Obligation Royal Bank of Canada 0% ( US78014K1390 ) en USD

Société émettrice Royal Bank of Canada
Prix sur le marché 22.78 %  ▲ 
Pays  Canada
Code ISIN  US78014K1390 ( en USD )
Coupon 0%
Echéance 31/12/2024 - Obligation échue



Prospectus brochure de l'obligation Royal Bank of Canada US78014K1390 en USD 0%, échue


Montant Minimal 1 000 USD
Montant de l'émission 3 289 000 USD
Cusip 78014K139
Notation Standard & Poor's ( S&P ) N/A
Notation Moody's N/A
Description détaillée La Banque Royale du Canada (RBC) est une institution financière multinationale canadienne offrant une large gamme de services financiers, incluant les services bancaires aux particuliers et aux entreprises, la gestion de patrimoine, les marchés des capitaux et l'assurance.

L'Obligation émise par Royal Bank of Canada ( Canada ) , en USD, avec le code ISIN US78014K1390, paye un coupon de 0% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 31/12/2024







424B2 1 form424b2.htm 5Y TRIGGER GEARS 78014K139
PRICING SUPPLEMENT

Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-227001
Dated December 26, 2019
Royal Bank of Canada Trigger GEARS
$ 3 ,2 8 8 ,5 3 0 Se c urit ie s Link e d t o t he S& P 5 0 0 ® I nde x due on De c e m be r 3 1 , 2 0 2 4
I nve st m e nt De sc ript ion
Trigger GEARS are unconditional, unsecured and unsubordinated debt securities issued by Royal Bank of Canada with returns linked to the performance of the S&P 500® Index (the "Underlying") (each, a "Security" and collectively, the
"Securities"). If the Underlying Return is positive, we will repay the principal amount at maturity plus pay a return equal to the Upside Gearing of 1.475 times the Underlying Return. If the Underlying Return is zero or negative, but the Final
Underlying Level is greater than or equal to the Downside Threshold, we will pay you the principal amount at maturity. If the Final Underlying Level is less than the Downside Threshold, we will pay less than the full principal amount at maturity, if
anything, resulting in a loss on your initial investment that is proportionate to the negative performance of the Underlying over the term of the Securities, and you may lose up to 100% of your initial investment. The Securities are not subject to
conversion into our common shares under subsection 39.2(2.3) of the Canada Deposit Insurance Corporation Act. I nve st ing in t he Se c urit ie s involve s signific a nt risk s. T he Se c urit ie s do not pa y divide nds or int e re st . Y ou
m a y lose som e or a ll of your princ ipa l a m ount . T he c ont inge nt re pa ym e nt of princ ipa l a pplie s only if you hold t he Se c urit ie s t o m a t urit y. Any pa ym e nt on t he Se c urit ie s, inc luding a ny re pa ym e nt of
princ ipa l, is subje c t t o our c re dit w ort hine ss. I f w e w e re t o de fa ult on our pa ym e nt obliga t ions, you m a y not re c e ive a ny a m ount s ow e d t o you unde r t he Se c urit ie s a nd you c ould lose your e nt ire
inve st m e nt . T he Se c urit ie s w ill not be list e d on a ny se c urit ie s e x c ha nge .
Fe a t ure s

K e y Da t e s
?
Enha nc e d Grow t h Pot e nt ia l -- At maturity, if the Underlying Return is positive, we will pay you the principal amount plus a return
Trade Date
December 26, 2019
equal to the Upside Gearing times the Underlying Return. If the Underlying Return is negative, investors may be exposed to the negative
Settlement Date
December 31, 2019
Underlying Return at maturity.
Final Valuation Date 1
December 26, 2024
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Cont inge nt Re pa ym e nt of Princ ipa l -- If the Underlying Return is negative, but the Final Underlying Level is not below the
Maturity Date 1
December 31, 2024
N OT I CE T O I N V EST ORS: T H E SECU RI T I ES ARE SI GN I FI CAN T LY RI SK I ER T H AN CON V EN T I ON AL DEBT I N ST RU M EN T S. T H E I SSU ER I S N OT N ECESSARI LY OBLI GAT ED T O REPAY T H E FU LL
1
Subject to postponement if a market disruption event occurs, as described under "General Terms of
Downside Threshold, we will repay your principal amount. However, if the Final Underlying Level is less than the Downside Threshold,
PRI N CI the
PA Securities
L AM OU -- Payment
N T OF T at
H E Maturity"
SECU in
RI the
T I E accompanying
S AT M AT U product
RI T Y , prospectus
AN D T H supplement
E SECU R UBS
I T I E -IND
S C -AN HAVE THE FULL DOWNSIDE MARKET RISK OF THE UNDERLYING. THIS MARKET RISK IS IN ADDITION TO THE
investors will be exposed to the full downside performance of the Underlying and we will pay less than the principal amount, resulting in aCREDIT 1.
RI SK I N H EREN T I N PU RCH ASI N G OU R DEBT OBLI GAT I ON . Y OU SH OU LD N OT PU RCH ASE T H E SECU RI T I ES I F Y OU DO N OT U N DERST AN D OR ARE N OT COM FORT ABLE WI T H T H E
loss of principal amount that is proportionate to the percentage decline in the Underlying. Accordingly, you may lose some or all of the
SI GN I FI CAN T RI SK S I N V OLV ED I N I N V EST I N G I N T H E SECU RI T I ES.
principal amount of the Securities. The contingent repayment of principal applies only at maturity. Any payment on the Securities,
Y OU SH OU LD CAREFU LLY CON SI DER T H E RI SK S DESCRI BED U N DER "K EY RI SK S" BEGI N N I N G ON PAGE 5 OF T H I S PRI CI N G SU PPLEM EN T AN D U N DER "RI SK FACT ORS" BEGI N N I N G ON PAGE PS-4
including any repayment of principal, is subject to our creditworthiness.
OF T H E ACCOM PAN Y I N G PRODU CT PROSPECT U S SU PPLEM EN T U BS-I N D-1 BEFORE PU RCH ASI N G AN Y SECU RI T I ES. EV EN T S RELAT I N G T O AN Y OF T H OSE RI SK S, OR OT H ER RI SK S AN D
U N CERT AI N T I ES, COU LD ADV ERSELY AFFECT T H E M ARK ET V ALU E OF, AN D T H E RET U RN ON , Y OU R SECU RI T I ES. Y OU COU LD LOSE SOM E OR ALL OF T H E PRI N CI PAL AM OU N T OF T H E
SECU RI T I ES.
Se c urit y Offe ring
We are offering Trigger GEARS Linked to the S&P 500® Index. The Securities are offered at a minimum investment of 100 Securities at the Price to Public described below.
I nit ia l U nde rlying
Dow nside
U nde rlying
U pside Ge a ring
Le ve l
T hre shold
CU SI P
I SI N
S&P 500® Index
1.475
3,239.91
2,429.93, which is 75% of the Initial
78014K139
US78014K1390
Underlying Level (rounded to two
decimal places)
Se e "Addit iona l I nform a t ion About Roya l Ba nk of Ca na da a nd t he Se c urit ie s" in t his pric ing supple m e nt . T he Se c urit ie s w ill ha ve t he t e rm s spe c ifie d in t he prospe c t us da t e d Se pt e m be r 7 , 2 0 1 8 , t he
prospe c t us supple m e nt da t e d Se pt e m be r 7 , 2 0 1 8 , produc t prospe c t us supple m e nt U BS-I N D-1 da t e d Se pt e m be r 7 , 2 0 1 8 a nd t his pric ing supple m e nt .
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Securities or passed upon the accuracy or the adequacy of this pricing supplement or the accompanying prospectus,
prospectus supplement and product prospectus supplement UBS-IND-1. Any representation to the contrary is a criminal offense.

