You are on page 1of 35



1 6
$ ,

+(5( 6

2

7
*

8&+

+,1*$6



,23,5$&<

1' 7 6$
22'7+,1*722 




-LP&KHQ 



,2 3 0
< 6



7KLV DUWLFOH EHJLQV DV GR VR PDQ\ RWKHU ZRUNV RI OHJDO VFKRODUVKLS ZLWK D

VWRU\ ,PDJLQHDZRQGHUSODQWWHHPLQJZLWKH[WUDRUGLQDU\FKHPLFDOSURSHUWLHV/LNH
PRVWOLYLQJRUJDQLVPVLQDGLYHUVHEXWIUDJLOHELRVSKHUHLWLVQDWLYHWRRQHRIWKHPDQ\
SRRUFRXQWULHVRIWKHJOREDOVRXWK7KHORFDOSRSXODWLRQDQGSURIHVVLRQDOERWDQLVWV

DJUHHWKDWWKHZRQGHUSODQWGHVHUYHVWKHWLWOHRIYLOODJHSKDUPDF\ 7KHGHYHORSLQJ
FRXQWU\ZKHUHWKLVZRQGHUSODQWLVQDWLYHVXSSOLHVERWKWKHJHQHWLFPDWHULDODQGWKH
HWKQRELRORJLFDO NQRZOHGJH WKDW DQ $PHULFDQ OLIH VFLHQFHV FRPSDQ\ XVHV WR GHYHORS
SHVWLFLGHVDQWLVHSWLFVHYHQFRQWUDFHSWLYHV2QHSURGXFWLQSDUWLFXODUDSHVWLFLGHDQG
LQVHFW UHSHOODQW LV PDUNHGO\ PRUH VWDEOH DQG HIIHFWLYH WKDQ WUDGLWLRQDO IRUPXODWLRQV
NQRZQ WR DQG XVHG E\ IDUPHUV LQ WKH VRXUFH FRXQWU\  7KH $PHULFDQ FRPSDQ\
SURFHHGVWRSDWHQWWKHQHZSHVWLFLGH7KHFRPSDQ\QRWRQO\IDLOVWRFRPSHQVDWHWKH
VRXUFH FRXQWU\ LW DOVR DVVHUWV SDWHQW ULJKWV LQ WKLV SHVWLFLGH DQG RWKHU SURGXFWV
GHYHORSHG IURP WKDW ZRQGHU SODQW DQG WUDGLWLRQDO NQRZOHGJH RI LWV XVHV  ,Q RWKHU
ZRUGVLWVWDQGVLQSRVLWLRQWRFROOHFWDSDWHQWGULYHQSUHPLXPIURPWKHYHU\YLOODJHUV
ZKRLQIRUPHGWKHFRPSDQ\RIWKHZRQGHUSODQWVSURSHUWLHVDQGZKRKHOSHGKDUYHVW
WKHFRPSDQ\VILUVWVDPSOHVRIWKHSODQW

:ULWHUVRIILFWLRQDUHUHSHDWHGO\WROGWRGUDZWKHHOHPHQWVRIWKHLUFUDIWIURP
UHDO OLIH  6R WRR ZLWK WKLV VOLJKWO\ PRUH IDFWGULYHQ YHUVLRQ RI VWRU\WHOOLQJ  :5
*UDFHV HQFRXQWHU ZLWK ,QGLDV QHHP WUHH $]DGLUDFKWD LQGLFD  QHDWO\ ILWV WKLV
1(

,//

$.(6

28

0$//

 &I 67$1/(< ),6+ 7+(5(6 12 68&+ 7+,1* $6 )5(( 63((&+  $1' ,76 $ *22' 7+,1*
722  

 $VVRFLDWH 'HDQ IRU )DFXOW\ DQG -DPHV / .UXVHPDUN 3URIHVVRU RI /DZ 8QLYHUVLW\ RI 0LQQHVRWD
/DZ6FKRROFKHQ[#PDURRQWFXPQHGX!$WWKHULVNRIIDLOLQJWRPHQWLRQRWKHUIDFXOW\PHPEHUV
ZKRVKRZHGPHVXFKKRVSLWDOLW\GXULQJP\VWD\DVD'LVWLQJXLVKHG6SHDNHUDWWKH0F*HRUJH6FKRRORI
/DZ 8QLYHUVLW\ RI WKH 3DFLILF IURP -DQXDU\   , ZLVK WR WKDQN 0LFKDHO 6 0LUHOHV DQG -HG
6FXOO\6SHFLDOWKDQNVWR.DWKOHHQ&KHQ


 &RPSDUH HJ 'DQLHO $ )DUEHU  6X]DQQD 6KHUU\ 7HOOLQJ 6WRULHV 2XW RI 6FKRRO $Q (VVD\ RQ
/HJDO 1DUUDWLYHV  67$1 / 5(9    ZLWK HJ 5LFKDUG 'HOJDGR 2Q 7HOOLQJ 6WRULHV LQ
6FKRRO$5HSO\WR)DUEHUDQG6KHUU\9$1'/5(9  


 6HH(':$5'2:,/6217+(',9(56,7<2)/,)(  



&*(25*(/$:5(9,(:

>9RO

QDUUDWLYH $SSURDFKLQJWKLVVWRU\LQQRWRULHW\LVWKDWRI(OL/LOO\ &RVGHULYDWLRQRI


YLQEODVWLQH DQG YLQFULVWLQH WZR FDQFHUILJKWLQJ DONDORLGV IURP WKH URV\ SHULZLQNOH

&DWKDUDQWKXV URVHXV IRUPHUO\ FODVVLILHG DV 9LQFD URVHD    9LQEODVWLQH LV XVHG LQ

WUHDWLQJ +RGJNLQV GLVHDVH  ZKLOH YLQFULVWLQH KDV EHFRPH WKH GUXJ RI FKRLFH IRU

WUHDWLQJ FKLOGKRRG OHXNHPLD   7KRXJK QHHP DQG WKH SHULZLQNOH GHVHUYH PRUH
DLUVSDFH,VKDOORIIHUDWKLUGVWRU\DVWKHSDUDGLJPDWLFWDOHRIDOOHJHGQRUWKHUQJUHHG
DQG VRXWKHUQ YLFWLPKRRG LQ WKH JOREDO GHEDWH RYHU ELRGLYHUVLW\ ELRWHFKQRORJ\ DQG
WKH SURSHU UHODWLRQVKLS EHWZHHQ WKH HQYLURQPHQWDO SURWHFWLRQ WHFKQRORJLFDO
LQQRYDWLRQDQGVRFLDOMXVWLFH


