What are 'Principal at Risk Securities'?

Principal at Risk Securities are a type of investment product where the investor's principal amount is at risk, meaning it could be lost, depending on the performance of an underlying asset or index. In this case, the performance of the iShares® MSCI Emerging Markets ETF will determine the return and potential loss of principal for these notes.

What is the iShares® MSCI Emerging Markets ETF?

The iShares® MSCI Emerging Markets ETF is an exchange-traded fund that aims to track the performance of the MSCI Emerging Markets Index. This index comprises stocks of companies in emerging market countries, offering investors exposure to these potentially higher-growth but also higher-risk economies.

Why is Wells Fargo filing this 8-K?

Wells Fargo is filing this 8-K to publicly disclose the details of a new debt offering, specifically the form of the Medium-Term Notes, Series K, and to provide the necessary legal and tax opinions from their counsel. This is a regulatory requirement when issuing such securities.

What is the risk for investors in these notes?

The primary risk for investors is the potential loss of their principal investment. If the iShares® MSCI Emerging Markets ETF performs poorly, the value of the notes could decline, and investors may not receive their full principal back at maturity. The specific terms and conditions outlining the 'at risk' nature of the principal would be detailed in the full Note prospectus, which is referenced by this filing.

WELLS FARGO & COMPANY/MN 8-K SEC Disclosure

Summary

This 8-K filing by Wells Fargo & Company (WFC) on June 27, 2014, primarily serves to disclose the details of a new debt issuance: Medium-Term Notes, Series K, Principal at Risk Securities Linked to the iShares® MSCI Emerging Markets ETF, due June 29, 2020. The filing itself does not contain financial statements but rather includes the form of the Note, legal opinions from external counsel (Faegre Baker Daniels LLP) and Wells Fargo's special tax counsel (Davis Polk & Wardwell LLP) regarding the Notes, and their respective consents. This indicates a standard procedure for registering and offering complex debt instruments tied to the performance of an emerging markets ETF.

Key Highlights

1Wells Fargo issued Medium-Term Notes, Series K, with a maturity date of June 29, 2020.
2These notes are 'Principal at Risk Securities,' meaning the principal amount could be lost based on the performance of the underlying asset.
3The performance of these notes is directly linked to the iShares® MSCI Emerging Markets ETF.
4The filing's purpose is to provide the form of the Note and associated legal/tax opinions, not financial results.
5External legal counsel, Faegre Baker Daniels LLP, provided an opinion on the Notes.
6Wells Fargo's special tax counsel, Davis Polk & Wardwell LLP, also provided a tax opinion on the Notes.
7This issuance suggests Wells Fargo is offering structured products to investors seeking exposure to emerging markets with a specific risk/return profile.

WELLS FARGO & COMPANY/MN 8-K Report, Exhibit Filing (Jun 27, 2014)

Summary

Key Highlights

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