Pric e t o Public
Fe e s a nd Com m issions (1)
Proc e e ds t o U s







Offe ring of Se c urit ie s
T ot a l
Pe r Se c urit y
T ot a l
Pe r Se c urit y
T ot a l
Pe r Se c urit y
Securities Linked to the S&P 500® Index (the "SPX")
$3,288,530
$10.00
$0.00
$0.00
$3,288,530
$10.00
(1) All sales of the Securities will be made to fee-based advisory accounts, for which UBS Financial Services Inc., which we refer to as UBS, is an investment advisor, and UBS will act as placement agent. The purchase price will be $10.00 per
Security and UBS will forgo any commissions related to these sales. See "Supplemental Plan of Distribution (Conflicts of Interest)" below.
The initial estimated value of the Securities as of the Trade Date was $9.913 per $10 in principal amount, which is less than the price to public. The actual value of the Securities at any time will reflect many factors, cannot be predicted with
accuracy, and may be less than this amount. We describe our determination of the initial estimated value under "Key Risks," beginning on page 5, "Supplemental Plan of Distribution (Conflicts of Interest)" and "Structuring the Securities" below.
The Securities will not constitute deposits insured under the Canada Deposit Insurance Corporation Act or by the United States Federal Deposit Insurance Corporation or any other Canadian or United States government agency or instrumentality.
U BS Fina nc ia l Se rvic e s I nc .
RBC Ca pit a l M a rk e t s, LLC
Addit iona l I nform a t ion About Roya l Ba nk of Ca na da a nd t he Se c urit ie s
You should read this pricing supplement together with the prospectus dated September 7, 2018, as supplemented by the prospectus supplement dated September 7, 2018, relating to our senior global medium-term notes,
Series H, of which these Securities are a part, and the more detailed information contained in product prospectus supplement UBS-IND-1 dated September 7, 2018. T his pric ing supple m e nt , t oge t he r w it h t he
doc um e nt s list e d be low , c ont a ins t he t e rm s of t he Se c urit ie s a nd supe rse de s a ll ot he r prior or c ont e m pora ne ous ora l st a t e m e nt s a s w e ll a s a ny ot he r w rit t e n m a t e ria ls inc luding
pre lim ina ry or indic a t ive pric ing t e rm s, c orre sponde nc e , t ra de ide a s, st ruc t ure s for im ple m e nt a t ion, sa m ple st ruc t ure s, fa c t she e t s, broc hure s or ot he r e duc a t iona l m a t e ria ls of ours.
You should carefully consider, among other things, the matters set forth in "Risk Factors" in the accompanying product prospectus supplement UBS-IND-1, as the Securities involve risks not associated with conventional debt
securities.
If the terms discussed in this pricing supplement differ from those discussed in the product prospectus supplement, the prospectus supplement or the prospectus, the terms discussed herein will control.
Y ou m a y a c c e ss t he se on t he SEC w e bsit e a t w w w .se c .gov a s follow s (or if suc h a ddre ss ha s c ha nge d, by re vie w ing our filing for t he re le va nt da t e on t he SEC w e bsit e ):
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Product prospectus supplement UBS-IND-1 dated September 7, 2018:
https://www.sec.gov/Archives/edgar/data/1000275/000114036118038046/form424b5.htm
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Prospectus supplement dated September 7, 2018:
https://www.sec.gov/Archives/edgar/data/1000275/000121465918005975/f97180424b3.htm
?
Prospectus dated September 7, 2018:
https://www.sec.gov/Archives/edgar/data/1000275/000121465918005973/l96181424b3.htm
As used in this pricing supplement, "we," "us" or "our" refers to Royal Bank of Canada.
2
I nve st or Suit a bilit y
T he Se c urit ie s m a y be suit a ble for you if, a m ong ot he r c onside ra t ions:
T he Se c urit ie s m a y not be suit a ble for you if, a m ong ot he r c onside ra t ions:
?
You fully understand the risks inherent in an investment in the Securities, including the risk of
?
You do not fully understand the risks inherent in an investment in the Securities, including the
loss of your entire initial investment.
risk of loss of your entire initial investment.
T he suit a bilit y c onside ra t ions ide nt ifie d a bove a re not e x ha ust ive . Whe t he r or not t he Se c urit ie s a re a suit a ble inve st m e nt for you w ill de pe nd on your individua l
?
You can tolerate the loss of all or a substantial portion of the principal amount of the
?
You require an investment designed to provide a full return of principal at maturity.
Securities and are willing to make an investment that may have the full downside market risk
c irc um st a nc e s, a nd you should re a c h a n inve st m e nt de c ision only a ft e r you a nd your inve st m e nt , le ga l, t a x , a c c ount ing, a nd ot he r a dvise rs ha ve c a re fully c onside re d t he
?
suit a bilit y You
of cannot
a n inv tolerate
e st m e n the
t in loss
t he of
S all
e c or
uri a
t i substantial
e s in ligh portion
t of yo of
ur the
pa principal
rt ic ula r amount
c irc um of
st the
as a hypothetical investment in the Underlying.
a nc e s. Y ou should a lso re vie w c a re fully t he "K e y Risk s" in t his pric ing supple m e nt a nd
"Risk Fa c tSecurities,
ors" in t and
he a you
c c are
om p not
a n willing
ying p to
ro make
duc t an
pr investment
ospe c t us that
sup may
ple m have
e nt the
U B full
S -I downside
N D-1 for risk s re la t e d t o a n inve st m e nt in t he Se c urit ie s. I n a ddit ion, you should re vie w
?
You believe that the level of the Underlying will appreciate over the term of the Securities.
c a re fully t market
he se risk
c t i as
on a
be hypothetical
low , "I nfor investment
m a t ion A in
bo the
ut t Underlying.
he U nde rlying," for m ore inform a t ion a bout t he U nde rlying.
?
You are willing to invest in the Securities based on the Upside Gearing set forth on the cover
?
You believe that the level of the Underlying will decline over the term of the Securities.
page of this pricing supplement.
?
You are unwilling to invest in the Securities based on the Upside Gearing set forth on the
?
You can tolerate fluctuations in the price of the Securities prior to maturity that may be similar
cover page of this pricing supplement.
to or exceed the downside fluctuations in the level of the Underlying.
?
You cannot tolerate fluctuations in the price of the Securities prior to maturity that may be
?
You do not seek current income from your investment and are willing to forgo dividends paid
similar to or exceed the downside fluctuations in the level of the Underlying.
on the securities represented by the Underlying.
?
You seek current income from this investment or prefer to receive the dividends paid on the
?
You are willing to hold the Securities to maturity and accept that there may be little or no
securities represented by the Underlying.
secondary market for the Securities.
?
https://www.sec.gov/Archives/edgar/data/1000275/000114036119023324/form424b2.htm[12/27/2019 1:52:31 PM]


