C A L C U L ATED BY
Selected RisK Considerations
Investing in the RBS ETNs involves a number of risks. Some of the risks
relating to the RBS ETNs are summarized here, but we urge you to read the more
detailed explanation of risks described under "Risk Factors" in the applicable
pricing supplement.
You may lose all or a significant portion of your investment: The RBS ETNs are
not principal protected. If the level of the Index decreases, or does not
increase by an amount sufficient to offset the investor fee, you will receive
less, and possibly significantly less, at maturity or upon early repurchase or
redemption than your original investment in the RBS ETNs.
The RBS ETNs involve risks not associated with an investment in conventional
debt securities.
Credit risk of RBS plc and RBS Group: The RBS ETNs are unsecured and
unsubordinated obligations of RBS plc, as issuer, and are guaranteed by RBS
Group. You are dependent on RBS plc's ability to pay all amounts due on the RBS
ETNs, and therefore you are subject to the credit risk of RBS plc and to
changes in the market's view of RBS plc's creditworthiness. In addition,
because the RBS ETNs are guaranteed by RBS Group, you are also dependent on the
credit risk of RBS Group in the event that RBS plc fails to make any payment or
delivery required by the terms of the RBS ETNs.
Issuer redemption: RBS plc has the right to redeem or "call" the RBS ETNs, in
whole but not in part, at its sole discretion at any time from the initial
settlement date to and including 12/4/2040. In addition, the implementation of
the RBS Retail Investor Products Exit Plan (as described below under "Recent
Developments") increases the likelihood of our calling the RBS ETNs prior to
maturity.
Strategy Risk: The Trendpilot[] Index uses a trend-following strategy that
seeks to capitalize on trends in the Benchmark Index based on its closing level
relative to its 200-Index business day moving average. This strategy differs
from one that seeks continuous long-only exposure to a single asset. The
Trendpilot[] Index is expected to perform poorly in non-trending volatile
markets. Movements in the Benchmark Index or the Cash Rate may have a material
and adverse impact on the Trendpilot[] Index's performance. There is no
assurance that the strategy will be successful or that it will outperform the
Benchmark Index or the Cash Rate.
Market Risk: The return on the RBS ETNs will depend on the performance of the
Index (which in turn will depend on the performance of the Benchmark Index and
the Cash Rate) and other market conditions. In particular, the RBS ETNs are
subject to the risk that mid-capitalization U.S equities may underperform other
segments of the equity market or the equity market in general.
A trading market for the RBS ETNs may not develop: Although the RBS ETNs are
listed on NYSE Arca, Inc., there is no guarantee that the listing will be
maintained or that a secondary market will develop. RBS plc is not required to
maintain any listing of the RBS ETNs.
No Interest Payments: You will not receive any interest payments on the RBS
ETNs.
Restrictions on your ability to offer RBS ETNs for repurchase by us: You must
offer at least 20,000 RBS ETNs to us for any single repurchase and satisfy the
other requirements described in the applicable pricing supplement for your
repurchase offer to be considered.
Actual trading price or market price may vary significantly from indicative
value and daily redemption value: The indicative value is meant to approximate
the intrinsic economic value of the RBS ETNs from time to time. Any payment on
the RBS ETNs at maturity or upon early repurchase or redemption is based on the
daily redemption value, which is determined by the calculation agent. If you
purchase or sell RBS ETNs in the secondary market, you will pay or receive the
market price of an RBS ETN. Factors that may influence the market price of the
RBS ETNs include: the level of the Index; the performance of, and volatility
in, the Benchmark Index; supply and demand for the RBS ETNs; economic,
financial, political, regulatory or judicial events that affect the level of
the Index; and the actual or perceived creditworthiness of RBS plc and RBS
Group.
The Index has limited actual history and may perform in unexpected ways: The
Trendpilot[] Index was created by RBS plc, as Index Sponsor, and established on
November 16, 2010. As such, it has limited actual history and may perform in
unexpected ways. The historical performance of the Index should not be taken as
indication of future performance.
