RBC Launches High-Risk Digital Notes Tied to Global Indices

Royal Bank of Canada (RBC) has filed a free writing prospectus detailing the terms of its new Dual Directional Barrier Digital Notes, set to mature on October 30, 2031. These notes are linked to the performance of two equity indices: the MSCI Emerging Markets Index (MXEF) and the EURO STOXX 50 Index (SX5E). The investment's return will be based on the least performing of the two indices.

The notes offer a minimum Digital Return of 63%, determined on the Trade Date of October 28, 2026. The Barrier Value is set at 70% of each underlier's Initial Underlier Value, also established on the Trade Date. The initial estimated value of the notes ranges between $880.00 and $930.00 per $1,000 principal amount, which is below the public offering price.

Investors face a Principal at Risk scenario if the Final Underlier Value drops below the Barrier Value. In such cases, investors lose 1% of principal for every 1% decline relative to the Initial Underlier Value. The notes do not pay interest, and the filing outlines several risks, including RBC's credit risk and potential conflicts of interest with RBC Capital Markets as the Calculation Agent.

The notes' payment structure depends on the performance of the least performing underlier. If the Final Underlier Value meets or exceeds the Initial Underlier Value, investors receive $1,000 plus additional returns based on the Underlier Return or Digital Return. If the value falls below the Barrier Value, investors face substantial principal losses.