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Share Name | Share Symbol | Market | Type |
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Royal Bank of Canada | NYSE:RY | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.65 | 0.64% | 101.82 | 102.04 | 100.96 | 101.84 | 1,595,965 | 21:00:02 |
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Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-227001
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Pricing Supplement
Dated July 27, 2021
to the Product Prospectus Supplement Dated September 10,
2018, the Prospectus Supplement Dated September 7, 2018
and the Prospectus Dated September 7, 2018
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$981,000
Auto-Callable Fixed Coupon Barrier Notes
Linked to the VanEck
Vectors® Gold Miners
ETF, Due August 1, 2022
Royal Bank of Canada
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Issuer:
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Royal Bank of Canada
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Stock Exchange Listing:
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None
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Trade Date:
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July 27, 2021
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Principal Amount:
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$1,000 per Note
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Issue Date:
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July 30, 2021
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Maturity Date:
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August 1, 2022
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Coupon Payment:
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Coupons on the Notes will be paid monthly, beginning on September 1, 2021, at the rate of 5.50% per annum.
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Final Price:
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The closing price of the Reference Asset on the Valuation Date.
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Automatic Call:
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If the closing price of the Reference Asset on any quarterly Observation Date beginning in January 2022 is greater than or equal to the Initial Price, the Notes will be automatically called for
100% of the principal amount, plus the Coupon applicable to the corresponding Observation Date.
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Payment at Maturity (if
held to maturity):
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For each $1,000 in principal amount of the Notes, the investor will receive $1,000 plus the Coupon Payment due at maturity, unless the Final Price is less than the Barrier Price.
If the Final Price is less than the Barrier Price, then the investor will receive, instead of the principal amount, in addition to the Coupon Payment due at maturity, for each $1,000 in
principal amount, an amount of cash that represents the percentage decrease in the Reference Asset from the Initial Price to the Final Price.
Investors could lose some or all of their principal amount if the Final Price of the Reference Asset is less than the Barrier Price.
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Monitoring Period:
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The Valuation Date only.
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Reference Asset
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Coupon
Rate
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Initial
Price
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Barrier Price
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CUSIP / ISIN
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Principal
Amount
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Price to
Public(1)
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Underwriting
Discounts and
Commissions(1)
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Proceeds to
Royal Bank of
Canada
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VanEck Vectors® Gold Miners ETF (GDX)
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5.50%
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$33.68
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$25.26, which is 75% of the Initial Price
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78016EFV4 / US78016EFV48
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$981,000
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100%
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$9,810
1%
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$971,190
99%
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General:
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This pricing supplement relates to an offering of Auto-Callable Fixed Coupon Barrier Notes (the “Notes”) linked to the VanEck Vectors® Gold Miners ETF.
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Issuer:
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Royal Bank of Canada (“Royal Bank”)
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Trade Date (Pricing
Date):
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July 27, 2021
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Issue Date:
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July 30, 2021
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Valuation Date:
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July 27, 2022
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Maturity Date:
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August 1, 2022
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Denominations:
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Minimum denomination of $1,000, and integral multiples of $1,000 thereafter.
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Designated Currency:
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U.S. Dollars
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Coupon Payment:
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The Notes will pay a monthly coupon at the rate of 5.50% per annum.
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Coupon Payment
Dates:
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September 1, 2021, September 30, 2021, November 1, 2021, December 2, 2021, December 30, 2021, February 1, 2022, March 3, 2022, March 31, 2022, May 2, 2022, June 2, 2022,
June 30, 2022 and the Maturity Date.
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Record Dates:
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The record date for each Coupon Payment Date will be one business day prior to that scheduled Coupon Payment Date; provided, however, that the Coupon Payment at maturity
or upon an automatic call will be payable to the person to whom the applicable payment is due.
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Automatic Call:
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If the closing price of the Reference Asset on any quarterly Observation Date is greater than or equal to the Initial Price, the
Notes will be automatically called for 100% of the principal amount, plus the Coupon payable on the immediatley following Call Setttlement Date.
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Observation Dates:
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January 27, 2022, April 27, 2022 and July 27, 2022.
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Call Settlement Dates:
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The Coupon Payment Date occurring immediately after the applicable Observation Date.
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Initial Price:
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The closing price of the Reference Asset on the Trade Date, as set forth on the cover page of this document.
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Barrier Price:
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75% of the Initial Price, as set forth on the cover page of this document.
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Final Price:
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The closing price of the Reference Asset on the Valuation Date.