You are unable or unwilling to hold the Securities to maturity or you seek an investment for
?
You are willing to assume our credit risk for all payments under the Securities, and understand
which there will be an active secondary market.
that if we default on our obligations, you may not receive any amounts due to you, including
?
You are not willing to assume our credit risk for all payments under the Securities, including
any repayment of principal.
any repayment of principal.
?
You fully understand and accept the risks associated with the Underlying.
?
You do not fully understand and accept the risks associated with the Underlying.
3
Fina l T e rm s of t he Se c urit ie s1
I nve st m e nt T im e line
I N V EST I N G I N T H E SECU RI T I ES I N V OLV ES SI GN I FI C AN T RI SK S. Y OU M AY LOSE SOM E OR ALL OF Y OU R PRI N CI PAL AM OU N T . AN Y PAY M EN T ON T H E SECU RI T I ES, I N CLU DI N G AN Y
Issuer:
Royal Bank of Canada
REPAY
M EN T OF PRI N CI PAL, I S SU BJ ECT TO OUR C The
RED Upside
I T WO Gearing
RT H I N E was
SS. set.
I F The
WE Initial
WERE Underlying
T O DEFAU LT ON OU R PAY M EN T OBLI GAT I ON S, Y OU M AY N OT RECEI V E AN Y AM OU N T S OWED
T ra de Da t e :
T O Y OU U N DER T H E SECU RI T I ES AN D Y OU COU LD LOSE Y OU R EN T I RE I N V EST M EN T .
Issue Price:
$10 per Security (subject to a minimum purchase of 100
Level and Downside Threshold were determined.
Securities).

1 Terms used in this pricing supplement, but not defined herein, shall have the meanings ascribed to them in the product prospectus supplement.


The Final Underlying Level and Underlying Return
Principal Amount:
$10 per Security.
are determined.

Term:
Approximately 5 years
If the Underlying Return is positive, we will pay you
a cash payment per $10.00 Security that provides
Underlying:
S&P 500® Index
you with your principal amount plus a return equal
to the Underlying Return multiplied by the Upside
Upside Gearing:
1.475
Gearing. Your payment at maturity per $10.00
Security will be equal to:
Payment at Maturity
I f t he U nde rlying Re t urn is posit ive , we will pay you:

(per $10 Security):
$10 + ($10 x the Underlying Return x the Upside Gearing)
$10 + ($10 x the Underlying Return x the Upside
Gearing)
I f t he U nde rlying Re t urn is ze ro or ne ga t ive a nd t he

Fina l U nde rlying Le ve l is gre a t e r t ha n or e qua l t o t he
If the Underlying Return is zero or negative and the
Dow nside T hre shold, we will pay you:
M a t urit y
Final Underlying Level is greater than or equal to
$10
Da t e :
the Downside Threshold, we will pay you a cash
payment of $10.00 per $10.00 Security.
I f t he Fina l U nde rlying Le ve l is le ss t ha n t he Dow nside

T hre shold, we will pay you:
If the Final Underlying Level is less than the
$10 + ($10 x the Underlying Return)
Downside Threshold, we will pay you a cash
payment that is less than the principal amount of
In this scenario, you will lose some or all of the principal amount of
$10.00 per Security, resulting in a loss of principal
the Securities in an amount proportionate to the negative
that is proportionate to the percentage decline in the
Underlying Return.
Underlying, and equal to:

Underlying Return:
Final Underlying Level ­ Initial Underlying Level
$10.00 + ($10.00 x Underlying Return)
Initial Underlying Level

In this scenario, you will lose some or all of the
Initial Underlying Level:
The closing level of the Underlying on the Trade Date, as set forth
principal amount of the Securities, in an amount
on the cover page of this pricing supplement.
proportionate to the negative Underlying Return.
Final Underlying Level:
The closing level of the Underlying on the Final Valuation Date.
Downside Threshold:
75% of the Initial Underlying Level, as set forth on the cover page
of this pricing supplement.
4
K e y Risk s
An investment in the Securities involves significant risks. Investing in the Securities is not equivalent to investing directly in any of the component securities of the Underlying. These risks are explained in
more detail in the "Risk Factors" section of the accompanying product prospectus supplement UBS-IND-1. We also urge you to consult your investment, legal, tax, accounting and other advisors before
investing in the Securities.
?
Y our I nve st m e nt in t he Se c urit ie s M a y Re sult in a Loss of Princ ipa l -- The Securities differ from ordinary debt securities in that we are not necessarily obligated to repay the full principal
amount of the Securities at maturity. The return on the Securities at maturity is linked to the performance of the Underlying and will depend on whether, and the extent to which, the Underlying Return is
positive or negative. If the Final Underlying Level is less than the Downside Threshold, you will be fully exposed to any negative Underlying Return and we will pay you less than your principal amount
at maturity, resulting in a loss of principal of your Securities that is proportionate to the percentage decline in the Underlying. Accordingly, you could lose the entire principal amount of the
Securities.
?
T he Cont inge nt Re pa ym e nt of Princ ipa l Applie s Only if Y ou H old t he Se c urit ie s t o M a t urit y -- You should be willing to hold your Securities to maturity. If you are able to sell your
Securities prior to maturity in the secondary market, you may have to sell them at a loss even if the level of the Underlying is above the Downside Threshold at the time of sale.
?
T he U pside Ge a ring Applie s Only if Y ou H old t he Se c urit ie s t o M a t urit y -- The application of the Upside Gearing only applies at maturity. If you are able to sell your Securities prior to
maturity in the secondary market, the price you receive will likely not reflect the full effect of the Upside Gearing and the return you realize may be less than the Upside Gearing times the return of the
Underlying at the time of sale, even if that return is positive.
?
N o I nt e re st Pa ym e nt s -- We will not pay any interest with respect to the Securities.
?
An I nve st m e nt in t he Se c urit ie s I s Subje c t t o Our Cre dit Risk -- The Securities are our unsubordinated, unsecured debt obligations, and are not, either directly or indirectly, an obligation of
any third party. Any payment to be made on the Securities, including any repayment of principal at maturity, depends on our ability to satisfy our obligations as they come due. As a result, our actual and
perceived creditworthiness may affect the market value of the Securities and, in the event we were to default on our obligations, you may not receive any amounts owed to you under the terms of the
Securities and you could lose your entire initial investment.
?
T he Se c urit ie s Will Be Subje c t t o Risk s, I nc luding N on -Pa ym e nt in Full, U nde r Ca na dia n Ba nk Re solut ion Pow e rs -- Under Canadian bank resolution powers, the Canada Deposit
Insurance Corporation ("CDIC") may, in circumstances where we have ceased, or are about to cease, to be viable, assume temporary control or ownership over us and may be granted broad powers by
one or more orders of the Governor in Council (Canada), including the power to sell or dispose of all or a part of our assets, and the power to carry out or cause us to carry out a transaction or a series
of transactions the purpose of which is to restructure our business. See "Description of Debt Securities -- Canadian Bank Resolution Powers" in the accompanying prospectus for a description of the
Canadian bank resolution powers, including the bail-in regime. If the CDIC were to take action under the Canadian bank resolution powers with respect to us, holders of the Securities could be exposed
to losses.
?
Y our Re t urn on t he Se c urit ie s M a y Be Low e r t ha n t he Re t urn on a Conve nt iona l De bt Se c urit y of Com pa ra ble M a t urit y -- The return that you will receive on the Securities, 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 could earn if you bought a conventional
senior interest bearing debt security of ours with the same maturity date or if you were able to invest directly in the Underlying or the securities included in the Underlying. Your investment may not
reflect the full opportunity cost to you when you take into account factors that affect the time value of money.
?
N o Divide nd Pa ym e nt s or V ot ing Right s -- Investing in the Securities is not equivalent to investing directly in any of the component securities of the Underlying. As a holder of the Securities, you
will not have voting rights or rights to receive cash dividends or other distributions or other rights that holders of the equity securities represented by the Underlying would have. The Underlying is a price
return index, and the Underlying Return excludes any cash dividend payments paid on its component stocks.
?
T he I nit ia l Est im a t e d V a lue of t he Se c urit ie s I s Le ss t ha n t he Pric e t o t he Public -- The initial estimated value that is set forth on the cover page of this document, which is less than
the public offering price you pay for the Securities, does not represent a minimum price at which we, RBCCM or any of our other affiliates would be willing to purchase the Securities in any secondary
market (if any exists) at any time. If you attempt to sell the Securities 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 Underlying, the borrowing rate we pay to issue securities of this kind, and the inclusion in the price to the public of our estimated profit and the costs
relating to our hedging of the Securities. These factors, together with various credit, market and economic factors over the term of the Securities, are expected to reduce the price at which you may be
able to sell the Securities in any secondary market and will affect the value of the Securities in
https://www.sec.gov/Archives/edgar/data/1000275/000114036119023324/form424b2.htm[12/27/2019 1:52:31 PM]


