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Filed pursuant to Rule 433 | Registration Statement Nos. 333-162219,
333-162219-01, 333-179685 and 333-179685-01
RBS Exchange Traded Notes [GRAPHIC OMITTED]
Frequently Asked Questions
What are RBS Exchange Traded Notes?
RBS Exchange Traded Notes (RBS ETNs) are unsecured and senior obligations of
either The Royal Bank of Scotland N.V. (RBS N.V.) or The Royal Bank of Scotland
plc (RBS plc). RBS ETNs are fully and unconditionally guaranteed by RBS Holdings
N.V. (RBS Holdings) or The Royal Bank of Scotland Group plc (RBS Group),
respectively. Any payment on the RBS ETNs is subject to the ability of the
applicable issuer and guarantor to pay their respective obligations as they
become due.
How do RBS ETNs differ from ETFs and Mutual Funds?
RBS ETNs, ETFs and mutual funds are all SEC-registered securities. However,
there are key differences among RBS ETNs, ETFs and mutual funds.
RBS ETNs ETFs Mutual Funds
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Type of The securities are unsecured and Equity securities of the issuer. Equity securities of the issuer.
Security senior obligations of the relevant Securities are registered under the Securities are registered under
issuer. Securities are registered Securities Act of 1933 and issuer the Securities Act of 1933 and
under the Securities Act of 1933. is registered under the Investment issuer is registered under the
Company Act of 1940. Investment Company Act of
1940.
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Legal Unsecured and senior obligations Equity ownership in the investment Equity ownership in the
Structure and of the relevant issuer with no rights company. Not FDIC insured. investment company. Not FDIC
Ownership to any specified pool of assets. Not insured.
FDIC insured.
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Investor Fees Annual investor fees apply. Fee Investors bear management Investors bear management
amount depends on the ETN fees and operating expenses, fees and operating expenses,
and will be disclosed in the which will vary by ETF. Brokerage which will vary by mutual fund.
applicable pricing supplement commissions will apply when ETF Investors may also pay or
and prospectus filed with the SEC. shares are bought or sold. bear sales loads (front-end or
Brokerage commissions will apply deferred), redemption fees,
when ETNs are bought or sold. account fees, purchase fees
and/or distribution and service
fees.
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Primary Risk Issuer credit risk and market risk. Tracking error and market risk. Market risk and, in the case of
index mutual funds, tracking
error.
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Liquidity -- Securities may be sold on an Securities may be sold on an No exchange liquidity.
Exchange exchange intraday at market price. exchange intraday at market price.
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Liquidity -- ETNs are repurchasable daily Retail investors may not redeem. Redeemable daily at the
Repurchase/ via broker-dealers at a specified Only broker-dealers that agree to net asset value (NAV) of the
Redemption repurchase price, subject to act as "authorized participants" mutual fund calculated as of
minimum size requirements. We (APs) of the ETF may redeem. the close of business. Certain
may charge a repurchase fee in ETF shares are redeemable daily investor fees may be payable
connection with certain ETNs. by APs at the net asset value upon redemption.
(NAV), calculated as of the close
of business, subject to minimum
size requirements. APs must pay
transaction fees in order to redeem.
Table continues on page 2
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RBS ETNs ETFs Mutual Funds
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Distributions Most ETNs do not pay periodic Yes (dividends/distributions by Yes (dividends/distributions by
distributions. We may make underlying portfolio securities held underlying portfolio securities
periodic distributions on certain by the ETF). held by the mutual fund).
ETNs and some ETNs may track
indices which index levels reflect
reinvestment of dividends, if any,
distributed by the underlying
companies.
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Maturity Typically 10-30 years. Unlimited. Unlimited.
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Short Sales Available subject to SEC rules. Available subject to SEC rules. No.
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Voting Rights No, except for changes to the Yes. Yes.
terms of the ETN.
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Tax Depends on the underlying market Depends on the assets held by the Depends on the assets held by
measure(s), coupon payments, ETF, distributions by the ETF and the mutual funds, distributions
if any, and when the ETN is sold, when the ETF shares are sold or by the mutual fund and when
redeemed or matures, among redeemed, among other factors. the mutual fund shares are
other factors. sold or redeemed, among
other factors.
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What are some of the market measures to which an RBS ETN can be linked?
[] The return on RBS ETNs is based on the performance of underlying market
measure(s) across various asset classes such as equity or commodity indices
and commodities, which are described in the pricing supplement and
prospectus applicable to your RBS ETN.
How do I buy an RBS ETN?
[] RBS ETNs are listed and traded on a U.S. securities exchange (currently,
NYSE Arca) and can be bought and sold during trading hours, in a similar
manner to buying or selling publicly traded stocks.
[] RBS ETNs can be purchased through your broker, financial advisor or an
online trading platform.
What happens if I buy and hold an RBS ETN to its maturity?
[] The applicable issuer will pay you an amount in cash equal to the daily
redemption value of your RBS ETN on the applicable valuation date.
[] The daily redemption value on the applicable valuation date will depend on
the performance of the underlying market measure(s) to which the RBS ETN is
linked, less applicable investor fees.