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Payment at Maturity (if
held to maturity):
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For each $1,000 in principal amount of the Notes, the investor will receive $1,000 plus the Coupon Payment due at maturity, unless the Final Price is less than the Barrier Price. If the Final
Price is less than the Barrier Price, then the investor will receive at maturity, in addition to the Coupon Payment due at maturity, for each $1,000 in principal amount of the Notes, an amount equal to:
$1,000 + ($1,000 x Percentage Change)
The amount of cash that you would receive in this case will be less than your principal amount, if anything, resulting in a loss that is proportionate to the decline of the Reference Asset from
the Trade Date to the Valuation Date.
Investors in the Notes could lose some or all of their principal amount if the Final Price of the Reference Asset is less than the Barrier Price.
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Percentage Change:
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Final Price – Initial Price
Initial Price
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Monitoring Period:
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The Valuation Date. The price of the Reference Asset between the Trade Date and the Valuation Date will not impact the Payment at Maturity.
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Monitoring Method:
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Close of Trading Day
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Calculation Agent:
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RBC Capital Markets, LLC (“RBCCM”)
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U.S. Tax Treatment:
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By purchasing a Note, each holder agrees (in the absence of a change in law, an administrative determination or a judicial ruling to the contrary) to treat the Notes as
an investment unit consisting of (i) a non-contingent debt instrument issued by us to you and (ii) a put option with respect to the Reference Asset written by you and purchased by us.
However, the U.S. federal income tax consequences of your investment in the Notes are uncertain and the Internal Revenue Service could assert that the Notes should be taxed in a manner
that is different from that described in the preceding sentence. Please see the section below, “Supplemental Discussion of U.S. Federal Income Tax Consequences,” and the discussion (including the opinion of our special tax counsel) in the
product prospectus supplement dated September 10, 2018 under “Supplemental Discussion of U.S. Federal Income Tax Consequences,” which apply to the Notes. Please note that references in that section of the product prospectus supplement to
Morrison & Foerster LLP shall be deemed to refer to Ashurst LLP.
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Secondary Market:
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RBCCM (or one of its affiliates), though not obligated to do so, may maintain a secondary market in the Notes after the issue date. The amount that you may receive upon
sale of your Notes prior to maturity may be less than the principal amount.
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Listing:
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The Notes will not be listed on any securities exchange.
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Settlement:
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DTC global (including through its indirect participants Euroclear and Clearstream, Luxembourg as described under “Description of Debt Securities—Ownership and Book-Entry
Issuance” in the prospectus dated September 7, 2018).
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Terms Incorporated in
the Master Note:
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All of the terms of the Notes appearing on the cover page and above the item captioned “Secondary Market” on pages P-2 and P-3 of this pricing supplement, and the terms appearing under the
caption “General Terms of the Notes” in the product prospectus supplement, as modified by this pricing supplement.
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You May Lose All or a Portion of the Principal Amount at Maturity — Investors in the Notes could lose all or a substantial portion of their principal amount if there is a
decline in the closing price of the Reference Asset between the Trade Date and the Valuation Date. If the Notes are not automatically called, and the Final Price is less than the Barrier Price, the amount of cash that you receive at maturity
will represent a loss of your principal that is proportionate to the decline in the closing price of the Reference Asset from the Trade Date to the Valuation Date. The Coupon Payments on the Notes may not be sufficient to compensate for any
such loss.
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The Payments on the Notes Are Limited — The payments on the Notes will be limited to the principal amount, plus the Coupon Payments due on the Notes. Accordingly, your
return on the Notes may be less than your return would be if you made an investment in the Reference Asset or in a security directly linked to the positive performance of the Reference Asset.
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The Notes Are Subject to an Automatic Call — If on any Observation Date beginning in January 2022, the closing price of the Reference Asset is greater than or equal to the
Initial Price, then the Notes will be automatically called. If the Notes are automatically called, then, on the applicable Call Settlement Date, for each $1,000 in principal amount, you will receive $1,000 plus the Coupon otherwise due on the
applicable Call Settlement Date. You will not receive any Coupons after the Call Settlement Date. You may be unable to reinvest your proceeds from the automatic call in an investment with a return that is as high as the return on the Notes
would have been if they had not been called.
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Your Return May Be Lower than the Return on a Conventional Debt Security of Comparable 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. Your return may be less than the return you would earn if you purchased one of our conventional senior interest bearing debt securities.
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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, the amounts due on each payment date are dependent upon our ability to repay our obligations at the applicable time. This will be the case even if the price of the Reference Asset increases after the
Trade Date. No assurance can be given as to what our financial condition will be during the term of the Notes.
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The Payments on the Notes Are Subject to Postponement due to Market Disruption Events - The payment at maturity and the 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—Consequences of Market Disruption Events" in
the product prospectus supplement.