5
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 Securities prior to maturity may be less
than the price to public, as any such sale price would not be expected to include our estimated profit and the costs relating to our hedging of the Securities. In addition, any price at which you may sell
the Securities is likely to reflect customary bid-ask spreads for similar trades. In addition to bid-ask spreads, the value of the Securities determined for any secondary market price is expected to be
based on a secondary market rate rather than the internal borrowing rate used to price the Securities and determine the initial estimated value. As a result, the secondary price will be less than if the
internal borrowing rate was used. The Securities are not designed to be short-term trading instruments. Accordingly, you should be able and willing to hold your Securities to maturity.
?
Our I nit ia l Est im a t e d V a lue of t he Se c urit ie s I s a n Est im a t e Only, Ca lc ula t e d a s of t he T im e t he T e rm s of t he Se c urit ie s We re Se t -- The initial estimated value of the
Securities is based on the value of our obligation to make the payments on the Securities, together with the mid-market value of the derivative embedded in the terms of the Securities. See "Structuring
the Securities" 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 Securities.
These assumptions are based on certain forecasts about future events, which may prove to be incorrect. Other entities may value the Securities or similar securities at a price that is significantly different
than we do.
The value of the Securities at any time after the Trade 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 Securities in any secondary market, if any, should be expected to differ materially from the initial estimated value of your Securities and the amount that may be paid at
maturity.
?
Cha nge s Affe c t ing t he U nde rlying -- The policies of the index sponsor concerning additions, deletions and substitutions of the stocks included in the Underlying and the manner in which the
index sponsor takes account of certain changes affecting those stocks included in the Underlying may adversely affect its level. The policies of the index sponsor with respect to the calculation of the
Underlying could also adversely affect its level. The index sponsor may discontinue or suspend calculation or dissemination of the Underlying and has no obligation to consider your interests in the
Securities when taking any action regarding the Underlying. Any such actions could have an adverse effect on the value of the Securities and the amount that may be paid at maturity.
?
La c k of Liquidit y -- The Securities will not be listed on any securities exchange. RBC Capital Markets, LLC ("RBCCM") intends to offer to purchase the Securities in the secondary market, but is not
required to do so. Even if there is a secondary market, it may not provide enough liquidity to allow you to trade or sell the Securities easily. Because other dealers are not likely to make a secondary
market for the Securities, the price at which you may be able to trade your Securities is likely to depend on the price, if any, at which RBCCM is willing to buy the Securities.
?
Pot e nt ia l Conflic t s -- We and our affiliates play a variety of roles in connection with the issuance of the Securities, including hedging our obligations under the Securities. In performing these duties,
the economic interests of the calculation agent and other affiliates of ours are potentially adverse to your interests as an investor in the Securities.
?
Pot e nt ia lly I nc onsist e nt Re se a rc h, Opinions or Re c om m e nda t ions by RBCCM , U BS or T he ir Affilia t e s -- RBCCM, UBS or their affiliates may publish research, express opinions or
provide recommendations that are inconsistent with investing in or holding the Securities, and which may be revised at any time. Any such research, opinions or recommendations could affect the level of
the Underlying or the equity securities included in the Underlying, and therefore, the market value of the Securities.
?
U nc e rt a in T a x T re a t m e nt -- Significant aspects of the tax treatment of an investment in the Securities are uncertain. You should consult your tax adviser about your tax situation.
?
Pot e nt ia l Roya l Ba nk of Ca na da a nd U BS I m pa c t on Pric e -- Trading or other transactions by us, UBS and our respective affiliates in the equity securities included in the Underlying or in
futures, options, exchange-traded funds or other derivative products on the equity securities included in the Underlying may adversely affect the market value of those equity securities, the level of the
Underlying and therefore, the market value of the Securities.
?
T he Proba bilit y T ha t t he U nde rlying Will Fa ll Be low t he Dow nside T hre shold on t he Fina l V a lua t ion Da t e Will De pe nd on t he V ola t ilit y of t he U nde rlying -- "Volatility"
refers to the frequency and magnitude of changes in the level of the Underlying. Greater expected volatility with respect to the Underlying reflects a higher expectation as of the Trade Date that the
Underlying could close below its Downside Threshold on the Final Valuation Date, resulting in the loss of some or all of your investment. However, an Underlying's volatility can change significantly over
the term of the Securities. The level of the Underlying could fall sharply, which could result in a significant loss of principal.
?
T he T e rm s of t he Se c urit ie s We re I nflue nc e d a t I ssua nc e a nd T he ir M a rk e t V a lue Prior t o M a t urit y Will Be I nflue nc e d by M a ny U npre dic t a ble Fa c t ors -- Many economic
and market factors influenced the terms of the Securities at issuance and will affect their value prior to maturity. These factors are similar in some ways to those that could affect the value of a
combination of instruments that might be used to replicate the payments on the Securities,
6
including a combination of a bond with one or more options or other derivative instruments. For the market value of the Securities, we expect that, generally, the level of the Underlying on any day will
affect the value of the Securities more than any other single factor. However, you should not expect the value of the Securities in the secondary market to vary in proportion to changes in the level of the
Underlying. The value of the Securities will be affected by a number of other factors that may either offset or magnify each other, including:
?
the actual or expected volatility of the Underlying;
?
the time remaining to maturity of the Securities;
?
the dividend rates on the equity securities included in the Underlying;
?
interest and yield rates in the market generally, as well as in each of the markets of the equity securities included in the Underlying;
?
a variety of economic, financial, political, regulatory or judicial events; and
?
our creditworthiness, including actual or anticipated downgrades in our credit ratings.
Some or all of these factors influenced the terms of the Securities at issuance and will influence the price you will receive if you choose to sell the Securities prior to maturity. The impact of any of the factors
set forth above may enhance or offset some or all of any change resulting from another factor or factors. You may have to sell the Securities at a substantial discount from the principal amount if, for
example, the level of the Underlying is at, below or not sufficiently above, the Initial Underlying Level.
7
H ypot he t ic a l Ex a m ple s a nd Re t urn T a ble a t M a t urit y
H ypot he t ic a l t e rm s only. Ac t ua l t e rm s m a y va ry. Se e t he c ove r pa ge for a c t ua l offe ring t e rm s.
The following table and hypothetical examples below illustrate the payment at maturity per $10.00 Security for a hypothetical range of Underlying Returns from -100.00% to +100.00% and assume a hypothetical Initial Underlying Level of 1,000, a
hypothetical Downside Threshold of 750.00, and the Upside Gearing of 1.475. The hypothetical Payment at Maturity examples set forth below are for illustrative purposes only and may not be the actual returns applicable to a purchaser of the