[] Payments are subject to the applicable issuer's (and in the case of the
guarantee, the applicable guarantor's) ability to pay.
Can I offer my RBS ETNs for repurchase by the issuer before their maturity
date?
[] If you own a minimum amount of a specific RBS ETN, you can offer to have
your RBS ETNs repurchased by the applicable issuer at the daily redemption
value through your broker, provided that your broker offers the minimum
repurchase amount for that RBS ETN.
[] The pricing supplement for a specific RBS ETN contains the repurchase
procedures for your broker to follow.
RBS Investor Products | ETN FAQ | page 2
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What is the daily redemption value of an RBS ETN?
[] The daily redemption value of an RBS ETN is the amount that would be
payable by the applicable issuer to the investor if the RBS ETN was
repurchased or redeemed by that issuer and that date was the applicable
valuation date.
[] The daily redemption value for an RBS ETN will depend on the performance of
the underlying market measure(s) to which the RBS ETN is linked, less
applicable investor fees.
[] The daily redemption value for each outstanding RBS ETN will be published
on www.rbs.com/etnUS.
Can an RBS ETN trade at a premium or discount to its daily redemption value or
indicative value?
[] If you sell RBS ETNs in the secondary market you will receive the market
price of the RBS ETNs, which may be more or less than the stated face
amount, the indicative value or the daily redemption value of your RBS
ETNs, and which may be more or less than what you paid for them.
[] For example, the issuer may decide to issue and sell additional RBS ETNs
from time to time at a price that is higher or lower than the stated face
amount, based on the indicative value of the RBS ETNs at that time.
[] The applicable issuer is under no obligation to issue or sell additional
RBS ETNs, and if that issuer does sell additional RBS ETNs, that issuer may
stop selling additional RBS ETNs for any reason. This could materially and
adversely affect the price and liquidity of the RBS ETNs in the secondary
market.
[] The RBS ETNs may trade at a premium if the applicable issuer suspends the
issuance of additional RBS ETNs. Paying a premium price over the indicative
value of the RBS ETNs could lead to significant losses.
[] Events such as a credit rating downgrade of the applicable issuer or
guarantor may adversely impact the market price of an RBS ETN, causing it
to trade at a discount to its daily redemption value or indicative value.
What is the tax treatment of an investment in an RBS ETN?
[] We expect to treat the RBS ETNs for U.S. federal income tax purposes as
prepaid financial contracts that are not debt. If this treatment is
respected, subject to any special considerations described in the
applicable pricing supplement (e.g., for ETNs with coupon payments and ETNs
linked to currencies):
[] you should not recognize taxable income or loss prior to the maturity
or disposition of your RBS ETNs;
[] your gain or loss on the RBS ETNs should be capital gain or loss; and
[] 1099s, not K-1s, would be the tax reporting forms received.
[] However, there is significant uncertainty about the tax treatment of
investments like the RBS ETNs. The Internal Revenue Service may take the
position, either on audit or by publishing generally applicable guidance,
that you must recognize taxable income during the period you hold RBS ETNs,
even though you receive no cash, and/or that your gain must be taxed as
ordinary income instead of capital gain. You should consult your tax
adviser regarding U.S. Federal tax consequences of an investment in the
ETNs (including possible alternative treatments) as well as tax
consequences arising under the laws of any state, local or non --U.S.
taxing jurisdiction.
RBS Investor Products | ETN FAQ | page 3
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What are some of the key risks to investing in RBS ETNs?
The applicable pricing supplement and prospectus for your RBS ETNs will describe
material risks related to an investment in RBS ETNs. These risks include the
following:
Credit risk of the relevant issuer and guarantor
[] RBS ETNs are unsecured and unsubordinated obligations of RBS N.V. or
RBS plc, as the case may be, and are fully and unconditionally
guaranteed by RBS Holdings or RBS Group, respectively. If the
applicable issuer fails to make any required payments on the RBS ETNs,
your receipt of such payments will depend on the ability of the
applicable guarantor to pay its obligations as they become due.
[] In addition, unlike ordinary debt securities, the RBS ETNs are not
principal protected and do not pay interest. The RBS ETNs are not bank
deposits and are not insured or guaranteed by the Federal Deposit
Insurance Corporation, the Deposit Insurance Fund or any other
government agency.
Market risk
[] The return on an RBS ETN will depend on the performance of the
underlying market measure(s) to which the RBS ETN is linked. You may
lose all or a significant amount of your investment in the RBS ETNs if
the level(s) of the underlying market measure(s) were to decrease
substantially.
Investor fees
[] The daily redemption value is the amount payable at maturity or upon
early repurchase or redemption of your RBS ETNs and is reduced by the
aggregate investor fee applicable to your RBS ETNs.
[] As a result, the level of the underlying market measure(s) to which
your RBS ETNs are linked must increase by an amount sufficient to
offset the aggregate investor fee in order for you to receive at least
the face amount of your investment at maturity or upon early
repurchase or redemption.
[] If the level(s) of the underlying market measures(s) were to decrease
or not increase sufficiently, you would receive less, and possibly
significantly less, than your initial investment at maturity or upon
early repurchase or redemption.
