Filed pursuant to Rule 433. Registration Statement Nos. 333-184147 and 333-184147-01
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THIS FREE WRITING PROSPECTUS AMENDS AND RESTATES IN ITS ENTIRETY THE FREE
WRITING PROSPECTUS FILED BY US ON APRIL 22, 2014, WITH THE HEADING "RBS GLOBAL
BIG PHARMA ETNS (DRGS)".
RBS Exchange Traded Notes
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RBS Global Big Pharma ETNs (DRGS)
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RBS ETN Details
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Issuer The Royal Bank of Scotland plc
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Guarantor The Royal Bank of Scotland Group plc
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Ticker DRGS
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Intraday Indicative Value Ticker DRGS.IV
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Inception Date 10/21/2011
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CUSIP 78009P135
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ISIN US78009P1350
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Primary Exchange NYSE Arca
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Maturity 10/25/2041
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Index NYSE Equal Weighted Pharmaceutical Total Return
Index(SM) (Bloomberg symbol: "DGETR (INDEX)")
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Annual Investor Fee 0.60% per annum.
(accrued on a daily basis)
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Repurchase at your option You may offer your RBS
ETNs to RBS plc for repurchase on any business
day on or prior to 10/17/2041, provided that
you offer a minimum of 20,000 RBS ETNs for any
single repurchase and follow the procedures
described in the pricing supplement.
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Early redemption at our option We may redeem all of
the RBS ETNs at our discretion at any time on
or prior to 10/23/2041. Pursuant to our
announced plan to exit the structured retail
investor products business, the likelihood that
we will redeem the ETNs prior to maturity has
increased. See "Recent Developments" on reverse
for more information.
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Daily Redemption Value Upon early
repurchase or redemption or at maturity, you
will receive a cash payment equal to the daily
redemption value per RBS ETN. The daily
redemption value on the relevant valuation date
will be published on www.rbs.com/etnus/drgs*.
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* Information contained on our website is not incorporated by reference in, and
should not be considered a part of, this[]document.
Index Summary(2) -- as of 3/31/2014
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Number of Components 25
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Average Market Cap $95.71 billion
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P/E Ratio 19.69
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P/B Ratio 4.00
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Dividend Yield 1.70
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To find out more Call toll free 855-RBS-ETPS or visit www.rbs.com/etnUS
Not FDIC Insured. May Lose Value.
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ETN Overview:
RBS Global Big Pharma Exchange Traded Notes ("RBS ETNs") are unsecured and
senior obligations of The Royal Bank of Scotland plc ("RBS plc"), and are fully
and unconditionally guaranteed by The Royal Bank of Scotland Group plc ("RBS
Group"). Any payments on the RBS ETNs when they become due at maturity or upon
early repurchase or redemption are dependent on the ability of RBS plc and RBS
Group to pay, and are also subject to market risk.
The return on this RBS ETN is based on the performance of the NYSE Arca Equal
Weighted Pharmaceutical Total Return Index(SM) (Bloomberg symbol: "DGETR
(INDEX)") (the "Index").
The Index
Index Components: The Index comprises stocks and depository receipts of some of
the largest companies involved in various phases of development, production and
marketing of pharmaceuticals.
Equally Weighted: The Index is calculated using an equal-dollar weighting
methodology so that each of the component securities in the Index is represented
in approximately equal-dollar amounts. The Index component weights are set to
equal dollar amounts at each rebalancing. During the quarter, each component's
weight changes independently based on the price movements of each respective
component stock. In addition, the Index is a total return index, which means
that the level of the Index takes into account the cash dividends, if any, paid
on the Index components.
Quarterly Rebalancing: The Index portfolio is rebalanced every quarter after the
close of trading on the third Friday of March, June, September and December.
