the Company.

7.       Further Issues and Variation of Rights

         The Company may at any time or from time to time, without the consent
         or sanction of the holder of the Series [ ] dollar preference shares,
         create and issue further preference shares in any currency ("Further
         Preference Shares") ranking as regards participation in the profits and
         assets of the Company in some or all respects pari passu with or after
         the Series [ ] dollar preference shares and so that, any Further
         Preference Shares ranking in some or all respects pari passu with the
         Series [ ] dollar preference shares may either carry rights identical
         in all respects with the Series [ ] dollar preference shares or carry
         rights differing therefrom in any respect including, but without
         limitation, rights as to dividend (cumulative or non-cumulative),
         dividend payment periods or dividend payment dates, premium on a return
         of capital, redemption or conversion.

         The rights, preferences or restrictions attached to the Series [ ]
         dollar preference shares are capable of being varied or abrogated with
         the written consent of the holders of three-quarters in nominal value,
         or with the sanction of an extraordinary resolution passed at a class
         meeting of holders of, the Series [ ] dollar preference shares (or, if
         the proposed variation or abrogation would affect two or more series of
         dollar denominated preference shares in the capital of the Company, and
         the effect thereof is substantially the same, of all such series). The
         necessary quorum shall be two persons holding or representing by proxy
         not less than one-third in nominal value of the relevant issued
         dollar-denominated preference shares. At a class meeting, on a show of
         hands every holder of a dollar denominated preference share of the
         class is entitled to one vote for each dollar denominated preference
         share of the class held by him and the necessary majority for the
         passing of an extraordinary resolution at a class meeting will be
         three-quarters of those present in person or by proxy in such class
         meeting.

         The rights attached to the Series [ ] dollar preference shares are not
         to be deemed to be varied or abrogated:

         (a)      by the creation or issue of any shares of any class or any
                  securities convertible into shares of any class, that rank
                  equally with such Series [ ] dollar preference shares in the
                  right to share in the Company's profits or assets, whether the
                  rights attaching to such shares are identical to or differ in
                  any respect from the dollar preference shares; or

         (b)      by a redemption, reduction or purchase by the Company of any
                  of its share capital, except in the circumstances described in
                  paragraph 2 above.