7KH 8QLWHG 6WDWHV KDV OLWHUDOO\ JRWWHQ IDW  ,Q WKLV 0DOWKXVLDQ ZRUOG 
UHIHUHQFHV WR IRRG VHFXULW\ DV DQ DSRORJ\ IRU $PHULFDQ DJULFXOWXUDO SROLFLHV WKDW

FRQVWULFWSURGXFWLRQDQGUDLVHSURGXFHUSULFHVDUHQRWKLQJVKRUWRIREVFHQH 2QO\D
QDWLRQWKDWLVREVFHQHO\ULFKE\WKH:HVWVKLVWRULFDOVWDQGDUGVDQGWKHODUJHUZRUOGV
FRQWHPSRUDU\ VWDQGDUGV FDQ LQGXOJH LQ IRRG DLG HLWKHU DV D PHDQV RI VXSSUHVVLQJ

GRPHVWLF VXSSOLHV RU DV D WRRO IRU VKDSLQJ IRUHLJQ UHODWLRQV PXFKOHVVERWK 7KH
UHDO SXEOLF KHDOWK FULVLV LQ $PHULFD DQG RWKHU ZHDOWK\ QDWLRQV LV QRW VWDUYDWLRQ EXW


REHVLW\   7KH SUHVFULSWLRQ IRU WKLV VRFLHWDO SDWKRORJ\ LV DFWXDOO\ TXLWH VLPSOH 


 6HHJHQHUDOO\1$7,21$/5(6($5&+&281&,/1((0$75(()2562/9,1**/2%$/352%/(06
 


 6HHHJ5LFKDUG6WRQH7KH%LRGLYHUVLW\7UHDW\3DQGRUDV%R[RU)DLU'HDO"6&,(1&(
  &KULVWRSKHU - +XQWHU &RPPHQW 6XVWDLQDEOH %LRSURVSHFWLQJ 8VLQJ 3ULYDWH &RQWUDFWV DQG
,QWHUQDWLRQDO/HJDO3ULQFLSOHVDQG3ROLFLHVWR&RQVHUYH5DZ0HGLFDO0DWHULDOV%&(197/$))/
5(9  


 6HH 5 /LWWOH HW DO 9LQEODVWLQH IRU 5HFXUUHQW +RGJNLQV 'LVHDVH )ROORZLQJ $XWRORJRXV %RQH
0DUURZ7UDQVSODQW-&/,1,&$/21&2/2*<  


 6HH$-9HHUPDQHWDO+LJK&XUH5DWHZLWKD0RGHUDWHO\,QWHQVLYH7UHDWPHQW5HJLPHQLQ1RQ
+LJK5LVN &KLOGKRRG $FXWH /\PSKREODVWLF /HXNHPLD 5HVXOWV RI 3URWRFRO $// 9, IURP WKH 'XWFK
&KLOGKRRG/HXNHPLD6WXG\*URXS-&/,1,&$/21&2/2*<  


 6HHJHQHUDOO\/XWKHU7ZHHWHQ'RGJLQJD0DOWKXVLDQ%XOOHWLQWKHVW&HQWXU\$*5,%86,1(66
   DVVHVVLQJ WKH SURVSHFWV IRU JOREDO IRRG VHFXULW\ LQ QH[W  \HDUV  6\PSRVLXP 0DOWKXV
0HQGHO DQG 0RQVDQWR ,QWHOOHFWXDO 3URSHUW\ DQG WKH /DZ DQG 3ROLWLFV RI *OREDO )RRG 6XSSO\  -
(197// /,7,*  


 2Q GRPHVWLF IRRG VXSSO\ SROLF\ GXULQJ WKH ODVW SHULRG RI VHULRXV IRRG LQVHFXULW\ LQ $PHULFDQ
KLVWRU\VHH*XDGDOXSH7/XQD7KH1HZ'HDODQG)RRG,QVHFXULW\LQWKH0LGVWRI3OHQW\'5$.(
-$*5,&/  


 -LP &KHQ (SLSK\WLF (FRQRPLFV DQG WKH 3ROLWLFV RI 3ODFH  0,11 - */2%$/ 75$'(  
 )RUDQRYHUYLHZRIFRQWHPSRUDU\$PHULFDQIRRGDLGSROLFLHVWKDWLVDVLQFLVLYHDVLWLVFRQFLVH
VHHJHQHUDOO\9HUQRQ:5XWWDQ'RHV)RRG$LG+DYHD)XWXUH"$0-$*5,&(&21  


 6HH HJ 3, %RXPWMH HW DO 'LHWDU\ +DELWV 'HPRJUDSKLFV DQG WKH 'HYHORSPHQW RI 2YHUZHLJKW
DQG2EHVLW\$PRQJ&KLOGUHQLQWKH8QLWHG6WDWHV)22'32/<  .DWKHULQH0)OHJDOHW
DO 3UHYDOHQFH DQG 7UHQGV LQ 2EHVLW\ $PRQJ 86$GXOWV-$0$  5RODQG6WXUP

@

7+(5( 61268&+7+,1*$6%,23,5$&<



$PHULFDQV VKRXOG HDW OHVV DQG H[HUFLVH PRUH  +DYLQJ H[SHULHQFHG D VKRFNLQJ
LQFUHDVH RI  \HDUV LQ OLIH H[SHFWDQF\ RYHU WKH FRXUVH RI D PHUH  \HDUV RI
FRPSUHKHQVLYH IRRG DQG GUXJ UHJXODWLRQ KRZHYHU $PHULFDQ VRFLHW\ DV D ZKROH
HYLGHQWO\ H[SHFWV WR FRQWLQXH WKH WZHQWLHWK FHQWXU\V XQSUHFHGHQWHG DQG SUREDEO\

XQUHSHDWDEOH DFWXDULDO OHDS IRUZDUG WKURXJK SKDUPDFHXWLFDO ZL]DUGU\   ,Q RWKHU
ZRUGVZHZRXOGVRRQHUWDNHGLHWSLOOVWKDQOLPLWSRUWLRQVRUZRUNRXW:KDWZHZDQW

LVDVOLFNSKDUPDFHXWLFDOVROXWLRQ2QHSLOOPDNHV\RXVPDOO 

$VLVWUXHRIURXJKO\IRXUILIWKVRIDOONQRZQGUXJVDQHIIHFWLYHSKDUPDFHXWLFDO

UHPHG\ IRU REHVLW\ LV OLNHO\ WR EH GHULYHG IURP D QDWXUDO VRXUFH   2QH SODXVLEOH
SKDUPDFRORJLFDO FDQGLGDWH WKH FDFWXV +RRGLD JRUGRQLLV LV SUL]HG IRU LWV DSSHWLWH

