The information in this preliminary pricing supplement
is not complete and may be changed. This preliminary pricing supplement is not an offer to sell nor does it seek an offer to buy
these securities in any jurisdiction where the offer or sale is not permitted.
Subject to completion dated May 15,
2019
PRICING
SUPPLEMENT
Filed Pursuant to Rule 424(b)(2)
Registration Statement Nos. 333-222672 and 333-222672-01
Dated May
, 2019
JPMorgan Chase Financial Company LLC Capped GEARS
Linked to the Russell 2000
®
Index due on or about June 30, 2020
Fully and Unconditionally Guaranteed
by JPMorgan Chase & Co.
Investment
Description
|
Capped GEARS (Growth Enhanced Asset Return Securities), which we refer to as the “Securities,” are unsecured and unsubordinated debt securities issued by JPMorgan Chase Financial Company LLC (“JPMorgan Financial”), the payment on which is fully and unconditionally guaranteed by JPMorgan Chase & Co., with a return linked to the performance of the Russell 2000
®
Index (the “Underlying”). If the Underlying Return is positive, JPMorgan Financial will repay your principal amount at maturity plus pay a return equal to the Underlying Return times the Upside Gearing of 3.00, up to the Maximum Gain of between 13.75% and 14.50%, which will be finalized on the Trade Date and provided in the pricing supplement. If the Underlying Return is zero, JPMorgan Financial will repay your principal amount at maturity. However, if the Underlying Return is negative, JPMorgan Financial will repay less than your principal amount at maturity, if anything, resulting in a loss of principal that is proportionate to the negative Underlying Return. In this case, you will have full downside exposure to the Underlying from the Initial Value to the Final Value and could lose all of your principal amount.
Investing in the Securities involves significant risks. You may lose some or all of your principal amount. You will not receive dividends or other distributions paid on any stocks included in the Underlying, and the Securities will not pay interest. Any payment on the Securities is subject to the creditworthiness of JPMorgan Financial as issuer of the Securities, and the creditworthiness of JPMorgan Chase & Co., as guarantor of the Securities. If JPMorgan Financial and JPMorgan Chase & Co. were to default on their payment obligations, you may not receive any amounts owed to you under the Securities and you could lose your entire investment.
|
Features
|
|
Key
Dates
|
q
Enhanced
Growth Potential Subject to Maximum Gain
— At maturity, the Upside Gearing feature will provide
leveraged exposure to any positive performance of the Underlying, up to the Maximum Gain of between 13.75% and 14.50%, which will be finalized on the Trade Date and provided in the pricing supplement. If the
Underlying Return is negative, investors will be exposed to the negative Underlying Return at maturity.
q
Full Downside Market
Exposure
— If the Underlying Return is negative, investors will be exposed to the negative Underlying Return
at maturity and JPMorgan Financial will pay less than your principal amount, if anything, resulting in a loss of principal
that is proportionate to the Underlying’s decline from the Initial Value to the Final Value. You may lose some or
all of your principal. Any payment on the Securities is subject to the creditworthiness of JPMorgan Financial and JPMorgan
Chase & Co.
|
|
Trade
Date
1
|
May 28, 2019
|
Original
Issue Date (Settlement Date)
1
|
May 31, 2019
|
Final
Valuation Date
2
|
June
25, 2020
|
Maturity
Date
2
|
June
30, 2020
|
1
|
Expected. In the event that we make any change to the expected Trade Date and Settlement Date, the Final Valuation Date and/or the Maturity Date will be changed so that the stated term of the Securities remains the same. See “Supplemental Plan of Distribution” for more details on the expected Settlement Date.
|
2
|
Subject
to postponement in the event of a market disruption event and as described under “General Terms of Notes — Postponement
of a Determination Date — Notes Linked to a Single Underlying –– Notes Linked to a Single Underlying (Other
Than a Commodity Index)” and “General Terms of Notes — Postponement of a Payment Date” in the accompanying
product supplement
|
THE
SECURITIES ARE SIGNIFICANTLY RISKIER THAN CONVENTIONAL DEBT INSTRUMENTS. JPMORGAN FINANCIAL IS NOT NECESSARILY
OBLIGATED TO REPAY THE FULL PRINCIPAL AMOUNT OF THE SECURITIES AT MATURITY, AND THE SECURITIES HAVE DOWNSIDE
MARKET RISK SIMILAR TO THE UNDERLYING. THIS MARKET RISK IS IN ADDITION TO THE CREDIT RISK INHERENT IN PURCHASING
A DEBT OBLIGATION OF JPMORGAN FINANCIAL FULLY AND UNCONDITIONALLY GUARANTEED BY JPMORGAN CHASE & CO. YOU
SHOULD NOT PURCHASE THE SECURITIES IF YOU DO NOT UNDERSTAND OR ARE NOT COMFORTABLE WITH THE SIGNIFICANT RISKS
INVOLVED IN INVESTING IN THE SECURITIES.
YOU SHOULD
CAREFULLY CONSIDER THE RISKS DESCRIBED UNDER “KEY RISKS” BEGINNING ON PAGE 6 OF THIS PRICING SUPPLEMENT, UNDER
“RISK FACTORS” BEGINNING ON PAGE PS-10 OF THE ACCOMPANYING PRODUCT SUPPLEMENT AND UNDER “RISK FACTORS”
BEGINNING ON PAGE US-1 OF THE ACCOMPANYING UNDERLYING SUPPLEMENT BEFORE PURCHASING ANY SECURITIES. EVENTS RELATING TO
ANY OF THOSE RISKS, OR OTHER RISKS AND UNCERTAINTIES, COULD ADVERSELY AFFECT THE MARKET VALUE OF, AND THE RETURN ON, YOUR
SECURITIES. YOU MAY LOSE SOME OR ALL OF YOUR INITIAL INVESTMENT IN THE SECURITIES. THE SECURITIES WILL NOT BE LISTED ON
ANY SECURITIES EXCHANGE.
|
Security
Offering
|
|
|
|
|
|
|
We are offering Capped GEARS
linked to the Russell 2000
®
Index. The Securities are offered at a minimum investment of $1,000 in
denominations of $10 and integral multiples thereof. The return on the Securities is subject to, and will not exceed, the
Maximum Gain. The Maximum Gain and Initial Value will be finalized on the Trade Date and provided in the pricing supplement.
The actual Maximum Gain will not be less than the bottom of the range listed below, but you should be willing to invest in the
Securities if the Maximum Gain were set equal to the bottom of that range.
