Free Writing Prospectus
(To the Prospectus, the Prospectus Supplement and the Product Prospectus
Supplement, each dated September 14, 2021)
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Filed Pursuant to Rule 433
Registration No. 333-259205
October 7, 2021
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Royal Bank of Canada
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$
Capped Buffered Return Enhanced Notes
Due October 12, 2023
Linked to the EURO STOXX 50® Index
Senior Global Medium Term Notes, Series I
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The Notes are designed for investors who seek a return of 1.5 times the appreciation of the EURO STOXX 50® Index (the “Index”), subject to the Maximum Return set forth below. Investors should be willing
to forgo interest and dividend payments and, if the Index declines by more than 15%, be willing to lose some or all of their principal.
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Senior unsecured obligations of Royal Bank of Canada maturing October 12, 2023(a)(b) Any payments on the Notes are subject to our credit risk.
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Minimum denominations of $10,000 and integral multiples of $1,000 in excess thereof.
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The Notes are expected to price on or about October 7, 2021(b) (the “Pricing Date”) and are expected to be issued on or about October 13, 2021(b) (the “issue date”).
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Key Terms
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Terms used in this free writing prospectus, but not defined herein, will have the meanings ascribed to them in the product prospectus supplement.
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Issuer:
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Royal Bank of Canada
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Reference Asset:
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EURO STOXX 50® Index (Bloomberg ticker symbol “SX5E”)
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Leverage Factor:
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1.50
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Payment at Maturity:
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If the Final Level is greater than the Initial Level, you will receive a cash payment that provides you with a return equal to the Percentage Change multiplied by the Leverage
Factor. Accordingly, if the Percentage Change is positive, your payment per $1,000 in principal amount of the Notes will be calculated as follows:
$1,000 + [$1,000 x (Percentage Change x Leverage Factor)]
However, the payment on the Notes will not exceed $1,279.00 for each $1,000 in principal amount.
If the Final Level is equal to or less than the Initial Level but greater than or equal to the Buffer Level, resulting in a Percentage Change that is equal to or less than 0%
but greater than or equal -15%, you will receive the principal amount of your Notes at maturity.
If the Final Level is less than the Buffer Level, you will lose approximately 1.1765% of the principal amount of your Notes for every 1% that the Final Level is less than the
Buffer Level. Accordingly, if the Percentage Change is less than -15%, your payment per $1,000 in principal amount of the Notes will be calculated as follows:
$1,000 + [$1,000 x (Percentage Change + Buffer Percentage) x Downside Multiplier]
If the Final Level is less than the Buffer Level, you will lose approximately 1.1765% of the principal amount of your Notes for every 1%
that the Percentage Change is less than 15%. Any payment on the Notes, including any repayment of principal, is subject to the creditworthiness of the Issuer and is not guaranteed by any third party.
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Percentage Change:
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The performance of the Index from the Initial Level to the Final Level, calculated as follows:
Final Level – Initial Level
Initial Level
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Maximum Return:
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$1,279.00 per $1,000 in principal amount of the Notes.
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Buffer Level:
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85% of the Initial Level.
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Buffer Percentage:
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15%
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Downside Multiplier:
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1 divided by 0.85, or approximately 1.1765.
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Initial Level:
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The closing level of the Index on the Pricing Date.
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Final Level:
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The arithmetic average of the closing levels of the Index on each of the Valuation Dates.
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Valuation Dates:
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October 2, 2023, October 3, 2023, October 4, 2023, October 5, 2023 and October 6, 2023(a)(b)
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Maturity Date:
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October 12, 2023(a)(b)
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Calculation Agent:
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RBC Capital Markets, LLC
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CUSIP/ISIN:
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78016F3G7/US78016F3G77
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Estimated Value:
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The initial estimated value of the Notes as of the Pricing Date is expected to be between $941.45 and $991.45 per $1,000 in principal amount, and will be less than the price to
public. The final pricing supplement relating to the Notes will set forth our estimate of the initial value of the Notes as of the Pricing Date. The actual value of the Notes at any time will reflect many factors, cannot be predicted with
accuracy, and may be less than this amount.
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Price to Public
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Underwriting Commission1
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Proceeds to Royal Bank of Canada
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Per Note
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$1,000
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$0
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$1,000
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Total
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$
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$0
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$
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RBC Capital Markets, LLC
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JPMorgan Chase Bank, N.A.