VXSSUHVVLQJ WKLUVWTXHQFKLQJ DQG DZDUHQHVVKHLJKWHQLQJ TXDOLWLHV   :KDW WKH 6DQ
SHRSOHRI6RXWK$IULFDKDYHNQRZQIRUWKRXVDQGVRI\HDUVDERXWWKHSODQWWKH\FDOO
;KREDODQJXLVKHGIRUWKUHHGHFDGHVLQWKHODERUDWRULHVRIWKH&RXQFLOIRU6FLHQWLILF

DQG,QGXVWULDO5HVHDUFK &6,5  3IL]HU&RUSRUDWLRQHYHQWXDOO\DFTXLUHGWKHULJKWVWR
DKRRGLDGHULYHGFRPSRXQGFDOOHG3 VRQDPHGEHFDXVHLWZDVWKHWKFKHPLFDO
WHVWHG  DQG DW RQH WLPH SODQQHG WR PDUNHW D GLHW GUXJ WKDW ZRXOG FRPSHWH DJDLQVW
FXUUHQWO\DYDLODEOHFRQFRFWLRQVWKDWUHO\RQWKHWURXEOHGFRPELQDWLRQRIHSKHGUDDQG

FDIIHLQH $VDIHHIIHFWLYHVXEVWLWXWHLIVXFFHVVIXOO\WHVWHGDQGPDUNHWHGZRXOGHDUQ
7KH (IIHFWV RI 2EHVLW\ 6PRNLQJ DQG 'ULQNLQJ RQ 0HGLFDO 3UREOHPV DQG &RVWV  +($/7+
$))$,56  0DUFK$SULO   5RODQG 6WXUP -HDQQH 6 5LQJHO  7DWLDQD $QGUH\HYD ,QFUHDVLQJ
2EHVLW\ 5DWHV DQG 'LVDELOLW\7UHQGV+($/7+ $))$,56 0DUFK$SULO FI0LFKHOOH0
0HOOR (ULF % 5LPP  'DYLG 0 6WXGGHUW 7KH 0F/DZVXLW 7KH )DVW)RRG ,QGXVWU\ DQG /HJDO
$FFRXQWDELOLW\IRU2EHVLW\+($/7+$))$,56 1RY'HF 


 &I $O\VRQ & )ORXUQR\ 5HVWRUDWLRQ 5[ $Q (YDOXDWLRQ DQG 3UHVFULSWLRQ  $5,= / 5(9 
  DSSO\LQJDPHGLFDODQDORJ\WRWKHSUREOHPRIHFRORJLFDOGHJUDGDWLRQDQGUHVWRUDWLRQ 


 6HH3HWHU%DUWRQ+XWW)RRGDQG'UXJ/DZ$6WURQJDQG&RQWLQXLQJ7UDGLWLRQ)22' '58*


&260(7/-  


 +HDU-())(5621 $,53/$1(:KLWH5DEELWRQ)($5$1' /2$7+,1*,1 /$6 9(*$6 5&$ 


*RDVN$OLFH:KHQVKHVWHQIHHWWDOO 


 6HH(':$5'2:,/6217+(',9(56,7<2)/,)(  




 6HH JHQHUDOO\ '%

0DF/HDQ 

/* /XR ,QFUHDVHG $73 &RQWHQW3URGXFWLRQ LQ WKH

+\SRWKDODPXV0D\%HD6LJQDOIRU(QHUJ\6HQVLQJRI6DWLHW\6WXGLHVRIWKH$QRUHFWLF0HFKDQLVPRID
3ODQW6WHURLGDO*O\FRVLGH%5$,1 5(6  2ULHQ/7XOS1HYLQ$+DUEL-HUHP\0LKDORY
$UD'HU0DUGHURVLDQ(IIHFWRI+RRGLD3ODQWRQ)RRG,QWDNHDQG%RG\:HLJKWLQ/HDQDQG2EHVH
/$1WXOFS 5DWV  )$6(% - $ 0DUFK   2ULHQ / 7XOS 1HYLQ $ +DUEL  $UD
'HU0DUGHURVLDQ (IIHFW RI +RRGLD 3ODQW RQ :HLJKW /RVV LQ &RQJHQLF 2EHVH /$1WXOFS 5DWV 
)$6(%-$ 0DUFK 


 6HH JHQHUDOO\ *HUDUG %RGHNHU 7UDGLWLRQDO 0HGLFDO .QRZOHGJH ,QWHOOHFWXDO 3URSHUW\ 5LJKWV 
%HQHILW6KDULQJ&$5'2=2-,17/ &203/  


 6HH HJ 5HJXODWLRQV RQ 6WDWHPHQWV 0DGH IRU 'LHWDU\ 6XSSOHPHQWV &RQFHUQLQJ WKH (IIHFW RI WKH



&*(25*(/$:5(9,(:

>9RO

PDVVLYHSURILWV3XUFKDVHUVRIGLHWSURGXFWVDUHRIWHQSDWKHWLFDOO\HDJHUWRREWDLQD

PRUHVOHQGHUILJXUH ,Q-XO\KRZHYHU3IL]HUZLWKGUHZIURPWKHSURMHFWDQG

GLVFRQWLQXHG FOLQLFDO GHYHORSPHQW RI 3   7KH IDLOXUH WR H[SORLW KRRGLD
FRPPHUFLDOO\PRRWHGWKHLPPHGLDWHTXHVWLRQRIZKHWKHU3VGHYHORSHUVRZHGWKH
6DQ SHRSOH DQ\ FRPSHQVDWLRQ  $V WKH VWRULHV RI QHHP DQG WKH URV\ SHULZLQNOH
LOOXVWUDWH KRZHYHU GHPDQGV IRU JOREDO MXVWLFH KRXQG DOPRVW HYHU\ HIIRUW WR H[WUDFW
DJULFXOWXUDO RU SKDUPDFHXWLFDO YDOXH IURP WKH ELRORJLFDO ERXQW\ RI WKH GHYHORSLQJ
ZRUOG

