Information on the RBCCM Europe
Allocation and Pricing of Securities
Offerings Policy

RBC Capital Markets - Europe
January 2023

Information on the RBCCM Europe Allocation and Pricing of Securities Offerings Policy

Page 2TABLE OF CONTENTS
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Purpose of this Document ................................................................................ 3
Requirements .................................................................................................... 3
Ownership / Responsibility for the Policy ...................................................... 6
Policy Review Schedule ................................................................................... 6
Client Enquiries ................................................................................................. 6© RBC

Information on the RBCCM Europe Allocation and Pricing of Securities Offerings Policy

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1 Purpose of this Document
This document sets out information on the RBCCM Europe Allocation and Pricing of Securities Offerings
Policy (“the Policy”) that sets out the principles for developing allocation recommendations, as required by
the Markets in Financial Instruments Directive 2014/65/EU (“MiFID II”) for the following legal entities
operating in the European Economic Area (“EEA”): Royal Bank of Canada, RBC Europe Limited and RBC
Capital Markets (Europe) GmbH, together referred to as “RBCCM”, “we” or “the firm”.
This document is published and updated as necessary on our website at:https://www.rbccm.com/en/policies-disclaimers.page

2 Pricing and Allocation Process
When RBCCM acts as an active Bookrunner on behalf of an issuer client1 on an offering of financial
instruments, the amount of the offering designated to each investor 2 who placed an order during the bookbuild is normally determined during the allocation process. The general objectives of the allocation andpricing process can vary from deal to deal and depend on the issuer client’s wishes (e.g. optimising price,establishing a long term stable and supportive investor base, generating sufficient liquidity, confidence inaftermarket performance). In the context of a securities offering, a firm owes duties to its issuer client but
it must also pay due regard to its responsibilities to investors. In its role as active Bookrunner, RBCCM
will act as a conduit between the issuer client and investors; by acting in this capacity, RBCCM’sinvolvement could lead to an actual or perceived conflict of interest and it is therefore important that
RBCCM has policies and procedures in place to address such conflicts.
2.1

Allocation objectives

When awarded a mandate to Manage an equity or bond issuance, RBCCM will endeavour to ensure thatits issuer client is apprised of the process of offering and allocation and that the client’s allocation
objectives are understood.
The matters covered are likely to include:

the process for identifying prospective purchasers of the financial instruments and the amount andprice level of demand (for example, where the offering is to involve a book build, an explanation of thebook building process);the factors relevant to recommendations and decisions on the pricing of the offering and the process
by which RBCCM proposes that such recommendations and decisions will be arrived at;
the factors relevant to recommendations and decisions on allocation (including recommendations anddecisions regarding the identity of investors and the apportionment of allocations among them) andthe process by which RBCCM proposes that such recommendations and decisions will be arrived at.
Where relevant, this should include the effect of any confidentiality constraints to which RBCCM is orexpects to be subject; andthe fact that purchasers of the securities are likely to include investment clients of RBCCM to whom
we provide other services and, where relevant, may also include RBCCM’s own principal book andthat this represents a potential conflict of interest which RBCCM will manage in accordance with its
internal procedures.

The issuer client will be offered the opportunity of active involvement in the process of allocation,
including the opportunity to express any requirements, wishes or preferences regarding allocation tospecific purchasers. In circumstances where the issuer client does not wish to become actively involved in
1 The definition of issuer client includes an entity that is issuing new securities or a vendor that is a seller of securities
2Investors are categorised as Corporate Finance Contacts© RBC

Information on the RBCCM Europe Allocation and Pricing of Securities Offerings Policy

Page 4the pricing and allocation process, RBCCM will make recommendations and decisions on pricing andallocation on the basis of its judgment, in accordance with its procedures and taking into account any
relevant factors referred to in this Policy.
Allocation decisions may differ in situations where RBCCM undertakes a “hard” underwriting commitment
and in such circumstances RBCCM may decide to make allocations at its own discretion.
Issuer client objectives will vary from transaction to transaction and may include some or all of thefollowing factors:
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a preference for specific investors;
valuation/price;
the extent to which the client is focused on aftermarket performance;
concentration (i.e. preferences as to size and number of large, medium and/or smaller holdings);
any minimum or maximum allocation amounts;
desired investor types (indication of any preference as to approximate balance between identified
investor “types” – e.g. long-only and hedge funds, “long-only-like” hedge funds, hedge funds that arelike long-only funds, hedge funds that will trade in the stock over the long term, providers of liquidity,
geography etc. and categories – e.g. retail fund/tracker fund/pension fund etc.) – in each case to theextent known, reasonably assumed or deduced in hindsight from the book of demand;
any “free float” or similar requirements of the relevant listing, trading or indexation regime;
desired geographical locations of investors (including consideration of applicable selling restrictions).
the level and timing of engagement in the transaction process (pilot fishing/market sounding (on wallcrossed basis or otherwise) / pre-deal investor education / roadshow meetings / other (such asreverse enquiry) / one-on-one / group;
the timing of the request for allocation, relative to final management meeting for the investor (whereapplicable) and size of the request for allocation;
existing/prior holdings; size of assets under management; interest in issuer/comparable companies orofferings or within the relevant sector (to the extent known or reasonably assumed); andany other considerations as appropriate.

