When Cas9 binds to the sgRNA, a complex is formed which is then directed to bind to the target DNA when a PAM(NGG) site is present directly downstream of the 20nt target sequence in the DNA. The PAM is required to be present on the target strand for the Cas9 complex to recognize and bind to the DNA. It is not part of the guide RNA sequence and should not be included in the oligo when designing sgRNAs.