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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 of our other affiliates 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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The Initial Estimated Value of the Notes Is Less than the Price to the Public — The initial estimated value that is set forth on the cover page of this pricing supplement
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 price of the Reference Asset, the borrowing rate we pay to issue securities of this kind, and the inclusion in
the price to the public of the underwriting discount and the estimated 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, as any such sale price would not be expected to include the underwriting discount and the hedging costs relating to the Notes. In
addition to bid-ask spreads, the value of the Notes determined by RBCCM for any secondary market price is expected to be based on the secondary rate rather than the internal funding rate used to price the Notes and determine the initial
estimated value. As a result, the secondary price will be less than if the internal funding rate was used. 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 on the Cover Page of this Pricing Supplement Is an Estimate Only, Calculated as of the Time the Terms of the Notes Were Set — The
initial estimated value of the Notes is based on the value of our obligation to make the payments on the Notes, together with the mid-market value of the derivative embedded in the terms of the Notes. See “Structuring the Notes” below. Our
estimate is based on a variety of assumptions, including our credit spreads, expectations as to dividends, interest rates and volatility, and the expected term of the Notes. These assumptions are based on certain forecasts about future
events, which may prove to be incorrect. Other entities may value the Notes or similar securities at a price that is significantly different than we do.
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Owning the Notes Is Not the Same as Owning the Reference Asset — The return on your Notes is unlikely to reflect the return you would realize if you actually owned the
Reference Asset. For instance, you will not receive or be entitled to receive any dividend payments or other distributions on the Reference Asset during the term of your Notes. As an owner of the Notes, you will not have voting rights or any
other rights that holders of the Reference Asset may have. Furthermore, the Reference Asset may appreciate substantially during the term of the Notes, while your potential return will be limited to the Coupon Payment due at maturity.
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There Is No Affiliation Between the Investment Advisor or the Index Sponsor and RBCCM, and RBCCM Is Not Responsible for any Disclosure by the Investment Advisor or the Index Sponsor
— We are not affiliated with the investment adviser of the Reference Asset or the index sponsor of its underlying index. However, we and our affiliates may currently, or from time to time in the future, engage in business with these
entities. Nevertheless, neither we nor our affiliates assume any responsibilities for the accuracy or the completeness of any information that any other entity prepares. You, as an investor in the Notes, should make your own investigation
into the Reference Asset and the companies in which it invests. None of these companies are involved in this offering, and have no obligation of any sort with respect to your Notes. These companies have no obligation to take your interests
into consideration for any reason, including when taking any corporate actions that might affect the value of your Notes.
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The Policies of the Reference Asset’s Investment Adviser Could Affect the Amount Payable on the Notes and Their Market Value — The policies of the Reference Asset’s
investment adviser concerning the management of the Reference Asset, additions, deletions or substitutions of the securities held by the Reference Asset could affect the market price of shares of the Reference Asset and, therefore, the amount
payable on the Notes and the market value of the Notes. The amount payable on the Notes and their market value could also be affected if the Reference Asset’s investment adviser changes these policies, for example, by changing the manner in
which it manages the Reference Asset, or if the Reference Asset’s investment adviser discontinues or suspends maintenance of the Reference Asset, in which case it may become difficult to determine the market value of the Notes. The Reference
Asset’s investment adviser have no connection to the offering of the Notes and have no obligations to you as an investor in the Notes in making its decisions regarding the Reference Asset.
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Changes that Affect the Underlying Index of the Reference Asset Will Affect the Market Value of the Notes and the Payments on the Notes — The policies of the sponsor of the
underlying index of the Reference Asset concerning the calculation of that index, additions, deletions or substitutions of the components of that index and the manner in which changes affecting those components, such as stock dividends,
reorganizations or mergers, may be reflected in that index and, therefore, could affect the share price of the Reference Asset, the amount payable on the Notes, if applicable, and the market value of the Notes prior to maturity. The amount
payable on the Notes and their market value could also be affected if the sponsor changes these policies, for example, by changing the manner in which it calculates the index, or if the calculation or publication of the index is discontinued
or suspended.
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The Reference Asset and its Underlying Index Are Different — The performance of the Reference Asset may not exactly replicate the performance of its underlying index,
because the Reference Asset will reflect transaction costs and fees that are not included in the calculation of its underlying index. It is also possible that the performance of the Reference Asset may not fully replicate or may in certain
circumstances diverge significantly from the performance of its underlying index due to the temporary unavailability of certain securities in the secondary market, the performance of any derivative instruments contained in such Reference
Asset or due to other circumstances. The Reference Asset may use futures contracts, options, swap agreements, currency forwards and repurchase agreements in seeking performance that corresponds to its underlying index and in managing cash
flows.