6R IUHTXHQW VR IDPLOLDU DQG VR XQLIRUP DUH WDOHV RI ELRORJLFDO H[SORLWDWLRQ
WKDWWKH\QRZIROORZDSUHGLFWDEOHVFULSW


/DUJH QRUWKHUQ FRUSRUDWLRQ! VHHNV  LV GHYHORSLQJ! D KLJKO\
VRSKLVWLFDWHG SODQW YDULHW\  SKDUPDFHXWLFDO SURGXFW! DQG VHQGV
UHVHDUFKHUV WR H[RWLF SODFH!  $IWHU LQWHUYLHZLQJ ORFDO IDUPHUV 
IRUDJHUV! WKH FRPSDQ\V UHVHDUFKHUV LGHQWLI\ D VSHFLHV  YDULHW\ 
EUHHG! RI OLIH IRUP! WKDW VHHPV UHVSRQVLEOH IRU GHVLUDEOH WUDLW!
7KHUHVHDUFKHUVFROOHFWDIHZVSHFLPHQWVDQGFROODWHWKHLULQWHUYLHZV
7KHVDPSOHVDQGWKHORFDOORUHLQVSLUHDVXFFHVVIXOSURJUDPRIFURVV
EUHHGLQJJHQHWLFHQJLQHHULQJSKDUPDFHXWLFDOGHYHORSPHQW!ZKLFK
VDYHV WKH FRPSDQ\ WKRXVDQGV RI KRXUV DQG HQDEOHV LW WR HFOLSVH LWV
FRPSHWLWLRQ7KHFRPSDQ\QHYHUVKDUHVLWVSURILWVKRZHYHUZLWKWKH
ORFDO FRPPXQLW\ IURP ZKLFK LW GHULYHG JHQHWLF UHVRXUFHV DQG

WUDGLWLRQDONQRZOHGJH

7KLVLVWKHSDUDGLJPDWLFELRSLUDF\QDUUDWLYH7KDWXQPLVWDNDEO\DFFXVDWRU\ZRUGKDV
VHW WKH UKHWRULFDO EDVHOLQH LQ PDQ\ GHEDWHV ZLWKLQ WKH LQWHUQDWLRQDO ODZ RI
HQYLURQPHQWDO SURWHFWLRQ DQG LQWHOOHFWXDO SURSHUW\ IRU \HDUV WR FRPH  0DQ\ FULWLFV
FRQGHPQWKHQRUWKHUQ>F@RUSRUDWLRQV>WKDW@DUHVXUYH\LQJUHPRWHDUHDVRIWKHZRUOG
IRUPHGLFLQDOSODQWVLQGLJHQRXVUHODWLYHVRIFRPPRQIRRGFURSVH[RWLFVZHHWHQHUV
VRXUFHV RI QDWXUDOO\ RFFXUULQJ SHVWLFLGHV DQG HYHQ WKH JHQHWLF PDWHULDO RI RQFH


LVRODWHG LQGLJHQRXV SHRSOHV   7KH HSLWKHWV ELRORJLFDO FRORQLDOLVP  JHQHWLF
3URGXFW RQ WKH 6WUXFWXUH RU )XQFWLRQ RI WKH %RG\  )HG 5HJ  -DQ    'LHWDU\
6XSSOHPHQWV&RQWDLQLQJ(SKHGULQH$ONDORLGV)HG5HJ $SULO 


 8QLWHG 6WDWHV Y $Q $UWLFOH RI )RRG  0DQLVFKHZLW]  'LHW 7KLQV  ) 6XSS  
('1< 


 6HH

3IL]HU

5HWXUQV

5LJKWV

RI

3

-XO\



 

DYDLODEOH

RQOLQH

DW

KWWSZZZSK\WRSKDUPFRXNSUHVV5HOILQDOILQDOKWP! 


 7KLV ILOOLQWKHEODQN ELRSLUDF\ IRUP LV LQVSLUHG E\ 3DXO - +HDOG 7KH 5KHWRULF RI %LRSLUDF\ 
&$5'2=2-,17/ &203/  


 %5,$1 72.$5 ($57+ )25 6$/( 5(&/$,0,1* (&2/2*< ,1 7+( $*( 2) &25325$7(

@

7+(5( 61268&+7+,1*$6%,23,5$&<



LPSHULDOLVP DQGHYHQSODLQSOXQGHU GRPLQDWHPDQ\LQVWDQFHVRIWKHELRSLUDF\


QDUUDWLYH

,FRPHQRWWRSUDLVHWKHELRSLUDF\QDUUDWLYHEXWWREXU\LW0RVWDOOHJDWLRQVRI
ELRSLUDF\ DUH VR WKRURXJKO\ ULGGOHG ZLWK LQFRQVLVWHQFLHV DQG RXWULJKW OLHV WKDW WKH
HQWLUHJHQUHSHQGLQJIXUWKHUFODULILFDWLRQPXVWEHFRQVLJQHGWRWKHUHDOPRIUXUDO

OHJHQG*UDFHKDVQRSDWHQWRQQHHPGHULYHGSURGXFWVLQ,QGLD DQGLWLVQRWFOHDU

WKDW WKH *UDFH SDWHQW JUDQWHG XQGHU $PHULFDQ ODZ  ZLOO KDYH DQ\ >QHJDWLYH@

HFRQRPLF RU VRFLDO HIIHFW LQ ,QGLD   7KH (XURSHDQ 3DWHQW 2IILFHV GHFLVLRQ WR

UHYRNH WKH *UDFH SDWHQW IXUWKHU ZHDNHQV LWV LPSDFW RQ ,QGLD   7KH IHDU WKDW WKH
*UDFHSDWHQWZRXOGGHSULYH,QGLDQYLOODJHUVRIWKHULJKWWRFRQWLQXHWUDGLWLRQDOXVHVRI
QHHP LQFOXGLQJWKHXVHRIWKHWUHHVEUDQFKHVDVWRRWKEUXVKHV LVSXUHO\VFXUULORXV