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J.P. Morgan Securities LLC
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Placement Agents
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Final Level
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Percentage Change
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Payment at Maturity
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Total Return on the Notes
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1,500.00
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50.00%
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$1,279.00
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27.90%
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1,250.00
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25.00%
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$1,279.00
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27.90%
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1,186.00
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18.60%
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$1,279.00
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27.90%
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1,150.00
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15.00%
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$1,225.00
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22.50%
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1,100.00
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10.00%
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$1,150.00
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15.00%
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1,050.00
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5.00%
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$1,075.00
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7.50%
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1,025.00
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2.50%
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$1,037.50
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3.75%
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1,000.00
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0.00%
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$1,000.00
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0.00%
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950.00
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-5.00%
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$1,000.00
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0.00%
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900.00
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-10.00%
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$1,000.00
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0.00%
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850.00
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-15.00%
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$1,000.00
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0.00%
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800.00
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-20.00%
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$941.18
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-5.88%
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700.00
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-30.00%
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$823.53
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-17.65%
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600.00
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-40.00%
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$705.88
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-29.41%
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500.00
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-50.00%
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$588.24
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-41.18%
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400.00
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-60.00%
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$470.59
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-52.94%
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300.00
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-70.00%
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$352.94
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-64.71%
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200.00
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-80.00%
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$235.29
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-76.47%
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100.00
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-90.00%
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$117.65
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-88.24%
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0.00
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-100.00%
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$0.00
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-100.00%
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Appreciation Potential — The Notes provide the opportunity to enhance index returns by multiplying a positive Percentage Change by the Leverage Factor, up to the Maximum
Return.
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Limited Protection Against Loss — Payment at maturity of the principal amount of the Notes is protected against a decline in the Final Level, as compared to the Initial
Level, of up to 15%. If the Final Level is less than the Initial Level by more than 15%, you will lose an amount equal to approximately 1.1765% of the principal amount of your Notes for every 1% that the Percentage Change is less than 15%.
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You May Lose Some or All of the Principal Amount at Maturity — Investors in the Notes could lose all or a substantial portion of their principal amount if the level of the
Index decreases by more than 15%. If the Percentage Change is less than -15%, the payment that you will receive at maturity will represent a loss of approximately 1.1765% of the principal amount for each 1% that the Final Level is less than
the Buffer Level, and you could lose up to 100% of the principal amount.
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The Notes Do Not Pay Interest and Your Return May Be Lower than the Return on a Conventional Debt Security of Comparable Maturity — There will be no periodic interest
payments on the Notes as there would be on a conventional fixed-rate or floating-rate debt security having the same maturity. The return that you will receive on the Notes, which could be negative, may be less than the return you could earn
on other investments. Even if your return is positive, your return may be less than the return you would earn if you bought one of our conventional senior interest bearing debt securities.
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Your Potential Payment at Maturity Is Limited — The Notes will provide less opportunity to participate in the appreciation of the Index than an investment in a security
linked to the Index providing full participation in the appreciation, because the return on the Notes if the Percentage Change is positive will not exceed the Maximum Return. Accordingly, your return on the Notes may be less than your
return would be if you made an investment in a security directly linked to the positive performance of the Index.
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Payments on the Notes Are Subject to Our Credit Risk, and Changes in Our Credit Ratings Are Expected to Affect the Market Value of the Notes — The Notes are our senior
unsecured debt securities. As a result, your receipt of the amount due on the maturity date is dependent upon our ability to repay our obligations at that time. This will be the case even if the level of the Index increases after the
Pricing Date. No assurance can be given as to what our financial condition will be at the maturity of the Notes.
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The Tax Treatment of the Notes Is Uncertain — Significant aspects of the tax treatment of an investment in the Notes are uncertain. You should consult your tax adviser
about your tax situation.
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There May Not Be an Active Trading Market for the Notes—Sales in the Secondary Market May Result in Significant Losses — There may be little or no secondary market for the
Notes. The Notes will not be listed on any securities exchange. RBCCM and our other affiliates may make a market for the Notes; however, they are not required to do so. RBCCM or any other affiliate of ours may stop any market-making
activities at any time. Even if a secondary market for the Notes develops, it may not provide significant liquidity or trade at prices advantageous to you. We expect that transaction costs in any secondary market would be high. As a result,
the difference between bid and asked prices for your Notes in any secondary market could be substantial.
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Many Economic and Market Factors Will Impact the Value of the Notes — In addition to the level of the Index on any day, the value of the Notes will be affected by a number
of economic and market factors that may either offset or magnify each other, including:
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the expected volatility of the Index;
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the time to maturity of the Notes;
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the dividend rate on the securities included in the Index;
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interest and yield rates in the market generally;
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the exchange rate between the U.S. dollar and the euro;
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a variety of economic, financial, political, regulatory or judicial events; and
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our creditworthiness, including actual or anticipated downgrades in our credit ratings.
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The Initial Estimated Value of the Notes Will Be Less than the Price to the Public — The initial estimated value that will be set forth in the final pricing supplement for
the Notes does not represent a minimum price at which we, RBCCM or any of our affiliates would be willing to purchase the Notes in any secondary market (if any exists) at any time. If you attempt to sell the Notes prior to maturity, their
market value may be lower than the price you paid for them and the initial estimated value. This is due to, among other things, changes in the level of the Index, the borrowing rate we pay to issue securities of this kind, and the inclusion
in the price to the public of the costs relating to our hedging of the Notes. These factors, together with various credit, market and economic factors over the term of the Notes, are expected to reduce the price at which you may be able to
sell the Notes in any secondary market and will affect the value of the Notes in complex and unpredictable ways. Assuming no change in market conditions or any other relevant factors, the price, if any, at which you may be able to sell your
Notes prior to maturity may be less than your original purchase price. The Notes are not designed to be short-term trading instruments. Accordingly, you should be able and willing to hold your Notes to maturity.