Securities. The actual payment at maturity will be determined based on the Final Underlying Level on the Final Valuation Date. You should consider carefully whether the Securities are suitable to your investment goals. The numbers appearing in
the table below have been rounded for ease of analysis.
Ex a m ple 1 ­ On t he Fina l V a lua t ion Da t e , t he U nde rlying c lose s 1 0 % a bove t he I nit ia l U nde rlying Le ve l. Because the Underlying Return is positive, we will pay you an amount based upon the Underlying Return times the
Upside Gearing, and the payment at maturity per $10 principal amount Security will be calculated as follows:
$10 + ($10 x 10% x 1.475) = $10 + $1.475 = $11.475
Ex a m ple 2 ­ On t he Fina l V a lua t ion Da t e , t he U nde rlying c lose s 1 0 % be low t he I nit ia l U nde rlying Le ve l. Because the Underlying Return is negative, but the Final Underlying Level is greater than the Downside Threshold,
we will pay you at maturity the principal amount of $10 per $10 principal amount Security.
Ex a m ple 3 ­ On t he Fina l V a lua t ion Da t e , t he U nde rlying c lose s 5 0 % be low t he I nit ia l U nde rlying Le ve l. Because the Underlying Return is negative and the Final Underlying Level is less than the Downside Threshold, we
will pay you at maturity a cash payment of $5.00 per $10 principal amount Security (a 50% loss on the principal amount), calculated as follows:
$10 + ($10 x -50%) = $10 - $5.00 = $5.00
H ypot he t ic a l Fina l
H ypot he t ic a l
H ypot he t ic a l Pa ym e nt a t
H ypot he t ic a l T ot a l Re t urn
U nde rlying Le ve l
U nde rlying Re t urn 1
M a t urit y ($ )
on Se c urit ie s 2 (% )
2,000.00
100.00%
$24.7500
147.500%
1,750.00
75.00%
$21.0625
110.625%
1,500.00
50.00%
$17.3750
73.750%
1,400.00
40.00%
$15.9000
59.000%
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1,300.00
30.00%
$14.4250
44.250%
1,200.00
20.00%
$12.9500
29.500%
1,100.00
10.00%
$11.4750
14.750%
1,050.00
5.00%
$10.7375
7.3750%
1,000.00
0.00%
$10.0000
0.000%
950.00
-5.00%
$10.0000
0.000%
900.00
-10.00%
$10.0000
0.000%
800.00
-20.00%
$10.0000
0.000%
750.00
-25.00%
$10.0000
0.000%
700.00
-30.00%
$7.0000
-30.000%
650.00
-35.00%
$6.5000
-35.000%
600.00
-40.00%
$6.0000
-40.000%
500.00
-50.00%
$5.0000
-50.000%
250.00
-75.00%
$2.5000
-75.000%
0.00
-100.00%
$0.0000
-100.00%
1 The Underlying Return excludes any cash dividend payments.
2 The "total return" is the number, expressed as a percentage, that results from comparing the payment at maturity per $10 principal amount Security to the purchase price of $10 per Security.
8
Wha t Are t he T a x Conse que nc e s of t he Se c urit ie s?
U .S. Fe de ra l I nc om e T a x Conse que nc e s
Set forth below, together with the discussion of U.S. federal income tax in the accompanying product prospectus supplement, prospectus supplement, and prospectus, is a summary of the material U.S. federal income tax
consequences relating to an investment in the Securities. The following summary supplements, and to the extent inconsistent supersedes, the discussion under the section entitled "Supplemental Discussion of U.S. Federal
Income Tax Consequences" in the accompanying product prospectus supplement, the section entitled "Certain Income Tax Consequences" in the accompanying prospectus supplement, and the section entitled "Tax
Consequences" in the accompanying prospectus, which you should carefully review prior to investing in the Securities.
In the opinion of our counsel, Morrison & Foerster LLP, it would generally be reasonable to treat the Securities as pre-paid cash-settled derivative contracts in respect of the Underlying for U.S. federal income tax purposes, and
the terms of the Securities require a holder and us (in the absence of a change in law or an administrative or judicial ruling to the contrary) to treat the Securities for all tax purposes in accordance with such characterization. If
the Securities are so treated, a U.S. holder should generally recognize capital gain or loss upon the sale or maturity of the Securities in an amount equal to the difference between the amount a holder receives at such time and
the holder's tax basis in the Securities. Capital gain recognized by an individual U.S. holder is generally taxed at preferential rates where the property is held for more than one year and is generally taxed at ordinary income
rates where the property is held for one year or less. The deductibility of capital losses is subject to limitations.
Alternative tax treatments are also possible and the Internal Revenue Service (the "IRS") might assert that a treatment other than that described above is more appropriate. In addition, the IRS has released a notice that may
affect the taxation of holders of the Securities. According to the notice, the IRS and the U.S. Treasury Department are actively considering whether the holder of an instrument such as the Securities should be required to accrue
ordinary income on a current basis. It is not possible to determine what guidance they will ultimately issue, if any. It is possible, however, that under such guidance, holders of the Securities will ultimately be required to accrue
income currently and this could be applied on a retroactive basis. The IRS and the U.S. Treasury Department are also considering other relevant issues, including whether additional gain or loss from such instruments should be
treated as ordinary or capital and whether the special "constructive ownership rules" of Section 1260 of the Code might be applied to such instruments. Holders are urged to consult their tax advisors concerning the significance,
and the potential impact, of the above considerations.
Under Section 871(m) of the Code, a "dividend equivalent" payment is treated as a dividend from sources within the United States. Such payments generally would be subject to a 30% U.S. withholding tax if paid to a non-U.S.
holder. Under U.S. Treasury Department regulations, payments (including deemed payments) with respect to equity-linked instruments ("ELIs") that are "specified ELIs" may be treated as dividend equivalents if such specified
ELIs reference an interest in an "underlying security," which is generally any interest in an entity taxable as a corporation for U.S. federal income tax purposes if a payment with respect to such interest could give rise to a U.S.
source dividend. However, the IRS has issued guidance that states that the U.S. Treasury Department and the IRS intend to amend the effective dates of the U.S. Treasury Department regulations to provide that withholding on
dividend equivalent payments will not apply to specified ELIs that are not delta-one instruments and that are issued before January 1, 2023. Based on our determination that the Securities are not delta-one instruments, non-
U.S. holders should not be subject to withholding on dividend equivalent payments, if any, under the Securities. However, it is possible that the Securities could be treated as deemed reissued for U.S. federal income tax
purposes upon the occurrence of certain events affecting the Underlying or the Securities (for example, upon an Underlying rebalancing), and following such occurrence the Securities could be treated as subject to withholding
on dividend equivalent payments. Non-U.S. holders that enter, or have entered, into other transactions in respect of the Underlying or the Securities should consult their tax advisors as to the application of the dividend
equivalent withholding tax in the context of the Securities and their other transactions. If any payments are treated as dividend equivalents subject to withholding, we (or the applicable withholding agent) would be entitled to
withhold taxes without being required to pay any additional amounts with respect to amounts so withheld.
Individual holders that own "specified foreign financial assets" may be required to include certain information with respect to such assets with their U.S. federal income tax return. You are urged to consult your own tax advisor
regarding such requirements with respect to the Securities.