1HHPLQLWVQDWXUDOIRUPLVXQSDWHQWDEOH 

$V IRU WKH URV\ SHULZLQNOH 0DGDJDVFDU KDV DQ HYHQ ZHDNHU FODLP RI XQMXVW

WUHDWPHQW   7KH URV\ SHULZLQNOH LV QDWLYH WR 0DGDJDVFDU EXW JURZV WKURXJKRXW WKH
WURSLFV  ,Q  5REHUW /DLQJ 1REOH D PHPEHU RI WKH PHGLFDO IDFXOW\ DW WKH
8QLYHUVLW\RI:HVWHUQ2QWDULRUHFHLYHGURV\SHULZLQNOHOHDYHVIURPKLVEURWKHU
&ODUN1REOHZKRLQWXUQUHSRUWHGWKDWWKHOHDYHVZHUHXVHGLQ-DPDLFDIRUGLDEHWHV
WUHDWPHQW ZKHQ LQVXOLQ ZDV XQDYDLODEOH  7KHOHDYHVKDGOLWWOHHIIHFWRQEORRGVXJDU
EXW VWURQJO\ LQKLELWHG ZKLWH EORRG FHOOV%\5REHUW1REOHVUHVHDUFKWHDPDW
:HVWHUQ 2QWDULR VXFFHVVIXOO\ LVRODWHG DQG SXULILHG WKH SRWHQW DONDORLG H[WUDFW QRZ
NQRZQ DV YLQEODVWLQH  :RUNLQJ LQGHSHQGHQWO\ (OL /LOO\  &R IRXQG WKDW D FUXGH
H[WUDFWRIWKHZKROHSHULZLQNOHSODQWSURORQJHGWKHOLYHVRIPLFHZLWKOHXNHPLD(OL




*5((1:$6+  


 6HH LG 60 0RKDPHG ,GULV 'RXEOHVSHDN DQG WKH 1HZ %LRORJLFDO &RORQLDOLVP  7+,5'
:25/'5(685*(1&(  


 6HH72.$5VXSUDQRWHDW


 6HH

HJ 9$1'$1$ 6+,9$ 3527(&7

25

3/81'(5 81'(567$1',1* ,17(//(&78$/

3523(57<5,*+76  


 6HH *HRUJH . )RVWHU 2SSRVLQJ )RUFHV LQ D 5HYROXWLRQ LQ ,QWHUQDWLRQDO 3DWHQW 3URWHFWLRQ 7KH
86 DQG ,QGLD LQ WKH 8UXJXD\ 5RXQG DQG ,WV $IWHUPDWK  8&/$ - ,17/ /  )25(,*1 $)) 
  


 6HH -DPHV ) :DOWHU 6WRUDJH 6WDEOH +LJK $]DGLUDFKWLQ 6ROXWLRQ 3DWHQW 1R  -DQ 
 


 (PLO\ 0DUGHQ 7KH 1HHP 7UHH 3DWHQW ,QWHUQDWLRQDO &RQIOLFW RYHU WKH &RPPRGLILFDWLRQ RI /LIH
%&,17/ &203/5(9  


 6HH'HFLVLRQ5HYRNLQJ(XURSHDQ3DWHQW1R (XU3DWHQW2II)HE 




 6HH)XQN%URV6HHG&RY.DOR,QRFXODQW&R86  




 6HH$ODLQ0DULH7KH5RV\3HULZLQNOH7KH/LWWOH)ORZHU7KDW6DYHV/LYHV -XQH  DYDLODEOHDW


KWWSZZZV\PELRVLVRQOLQHFRPMXQBSHULZLQNOHKWP! 



&*(25*(/$:5(9,(:

>9RO

/LOO\HYHQWXDOO\V\QWKHVL]HGYLQFULVWLQH,QVRIDUDV-DPDLFDKDVDPXFKVWURQJHUFODLP
DVWKHVRXUFHRIWUDGLWLRQDONQRZOHGJHWKDWIDFLOLWDWHGWKHGHYHORSPHQWRIYLQEODVWLQH
DQG YLQFULVWLQH HYHQ DGYRFDWHV RI EHQHILWVKDULQJ ILQG LW GLIILFXOW LI QRW DOWRJHWKHU
LPSRVVLEOH WR IDVKLRQ D FRQYLQFLQJ FDVH WKDW (OL /LOO\ VKRXOG FRPSHQVDWH

0DGDJDVFDU 

'HVSLWH LWV LPSODXVLELOLW\ WKH ELRSLUDF\ QDUUDWLYH QRZ GRPLQDWHV OHJDO
VFKRODUVKLSRQWKHFRPPHUFLDOL]DWLRQRISURGXFWVZKRVHGHYHORSPHQWFDQEHWUDFHG
WR D GHYHORSLQJ FRXQWU\  $GYRFDWHV IRU WKH JOREDO VRXWK KDYH EHHQ FODPRULQJ IRU
SURSULHWDU\SURWHFWLRQDJDLQVWQRUWKHUQLQGXVWULDOXVHVRIHWKQRELRORJLFDONQRZOHGJH

DQGWKDWGHPDQGVKRZVQRVLJQRIDEDWLQJ $JDLQVWWKLVWLGHSLHFHPHDOUHEXWWDORI
WKHELRSLUDF\QDUUDWLYHVHHPVIXWLOH,QDQ\HYHQW>L@WZRXOGEHDYHU\HDV\DQGFKHDS
GLVSOD\RIFRPPRQSODFHOHDUQLQJWRSLHUFHWKHJORZLQJDQGHPSKDWLFODQJXDJHRI

WKH ELRSLUDF\ QDUUDWLYH  DV FRQYH\HG LQ LQGLYLGXDO VWRULHV DERXW QHHP URV\
SHULZLQNOH RU KRRGLD  7KH WLPH KDV FRPH LQ VKRUW WR GLVPDQWOH WKH P\WK RI
ELRSLUDF\URRWDQGEUDQFK

7KLV DUWLFOH WDNHV D PRGHVW ILUVW VWHS WRZDUG GHFRQVWUXFWLQJ WKH ELRSLUDF\
QDUUDWLYH  ,W ZLOO DVVHVV FODLPV RI ELRSLUDF\ DFFRUGLQJ WR WKH OD\HUHG PRGHO RI
LQIRUPDWLRQSODWIRUPV(YHU\LQIRUPDWLRQSODWIRUPFRQVLVWVRIWKUHHGLVWLQFWOD\HUV F
SK\VLFDOORJLFDODQGFRQWHQW FDQGELRORJLFDOLQIRUPDWLRQLVQRH[FHSWLRQ/D\HUE\
OD\HU,ZLOOVWULSWKHELRSLUDF\QDUUDWLYHRILWVSODXVLELOLW\7KHFRQYHQWLRQDOELRORJLFDO
GLVWLQFWLRQEHWZHHQSKHQRW\SHVDQGJHQRW\SHVVHSDUDWHVWKHSK\VLFDOIURPWKHORJLFDO
OD\HU RI LQIRUPDWLRQ LQ LQGLYLGXDO ELRORJLFDO VSHFLPHQV DQG LQ VSHFLHV DW ODUJH
(WKQRELRORJLFDO NQRZOHGJH LV EHVW FKDUDFWHUL]HG DV WKH LQYHQWLYH WUDQVIRUPDWLRQ RI
JHQHWLF LQIRUPDWLRQ LQWR FRPPHUFLDOO\ YDOXDEOH DSSOLFDWLRQV  $Q DSSURSULDWHO\
XWLOLWDULDQYLHZRISURSHUW\DQGLWVUHODWLRQVKLSWRHDFKOD\HURIELRORJLFDOLQIRUPDWLRQ
WKXVGLVVROYHVDQ\DOOHJDWLRQRIELRSLUDF\

