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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 4/15/2042. 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 RBS Trendpilot[] ETN uses a trend-following strategy that
seeks to capitalize on trends in the Benchmark Index based on its closing level
relative to its 100-Index business day moving average. This strategy differs
from one that seeks continuous long-only exposure to a single asset. The RBS
Trendpilot[] ETN 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 RBS Trendpilot[] ETN 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. Because the Benchmark Index tracks
only the stocks of companies based in the People's Republic of China (the
"PRC"), it is subject to risks including emerging market risks, concentration
risk, and the risk that the PRC government may pursue economic, tax, or other
regulatory policies which will adversely affect the stock prices of companies
based in the PRC. Furthermore, as the securities tracked by the Benchmark Index
include depository receipts, there are risks relating to foreign exchange and
potential price discrepancy between the depository receipts and their
underlying stocks.
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 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.
BNY Mellon is a corporate brand of The Bank of New York Mellon Corporation and
may be used as a generic term to reference the corporation as a whole or its
various subsidiaries. BNY Mellon and BNY Mellon ADR Indices and BNY Mellon DR
Indices are service marks owned by The Bank of New York Mellon Corporation.
This information is provided for general purposes only and is not investment
advice. We provide no advice nor recommendations or endorsement with respect to
any company, security or products based on any index licensed by BNY Mellon,
and we make no representation regarding the advisability of investing in the
same. BNY Mellon's Depositary Receipt business is conducted through BNY
Mellon.
BNY Mellon does not guarantee the accuracy, timeliness and/or completeness of
BNY Mellon ADR Indices and BNY Mellon DR Indices, or any associated indices, or
any data included therein, and BNY Mellon shall have no liability for any
errors, omissions, or interruptions therein. BNY Mellon makes no express or
implied warranties, and expressly disclaims all warranties of merchantability
or fitness for a particular purpose or use with respect to BNY Mellon ADR
Indices and BNY Mellon DR Indices or any associated indices, or any data
included therein, or any materials derived from such data. Without limiting any
of the foregoing, in no event shall the company have any liability for any
special, punitive, indirect, or consequential damages (including lost profits),
even if notified of the possibility of such damages. For the full disclaimer
please see the pricing supplement relating to the notes that RBS plc and RBS
Group fi led with the SEC.
RBS China 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. 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. "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 China 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 October 31, 2013
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