The accompanying product prospectus supplement notes that FATCA withholding on payments of gross proceeds from a sale or redemption of Securities will only apply to payments made after December 31, 2018. That
discussion is modified to reflect regulations proposed by the U.S. Treasury Department in December 2018 indicating an intent to eliminate the requirement under FATCA of withholding on gross proceeds of the disposition of
financial instruments. The U.S. Treasury Department has indicated that taxpayers may rely on these proposed regulations pending their finalization. Prospective investors are urged to consult with their own tax advisors
regarding the possible implications of FATCA on their investment in the Securities.
Please see the discussion under the section entitled "Supplemental Discussion of U.S. Federal Income Tax Consequences" in the accompanying product prospectus supplement for a further discussion of the U.S. federal
income tax consequences of an investment in the Securities.
Ca na dia n Fe de ra l I nc om e T a x Conse que nc e s
For a discussion of the material Canadian federal income tax consequences relating to an investment in the Securities, please see the section entitled "Tax Consequences--Canadian Taxation" in the accompanying prospectus,
which you should carefully review prior to investing in the Securities.
9
I nform a t ion About t he U nde rlying
We have derived all information contained in this document regarding the SPX, including, without limitation, its make-up, method of calculation, and changes in its components, from publicly available sources. The information
reflects the policies of, and is subject to change by, the index sponsor. The index sponsor, which owns the copyright and all other rights to the SPX, has no obligation to continue to publish, and may discontinue publication of
the SPX. None of us, UBS or RBCCM accepts any responsibility for the calculation, maintenance or publication of the SPX or any successor index.
The SPX is intended to provide an indication of the pattern of price movements among U.S. large capitalization stocks. The calculation of the level of the SPX is based on the relative value of the aggregate market value of the
common stocks of 500 companies as of a particular time compared to the aggregate average market value of the common stocks of 500 similar companies during the base period of the years 1941 through 1943.
The index sponsor calculates the SPX by reference to the prices of the constituent stocks of the SPX without taking account of the value of dividends paid on those stocks. As a result, the return on the Securities will not reflect
the return you would realize if you actually owned the SPX constituent stocks and received the dividends paid on those stocks.
Com put a t ion of t he SPX
While the index sponsor currently employs the following methodology to calculate the SPX, no assurance can be given that the index sponsor will not modify or change this methodology in a manner that may affect the Payment
at Maturity.
Historically, the market value of any component stock of the SPX was calculated as the product of the market price per share and the number of then outstanding shares of such component stock. In March 2005, the index
sponsor began shifting the SPX halfway from a market capitalization weighted formula to a float-adjusted formula, before moving the SPX to full float adjustment on September 16, 2005. The index sponsor's criteria for selecting
stocks for the SPX did not change with the shift to float adjustment. However, the adjustment affects each company's weight in the SPX.
Under float adjustment, the share counts used in calculating the SPX reflect only those shares that are available to investors, not all of a company's outstanding shares. Float adjustment excludes shares that are closely held by
control groups, other publicly traded companies or government agencies.
In September 2012, all shareholdings representing more than 5% of a stock's outstanding shares, other than holdings by "block owners," were removed from the float for purposes of calculating the SPX. Generally, these
"control holders" will include officers and directors, private equity, venture capital and special equity firms, other publicly traded companies that hold shares for control, strategic partners, holders of restricted shares, ESOPs,
employee and family trusts, foundations associated with the company, holders of unlisted share classes of stock, government entities at all levels (other than government retirement/pension funds) and any individual person
who controls a 5% or greater stake in a company as reported in regulatory filings. However, holdings by block owners, such as depositary banks, pension funds, mutual funds and ETF providers, 401(k) plans of the company,
government retirement/pension funds, investment funds of insurance companies, asset managers and investment funds, independent foundations and savings and investment plans, will ordinarily be considered part of the float.
Treasury stock, stock options, restricted shares, equity participation units, warrants, preferred stock, convertible stock, and rights are not part of the float. Shares held in a trust to allow investors in countries outside the country
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of domicile, such as depositary shares and Canadian exchangeable shares are normally part of the float unless those shares form a control block.
For each stock, an investable weight factor ("IWF") is calculated by dividing the available float shares by the total shares outstanding. Available float shares are defined as the total shares outstanding less shares held by control
holders. This calculation is subject to a 5% minimum threshold for control blocks. For example, if a company's officers and directors hold 3% of the company's shares, and no other control group holds 5% of the company's
shares, the index sponsor would assign that company an IWF of 1.00, as no control group meets the 5% threshold. However, if a company's officers and directors hold 3% of the company's shares and another control group
holds 20% of the company's shares, the index sponsor would assign an IWF of 0.77, reflecting the fact that 23% of the company's outstanding shares are considered to be held for control. As of July 31, 2017, companies with
multiple share class lines are no longer eligible for inclusion in the SPX. Constituents of the SPX prior to July 31, 2017 with multiple share class lines will be grandfathered in and continue to be included in the SPX. If a
constituent company of the SPX reorganizes into a multiple share class line structure, that company will remain in the SPX at the discretion of the S&P Index Committee in order to minimize turnover
The SPX is calculated using a base-weighted aggregate methodology. The level of the SPX reflects the total market value of all 500 component stocks relative to the base period of the years 1941 through 1943. An indexed
number is used to represent the results of this calculation in order to make the level easier to work with and track over time. The actual total market value of the component stocks during the base period of the years 1941
through 1943 has been set to an indexed level of 10. This is often indicated by the notation 1941- 43 = 10. In practice, the daily calculation of the SPX is computed by dividing the total market value of the component stocks by
the "index divisor." By itself, the index divisor is an arbitrary number. However, in the context of the calculation of the SPX, it serves as a link to the original base period level of the SPX. The index divisor keeps the SPX
comparable over time and is the manipulation point for all adjustments to the SPX, which is index maintenance.
I nde x M a int e na nc e
Index maintenance includes monitoring and completing the adjustments for company additions and deletions, share changes, stock splits, stock dividends, and stock price adjustments due to company restructuring or spinoffs.
Some corporate actions, such as stock splits and stock dividends, require changes in the common shares outstanding and the stock prices of the companies in the SPX, and do not require index divisor adjustments.