+DYLQJGUDLQHGWKHELRSLUDF\QDUUDWLYHRILWVUKHWRULFDOSRZHUWKLVDUWLFOHZLOO
FRQFOXGH E\ EULHIO\ FRQVLGHULQJ ZKDW WKH SURSRQHQWV RI WKLV QDUUDWLYH KDYH EHHQ
VHHNLQJDQGKRZWKHJOREDOFRPPXQLW\PLJKWJLYHWKHJOREDOVRXWKZKDWLWQHHGV LI
QRWQHFHVVDULO\ZKDWLWZDQWV 0RVWRIDOODGYRFDWHVIRUWKHJOREDOVRXWKVHHNVRPH
ZD\ RI FRPSHQVDWLQJ WUDGLWLRQDO FRPPXQLWLHV IRU WKHLU FRQWULEXWLRQ WR WKH JOREDO


 6HH HJ $% &811,1*+$0 (7+,&6 (7+12%,2/2*,&$/ 5(6($5&+ $1' %,2',9(56,7< 
  '$55(// $ 326(<  *5$+$0 '87),(/' %(<21' ,17(//(&78$/ 3523(57< 72:$5'
75$',7,21$/ 5(6285&( 5,*+76 )25 ,1',*(1286 3(23/(6 $1' /2&$/ &20081,7,(6  
.DUHQ $QQH *ROGPDQ &RPSHQVDWLRQ IRU 8VH RI %LRORJLFDO 5HVRXUFHV DQG WKH &RQYHQWLRQ RQ
%LRORJLFDO 'LYHUVLW\ &RPSDWLELOLW\ RI &RQVHUYDWLRQ 0HDVXUHV DQG &RPSHWLWLYHQHVV RI WKH %LRWHFK
,QGXVWU\/$: 32/<,17/%86  


 6HH+HDOGVXSUDQRWHDW


 5HJLQDY'XGOH\ 6WHSKHQV4%'  

@



7+(5( 61268&+7+,1*$6%,23,5$&<

VWRUHKRXVHRIELRORJLFDONQRZOHGJH$OWKRXJKWKDWJRDOUHPDLQVRXWRIUHDFKPRUH
PRGHVW F DQG LQ PDQ\ ZD\V PRUH EHQHILFLDO F LQWHUPHGLDWH REMHFWLYHV DUH TXLWH
IHDVLEOH  6LPSOH DQG VDOXWDU\ UHIRUPV RI H[LVWLQJ SDWHQW ODZ FDQ SUHYHQW RXWVLGHUV
IURP VHFXULQJ LQWHOOHFWXDO SURSHUW\ LQ NQRZOHGJH DOUHDG\ GHYHORSHG E\ WUDGLWLRQDO
FRPPXQLWLHV  7R WKH H[WHQW WKDW ELRSURVSHFWLQJ ZLOO UHPDLQ SDUW RI WKH JOREDO
FRPPXQLW\VSRUWIROLRRIWRROVIRUSURWHFWLQJWKHELRVSKHUHFRXQWULHVULFKDQGSRRU
VKRXOGGHYHORSDIUDPHZRUNIRUUHJXODWLQJWKLVSUDFWLFHDQGFRRSHUDWHLQHQFRXUDJLQJ
WKHSURIHVVLRQDOL]DWLRQRISDUDWD[RQRP\


 ,,6
%
1
, 3
/
/



$%LRORJLFDO'LYHUVLW\DVD6\VWHPRI,QIRUPDWLRQ


(DFKDOOHJHGHSLVRGHRIELRSLUDF\LQYROYHVWKUHHGLVWLQFWVRXUFHVRISRWHQWLDO
ELRORJLFDOYDOXH)LUVWSODQWRUDQLPDOVSHFLPHQVPD\EHYDOXDEOHDVSK\VLFDOFKDWWHOV
6HFRQG WKH FKHPLFDO DQG JHQHWLF LQIRUPDWLRQ FRQWDLQHG LQ WKRVH VSHFLPHQV
UHSUHVHQWV D GLVWLQFW DQG SRWHQWLDOO\ OXFUDWLYH VRXUFH RI YDOXH  )LQDOO\ ORFDO
FRPPXQLWLHVDUHOLNHOLHUWKDQWKHZRUOGDWODUJHLQFOXGLQJHYHQWUDLQHGVFLHQWLVWVWR
UHFRJQL]HZKLFKQDWLYHVSHFLHVKDYHPHGLFLQDOO\XVHIXOSURSHUWLHV7KLVILQDOEXQGOH
RIYDOXHPD\EHFDOOHGHWKQRELRORJLFDONQRZOHGJH7KLVLQWHUORFNLQJWULRFRUUHVSRQGV
ZLWK WKH ELRORJLFDO FDWHJRULHV RI SKHQRW\SH JHQRW\SH DQG PHPH  7KH WULR
FROOHFWLYHO\ IRUPV D FRPSUHKHQVLYH LQIRUPDWLRQ SODWIRUP RQ ZKLFK HQWHUSULVLQJ
KXPDQ DJHQWV UDQJLQJ IURP YLOODJH VKDPDQV WR PXOWLQDWLRQDO SKDUPDFHXWLFDO
FRPSDQLHVFDQGHYHORSDSSOLFDWLRQVRIFRPPHUFLDOYDOXHLQORFDODQGJOREDOPDUNHWV
%LRSLUDF\QDUUDWLYHVRIWHQIDLOWRLGHQWLI\ZKHUHHSLVRGHVRIDOOHJHGWKHIWWDNHSODFH
$WWHQWLRQWRWKHOD\HUHGQDWXUHRIELRORJLFDOLQIRUPDWLRQFODULILHVWKHH[WHQWWRZKLFK
DOOHJHGDFWVRIH[SURSULDWLRQZDUUDQWOHJDOFRQFHUQ