Uncertain Tax Treatment: Significant aspects of the tax treatment of the RBS
ETNs are uncertain. You should consult your own tax adviser about your own
situation.
The RBS ETNs are complex and not suitable for all investors. You should
carefully read the relevant pricing supplement and prospectus, including the
more detailed explanation of the risks involved in any investment in the RBS
ETNs as described in the "Risk Factors" section of the pricing supplement,
before investing. IMPORTANT INFORMATION: The Royal Bank of Scotland plc (RBS
plc) and The Royal Bank of Scotland Group plc (RBS Group) have filed a
registration statement (including a prospectus) with the U.S. Securities and
Exchange Commission (SEC) for the offering of RBS ETNs to which this
communication relates. Before you invest in any RBS ETNs, you should read the
prospectus in that registration statement and other documents that have been
filed by RBS plc and RBS Group with the SEC for more complete information about
RBS plc and RBS Group, and the offering. You may get these documents for free
by visiting EDGAR on the SEC's web site at www.sec.gov. Alternatively, RBS plc,
RBS Securities Inc. (RBSSI) or any dealer participating in the offering will
arrange to send you the prospectus and the pricing supplement at no charge if
you request it by calling 1-855-RBS-ETPS (toll-free).
RECENT DEVELOPMENTS: On June 13, 2013, we announced that we would be exiting
the structured retail investor products business that is responsible for
issuing and maintaining the RBS ETNs, and that we expect to move such business
into a runoff organization which will go through a process of restructuring and
/ or business sales (the "RBS Retail Investor Products Exit Plan"). The
implementation of the RBS Retail Investor Products Exit Plan increases the
likelihood that the RBS ETNs will be redeemed by us prior to maturity. We plan
to continue to maintain and issue the RBS ETNs, but our plans could change. We
cannot give you any assurances as to any minimum period of time that you may
hold the RBS ETNs before we redeem them at our option.
RBS US Mid Cap Trendpilot[] Index (USD), is the property of The Royal Bank of
Scotland plc, which has contracted with S and P Opco, LLC (a subsidiary of S and
P Dow Jones Indices LLC) ("S and P Dow Jones Indices") to maintain and calculate
the Index. The S and P MidCap 400([R]) Index is the exclusive property of S and
P Dow Jones Indices and has been licensed for use by RBSSI and its affiliates in
connection with the RBS US Mid Cap Trendpilot[] Index (USD). S and P Dow Jones
Indices shall have no liability for any errors or omissions in calculating the
Index. S and P ([R]) is a registered trademark of Standard and Poor's Financial
Services LLC ("SPFS") and Dow Jones([R]) is a registered trademark of Dow Jones
Trademark Holdings LLC ("Dow Jones"). These trademarks have been licensed to S
and P Dow Jones Indices. "Standard and Poor's([R])", "S and P ([R])" and "S and
P MidCap 400([R])" are registered trademarks of SPFS and together with
"Calculated by S and P Dow Jones Indices" and its related stylized mark(s) have
been licensed for use by RBSSI and its affiliates. The RBS US Mid Cap
Trendpilot[] ETNs are not sponsored, endorsed, sold or promoted by S and P Dow
Jones Indices, SPFS, Dow Jones, their affiliates or their third party licensors,
and neither S and P Dow Jones Indices, SPFS, Dow Jones, their affiliates or
their third party licensors make any representation regarding the advisability
of investing in such RBS ETNs.
Copyright [C] RBS Securities Inc. All rights reserved.
RBS Securities Inc., is a U.S. registered broker-dealer, member of FINRA and
SIPC, and an indirect wholly-owned subsidiary of The Royal Bank of Scotland plc
and The Royal Bank of Scotland Group plc.
www.rbs.com/etnUS | TOLL FREE: 855-RBS-ETPS | Not FDIC Insured. May Lose Value.
Dated January 9, 2014
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