Underlying
|
Upside
Gearing
|
Maximum
Gain
|
Initial
Value
|
CUSIP
|
ISIN
|
Russell
2000
®
Index (Bloomberg ticker: RTY)
|
3.00
|
13.75% to 14.50%
|
•
|
48132E794
|
US48132E7940
|
See “Additional
Information about JPMorgan Financial, JPMorgan Chase & Co. and the Securities” in this pricing supplement. The Securities
will have the terms specified in the prospectus and the prospectus supplement, each dated April 5, 2018, product supplement no.
UBS-1-I dated April 5, 2018, underlying supplement no. 1-I dated April 5, 2018 and this pricing supplement.
The terms of the
Securities as set forth in this pricing supplement, to the extent they differ or conflict with those set forth in the accompanying
product supplement, will supersede the terms set forth in that product supplement.
Neither the Securities
and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of the Securities
or passed upon the accuracy or the adequacy of this pricing supplement or the accompanying prospectus, the accompanying prospectus
supplement, the accompanying product supplement and the accompanying underlying supplement. Any representation to the contrary
is a criminal offense.
|
Price
to Public
1
|
Fees
and Commissions
2
|
Proceeds
to Issuer
|
Offering
of Securities
|
Total
|
Per
Security
|
Total
|
Per
Security
|
Total
|
Per
Security
|
Securities
Linked to the Russell 2000
®
Index
|
|
$10.00
|
|
$0.20
|
|
$9.80
|
1
|
See “Supplemental Use
of Proceeds” in this pricing supplement for information about the components of the price to public of the Securities.
|
2
|
UBS Financial Services Inc., which we refer to
as UBS, will receive selling commissions from us that will not exceed $0.20 per $10 principal amount Security. See “Plan of
Distribution (Conflicts of Interest)” in the accompanying product supplement, as supplemented by “Supplemental
Plan of Distribution” in this pricing supplement.
|
If the Securities priced today and assuming a Maximum Gain equal to the middle of the range listed above,
the estimated value of the Securities would be approximately $9.773 per $10 principal amount Security. The estimated value of the
Securities, when the terms of the Securities are set, will be provided in the pricing supplement and will not be less than $9.65
per $10 principal amount Security. See “The Estimated Value of the Securities” in this pricing supplement for additional
information.
The Securities are not bank
deposits, are not insured by the Federal Deposit Insurance Corporation or any other governmental agency and are not obligations
of, or guaranteed by, a bank.
UBS Financial Services Inc.
|
|
Additional
Information about JPMorgan Financial, JPMorgan Chase & Co. and the Securities
|
You may revoke your offer to purchase the Securities at any time prior to the time at which we accept such
offer by notifying the agent. We reserve the right to change the terms of, or reject any offer to purchase, the Securities prior
to their issuance. In the event of any changes to the terms of the Securities, we will notify you and you will be asked to accept
such changes in connection with your purchase. You may also choose to reject such changes, in which case we may reject your offer
to purchase.
You should read this pricing
supplement together with the accompanying prospectus, as supplemented by the accompanying prospectus supplement relating to our
Series A medium-term notes of which these Securities are a part, and the more detailed information contained in the accompanying
product supplement and the accompanying underlying supplement.
This pricing supplement, together with the documents listed
below, contains the terms of the Securities and supersedes all other prior or contemporaneous oral statements as well as any other
written materials including preliminary or indicative pricing terms, correspondence, trade ideas, structures for implementation,
sample structures, fact sheets, brochures or other educational materials of ours.
You should carefully consider, among other
things, the matters set forth in the “Risk Factors” sections of the accompanying product supplement and the accompanying
underlying supplement, as the Securities involve risks not associated with conventional debt securities.
You may access these documents
on the SEC website at www.sec.gov as follows (or if such address has changed, by reviewing our filings for the relevant date on
the SEC website):
Our Central Index Key, or
CIK, on the SEC website is 1665650, and JPMorgan Chase & Co.’s CIK is 19617. As used in this pricing supplement, the
“Issuer,” “JPMorgan Financial,” “we,” “us” and “our” refer to JPMorgan
Chase Financial Company LLC.
Supplemental
Terms of the Securities
|
For purposes of the accompanying
product supplement, the Russell 2000
®
Index is an “Index.”
Investor
Suitability
The
Securities may be suitable for you if, among other considerations:
t
You fully understand the risks inherent in an investment in the
Securities, including the risk of loss of your entire principal amount.
t
You can tolerate a loss of all or a substantial portion of your
investment and are willing to make an investment that has the same downside market risk as a hypothetical investment in
the Underlying.
t
You believe the level of the Underlying will increase over the term
of the Securities and that the appreciation is unlikely to exceed an amount equal to the Maximum Gain indicated on the
cover hereof (the actual Maximum Gain will be finalized on the Trade Date and provided in the pricing supplement and will
not be less than the bottom of the range indicated on the cover hereof).
t
You understand and accept that your potential return is limited by the Maximum Gain and you would be willing to
invest in the Securities if the Maximum Gain were set equal to the bottom of the range indicated on the cover hereof.
t
You can tolerate fluctuations in the price of the Securities prior
to maturity that may be similar to or exceed the downside fluctuations in the level of the Underlying.
t
You do not seek current income from your investment and are willing
to forgo dividends paid on the stocks included in the Underlying.
t
You are willing and able to hold the Securities to maturity.
t
You accept that there may be little or no secondary market for the
Securities and that any secondary market will depend in large part on the price, if any, at which J.P. Morgan Securities
LLC, which we refer to as JPMS, is willing to trade the Securities.
t
You understand and accept the risks associated with the Underlying.
t
You are willing to assume the credit risks of JPMorgan Financial
and JPMorgan Chase & Co. for all payments under the Securities, and understand that if JPMorgan Financial and JPMorgan
Chase & Co. default on their obligations, you may not receive any amounts due to you including any repayment of principal.
|
|
The
Securities may not be suitable for you if, among other considerations:
t
You do not fully understand the risks inherent in an investment
in the Securities, including the risk of loss of your entire principal amount.
t
You require an investment designed to provide a full return of principal
at maturity.
t
You cannot tolerate a loss of all or a substantial portion of your
investment, or you are not willing to make an investment that has the same downside market risk as a hypothetical investment
in the Underlying.
t
You believe the level of the Underlying will decline over the term
of the Securities, or you believe the Underlying will appreciate over the term of the Securities by more than the Maximum
Gain indicated on the cover hereof (the actual Maximum Gain will be finalized on the Trade Date and provided in the pricing supplement and will
not be less than the bottom of the range indicated on the cover hereof).
t
You seek an investment that has unlimited return potential without
a cap on appreciation.
t
You would be unwilling to invest in the Securities if the Maximum Gain were set equal to the bottom of the
range indicated on the cover hereof.
t
You cannot tolerate fluctuations in the price of the Securities
prior to maturity that may be similar to or exceed the downside fluctuations in the level of the Underlying.
t
You seek current income from your investment or prefer not to forgo
dividends paid on the stocks included in the Underlying.
t
You are unwilling or unable to hold the Securities to maturity or
seek an investment for which there will be an active secondary market.
t
You do not understand or accept the risks associated with the Underlying.
t
You are not willing to assume the credit risks of JPMorgan Financial
and JPMorgan Chase & Co. for all payments under the Securities, including any repayment of principal.
|
The suitability
considerations identified above are not exhaustive. Whether or not the Securities are a suitable investment for you will depend
on your individual circumstances, and you should reach an investment decision only after you and your investment, legal, tax,
accounting and other advisers have carefully considered the suitability of an investment in the Securities in light of your particular
circumstances. You should also review carefully the “Key Risks” section of this pricing supplement and the “Risk
Factors” sections of the accompanying product supplement and the accompanying underlying supplement for risks related to
an investment in the Securities. For more information on the Underlying, please see the section titled “The Underlying”
below.