(YHU\LQIRUPDWLRQSODWIRUPFRQVLVWVRIWKUHHOD\HUVDSK\VLFDOOD\HUDORJLFDO

OD\HU DQG D FRQWHQW OD\HU   7KDQNV WR WKH UHODWLRQVKLS EHWZHHQ HQHUJ\ DQG

LQIRUPDWLRQ WKHEHQHILFHQFHRIWKHVXQFRXOGEHUHJDUGHGDVDFRQWLQXRXVJLIWRI


  ZRUGV RI LQIRUPDWLRQ SHU VHFRQG WR WKH (DUWK UDWKHU WKDQ DV  [   PHJDZDWW

KRXUV RI SRZHU SHU VHFRQG   %OHVVHG ZLWK LQIRUPDWLRQ WKDW KDV  IORZ>HG@ IRU
75,33,1*7+(

,23,5$&<

$55$7,9(2) 76

2:(5

$<(5%<

$<(5



 6HH <RFKDL %HQNOHU )URP &RQVXPHUV WR 8VHUV 6KLIWLQJ WKH 'HHSHU 6WUXFWXUHV RI 5HJXODWLRQ
7RZDUGV6XVWDLQDEOH&RPPRQVDQG8VHU$FFHVV)('&200/-  


 6HH JHQHUDOO\ 0\URQ 7ULEXV  (GZDUG & 0F,UYLQH (QHUJ\ DQG ,QIRUPDWLRQ 7KHUPRG\QDPLFV
DQG,QIRUPDWLRQ7KHRU\ 6&,$06HSWDW


 -(/29(/2&.*$,$$1(:/22.$7/,)(21($57+  



&*(25*(/$:5(9,(:

>9RO

PLOOLRQV RI \HDUV QDWXUH KDV FRPSLOHG PRUH LQIRUPDWLRQ RI D KLJKHU RUGHU RI
VRSKLVWLFDWLRQDQGFRPSOH[LW\LQDIHZVTXDUH\DUGVRIIRUHVWWKDQWKHUHLVLQDOOWKH

WKH OLEUDULHV RI PDQNLQG   7KH UHVXOWLQJ LQIRUPDWLRQ LV HQFRGHG ZLWKLQ OLYLQJ
RUJDQLVPV7KHJHQHWLFLQIRUPDWLRQIURPDFRPPRQPRXVHIRULQVWDQFHFRXOGILOO

HYHU\ HGLWLRQ RI WKH (QF\FORSGLD %ULWDQQLFD SXEOLVKHG VLQFH    *LYHQ WKH
G\QDPLF QDWXUH RI WKH ELRVSKHUH DV D QHWZRUN RI OLYLQJ WKLQJV WKDW FRQWLQXDOO\

UHQHJRWLDWHWKHOLQNVEHWZHHQWKHP >W@KHELRVSKHUHWKDWLVWKHSODQHWHDUWKVKRXOG
EHUHJDUGHGDVDQH[FHHGLQJO\FRPSOH[FRPSXWHUSURJUDPZLWKPLOOLRQVRISDUWV

HDFK RI ZKLFK LV HYROYLQJ   %LRORJLVW 5LFKDUG 'DZNLQV HORTXHQWO\ ODXGV WKH
LOOXPLQDWLQJLQVLJKWRIQDWXUHDVPHJDFRPSXWHU


<RXFDQLI\RXZLVKWKLQNRIWKHJHQHVLQDOOWKHSRSXODWLRQVRIWKH
ZRUOG DV FRQVWLWXWLQJ D JLDQW FRPSXWHU FDOFXODWLQJ FRVWV DQG EHQHILWV
DQG FXUUHQF\ FRQYHUVLRQV ZLWK WKH VKLIWLQJ SDWWHUQV RI JHQH
IUHTXHQFLHVGRLQJGXW\IRUWKHVKXWWOLQJVDQGVRIDQHOHFWURQLFGDWD

SURFHVVRU


$Q DSSURSULDWHO\ KLJK OHYHO RI DEVWUDFWLRQ PDNHV LW HDV\ WR SHUFHLYH WKH
OD\HUHG QDWXUH RI WKH ELRVSKHUH DW ODUJH DV DQ LQIRUPDWLRQ SODWIRUP  7KH SODQHWV
VXUIDFH LWV ZDWHUV DQG LWV DWPRVSKHUH FRQVWLWXWH D SK\VLFDO OD\HU ZKLFK LQ WXUQ
SURYLGHV KDELWDW IRU DOO RUJDQLVPV  7KH ELRORJLFDO G\QDPLFV WKDW GLFWDWH HFRV\VWHP
IXQFWLRQ DQG VWDELOLW\ FRPSULVH D ORJLFDO OD\HU RI VRUWV PXFK DV ODQJXDJHV VXFK DV
+70/ DQG -DYD DQG VWDQGDUGV IRU LQWHUFRQQHFWLRQ VXFK DV 7&3,3 HQDEOH WKH
,QWHUQHWWRIXQFWLRQ7KHVXFFHVVRUIDLOXUHRIHIIRUWVWRFRQVHUYHELRGLYHUVLW\RIWHQ

KLQJHV RQ WKH ODZV WUHDWPHQW RI WKH ELRVSKHUHV SK\VLFDO DQG ORJLFDO OD\HUV   6LQFH
WKHLULPSDFWVDUHIHOWPRVWSURIRXQGO\DWWKHVHORZHUOD\HUVFOLPDWHFKDQJHKDELWDW

GHVWUXFWLRQDQGDOLHQLQYDVLYHVSHFLHVSRVHWKHJUHDWHVWWKUHDWVWRELRORJLFDOGLYHUVLW\ 


 *$5<61<'(57857/(,6/$1'  




 5,&+$5' 72%,1 7+( (;3(1'$%/( )8785( 86 32/,7,&6 $1' 7+( 3527(&7,21 2)
%,2/2*,&$/',9(56,7<  


 6HHJHQHUDOO\5,&+$5'6287+:22'7+(6725<2)/,)(  




 -RKQ&KDUOHV.XQLFK3UHVHUYLQJWKH:RPERIWKH8QNQRZQ6SHFLHVZLWK+RWVSRWV/HJLVODWLRQ
+$67,1*6/-  


 5,&+$5''$:.,16&/,0%,1*02817,0352%$%/(  




 6HH JHQHUDOO\ -LP &KHQ :HEV RI /LIH %LRGLYHUVLW\ &RQVHUYDWLRQ DV D 6SHFLHV RI ,QIRUPDWLRQ
3ROLF\,2:$/5(9  


 6HH JHQHUDOO\ -LP &KHQ $FURVV WKH $SRFDO\SVH RQ +RUVHEDFN ,PSHUIHFW /HJDO 5HVSRQHVHV WR
%LRGLYHUVLW\ /RVV  :$6+ 8 -/  32/<    -LP &KHQ $FURVV WKH $SRFDO\SVH RQ
+RUVHEDFN