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The Initial Estimated Value of the Notes That We Will Provide in the Final Pricing Supplement Will Be an Estimate Only, Calculated as of the Pricing Date — The value of the
Notes at any time after the Pricing Date will vary based on many factors, including changes in market conditions, and cannot be predicted with accuracy. As a result, the actual value you would receive if you sold the Notes in any secondary
market, if any, should be expected to differ materially from the initial estimated value of your Notes.
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We and Our Affiliates May Have Adverse Economic Interests to the Holders of the Notes — We, RBCCM and our other respective affiliates trade the securities represented by
the Index, and other financial instruments related to the Index, on a regular basis, for their accounts and for other accounts under our or their management. We, RBCCM and our other affiliates may also issue or underwrite or assist
unaffiliated entities in the issuance or underwriting of other securities or financial instruments that relate to the Index. To the extent that we or any of our affiliates serves as issuer, agent or underwriter for such securities or
financial instruments, our or their interests with respect to such products may be adverse to those of the holders of the Notes. Any of these trading activities could potentially affect the performance of the Index and, accordingly, could
affect the value of the Notes, and the amounts, if any, payable on the Notes.
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We May Issue Research That Is Inconsistent with an Investment in the Notes — We or our affiliates may issue research reports on securities that are, or may become,
components of the Index. We may also publish research from time to time on financial markets and other matters that may influence the levels of the Index or the value of the Notes, or express opinions or provide recommendations that may be
inconsistent with the purchasing or holding the Notes or with the investment view implicit in the Notes or the Index. You should make your own independent investigation of the merits of investing in the Notes and the Index.
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An Investment in the Notes Is Subject to Risks Relating to Non-U.S. Securities Markets — Because foreign companies or foreign equity securities included in the Reference
Asset are publicly traded in the applicable foreign countries and are denominated in euros, an investment in the Notes involves particular risks. For example, the non-U.S. securities markets may be more volatile than the U.S. securities
markets, and market developments may affect these markets differently from the U.S. or other securities markets. Direct or indirect government intervention to stabilize the securities markets outside the U.S., as well as cross-shareholdings
in certain companies, may affect trading prices and trading volumes in those markets. Also, the public availability of information concerning the foreign issuers may vary depending on their home jurisdiction and the reporting requirements
imposed by their respective regulators. In addition, the foreign issuers may be subject to accounting, auditing and financial reporting standards and requirements that differ from those applicable to U.S. reporting companies.
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The Payments on the Notes Will Not Be Adjusted for Changes in Exchange Rates Relative to the U.S. Dollar Even Though the Securities Comprising the Index Are Traded in Euros and
the Notes Are Denominated in U.S. Dollars — Although the equity securities comprising the Index are traded in euros, and the Notes are denominated in U.S. dollars, the amount payable on the Notes at maturity, if any, will not be
adjusted for changes in the exchange rate between the U.S. dollar and the euro. Changes in exchange rates, however, may also reflect changes in the applicable non-U.S. economies that in turn may affect the level of the Index, and therefore
the Notes. The amount we pay in respect of the Notes on the maturity date, if any, will be determined solely in accordance with the procedures described in this document.
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You Will Not Have Any Rights to the Securities Included in the Reference Asset — As a holder of the Notes, you will not have voting rights or rights to receive cash
dividends or other distributions or other rights that holders of securities included in the Reference Asset would have. The Final Level will not reflect any dividends paid on the securities included in the Reference Asset, and accordingly,
any positive return on the Notes may be less than the potential positive return on those securities.
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The Payments on the Notes Are Subject to Market Disruption Events and Adjustments — The payment at maturity and each Valuation Date are subject to adjustment as described
in the product prospectus supplement. For a description of what constitutes a market disruption event as well as the consequences of that market disruption event, see “General Terms of the Notes-Market Disruption Events” in the product
prospectus supplement.
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Reference Asset =
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Free float market capitalization of the Index
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Divisor
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sponsor, endorse, sell, or promote the Notes;
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recommend that any person invest in the Notes offered hereby or any other securities;
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have any responsibility or liability for or make any decisions about the timing, amount, or pricing of the Notes;
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have any responsibility or liability for the administration, management, or marketing of the Notes; or
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consider the needs of the Notes or the holders of the Notes in determining, composing, or calculating the Index, or have any obligation to do so.
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STOXX does not make any warranty, express or implied, and disclaims any and all warranty concerning:
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the results to be obtained by the Notes, the holders of the Notes or any other person in connection with the use of the Index and the data included in the Index;
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the accuracy or completeness of the Index and its data; and
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the merchantability and the fitness for a particular purpose or use of the Index and its data;
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STOXX will have no liability for any errors, omissions, or interruptions in the Index or its data; and
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Under no circumstances will STOXX be liable for any lost profits or indirect, punitive, special, or consequential damages or losses, even if STOXX knows that they might occur.
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