Indicative
Terms
|
Issuer:
|
|
JPMorgan
Chase Financial Company LLC, an indirect, wholly owned finance subsidiary of JPMorgan Chase & Co.
|
Guarantor:
|
|
JPMorgan
Chase & Co.
|
Issue
Price:
|
|
$10.00
per Security (subject to a minimum purchase of 100 Securities or $1,000)
|
Principal
Amount:
|
|
$10.00
per Security. The payment at maturity will be based on the principal amount.
|
Underlying:
|
|
Russell
2000
®
Index
|
Term1:
|
|
Approximately 13
months
|
Payment
at Maturity (per $10 principal amount Security):
|
|
If
the Underlying Return is positive
, JPMorgan Financial will pay you a cash payment
at maturity per $10 principal amount Security equal to:
$10.00
+ ($10.00 × Underlying Return × Upside Gearing)
provided,
however,
that in no event will JPMorgan Financial pay you at maturity an amount greater than:
$10.00
+ ($10.00 × Maximum Gain)
If
the Underlying Return is zero
, JPMorgan Financial will pay you a cash payment at maturity of $10.00 per $10 principal
amount Security.
If
the Underlying Return is negative,
JPMorgan Financial will pay you a cash payment at maturity per $10 principal amount
Security equal to:
$10.00
+ ($10.00 × Underlying Return)
In this
scenario, you will be exposed to the decline of the Underlying and you will lose some or all of your principal amount
in an amount proportionate to the negative Underlying Return.
|
Underlying
Return:
|
|
(Final
Value – Initial Value)
Initial
Value
|
Upside
Gearing:
|
|
3.00
|
Maximum
Gain:
|
|
Between 13.75% and 14.50%. The actual Maximum Gain will be finalized on the Trade Date and provided in the
pricing supplement and will not be less than 13.75%.
In no event will the return on the Principal Amount be greater than the Maximum Gain.
|
Initial
Value:
|
|
The
closing level of the Underlying on the Trade Date
|
Final
Value:
|
|
The
closing level of the Underlying on the Final Valuation Date
|
1
See footnote 1 under “Key Dates” on the front cover
Investment
Timeline
|
|
|
|
Trade
Date
|
|
The
Initial Value is observed. The Maximum Gain is determined.
|
|
|
|
|
Maturity
Date
|
|
The
Final Value and the Underlying Return are determined.
If
the Underlying Return is positive
, JPMorgan Financial will pay you a cash payment at maturity per $10 principal amount
Security equal to:
$10.00
+ ($10.00 × Underlying Return ×
Upside Gearing)
provided,
however,
that in no event will you receive at maturity an amount greater than:
$10.00
+ ($10.00 × Maximum Gain)
If
the Underlying Return is zero
, JPMorgan Financial will pay you a cash payment at maturity of $10.00 per $10 principal
amount Security.
If
the Underlying Return is negative
, JPMorgan Financial will pay you a cash payment at maturity per $10 principal amount
Security equal to:
$10.00
+ ($10.00 × Underlying Return)
Under these
circumstances, you will be exposed to the decline of the Underlying and you will lose some or all of your principal amount.
|
|
|
|
INVESTING IN THE SECURITIES
INVOLVES SIGNIFICANT RISKS. YOU MAY LOSE SOME OR ALL OF YOUR PRINCIPAL AMOUNT. ANY PAYMENT ON THE SECURITIES, INCLUDING ANY
REPAYMENT OF PRINCIPAL, IS SUBJECT TO THE CREDITWORTHINESS OF JPMORGAN FINANCIAL AND JPMORGAN CHASE & CO. IF JPMORGAN
FINANCIAL AND JPMORGAN CHASE & CO. WERE TO DEFAULT ON THEIR PAYMENT OBLIGATIONS, YOU MAY NOT RECEIVE ANY AMOUNTS OWED
TO YOU UNDER THE SECURITIES AND YOU COULD LOSE YOUR ENTIRE INVESTMENT.
|
|
|
|
What
Are the Tax Consequences of the Securities?
|
You should review
carefully the section entitled “Material U.S. Federal Income Tax Consequences” in the accompanying product supplement
no. UBS-1-I. The following discussion, when read in combination with that section, constitutes the full opinion of our special
tax counsel, Davis Polk & Wardwell LLP, regarding the material U.S. federal income tax consequences of owning and disposing
of Securities.
Based on current market
conditions, in the opinion of our special tax counsel it is reasonable to treat the Securities as “open transactions”
that are not debt instruments for U.S. federal income tax purposes, as more fully described in “Material U.S. Federal Income
Tax Consequences — Tax Consequences to U.S. Holders — Notes Treated as Open Transactions That Are Not Debt Instruments”
in the accompanying product supplement. Assuming this treatment is respected, the gain or loss on your Securities should be treated
as long-term capital gain or loss if you hold your Securities for more than a year, whether or not you are an initial purchaser
of Securities at the issue price. However, the IRS or a court may not respect this treatment, in which case the timing and character
of any income or loss on the Securities could be materially and adversely affected. In addition, in 2007 Treasury and the IRS
released a notice requesting comments on the U.S. federal income tax treatment of “prepaid forward contracts” and
similar instruments. The notice focuses in particular on whether to require investors in these instruments to accrue income over
the term of their investment. It also asks for comments on a number of related topics, including the character of income or loss
with respect to these instruments; the relevance of factors such as the nature of the underlying property to which the instruments
are linked; the degree, if any, to which income (including any mandated accruals) realized by non-U.S. investors should be subject
to withholding tax; and whether these instruments are or should be subject to the “constructive ownership” regime,
which very generally can operate to recharacterize certain long-term capital gain as ordinary income and impose a notional interest
charge. While the notice requests comments on appropriate transition rules and effective dates, any Treasury regulations or other
guidance promulgated after consideration of these issues could materially and adversely affect the tax consequences of an investment
in the Securities, possibly with retroactive effect. You should consult your tax adviser regarding the U.S. federal income tax
consequences of an investment in the Securities, including possible alternative treatments and the issues presented by this notice.