Index Components(2) -- as of 3/31/2014
Company weight (%) Ticker eXchange
--- ---------------------------------------------- ---------- ------ --------
1. Teva Pharmaceutical Industries Ltd.(1) 4.29 TEVA NYSE
2. Novartis Ag(1) 4.18 NVS NYSE
3. Novo Nordisk A/S(1) 4.15 NVO NYSE
4. Merck and Co., Inc. 4.15 MRK NYSE
5. Sanofi(1) 4.12 SNY NYSE
6. Hospira, Inc. 4.08 HSP NYSE
7. Eli Lilly and Co. 4.08 LLY NYSE
8. Johnson and Johnson 4.08 JNJ NYSE
9. Astrazeneca plc(1) 4.05 AZN NYSE
10. Forest Laboratories, Inc. 4.04 FRX NYSE
11. Glaxosmithkline plc(1) 4.03 GSK NYSE
12. Abbott Laboratories 4.02 ABT NYSE
13. Bristol-Myers Squibb, Co. 4.00 BMY NYSE
14. Pfizer, Inc. 3.99 PFE NYSE
15. Allergan, Inc. 3.97 AGN NYSE
16. Shire plc(1) 3.96 SHPG NASDAQ
17. Zoetis, Inc. 3.96 ZTS NYSE
18. Actavis plc(1) 3.92 ACT NYSE
19. Dr Reddy's Laboratories Ltd. 3.91 RDY NYSE
20. Perrigo Co plc(1) 3.89 PRGO NYSE
21. Valeant Pharmaceuticals International, Inc.(1) 3.87 VRX NYSE
22. Jazz Pharmaceuticals plc(1) 3.86 JAZZ NASDAQ
23. Endo International plc(1) 3.84 ENDP NASDAQ
24. Abbvie, Inc. 3.84 ABBV NYSE
25. Mylan, Inc. 3.74 MYL NASDAQ
(1) Components are represented in the Index by their depositary receipts traded
on U.S. exchanges.
(2) Source: Bloomberg. The Index Components and Index Summary present actual
historical information on the NYSE Arca Equal Weighted Pharmaceutical
Index(SM) (the "Price Return Index"). The only difference between the Index
and the Price Return Index is that the level of the Index incorporates the
cash dividends paid on the Index components. See also "Certain Key Terms"
on the following page.
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Historical Performance (%) -- as of 3/31/2014
annualiZed
since RBS etn
3-month YEAR-TO- annualiZed annualiZed annualiZed
inception
(%) DATE (%) 1-year (%) 3-year (%) 5-year (%)
(10/21/11) (%)
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RBS Global Big Pharma ETN Daily Redemption Value(1) 9.79 9.79 35.92 -- --
27.72
NYSE Arca Equal Weighted Pharmaceutical Total Return 9.45 9.45 34.68 21.48 19.35
26.02
Index(SM)
NYSE Arca Equal Weighted Pharmaceutical Index(SM)
(Price Return Index) 9.95 9.95 36.75 23.97 22.12
28.49
SandP 500([R]) Index (Price Return) 1.30 1.30 19.32 12.19 18.60
13.69
Source: Bloomberg. The table above presents the actual historical performance of
the RBS ETNs, the Index, the NYSE Arca Equal Weighted Pharmaceutical
Index(SM) (the "Price Return Index") and the SandP 500([R]) Index (Price Return)
over the specified periods. The only difference between the Index and the Price
Return Index is that the level of the Index incorporates the cash dividends paid
on the Index components, while the Price Return Index does not. It is not
possible to invest directly in an index. For information regarding the
performance of the Index, see pages PS-13 to PS-16 of the pricing supplement of
the
RBS ETNs filed with the U.S. Securites and Exchange Commisson (SEC). Past
performance does not guarantee future results.
(1) Includes the deduction of the annual investor fee, which accrues on a daily
basis. The annual investor fee will be equal to 0.60% per annum.
Country Breakdown -- as of 3/31/2014
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country companies
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United States 13
United
Kingdom 6
Switzerland 1
Denmark 1
France 1
Israel 1
Canada 1
India 1
Source: Bloomberg. The chart and table above present the country of
incorporation of the companies which equity securities comprise the NYSE Arca
Equal Weighted Pharmaceutical Index(SM) (the "Price Return Index"). The Index
and the Price Return Index have identical components.