10
To prevent the level of the SPX from changing due to corporate actions, corporate actions which affect the total market value of the SPX require an index divisor adjustment. By adjusting the index divisor for the change in
market value, the level of the SPX remains constant and does not reflect the corporate actions of individual companies in the SPX. Index divisor adjustments are made after the close of trading and after the calculation of the
index closing level.
Changes in a company's shares outstanding and IWF due to its acquisition of another public company are made as soon as reasonably possible. At S&P's discretion, de minimis merger and acquisition share changes are
accumulated and implemented with the quarterly share rebalancing.
All other changes of less than 5% are accumulated and made quarterly on the third Friday of March, June, September, and December.
Changes in a company's total shares outstanding of 5% or more due to public offerings are made as soon as reasonably possible. Other changes of 5% or more (for example, due to tender offers, Dutch auctions, voluntary
exchange offers, company stock repurchases, private placements, acquisitions of private companies or non-index companies that do not trade on a major exchange, redemptions, exercise of options, warrants, conversion of
preferred stock, notes, debt, equity participations, at-the-market stock offerings or other recapitalizations) are made weekly, and are generally announced on Fridays for implementation after the close of trading the following
Friday (one week later). If a 5% or more share change causes a company's IWF to change by five percentage points or more, the IWF is updated at the same time as the share change. IWF changes resulting from partial tender
offers are considered on a case-by-case basis.
Lic e nse Agre e m e nt
S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("S&P") and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"). These trademarks have been licensed
for use by S&P Dow Jones Indices LLC. "Standard & Poor's®," "S&P 500®" and "S&P®" are trademarks of S&P. These trademarks have been sublicensed for certain purposes by us. The SPX is a product of S&P Dow Jones
Indices LLC and/or its affiliates and has been licensed for use by us.
The Securities are not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P or any of their respective affiliates (collectively, "S&P Dow Jones Indices"). S&P Dow Jones Indices make no
representation or warranty, express or implied, to the holders of the Securities or any member of the public regarding the advisability of investing in securities generally or in the Securities particularly or the ability of the SPX to
track general market performance. S&P Dow Jones Indices' only relationship to us with respect to the SPX is the licensing of the SPX and certain trademarks, service marks and/or trade names of S&P Dow Jones Indices
and/or its third party licensors. The SPX is determined, composed and calculated by S&P Dow Jones Indices without regard to us or the Securities. S&P Dow Jones Indices have no obligation to take our needs or the needs of
holders of the Securities into consideration in determining, composing or calculating the SPX. S&P Dow Jones Indices are not responsible for and have not participated in the determination of the prices, and amount of the
Securities or the timing of the issuance or sale of the Securities or in the determination or calculation of the equation by which the Securities are to be converted into cash. S&P Dow Jones Indices have no obligation or liability in
connection with the administration, marketing or trading of the Securities. There is no assurance that investment products based on the SPX will accurately track index performance or provide positive investment returns. S&P
Dow Jones Indices LLC and its subsidiaries are not investment advisors. Inclusion of a security or futures contract within an index is not a recommendation by S&P Dow Jones Indices to buy, sell, or hold such security or futures
contract, nor is it considered to be investment advice. Notwithstanding the foregoing, CME Group Inc. and its affiliates may independently issue and/or sponsor financial products unrelated to the Securities currently being issued
by us, but which may be similar to and competitive with the Securities. In addition, CME Group Inc. and its affiliates may trade financial products which are linked to the performance of the SPX. It is possible that this trading
activity will affect the value of the Securities.
S&P DOW JONES INDICES DO NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE SPX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION,
INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL NOT BE SUBJECT TO ANY
DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P DOW JONES INDICES MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY US, HOLDERS OF THE SECURITIES, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF
THE SPX OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT,
SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS
BETWEEN S&P DOW JONES INDICES AND US, OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.
11
H ist oric a l I nform a t ion
The following graph sets forth historical closing levels of the Underlying, for the period from December 26, 2009 to December 26, 2019, as reported by Bloomberg Financial Markets. T he hist oric a l pe rform a nc e of t he
U nde rlying should not be t a k e n a s a n indic a t ion of it s fut ure pe rform a nc e . We c a nnot give you a ssura nc e t ha t t he pe rform a nc e of t he U nde rlying w ill re sult in t he re t urn of a ny of
your init ia l inve st m e nt .
H I ST ORI C PERFORM AN CE I S N OT AN I N DI CAT I ON OF FU T U RE PERFORM AN CE.
Source: Bloomberg L.P. We have not independently verified the accuracy or completeness of the information obtained from Bloomberg Financial Markets.
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12
Supple m e nt a l Pla n of Dist ribut ion (Conflic t s of I nt e re st )
We have agreed to indemnify UBS and RBCCM against liabilities under the Securities Act of 1933, as amended, or to contribute payments that UBS and RBCCM may be required to make relating to these liabilities as described
in the prospectus supplement and the prospectus.
All sales of the Securities will be made to certain fee-based advisory accounts for which UBS is an investment advisor and UBS will act as placement agent. The purchase price will be $10.00 per Security, and UBS will forgo
any commissions related to these sales, Investors that purchase and hold the Securities in fee-based advisory accounts will pay advisory fees to UBS based on the amount of assets held in those accounts. Subject to regulatory
constraints and market conditions, RBCCM intends to offer to purchase the Securities in the secondary market, but it is not required to do so.
We will deliver the Securities on a date that is greater than two business days following the Trade Date. Under Rule 15c6-1 of the Exchange Act, trades in the secondary market generally are required to settle in two business
days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the Securities more than two business days prior to the original issue date will be required to specify alternative
settlement arrangements to prevent a failed settlement.
Subject to regulatory constraints and market conditions, RBCCM intends to offer to purchase the Securities in the secondary market, but it is not required to do so.
We or our affiliates may enter into swap agreements or related hedge transactions with one of our other affiliates or unaffiliated counterparties in connection with the sale of the Securities and RBCCM and/or an affiliate may
earn additional income as a result of payments pursuant to the swap or related hedge transactions. See "Use of Proceeds and Hedging" in the accompanying product prospectus supplement UBS-IND-1.
The value of the Securities shown on your account statement may be based on RBCCM's estimate of the value of the Securities if RBCCM or another of our affiliates were to make a market in the Securities (which it is not