Section 871(m) of the Code and Treasury regulations promulgated thereunder (“Section 871(m)”)
generally impose a 30% withholding tax (unless an income tax treaty applies) on dividend equivalents paid or deemed paid to Non-U.S.
Holders with respect to certain financial instruments linked to U.S. equities or indices that include U.S. equities. Section
871(m) provides certain exceptions to this withholding regime, including for instruments linked to certain broad-based indices
that meet requirements set forth in the applicable Treasury regulations (such an index, a “Qualified Index”).
Additionally, a recent IRS notice excludes from the scope of Section 871(m) instruments issued prior to January 1, 2021 that do
not have a delta of one with respect to underlying securities that could pay U.S.-source dividends for U.S. federal income tax
purposes (each an “Underlying Security”). Based on certain determinations made by us, we expect that Section
871(m) will not apply to the Securities with regard to Non-U.S. Holders. Our determination is not binding on the IRS, and
the IRS may disagree with this determination. Section 871(m) is complex and its application may depend on your particular
circumstances, including whether you enter into other transactions with respect to an Underlying Security. If necessary,
further information regarding the potential application of Section 871(m) will be provided in the pricing supplement for the Securities.
You should consult your tax adviser regarding the potential application of Section 871(m) to the Securities.
Withholding under
legislation commonly referred to as “FATCA” may (if the Securities are recharacterized as debt instruments) apply
to amounts treated as interest paid with respect to the Securities, as well as to payments of gross proceeds of a taxable disposition,
including redemption at maturity, of a Security, although under recently proposed regulations (the preamble to which specifies
that taxpayers are permitted to rely on them pending finalization), no withholding will apply to payments of gross proceeds (other
than any amount treated as interest). You should consult your tax adviser regarding the potential application of FATCA to the
Securities.
An investment in the
Securities involves significant risks. Investing in the Securities is not equivalent to investing directly in the Underlying.
These risks are explained in more detail in the “Risk Factors” sections of the accompanying product supplement and
the accompanying underlying supplement. We also urge you to consult your investment, legal, tax, accounting and other advisers
before you invest in the Securities.
Risks Relating to the Securities
Generally
|
t
|
Your
Investment in the Securities May Result in a Loss
—
The Securities differ from ordinary debt securities in that we will not necessarily repay
the full principal amount of the Securities. We will pay you the principal amount of
your Securities in cash only if the Final Value has not declined below the Initial Value.
If the Underlying Return is negative, you will lose some or all of your principal amount
in an amount proportionate to the negative Underlying Return. Accordingly, you could
lose up to your entire principal amount.
|
|
t
|
Credit
Risks of JPMorgan Financial and
JPMorgan Chase & Co.
— The Securities are unsecured and unsubordinated
debt obligations of the Issuer, JPMorgan Chase Financial Company LLC, the payment on
which is fully and unconditionally guaranteed by JPMorgan Chase & Co. The Securities
will rank
pari passu
with all of our other unsecured and unsubordinated obligations,
and the related guarantee JPMorgan Chase & Co. will rank
pari passu
with all
of JPMorgan Chase & Co.’s other unsecured and unsubordinated obligations. The
Securities and related guarantees are not, either directly or indirectly, an obligation
of any third party. Any payment to be made on the Securities, including any repayment
of principal, depends on the ability of JPMorgan Financial and JPMorgan Chase & Co.
to satisfy their obligations as they come due. As a result, the actual and perceived
creditworthiness of JPMorgan Financial and JPMorgan Chase & Co. may affect the market
value of the Securities and, in the event JPMorgan Financial and JPMorgan Chase &
Co. were to default on their obligations, you may not receive any amounts owed to you
under the terms of the Securities and you could lose your entire investment.
|
|
t
|
As
a Finance Subsidiary, JPMorgan Financial Has No Independent Operations and Limited Assets
—
As a finance subsidiary of JPMorgan Chase & Co., we have no independent
operations beyond the issuance and administration of our securities. Aside from the initial
capital contribution from JPMorgan Chase & Co., substantially all of our assets relate
to obligations of our affiliates to make payments under loans made by us or other intercompany
agreements. As a result, we are dependent upon payments from our affiliates to meet our
obligations under the Securities. If these affiliates do not make payments to us and
we fail to make payments on the Securities, you may have to seek payment under the related
guarantee by JPMorgan Chase & Co., and that guarantee will rank
pari passu
with all other unsecured and unsubordinated obligations of JPMorgan Chase & Co.
|
|
t
|
The
Appreciation Potential of the Securities Is Limited by the Maximum Gain
—
The appreciation potential of the Securities is limited by the Maximum Gain. The Maximum Gain will be finalized
on the Trade Date and provided in the pricing supplement and will not be less than the bottom of the range indicated on the front
cover of this pricing supplement. Accordingly, the appreciation potential of the Securities will be limited by the Maximum Gain
even if the Underlying Return times the Upside Gearing is greater than the Maximum Gain.
|
|
t
|
The
Upside Gearing Applies Only If You Hold the Securities to Maturity
—
You should be willing to hold your Securities to maturity. If you are able to sell your
Securities prior to maturity in the secondary market, if any, the price you receive likely
will not reflect the full economic value of the Upside Gearing or the Securities themselves,
and the return you realize may be less than the product of the performance of the Underlying
and the Upside Gearing and may be less than the Underlying’s return, even if that
return is positive and does not exceed the Maximum Gain. You can receive the full benefit
of the Upside Gearing, subject to the Maximum Gain, only if you hold your Securities
to maturity.
|
|
t
|
No
Interest Payments
— JPMorgan Financial will
not make any interest payments to you with respect to the Securities.
|
|
t
|
Potential
Conflicts
— We and our affiliates play a
variety of roles in connection with the issuance of the Securities, including acting
as calculation agent and hedging our obligations under the Securities and making the
assumptions used to determine the pricing of the Securities and the estimated value of
the Securities when the terms of the Securities are set, which we refer to as the estimated
value of the Securities. In performing these duties, our and JPMorgan Chase & Co.’s
economic interests and the economic interests of the calculation agent and other affiliates
of ours are potentially adverse to your interests as an investor in the Securities. In
addition, our and JPMorgan Chase & Co.’s business activities, including hedging
and trading activities, could cause our and JPMorgan Chase & Co.’s economic
interests to be adverse to yours and could adversely affect any payment on the Securities
and the value of the Securities. It is possible that hedging or trading activities of
ours or our affiliates in connection with the Securities could result in substantial
returns for us or our affiliates while the value of the Securities declines. Please refer
to “Risk Factors — Risks Relating to Conflicts of Interest” in the
accompanying product supplement for additional information about these risks.
|
|
t
|
The
Probability That the Final Value Will Fall Below the Initial Value on the Final Valuation
Date Will Depend on the Volatility of the Underlying —
“Volatility"
refers to the frequency and magnitude of changes in the level of the Underlying. Greater
expected volatility with respect to the Underlying reflects a higher expectation as of
the Trade Date that the Underlying could close below the Initial Value on the Final Valuation
Date of the Securities, resulting in the loss of some or all of your investment. However,
the Underlying’s volatility can change significantly over the term of the Securities.
