Filed pursuant to Rule 433. Registration Statement Nos. 333-184147 and 333-184147-01
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RBS Exchange Traded Notes
RBS China Trendpilot[TM] ETN (TCHI)
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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 TCHI
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Intraday Indicative Value Ticker TCHI.IV
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CUSIP 78009P150
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ISIN US78009P1509
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Primary Exchange NYSE Arca
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Maturity 4/18/2042
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Index RBS China Trendpilot(TM) Index (USD) (Bloomberg symbol:
"TPCHINUT (Index)") (the "Trendpilot[] Index), which tracks the
Benchmark Index or the Cash Rate depending on the relative
performance of the Benchmark Index on a simple historical
moving average basis.
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Benchmark Index BNY Mellon China Select ADR Total Return Index(SM)
(Bloomberg page: "BKTCNT (Index)")
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Benchmark Index Reinvested 2.04%
Dividend Yield(1)
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Cash Rate Yield on a hypothetical notional investment in 3-month U.S.
Treasury bills as of the most recent weekly auction
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Annual Investor Fee When the Index is tracking the Benchmark Index: 1.10% per
(accrued on a daily basis) annum. When the Index is tracking the Cash Rate: 0.50% per
annum.
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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 4/10/2042, 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 4/16/2042. 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 page 4 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/tchi*.
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Ranking and Guarantee The RBS ETNs are unsecured and senior debt obligations of RBS
plc, as the Issuer, and RBSG, as the Guarantor of the Issuer's
obligations under the RBS ETNs. Any payment on the ETNs is
subject to the ability of the Issuer and Guarantor to pay their
respective obligations as they become due.
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(1)Benchmark Index Reinvested Dividend Yield means the sum of the gross
dividends paid on the securities comprising the Benchmark Index (which is a
total return index) over the prior 12 months ending 3/31/2014 divided by the
closing level of the price return version of the Benchmark Index as of
3/31/2014. The RBS ETNs do not pay dividends or interest. *Information contained
on our website is not incorporated by reference in, and should not be considered
a part of, this document.
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:
The RBS China Trendpilot[TM] 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.
RBS China Trendpilot[TM] ETNs track the RBS China Trendpilot[TM] Index (USD)
which provides:
Trend-following exposure using an objective and transparent methodology to
either the BNY Mellon China Select ADR Total Return Index(SM) or the Cash Rate.
China Exposure in positive trending markets by tracking the BNY Mellon China
Select ADR Total Return Index(SM), the level of which reflects the reinvestment
of any cash dividends paid on its component securities.
Cash Rate Exposure in negative trending markets by tracking a notional
investment in 3-month U.S. Treasury bills with the yield determined as of the
most recent weekly auction.
Illustration of the Trendpilot([TM]) Index Methodology
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Time
*An "Index business day" is a day on which the principal exchange on which the
components of the Benchmark Index trade is open for regular trading sessions for
at least three hours.
The above graph illustrates the operation of the Trendpilot[TM] Index
Methodology. It does not reflect any actual performance of the Benchmark Index
or the Index, and is not an indication of how either index may perform in the
future. The hypothetical illustration above also does not include any fees,
transaction costs or expenses.
If neither of the above conditions is satisfied, the trend of the Benchmark
Index will be the same as the trend of the Benchmark Index on the immediately
preceding Index business day. The Index will implement any trend reversal at
the open of trading on the second Index business day immediately following the
Index business day on which the Benchmark Index trend switches from positive to
negative or from negative to positive, as the case may be.
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Historical Performance (%) -- as of 3/31/2014
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SINCE RBS ETN
3-MONTH YEAR-TO- 1-YEAR ANNUALIZED INCEPTION
(%) DATE (%) (%) 3-YEAR (%) (4/13/12) (%)
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RBS China Trendpilot[TM] ETN Daily Redemption Value(1) -7.66 -7.66 10.95 -- 4.27
RBS China Trendpilot(TM) Index -7.46 -7.46 12.00 -- 5.18
BNY Mellon China Select Total Return Index(SM) (Benchmark Index) -3.53 -3.53 27.82 0.48 9.51
Source: Bloomberg. The table above presents the actual performance of the Index,
the RBS ETNs and the Benchmark Index over the specified periods. It is not
possible to invest directly in an index. For more information regarding the
performance of the Index, see pages PS-14 to PS-17 of the pricing supplement to
the RBS ETNs filed with the U.S. Securities and Exchange Commission (SEC). Past
performance does not guarantee future results. (1)Reflects the deduction of the
annual investor fee, which accrues on a daily basis. The annual investor fee
will be equal to (i) 1.10% per annum when the Index is tracking the Benchmark
Index, and (ii) 0.50% per annum when the Index is tracking the Cash Rate. The
per annum cash rate on 3/31/2014 was 0.05%
Top 10 Holdings(2) -- as of 3/31/2014
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COMPANY (%)
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China Mobile Ltd. (ADR) 10.06
Baidu.com (ADR) 8.77
CNOOC Ltd. (ADR) 6.89
PetroChina Co. Ltd. (ADR) 6.79
China Petroleum and Chemical Corp. 6.71
China Life Insurance Co. Ltd. (ADR) 6.36
Qihoo 360 Technology Co. Ltd. (ADR) 3.32
China Telecom Corporation Ltd. (H Shares) 3.29
Ctrip.com International (ADR) 3.19
China Unicom (Hong Kong) Ltd. (ADR) 3.12
Sector Weightings(3) -- as of 3/31/2014
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SECTOR (%)
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Energy 23.75
Information
Technology 21.41
Consumer
Discretionary 17.43
Telecommunication
Services 16.47
Financials 7.23
Health Care 3.67
Materials 3.45
Consumer Staples 2.98
Utilities 2.12
Industrials 1.49
(2)Source: BNY Mellon([R])
(3)Based on standard industry classifications
The Benchmark Index includes depositary receipts, which are quoted and traded in
U.S. dollars on The New York Stock Exchange (NYSE), The NYSE Amex and The NASDAQ
Stock Market (NASDAQ). Each depositary receipt generally represents an ownership
interest in shares (or fractions of a share) of an underlying stock that may be
quoted and traded in its local jurisdiction in a foreign currency. Depositary
receipts are included in the Benchmark Index based, among other things, on their
market capitalization and liquidity.
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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[TM] 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[TM] 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[TM] 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[TM] 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.
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 filed
with the SEC.
RBS China Trendpilot[TM] Index (USD), is the property of The Royal Bank of
Scotland plc, which has contracted with SandP Opco, LLC (a subsidiary of SandP
Dow Jones Indices LLC) ("SandP Dow Jones Indices") to maintain and calculate the
Index. SandP Dow Jones Indices shall have no liability for any errors or
omissions in calculating the Index. SandP([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 SandP Dow Jones Indices. "Calculated by SandP
Dow Jones Indices" and its related stylized mark(s) have been licensed for use
by RBSSI and its affiliates. The RBS China Trendpilot[TM] ETNs, are not
sponsored, endorsed, sold or promoted by SandP Dow Jones Indices, SPFS, Dow
Jones, their affiliates or their third party licensors, and neither SandP 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 April 21, 2014
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