Liquidity risk
[] Even though RBS ETNs are expected to be listed on a U.S. securities
exchange, there is no guarantee that the listing will be maintained or
that a secondary market will develop. The applicable issuer is not
required to maintain any listing of RBS ETNs on any securities
exchange.
Restrictions on your ability to offer RBS ETNs for repurchase by the relevant
Issuer
[] Through your broker, you may offer RBS ETNs for repurchase by the
applicable issuer, subject to certain restrictions and procedures
described in the applicable pricing supplement.
Call risk
[] The applicable issuer also has the right to redeem your RBS ETNs, in
its sole discretion. If the applicable issuer elects to redeem your
RBS ETNs, you may not be able to reinvest your proceeds in a
comparable investment.
Uncertain tax treatment
[] Significant aspects of the U.S. federal income tax treatment of the
RBS ETNs are uncertain, and the Internal Revenue Service or a court
might not agree with the intended tax consequences described in the
applicable pricing supplement.
RBS Investor Products | ETN FAQ | page 4
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What are the differences among the trading price or market price, the
indicative value and the daily redemption value of an RBS ETN?
Term What does it mean? Trading Information How determined?
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Trading price The price at which you can buy or The "best bid" and the "best Trading generally occurs on the
or sell RBS ETNs in the secondary offer" are published continuously NYSE Arca at a price between
market price market. during regular exchange hours on the current "best bid" and "best
the NYSE Arca offer."
The "best bid" is the lowest price
at which an investor is offering to
sell RBS ETNs.
(Our obligation to repurchase
RBS ETNs at the daily redemption
value is intended to induce
arbitrageurs(1) to counteract any
trading of the RBS ETNs at a
price lower than their indicative
value, but there can be no
assurance that arbitrageurs(1) will
do so.)
The "best offer" is the highest
price at which an investor is
offering to purchase RBS ETNs.
(To the extent we stand ready
to issue and sell additional RBS
ETNs at their indicative value or
daily redemption value, we expect
arbitrageurs(1) will be induced to
counteract any trading of the RBS
* The market price of an RBS ETNs at a price higher than their
ETN will depend on the supply indicative value, but there can be
and demand for that RBS ETN, no assurance that arbitrageurs(1)
as well as various other factors, will do so. If we were to suspend
including market conditions the issuance of additional RBS
and the applicable issuer's and ETNs, the RBS ETNs might trade
guarantor's actual or perceived at a premium to their indicative
creditworthiness. value.)
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Intraday An intraday "indicative value" is During regular exchange hours The "indicative value" of the RBS
"indicative meant to approximate the intrinsic on the NYSE Arca ETNs at any given time equals:
value" economic value of the RBS ETNs. (and published every 15
The indicative value will generally seconds) [] the daily redemption value
not be the same as the daily on the immediately preceding
redemption value, because the valuation date, multiplied by
indicative value fluctuates with the [] the index factor at such time,
level(s) of the underlying market multiplied by
measure(s) and is not calculated [] the fee factor for the day on
at the same time as the daily which it is calculated.
redemption value (except at the
close on the applicable valuation The "index factor" and "fee
date). factor" are terms in the
applicable pricing supplement for
a particular RBS ETN.
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Daily The price we will pay holders at Daily on www.rbs.com/etnus The daily redemption value is
redemption maturity upon early repurchase determined using the same
value or upon redemption of the RBS formula as the indicative value,
ETNs. but it is calculated as of the
close on the applicable valuation
date. The applicable valuation
*The daily redemption value date occurs at least one day after
of an RBS ETN is calculated you confirm your offer to us to
by RBS Securities Inc., as repurchase or we deliver a notice
calculation agent, based on the to redeem.
performance of the underlying
market measure(s), reduced by
applicable fees, as specified
in the table above.
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((1) Arbitrageurs - One who profits from the differences in price when the
same, or extremely similar, security, currency, or commodity is traded on two
or more markets. The arbitrageur profits by simultaneously purchasing and
selling these securities to take advantage of pricing differentials (spreads)
created by market conditions.
RBS Investor Products | ETN FAQ | page 5
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www.rbs.com/etnUS The issuer, RBS N.V. and its guarantor, RBS Holdings, and the issuer, RBS plc and its guarantor RBS Group have filed separate registration statements (including prospectuses) with the U.S. Securities and Exchange Commission (SEC) for the offering of RBS ETNs to which this communication may relate. Before you invest in any RBS ETNs, you should read the relevant prospectus in the registration statement and other documents that have been filed with the SEC for more complete information about the relevant RBS entities and offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the relevant issuer, RBS Securities Inc. or any dealer participating in the offering will arrange to send you the relevant prospectus and pricing supplement at no charge if you request by calling 1-855-RBS-ETPS (toll free). Copyright [C] 2012 RBS Securities Inc. All rights reserved. RBS Securities Inc., a U.S. registered broker-dealer, member of FINRA and SIPC, is an indirect wholly-owned subsidiary of The Royal Bank of Scotland plc and an affiliate of RBS N.V. Dated June 27, 2012 |