The level of the Underlying could fall sharply, which could result in a significant loss
of principal.
|
|
t
|
The
Estimated Value of the Securities Will Be Lower Than the Original Issue Price (Price to Public) of the Securities
—
The estimated value of the Securities is only an estimate determined
by reference to several factors. The original issue price of the Securities will exceed the estimated value of the Securities
because costs associated with selling, structuring and hedging the Securities are included in the original issue price of the
Securities. These costs include the selling commissions, the projected profits, if any, that our
|
|
|
affiliates
expect to realize for assuming risks inherent in hedging our obligations under the Securities and the estimated cost of hedging
our obligations under the Securities. See “The Estimated Value of the Securities” in this pricing supplement
.
|
|
t
|
The
Estimated Value of the Securities Does Not Represent Future Values of the Securities
and May Differ from Others’ Estimates
— The estimated value of the Securities
is determined by reference to internal pricing models of our affiliates when the terms
of the Securities are set. This estimated value of the Securities is based on market
conditions and other relevant factors existing at that time and assumptions about market
parameters, which can include volatility, dividend rates, interest rates and other factors.
Different pricing models and assumptions could provide valuations for the Securities
that are greater than or less than the estimated value of the Securities. In addition,
market conditions and other relevant factors in the future may change, and any assumptions
may prove to be incorrect. On future dates, the value of the Securities could change
significantly based on, among other things, changes in market conditions, our or JPMorgan
Chase & Co.’s creditworthiness, interest rate movements and other relevant
factors, which may impact the price, if any, at which JPMS would be willing to buy Securities
from you in secondary market transactions. See “The Estimated Value of the Securities”
in this pricing supplement.
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t
|
The
Estimated Value of the Securities Is Derived by Reference to an Internal Funding Rate
— The internal funding rate used in the determination of the estimated value
of the Securities may differ from the market-implied funding rate for vanilla fixed income
instruments of a similar maturity issued by JPMorgan Chase & Co. or its affiliates.
Any difference may be based on, among other things, our and our affiliates’ view
of the funding value of the Securities as well as the higher issuance, operational and
ongoing liability management costs of the Securities in comparison to those costs for
the conventional fixed income instruments of JPMorgan Chase & Co. This internal funding
rate is based on certain market inputs and assumptions, which may prove to be incorrect,
and is intended to approximate the prevailing market replacement funding rate for the
Securities. The use of an internal funding rate and any potential changes to that rate
may have an adverse effect on the terms of the Securities and any secondary market prices
of the Securities. See “The Estimated Value of the Securities” in this pricing
supplement.
|
|
t
|
The
Value of the Securities as Published by JPMS (and Which May Be Reflected on Customer
Account Statements) May Be Higher Than the Then-Current Estimated Value of the Securities
for a Limited Time Period
— We generally expect that some of the costs included
in the original issue price of the Securities will be partially paid back to you in connection
with any repurchases of your Securities by JPMS in an amount that will decline to zero
over an initial predetermined period. These costs can include selling commissions, projected
hedging profits, if any, and, in some circumstances, estimated hedging costs and our
internal secondary market funding rates for structured debt issuances. See “Secondary
Market Prices of the Securities” in this pricing supplement for additional information
relating to this initial period. Accordingly, the estimated value of your Securities
during this initial period may be lower than the value of the Securities as published
by JPMS (and which may be shown on your customer account statements).
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|
t
|
Secondary
Market Prices of the Securities Will Likely Be Lower Than the Original Issue Price of
the Securities
— Any secondary market prices of the Securities will likely
be lower than the original issue price of the Securities because, among other things,
secondary market prices take into account our internal secondary market funding rates
for structured debt issuances and, also, because secondary market prices may exclude
selling commissions, projected hedging profits, if any, and estimated hedging costs that
are included in the original issue price of the Securities. As a result, the price, if
any, at which JPMS will be willing to buy Securities from you in secondary market transactions,
if at all, is likely to be lower than the original issue price. Any sale by you prior
to the Maturity Date could result in a substantial loss to you. See the immediately following
risk factor for information about additional factors that will impact any secondary market
prices of the Securities.
|
The
Securities are not designed to be short-term trading instruments. Accordingly, you should be able and willing to hold your Securities
to maturity. See “— Lack of Liquidity” below.
|
t
|
Many
Economic and Market Factors Will Impact the Value of the Securities
—
As
described under “The Estimated Value of the Securities” in this pricing supplement,
the Securities can be thought of as securities that combine a fixed-income debt component
with one or more derivatives. As a result, the factors that influence the values of fixed-income
debt and derivative instruments will also influence the terms of the Securities at issuance
and their value in the secondary market. Accordingly, the secondary market price of the
Securities during their term will be impacted by a number of economic and market factors,
which may either offset or magnify each other, aside from the selling commissions, projected
hedging profits, if any, estimated hedging costs and the level of the Underlying, including:
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|
t
|
any
actual or potential change in our or JPMorgan Chase & Co.’s creditworthiness
or credit spreads;
|
|
t
|
customary
bid-ask spreads for similarly sized trades;
|
|
t
|
our
internal secondary market funding rates for structured debt issuances;
|
|
t
|
the
actual and expected volatility in the level of the Underlying;
|
|
t
|
the
time to maturity of the Securities;
|
|
t
|
the
dividend rates on the equity securities included in the Underlying;
|
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t
|
interest
and yield rates in the market generally; and
|
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t
|
a
variety of other economic, financial, political, regulatory and judicial events.
|
Additionally,
independent pricing vendors and/or third party broker-dealers may publish a price for the Securities, which may also be reflected
on customer account statements. This price may be different (higher or lower) than the price of the Securities, if any, at which
JPMS may be willing to purchase your Securities in the secondary market.
|
t
|
Investing
in the Securities Is Not Equivalent to Investing in the Stocks Composing the Underlying
— Investing in the Securities is not equivalent
to investing in the stocks included in the Underlying. As an investor in the Securities,
you will not have any ownership interest or rights in the stocks included in the Underlying,
such as voting rights, dividend payments or other distributions.