obligated to do). That estimate will be based upon the price that RBCCM may pay for the Securities in light of then prevailing market conditions, our creditworthiness and transaction costs. For a period of approximately 1 month
after the issue date of the Securities, the value of the Securities that may be shown on your account statement may be higher than RBCCM's estimated value of the Securities at that time. This is because the estimated value of
the Securities will not include our hedging costs and profits; however, the value of the Securities shown on your account statement during that period may be a higher amount, reflecting the addition of our estimated costs and
profits from hedging the Securities. Any such excess is expected to decrease over time until the end of this period. After this period, if RBCCM repurchases your Securities, it expects to do so at prices that reflect their estimated
value. This period may be reduced at RBCCM's discretion based on a variety of factors, including but not limited to, the amount of the Securities that we repurchase and our negotiated arrangements from time to time with UBS.
For additional information as to the relationship between us and RBCCM, please see the section "Plan of Distribution--Conflicts of Interest" in the prospectus dated September 7, 2018.
Each of RBCCM, UBS and any other broker-dealer offering the Securities have not offered, sold or otherwise made available and will not offer, sell or otherwise make available any of the Securities to, any retail investor in the
European Economic Area ("EEA"). For these purposes, the expression "offer" includes the communication in any form and by any means of sufficient information on the terms of the offer and the Securities to be offered so as to
enable an investor to decide to purchase or subscribe the Securities, and a "retail investor" means a person who is one (or more) of: (a) a retail client, as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended,
"MiFID II"); or (b) a customer, within the meaning of Directive 2016/97/EU, as amended, where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (c) not a qualified
investor as defined in Regulation (EU) (2017/1129) (the "Prospectus Regulation"). Consequently, no key information document required by Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or
selling the Securities or otherwise making them available to retail investors in the EEA has been prepared, and therefore, offering or selling the Securities or otherwise making them available to any retail investor in the EEA may
be unlawful under the PRIIPs Regulation.
St ruc t uring t he Se c urit ie s
The Securities are our debt securities, the return on which is linked to the performance of the Underlying. As is the case for all of our debt securities, including our structured notes, the economic terms of the Securities reflect
our actual or perceived creditworthiness at the time of pricing. In addition, because structured notes result in increased operational, funding and liability management costs to us, we typically borrow the funds under these
Securities at a rate that is more favorable to us than the rate that we might pay for a conventional fixed or floating rate debt security of comparable maturity. Using this relatively lower implied borrowing rate rather than the
secondary market rate is a factor that resulted in a higher initial estimated value of the Securities at the time their terms were set than if the secondary market rate was used. Unlike the estimated value included on the cover of
this document, any value of the Securities determined for purposes of a secondary market transaction may be based on a different borrowing rate, which may result in a lower value for the Securities than if our initial internal
borrowing rate were used.
In order to satisfy our payment obligations under the Securities, we may choose to enter into certain hedging arrangements (which may include call options, put options or other derivatives) on the issue date with RBCCM or one
of our other subsidiaries. The terms of these hedging arrangements take into account a number of factors, including our creditworthiness, interest rate movements, the volatility of the Underlying, and the tenor of the Securities.
The economic terms of the Securities and their initial estimated value depend in part on the terms of these hedging arrangements.
The lower implied borrowing rate is a factor that reduces the economic terms of the Securities to you. The initial offering price of the Securities also reflects our estimated hedging costs. These factors result in the initial
estimated value for the Securities on the Trade Date being less than their public offering price. See "Key Risks -- The Initial Estimated Value of the Securities Is Less than the Price to the Public" above.
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T e rm s I nc orpora t e d in M a st e r N ot e
The terms appearing above under the caption "Final Terms of the Securities" and the provisions in the accompanying product prospectus supplement UBS-IND-1 dated September 7, 2018 under the caption "General Terms of
the Securities," are incorporated into the master note issued to DTC, the registered holder of the Securities.
V a lidit y of t he Se c urit ie s
In the opinion of Norton Rose Fulbright Canada LLP, the issue and sale of the Securities has been duly authorized by all necessary corporate action of the Bank in conformity with the Indenture, and when the Securities have
been duly executed, authenticated and issued in accordance with the Indenture and delivered against payment therefor, the Securities will be validly issued and, to the extent validity of the Securities is a matter governed by the
laws of the Province of Ontario or Québec, or the laws of Canada applicable therein, and will be valid obligations of the Bank, subject to equitable remedies which may only be granted at the discretion of a court of competent
authority, subject to applicable bankruptcy, to rights to indemnity and contribution under the Securities or the Indenture which may be limited by applicable law; to insolvency and other laws of general application affecting
creditors' rights, to limitations under applicable limitations statutes, and to limitations as to the currency in which judgments in Canada may be rendered, as prescribed by the Currency Act (Canada). This opinion is given as of
the date hereof and is limited to the laws of the Provinces of Ontario and Québec and the federal laws of Canada applicable thereto. In addition, this opinion is subject to customary assumptions about the Trustee's
authorization, execution and delivery of the Indenture and the genuineness of signatures and certain factual matters, all as stated in the letter of such counsel dated September 7, 2018, which has been filed as Exhibit 5.1 to
Royal Bank's Form 6-K filed with the SEC dated September 7, 2018.
In the opinion of Morrison & Foerster LLP, when the Securities have been duly completed in accordance with the Indenture and issued and sold as contemplated by the prospectus supplement and the prospectus, the Securities
will be valid, binding and enforceable obligations of Royal Bank, entitled to the benefits of the Indenture, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally, concepts of
reasonableness and equitable principles of general applicability (including, without limitation, concepts of good faith, fair dealing and the lack of bad faith). This opinion is given as of the date hereof and is limited to the laws of
the State of New York. This opinion is subject to customary assumptions about the Trustee's authorization, execution and delivery of the Indenture and the genuineness of signatures and to such counsel's reliance on the Bank
and other sources as to certain factual matters, all as stated in the legal opinion dated September 7, 2018, which has been filed as Exhibit 5.2 to the Bank's Form 6-K dated September 7, 2018.
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https://www.sec.gov/Archives/edgar/data/1000275/000114036119023324/form424b2.htm[12/27/2019 1:52:31 PM]


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