The above factors may also be relevant when selecting investors to attend investor or deal roadshows orwhen selecting investors for the purposes of market soundings.
2.2

Basis of Pricing

Valuation and pricing can be complex processes, which normally involve a strong element of judgment
and experience. In the context of a securities offering, there may be tension between the wish to
maximize the proceeds of the offering and the issuer’s interest in the future performance and investor
perception of, and interest in, its securities. It is therefore important that RBCCM and its issuer clients
discuss the basis of pricing and (unless the price is agreed at the outset) how the final decision on pricing
is to be reached. RBCCM will take appropriate steps to ensure that the issuer client remains fully
informed of developments relevant to pricing during the offering process.
RBCCM will provide issuer clients with information about how the recommendation as to the price of theoffering and the timings involved are determined. RBCCM will also inform and engage with the issuer
client about any hedging or stabilisation strategies that RBCCM intends to undertake with respect to theoffering, including how these strategies may impact the issuer client’s interests.
2.3

Factors Relevant to Allocation

The basis of allocation in an individual case will depend on the particular facts and circumstances and willbe the result of discussions with the issuer, any other Syndicate members, and with the exercise ofjudgment. No one factor will be determinative, but factors which will often be relevant include thefollowing:© RBC

Information on the RBCCM Europe Allocation and Pricing of Securities Offerings Policy
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Page 5the size of an investor’s expressed interest (both absolutely and relative to the investor’s portfolio or
assets under management);
the extent to which the investor’s expressed interest and the size of the allocation requested appears
consistent with the investor’s investment strategy and objectives and purchasing capacity;
the investor’s behaviour in and following past issues generally;
the investor’s interest in, and past dealings in, other securities of the issuer;
the investor’s interest in, and past dealings in securities of, other issuers in the sector;
the nature and level of interest shown by the investor in the issuer and the particular offering, forexample its involvement in road shows and other direct contacts with the issuer or seller of thesecurities and the timing of the investor’s interest, especially if interest is expressed only at a
relatively late stage, and pricing sensitivity;
any statement by the investor about its intentions and the perceived credibility of any such statement;
the category or description into which the investor falls (e.g. retail fund, pension fund, tracker fund);the geographical location of the investor;
the sector or sectors of the investor’s main business;
any selling restrictions or other relevant legal or regulatory restrictions in jurisdictions with which theinvestor is connected; andthe desirability of avoiding allocations in inconvenient or uneconomic amounts.

2.4

Records of Allocation Decisions

RBCCM will record relevant allocation decisions at material stages in the allocation process. Suchrecords should include:
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the firm’s overarching allocation policy in force at the time of the commencement of the service;
the firm’s initial discussion with the issuer client and the agreed proposed allocation per type ofinvestment client;
the content and timing of allocation requests received from each investment client with an indicationof their type;where relevant (e.g. where there is a departure from any previously-agreed instructions orpreferences) any further discussion and instructions or preferences provided by the issuer client,
other members of the Syndicate, or RBCCM itself, on the allocation process, including any emerging
in light of allocation requests received from investment clients; andthe final allocations registered in each individual investment client’s account.

When the final schedule of allocations is agreed, a list of those investors to whom allocations will bemade, together with the number of financial instruments to be allocated to each such investor will beemailed or otherwise made available to the client for their sign-off. This version of the final schedule ofallocations will be deemed to be final unless there are any material subsequent changes, for example asa result of investors withdrawing or scaling back their orders, in which case such amended or updated
schedule of allocations will be recorded as the final schedule.
2.5

Unacceptable Allocation Practices

The following are regarded as unacceptable practices which are explicitly prohibited:“spinning” arrangements under which RBCCM uses an allocation as an inducement to therecipient to award or procure the award, or as a reward for the past award, of other business toRBCCM;

“laddering” whereby investors are allocated securities in an offering to support the price after
issue with buy orders;requiring investors to purchase additional securities in the after-market as a condition of being
allocated securities in an offering (“laddering” or “tie-in” arrangements);© RBC

Information on the RBCCM Europe Allocation and Pricing of Securities Offerings Policy

2.6

Page 6other “quid pro quo” arrangements under which the allocation of securities to an investor in anoffering is made conditional on or linked with a compensating benefit such as the investor’s
undertaking to accept allocations in another offer of securities or payment of excessivecommissions on aftermarket dealings in the offered securities or on dealings in other securities;
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RBCCM should not make requests for allocations to “friends and family” as it could be construed
as “spinning”. Any “friends and family” allocations are solely at the request of the issuer client.
Internal Procedures

Decisions about recommendations on pricing and allocation to be provided to issuer clients are not madeby sales and trading employees. While sales and trading employees may (and generally will) provide
information and guidance, including information and guidance about investor demand and views, andduring the process of book building, pricing and allocation, they will not determine the final
recommendation on pricing and allocation. This responsibility lies with the Syndicate desk in consultation
with the issuer client.
RBCCM does not allocate securities to retail clients. Block allocations may be made to entities such as
Wealth Management firms who are responsible for the decision making and allocations to retail clients
without any involvement from RBCCM employees.
Deal announcements should conform to industry standards, be comprehensive of the key transaction
terms and be public at the time the book opens. It is also best practice that the announcement be madeas close as practicable to the draft disclosure document being made available.
Final allocations remain confidential and will not be shared externally outside of RBCCM except forsharing with other syndicate members and the issuer client.

3 Ownership / Responsibility for the Policy
The Policy is owned by RBCCM Compliance Europe.

4 Policy Review Schedule
We conduct a biennial review of the Policy or more frequently if required.

5 Client Enquiries
Should you have any enquiries in relation to this document or the Policy please contact your usualbusiness contact.
Complaints should be directed to your usual business contact or the RBCCM Head of Syndicate.
RBCCM reserves the right to amend or supplement this policy at any time. This policy is a summary of
the principal provisions of more detailed internal RBC policies applicable to the firm as a whole.
End of document© RBC