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t
|
We
Cannot Control Actions by the Sponsor of the Underlying and That Sponsor Has No Obligation
to Consider Your Interests
—
We and our affiliates are not affiliated with the sponsor of the Underlying and have
no ability to control or predict its actions, including any errors in or discontinuation
of public disclosure regarding methods or policies relating to the calculation of the
Underlying. The sponsor of the Underlying is not involved in this Security offering in
any way and has no obligation to consider your interest as an owner of the Securities
in taking any actions that might affect the market value of your Securities.
|
|
t
|
Your
Return on the Securities Will Not Reflect Dividends on the Stocks Composing the Underlying
— Your return on the Securities will not
reflect the return you would realize if you actually owned the stock included in the
Underlying and received the dividends on the stock included in the Underlying. This is
because the calculation agent will calculate the amount payable to you at maturity of
the Securities by reference to the Final Value, which reflects the closing level of the
Underlying on the Final Valuation Date without taking into consideration the value of
dividends on the stock included in the Underlying.
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|
t
|
Lack
of Liquidity
— The Securities will not be
listed on any securities exchange. JPMS intends to offer to purchase the Securities in
the secondary market, but is not required to do so. Even if there is a secondary market,
it may not provide enough liquidity to allow you to trade or sell the Securities easily.
Because other dealers are not likely to make a secondary market for the Securities, the
price at which you may be able to trade your Securities is likely to depend on the price,
if any, at which JPMS is willing to buy the Securities.
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|
t
|
Potentially
Inconsistent Research, Opinions or Recommendations by JPMS, UBS or Their Affiliates
— JPMS, UBS or their affiliates may publish research,
express opinions or provide recommendations that are inconsistent with investing in or
holding the Securities, and that may be revised at any time. Any such research, opinions
or recommendations may or may not recommend that investors buy or hold investments linked
to the Underlying and could affect the value of the Underlying, and therefore the market
value of the Securities.
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t
|
Tax
Treatment
— Significant aspects of the tax
treatment of the Securities are uncertain. You should consult your tax adviser about
your tax situation.
|
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t
|
Potential
JPMorgan Financial Impact on the Market Price of the Underlying
—
Trading or transactions by JPMorgan Financial or its affiliates in the Underlying or
in futures, options or other derivative products on the Underlying may adversely affect
the market value of the Underlying and, therefore, the market value of the Securities.
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|
t
|
The Final Terms and Valuation of the Securities Will Be Finalized on the Trade Date and Provided in the Pricing
Supplement
—
The final terms of the Securities will be based on relevant market conditions when the terms of the Securities
are set and will be finalized on the Trade Date and provided in the pricing supplement. In particular, each of the estimated value
of the Securities and the Maximum Gain will be finalized on the Trade Date and provided in the pricing supplement, and each may
be as low as the applicable minimum set forth on the cover of this pricing supplement. Accordingly, you should consider your potential
investment in the Securities based on the minimums for the estimated value of the Securities and the Maximum Gain.
|
Risks Relating
to the Underlying
|
t
|
An
Investment in the Securities is Subject to Risks Associated with Small Capitalization
Stocks
— The equity securities included
in the Underlying are issued by companies with relatively small market capitalization.
The stock prices of smaller companies may be more volatile than stock prices of large
capitalization companies. Small capitalization companies may be less able to withstand
adverse economic, market, trade and competitive conditions relative to larger companies.
These companies tend to be less well-established than large market capitalization companies.
Small capitalization companies are less likely to pay dividends on their stocks, and
the presence of a dividend payment could be a factor that limits downward stock price
pressure under adverse market conditions.
|
Hypothetical
Examples and Return Table
|
Hypothetical
terms only. Actual terms may vary. See the cover page for actual offering terms.
The following table and hypothetical examples below illustrate the payment at maturity per $10.00 principal amount
Security for a hypothetical range of Underlying Returns from -100.00% to +100.00% on an offering of the Securities linked to a
hypothetical Underlying, and assume a hypothetical Initial Value of 100, a hypothetical Upside Gearing of 1.50 and a hypothetical
Maximum Gain of 12.00%. The hypothetical Initial Value of 100 has been chosen for illustrative purposes only and may not represent
a likely actual Initial Value. The actual Initial Value will be based on the closing level of the Underlying on the Trade Date
and will be provided in the pricing supplement. For historical data regarding the actual closing levels of the Underlying, please
see the historical information set forth under “The Underlying” in this pricing supplement. The actual Upside Gearing
is specified on the cover of this pricing supplement. The actual Maximum Gain will be finalized on the Trade Date and provided
in the pricing supplement. The hypothetical payment at maturity examples set forth below are for illustrative purposes only and
may not be the actual returns applicable to a purchaser of the Securities. The actual payment at maturity may be more or less than
the amounts displayed below and will be determined based on the actual terms of the Securities, including the Upside Gearing, the
Initial Value and the Maximum Gain to be finalized on the Trade Date and provided in the pricing supplement and the Final Value
on the Final Valuation Date. You should consider carefully whether the Securities are suitable to your investment goals. The numbers
appearing in the table below have been rounded for ease of analysis.
Final
Value
|
Underlying
Return (%)
|
Payment
at Maturity ($)
|
Return
at Maturity per
$10.00 issue price (%)
|
200.00
|
100.00%
|
$11.20
|
12.00%
|
190.00
|
90.00%
|
$11.20
|
12.00%
|
180.00
|
80.00%
|
$11.20
|
12.00%
|
170.00
|
70.00%
|
$11.20
|
12.00%
|
160.00
|
60.00%
|
$11.20
|
12.00%
|
150.00
|
50.00%
|
$11.20
|
12.00%
|
140.00
|
40.00%
|
$11.20
|
12.00%
|
130.00
|
30.00%
|
$11.20
|
12.00%
|
120.00
|
20.00%
|
$11.20
|
12.00%
|
110.00
|
10.00%
|
$11.20
|
12.00%
|
108.00
|
8.00%
|
$11.20
|
12.00%
|
106.00
|
6.00%
|
$10.90
|
9.00%
|
104.00
|
4.00%
|
$10.60
|
6.00%
|
102.00
|
2.00%
|
$10.30
|
3.00%
|
100.00
|
0.00%
|
$10.00
|
0.00%
|
95.00
|
-5.00%
|
$9.50
|
-5.00%
|
90.00
|
-10.00%
|
$9.00
|
-10.00%
|
80.00
|
-20.00%
|
$8.00
|
-20.00%
|
70.00
|
-30.00%
|
$7.00
|
-30.00%
|
60.00
|
-40.00%
|
$6.00
|
-40.00%
|
50.00
|
-50.00%
|
$5.00
|
-50.00%
|
40.00
|
-60.00%
|
$4.00
|
-60.00%
|
30.00
|
-70.00%
|
$3.00
|
-70.00%
|
20.00
|
-80.00%
|
$2.00
|
-80.00%
|
10.00
|
-90.00%
|
$1.00
|
-90.00%
|
0.00
|
-100.00%
|
$0.00
|
-100.00%
|
Example 1 — The level
of the Underlying increases by 2% from the Initial Value of 100 to the Final Value of 102.
