This excerpt taken from the HBC 20-F filed Mar 10, 2009.
Quantitative factors hereinafter referred to as the majority of risks and rewards of ownership. In substance:
In a number of cases, these SPEs are accounted for off-balance sheet under IFRSs where HSBC does not have the majority of the risks and rewards of ownership of the SPE. However in certain circumstances, after careful consideration of the facts, HSBC consolidates an SPE when, although it does not obtain the majority of risks and rewards of ownership, the qualitative features of HSBCs involvement indicate that, in substance, the activities of the SPE are being conducted on behalf of HSBC.
HSBC reassesses the required consolidation accounting tests whenever there is a change in the substance of the relationship between HSBC and an SPE, for example, when the nature of HSBCs involvement or the governing rules, contractual
arrangements or capital structure of the SPE change. The most significant categories of SPEs are discussed in more detail below.