Historical Dividend Yield -- as of 3/31/2014
dividend yield dividend yield
Year NYSE Pharma indeX (%) SandP 500([R]) indeX (%)
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2003 1.89 1.88
2004 1.83 1.59
2005 1.95 1.74
2006 2.06 1.79
2007 2.10 1.82
2008 2.79 2.20
2009 3.74 3.59
2010 2.98 1.84
2011 3.45 1.83
2012 2.74 2.10
2013 1.70 1.94
Source: Bloomberg. The table above presents the actual historical Dividend Yield
calculated based on the cash dividends paid on the component securities of the
NYSE Arca Equal Weighted Pharmaceutical Index(SM) (Price Return) and the SandP
500([R]) Index (Price Return) over the prior 12 months ending on the last
trading day of the month referenced above. Unlike total return indices, the
levels of price return indices do not incorporate any cash dividends paid on
their index components. See "Certain Key Terms" on the back for the calculation
of the Dividend Yield.
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[GRAPHIC OMITTED] THIS FREE WRITING PROSPECTUS AMENDS AND RESTATES IN ITS ENTIRETY THE FREE WRITING PROSPECTUS FILED BY US ON APRIL 22, 2014, WITH THE HEADING "RBS GLOBAL BIG PHARMA ETNS (DRGS)". 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 10/23/2041. In addition, the implementation of the RBS Retail Investor Products Exit Plan increases the likelihood of our calling the RBS ETNs prior to maturity. Market Risk: The return on the ETNs will depend on the performance of the Index (which in turn will depend on the performance of the Underlying Indices) and other market conditions. In particular, the ETNs are subject to the risk that large-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 ETN. Factors that may influence the market price of the RBS ETNs include: the level of the Index; the index components in the Underlying 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 very limited actual history and may perform in unexpected ways: The Index was created by RBS plc, as Index Sponsor, and established on October 21, 2011. As such, it has very limited actual history. 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. CERTAIN KEY TERMS: The P/E Ratio, P/B Ratio and Dividend Yield information are sourced from Bloomberg. P/E Ratio is derived by dividing the closing level of the Price Return Index as of the specified date by the sum of the trailing 12-month earnings per share of the securities comprising the Price Return Index. P/B Ratio is derived by dividing the closing level of the Price Return Index as of the specified date by the sum of the book value per share of the securities comprising the Price Return Index as of that date. Dividend Yield means the sum of the gross dividends paid on the securities comprising the Price Return Index over the prior 12 months divided by the closing level of the Price Return Index as of the specified date; however, unlike the Index (which is a total return index), the level of the Price Return Index does not incorporate cash dividends paid on its components. IMPORTANT INFORMATION: RBS plc and 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. The NYSE Arca Equal Weighted Pharmaceutical Index(SM)[]and the NYSE Arca Equal Weighted Pharmaceutical Total Return Index(SM)[]are service marks[]of NYSE Euronext or its affiliates (NYSE Euronext) and have been licensed for use by The Royal Bank of Scotland plc and RBS Securities, Inc. (Licensees) in connection with[]the RBS ETNS. Neither the Licensees nor the RBS ETNs is sponsored, endorsed, sold or promoted by NYSE Euronext. NYSE Euronext makes no representations or warranties regarding the[]RBS ETNs or the ability of the NYSE Arca Equal Weighted Pharmaceutical Index(SM)[]or the[]NYSE Arca Equal Weighted Pharmaceutical Total Return Index(SM) to track general stock market performance. NYSE EURONEXT MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE NYSE ARCA EQUAL WEIGHTED PHARMACEUTICAL INDEX(SM)[]OR THE NYSE ARCA EQUAL WEIGHTED PHARMACEUTICAL TOTAL RETURN INDEX(SM)[]OR ANY DATA INCLUDED THEREIN. IN NO EVENT SHALL NYSE EURONEXT HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. 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 May 1, 2014 |