Because the Upside
Gearing of 1.50 times the Underlying Return of 2% is less than the Maximum Gain of 12.00%, JPMorgan Financial will pay you your
principal amount
plus
a return equal to the Underlying Return
times
the Upside Gearing, resulting in a payment at
maturity of $10.30 per $10 principal amount Security, calculated as follows:
$10.00
+ ($10.00 × Underlying Return × Upside Gearing)
$10.00 + ($10.00 × 2% × 1.50) = $10.30
Example 2 — The level
of the Underlying increases by 10% from the Initial Value of 100 to the Final Value of 110.
Because the Upside
Gearing of 1.50 times the Underlying Return of 10% is greater than the Maximum Gain of 12.00%, JPMorgan Financial will pay you
your principal amount
plus
a return equal to the Maximum Gain of 12.00%, resulting in a payment at maturity of $11.20 per
$10 principal amount Security, calculated as follows:
$10.00
+ ($10.00 × Maximum Gain)
$10.00 + ($10.00 × 12.00%) = $11.20
Example 3 — The level
of the Underlying increases by 40% from the Initial Value of 100 to the Final Value of 140.
Because the Upside
Gearing of 1.50 times the Underlying Return of 40% is significantly greater than the Maximum Gain of 12.00%, JPMorgan Financial
will pay you your principal amount
plus
a return equal to only the Maximum Gain of 12.00%, resulting in a payment at maturity
of $11.20 per $10 principal amount Security, calculated as follows:
$10.00
+ ($10.00 × Maximum Gain)
$10.00 + ($10.00 × 12.00%) = $11.20
Example 4 — The level
of the Underlying decreases by 40% from the Initial Value of 100 to the Final Value of 60.
Because the Underlying
Return is -40%, JPMorgan Financial will pay you a payment at maturity of $6.00 per $10 principal amount Security, calculated as
follows:
$10.00
+ ($10.00 × Underlying Return)
$10.00 + ($10.00 × -40.00%) = $6.00
If the Underlying
Return is negative, investors will be exposed to the negative Underlying Return at maturity, resulting in a loss of principal
that is proportionate to the Underlying’s decline from the Initial Value to the Final Value. Investors could lose some or
all of their principal amount.
The hypothetical returns
and hypothetical payments on the Securities shown above apply
only if you hold the Securities for their entire term.
These
hypotheticals do not reflect fees or expenses that would be associated with any sale in the secondary market. If these fees and
expenses were included, the hypothetical returns and hypothetical payments shown above would likely be lower.
The Russell 2000
®
Index consists of the middle 2,000 companies included in the Russell 3000E™ Index and, as a result of the index calculation
methodology, consists of the smallest 2,000 companies included in the Russell 3000
®
Index. The Russell 2000
®
Index is designed to track the performance of the small capitalization segment of the U.S. equity market. For additional
information about the Russell 2000
®
Index, see the information set forth under “Equity Index Descriptions
— The Russell Indices” in the accompanying underlying supplement.
Historical Information
The following table sets forth the quarterly high and low closing levels of the Underlying, based on daily closing
levels of the Underlying as reported by the Bloomberg Professional
®
service (“Bloomberg”), without independent
verification. The information given below is for the four calendar quarters in each of 2014, 2015, 2016, 2017 and 2018 and the
first calendar quarter of 2019. Partial data is provided for the second calendar quarter of 2019. The closing level of the Underlying
on May 14, 2019 was 1,543.058. The actual Initial Value will be the closing level of the Underlying on the Trade Date. We obtained
the closing levels of the Underlying above and below from Bloomberg, without independent verification.
You
should not take the historical levels of the Underlying as an indication of future performance
.
Quarter
Begin
|
Quarter
End
|
Quarterly
Closing High
|
Quarterly
Closing Low
|
Close
|
1/1/2014
|
3/31/2014
|
1,208.651
|
1,093.594
|
1,173.038
|
4/1/2014
|
6/30/2014
|
1,192.964
|
1,095.986
|
1,192.964
|
7/1/2014
|
9/30/2014
|
1,208.150
|
1,101.676
|
1,101.676
|
10/1/2014
|
12/31/2014
|
1,219.109
|
1,049.303
|
1,204.696
|
1/1/2015
|
3/31/2015
|
1,266.373
|
1,154.709
|
1,252.772
|
4/1/2015
|
6/30/2015
|
1,295.799
|
1,215.417
|
1,253.947
|
7/1/2015
|
9/30/2015
|
1,273.328
|
1,083.907
|
1,100.688
|
10/1/2015
|
12/31/2015
|
1,204.159
|
1,097.552
|
1,135.889
|
1/1/2016
|
3/31/2016
|
1,114.028
|
953.715
|
1,114.028
|
4/1/2016
|
6/30/2016
|
1,188.954
|
1,089.646
|
1,151.923
|
7/1/2016
|
9/30/2016
|
1,263.438
|
1,139.453
|
1,251.646
|
10/1/2016
|
12/31/2016
|
1,388.073
|
1,156.885
|
1,357.130
|
1/1/2017
|
3/31/2017
|
1,413.635
|
1,345.598
|
1,385.920
|
4/1/2017
|
6/30/2017
|
1,425.985
|
1,345.244
|
1,415.359
|
7/1/2017
|
9/30/2017
|
1,490.861
|
1,356.905
|
1,490.861
|
10/1/2017
|
12/31/2017
|
1,548.926
|
1,464.095
|
1,535.511
|
1/1/2018
|
3/31/2018
|
1,450.387
|
1,372.544
|
1,529.327
|
4/1/2018
|
6/30/2018
|
1,706.985
|
1,492.531
|
1,643.069
|
7/1/2018
|
9/30/2018
|
1,740.753
|
1,653.132
|
1,696.571
|
10/1/2018
|
12/31/2018
|
1,672.992
|
1,266.925
|
1,348.559
|
1/1/2019
|
3/31/2019
|
1,590.062
|
1,330.831
|
1,539.739
|
4/1/2019
|
5/14/2019*
|
1,614.976
|
1,523.001
|
1,543.058
|
*As of the date of this pricing
supplement, available information for the second calendar quarter of 2019 includes data for the period from April 1, 2019 through
May 14, 2019. Accordingly, the “Quarterly Closing High,” “Quarterly Closing Low” and “Close”
data indicated are for this shortened period only and do not reflect complete data for the second calendar quarter of 2019.