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An Investment in the Notes Is Subject to Management Risks — The Reference Asset is not managed according to traditional methods of ‘‘active’’ investment management, which
involve the buying and selling of securities based on economic, financial and market analysis and investment judgment. Instead, the Reference Asset, utilizing a ‘‘passive’’ or indexing investment approach, attempts to approximate the
investment performance of its underlying index by investing in a portfolio of securities that generally replicate its underlying index. Therefore, unless a specific security is removed from its underlying index, the Reference Asset generally
would not sell a security because the security’s issuer was in financial trouble. In addition, the Reference Asset
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An Investment in the Notes Is Subject to Risks Associated with the Gold and Silver Mining Industries — All or substantially all of the stocks held by the GDX are issued by
gold or silver mining companies. As a result, the stocks that will determine the performance of the GDX are concentrated in one sector. Although an investment in the Notes will not give holders any
ownership or other direct interests in the stocks held by the GDX, the return on the Notes will be subject to certain risks associated with a direct equity investment in gold or silver mining companies.
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There Are Risks Associated with Investments in Securities Linked to the Value of Foreign Equity Securities — The GDX includes equity
securities issued by non-U.S. companies. An investment in securities linked to the value of non-U.S. equity securities involves particular risks. Non-U.S. securities markets may be more volatile than U.S. securities markets, and market
developments may affect non-U.S. securities markets differently from the U.S. securities markets. Direct or indirect government intervention to stabilize these non-U.S. securities markets, as well as cross shareholdings among non-U.S.
companies, may affect trading prices and volumes in those markets. Also, there is generally less publicly available information in the U.S. about non-U.S. companies than about those companies that are subject to the reporting requirements of
the SEC, and non-U.S. companies are subject to accounting, disclosure, auditing and financial reporting standards and requirements that differ from those applicable to U.S. reporting companies.
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The Notes Are Subject to Exchange Rate Risk — Because securities held by the GDX are traded in currencies other than U.S. dollars, and
the Notes are denominated in U.S. dollars, the amount payable on the Notes at maturity may be exposed to fluctuations in the exchange rate between the U.S. dollar and each of the currencies in which those securities are denominated. These
changes in exchange rates may reflect changes in various non-U.S. economies that in turn may affect the payment on the Notes at maturity. An investor’s net exposure will depend on the extent to which the currencies in which the relevant
securities are denominated either strengthen or weaken against the U.S. dollar and the relative weight of each security.
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You Must Rely on Your Own Evaluation of the Merits of an Investment Linked to the Reference Asset — In the ordinary course of their business, our affiliates may have
expressed views on expected movement in the Reference Asset or the equity securities that they represent, and may do so in the future. These views or reports may be communicated to our clients and clients of our affiliates. However, these
views are subject to change from time to time. Moreover, other professionals who transact business in markets relating to the Reference Asset may at any time have significantly different views from those of our affiliates. For these reasons,
you are encouraged to derive information concerning the Reference Asset from multiple sources, and you should not rely solely on views expressed by our affiliates.
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Our Business Activities May Create Conflicts of Interest — We and our affiliates expect to engage in trading activities related to the
Reference Asset or the securities held by the Reference Asset that are not for the account of holders of the Notes or on their behalf. These trading activities may present a conflict between the holders’ interests in the Notes and the
interests we and our affiliates will have in their proprietary accounts, in facilitating transactions, including options and other derivatives transactions, for their customers and in accounts under their management. These trading activities,
if they influence the prices of the Reference Asset, could be adverse to the interests of the holders of the Notes. We and one or more of our affiliates may, at present or in the future, engage in business with GDX or the issuers of the
securities held by GDX, including making loans to or providing advisory services. These services could include investment banking and merger and acquisition advisory services. These activities may present a conflict between our or one or more
of our affiliates’ obligations and your interests as a holder of the Notes. Moreover, we and our affiliates may have published, and in the future expect to publish, research reports with respect to the Reference Asset. This research is
modified from time to time without notice and may express opinions or provide recommendations that are inconsistent with purchasing or holding the Notes. Any of these activities by us or one or more of our affiliates may affect the price of
the Reference Asset, and, therefore, the market value of the Notes.
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(1) |
the weight of any single component security may not account for more than 20% of the total value of the Underlying Index;
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(2) |
the component securities are split into two subgroups–large and small, which are ranked by market capitalization weight in the Underlying Index. Large securities are defined as having a starting index weight greater than or equal to 5%.
Small securities are defined as having a starting index weight below 5%; and
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the final aggregate weight of those component securities which individually represent more than 4.5% of the total value of the Underlying Index may not account for more than 45% of the total index value.
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P-18
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RBC Capital Markets, LLC
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1 Year Royal Bank of Canada Chart |
1 Month Royal Bank of Canada Chart |
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