The graph below illustrates the daily performance of the Underlying from January 2, 2009 through May 14, 2019,
based on information from Bloomberg, without independent verification.
Past
performance of the Underlying is not indicative of the future performance of the Underlying.
The historical performance of the Underlying should not be taken as an indication of future performance, and no
assurance can be given as to the closing level of the Underlying on the Trade Date or the Final Valuation Date. We cannot give
you assurance that the performance of the Underlying will result in the return of any of your principal amount.
Supplemental
Plan of Distribution
|
We and JPMorgan Chase & Co. have agreed to indemnify UBS and JPMS against liabilities under the Securities
Act of 1933, as amended, or to contribute to payments that UBS may be required to make relating to these liabilities as described
in the prospectus supplement and the prospectus. We will agree that UBS may sell all or a part of the Securities that it purchases
from us to the public or its affiliates at the price to public indicated on the cover hereof.
Subject to regulatory
constraints, JPMS intends to offer to purchase the Securities in the secondary market, but it is not required to do so.
We or our affiliates
may enter into swap agreements or related hedge transactions with one of our other affiliates or unaffiliated counterparties in
connection with the sale of the Securities, and JPMS and/or an affiliate may earn additional income as a result of payments pursuant
to the swap or related hedge transactions. See “Supplemental Use of Proceeds” in this pricing supplement and “Use
of Proceeds and Hedging” in the accompanying product supplement.
We expect that delivery
of the Notes will be made against payment for the Notes on or about the Original Issue Date set forth on the front cover of this
pricing supplement, which will be the third business day following the Trade Date of the Notes (this settlement cycle being referred
to as “T+3”). Under Rule 15c6-1 of the Securities Exchange Act of 1934, as amended, trades in the secondary market
generally are required to settle in two business days, unless the parties to that trade expressly agree otherwise. Accordingly,
purchasers who wish to trade Notes on any date prior to two business days before delivery will be required to specify an alternate
settlement cycle at the time of any such trade to prevent a failed settlement and should consult their own advisors.
The
Estimated Value of the Securities
|
The estimated value
of the Securities set forth on the cover of this pricing supplement is equal to the sum of the values of the following hypothetical
components: (1) a fixed-income debt component with the same maturity as the Securities, valued using the internal funding rate
described below, and (2) the derivative or derivatives underlying the economic terms of the Securities. The estimated value of
the Securities does not represent a minimum price at which JPMS would be willing to buy your Securities in any secondary market
(if any exists) at any time. The internal funding rate used in the determination of the estimated value of the Securities may
differ from the market-implied funding rate for vanilla fixed income instruments of a similar maturity issued by JPMorgan Chase
& Co. or its affiliates. Any difference may be based on, among other things, our and our affiliates’ view of the funding
values of the Securities as well as the higher issuance, operational and ongoing liability management costs of the Securities
in comparison to those costs for the conventional fixed income instruments of JPMorgan Chase & Co. This internal funding rate
is based on certain market inputs and assumptions, which may prove to be incorrect, and is intended to approximate the prevailing
market replacement funding rate for the Securities. The use of an internal funding rate and any potential changes to that rate
may have an adverse effect on the terms of the Securities and any secondary market prices of the Securities. For additional information,
see “Key Risks — Risks Relating to the Securities Generally — The Estimated Value of the Securities Is Derived
by Reference to an Internal Funding Rate” in this pricing supplement. The value of the derivative or derivatives underlying
the economic terms of the Securities is derived from internal pricing models of our affiliates. These models are dependent on
inputs such as the traded market prices of comparable derivative instruments and on various other inputs, some of which are market-observable,
and which can include volatility, dividend rates, interest rates and other factors, as well as assumptions about future market
events and/or environments. Accordingly, the estimated value of the Securities is determined when the terms of the Securities
are set based on market conditions and other relevant factors and assumptions existing at that time. See “Key Risks —
Risks Relating to the Securities Generally — The Estimated Value of the Securities Does Not Represent Future Values of the
Securities and May Differ from Others’ Estimates” in this pricing supplement.
The estimated value of the Securities will be lower than the original issue price of the Securities because costs
associated with selling, structuring and hedging the Securities are included in the original issue price of the Securities. These
costs include the selling commissions paid to UBS, the projected profits, if any, that our affiliates expect to realize for assuming
risks inherent in hedging our obligations under the Securities and the estimated cost of hedging our obligations under the Securities.
Because hedging our obligations entails risk and may be influenced by market forces beyond our control, this hedging may result
in a profit that is more or less than expected, or it may result in a loss. We or one or more of our affiliates will retain any
profits realized in hedging our obligations under the Securities. See “Key Risks — Risks Relating to the Securities
Generally — The Estimated Value of the Securities Will Be Lower Than the Original Issue Price (Price to Public) of the Securities”
in this pricing supplement.
Secondary
Market Prices of the Securities
|
For information
about factors that will impact any secondary market prices of the Securities, see “Key Risks — Risks Relating to the
Securities Generally — Secondary Market Prices of the Securities Will Be Impacted by Many Economic and Market Factors”
in this pricing supplement. In addition, we generally expect that some of the costs included in the original issue price of the
Securities will be partially paid back to you in connection with any repurchases of your Securities by JPMS in an amount that
will decline to zero over an initial predetermined period that is intended to be up to seven months. The length of any such initial
period reflects secondary market volumes for the Securities, the structure of the Securities, whether our affiliates expect to
earn a profit in connection with our hedging activities, the estimated costs of hedging the Securities and when these costs are
incurred, as determined by our affiliates. See “Key Risks — Risks Relating to the Securities Generally — The
Value of the Securities as Published by JPMS (and Which May Be Reflected on Customer Account Statements) May Be Higher Than the
Then-Current Estimated Value of the Securities for a Limited Time Period” in this pricing supplement.
Supplemental
Use of Proceeds
|
The Securities are
offered to meet investor demand for products that reflect the risk-return profile and market exposure provided by the Securities.
See “Hypothetical Examples and Return Table” in this pricing supplement for an illustration of the risk-return profile
of the Securities and “The Underlying” in this pricing supplement for a description of the market exposure provided
by the Securities.
The original issue
price of the Securities is equal to the estimated value of the Securities plus the selling commissions paid to UBS, plus (minus)
the projected profits (losses) that our affiliates expect to realize for assuming risks inherent in hedging our obligations under
the Securities, plus the estimated cost of hedging our obligations under the Securities.
JPMorgan Chase & CO Prfd H (NYSE:JPMPH)
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