,PSHUIHFW

/HJDO

5HVSRQVHV

WR

%LRGLYHUVLW\

/RVV

LQ

7+(

-85,6'<1$0,&6

2)

(19,5210(17$/ 3527(&7,21 &+$1*( $1' 7+( 35$*0$7,& 92,&( ,1 (19,5210(17$/ /$:

@

7+(5( 61268&+7+,1*$6%,23,5$&<




0RVWFDVXDOREVHUYHUVKRZHYHUKDYHGLIIFXOW\XQGHUVWDQGLQJWKHELRVSKHUHDV
DQLQIRUPDWLRQSODWIRUP,QVWHDGWUHDWLQJQDWXUHDVDQDGPLWWHGO\G\QDPLFFROOHFWLRQ
RI VSHFLHV DQG VSHFLPHQV LV SUREDEO\ WKHPRVWSRSXODUDQGPRVWHDVLO\XQGHUVWRRG

VHQVH LQ ZKLFK WKH ELRVSKHUH VHUYHV DV D VWRUHKRXVH RI LQIRUPDWLRQ   (YHQ ZKHQ
HPERGLHG ZLWKLQ VPDOOHU XQLWV RI WUDQVPLWWDEOH ELRORJLFDO LQIRUPDWLRQ VSHFLHV
VSHFLPHQVDQGJHQHV KRZHYHUELRORJLFDOFRQWHQWLVLWVHOIOD\HUHG7KHELRORJLFDO
FRQWHQW UHSUHVHQWHG E\ D VLQJOH VSHFLHV FDQ EH IXUWKHUGLYLGHGLQWRSK\VLFDOORJLFDO
DQG DSSOLFDWLRQEDVHG VXEOD\HUV  ,QGLYLGXDO VSHFLPHQV UHSUHVHQW WKH SK\VLFDO
VXEOD\HU  7KH JHQHWLF LQIRUPDWLRQ ZLWKLQ WKHVH VSHFLPHQV '1$ FRQVWLWXWHV WKH
ORJLFDOVXEOD\HU)LQDOO\KXPDQNQRZOHGJHUHJDUGLQJSRWHQWLDODSSOLFDWLRQVRIJHQHWLF
LQIRUPDWLRQ IRUPV D XQLTXHO\ VRIW IRUP RI ELRORJLFDO FRQWHQW  7KH HOHFWURQLF
DQDORJ\LVFRPSOHWHMXVWDVLQGLYLGXDOZHEVLWHVPDQLSXODWH+70/-DYD7&3,3DQG
RWKHU HOHPHQWV RI WKH ,QWHUQHWV ORJLFDO FRGH KXPDQ LQJHQXLW\ WUDQVIRUPV WKH
ELRORJLFDO FRGH HPEHGGHG LQRWKHURUJDQLVPV'1$LQWRIRRGVGUXJVDQGRWKHU
SURGXFWVWKDWVHUYHKXPDQV6RPHOD\HUHGPRGHOVRILQIRUPDWLRQSROLF\LGHQWLI\QRW

RQHEXWWZROD\HUVEH\RQGORJLFDSSOLFDWLRQVDQGFRQWHQW 7RDYRLGFRQIXVLRQZLWK
WKH QRWLRQ RI VSHFLHV LQ WKHLU RZQ ULJKW DV D VRXUFH RI ELRORJLFDO FRQWHQW , VKDOO
GHVFULEHWKHFRUSXVRIKXPDQNQRZOHGJHDERXWJHQHWLFLQIRUPDWLRQDVWKHDSSOLFDWLRQ
VXEOD\HURIWKHELRVSKHUH

+DSSLO\ WKH ERXQGDULHV EHWZHHQ WKH SK\VLFDO DQG ORJLFDO VXEOD\HUV DQG
EHWZHHQ WKH ORJLFDO DQG DSSOLFDWLRQ VXEOD\HUV FRUUHVSRQG WR WZR VWDQGDUG GLYLGLQJ
OLQHVLQELRORJ\WKHGLVWLQFWLRQEHWZHHQSKHQRW\SHVDQGJHQRW\SHVDQGWKHGLVWLQFWLRQ
EHWZHHQ JHQHV DQG PHPHV  &DUHIXO H[DPLQDWLRQ RI WKHVH GLVWLQFWLRQV DQG RI WKH
VXEOD\HUV WKH\ GHPDUFDWH XQGHUPLQHV WKH QRUPDWLYH SUHPLVHV RI WKH ELRSLUDF\
QDUUDWLYH



 -LP&KHQHG 


 6HH -LP &KHQ 'LYHUVLW\ DQG 'HDGORFN 7UDQVFHQGLQJ &RQYHQWLRQDO :LVGRP RQ WKH 5HODWLRQVKLS
%HWZHHQ%LRORJLFDO'LYHUVLW\DQG,QWHOOHFWXDO3URSHUW\(197//5375
 


 6HH HJ &200,77(( 21 7+( ,17(51(7 ,1 7+( (92/9,1* ,1)250$7,21 ,1'8675,(6 7+(
,17(51(76&20,1*2)$*(  0DUN$/HPOH\ /DZUHQFH/HVVLJ7KH(QGRI(QGWR
(QG 3UHVHUYLQJ WKH $UFKLWHFWXUH RI WKH ,QWHUQHW LQ WKH %URDGEDQG (UD  8&/$ / 5(9  
  .HYLQ :HUEDFK $ /D\HUHG 0RGHO IRU ,QWHUQHW 3ROLF\  - 21 7(/(&2006 +,*+ 7(&+
/  



&*(25*(/$:5(9,(:

>9RO

%7KH3K\VLFDODQG/RJLFDO6XEOD\HUV
'LVWLQJXLVKLQJ3KHQRW\SHVIURP*HQRW\SHV



  3KHQRW\SHV YHUVXV JHQRW\SHV RU EDG VH[ PDNHV JRRG HDWLQJ  7KH
GLVWLQFWLRQ EHWZHHQ SKHQRW\SHV DQG JHQRW\SHV VHSDUDWHV ELRORJLFDO VSHFLPHQV DV
SK\VLFDO FKDWWHO IURP ELRORJLFDO VSHFLPHQV DV VRXUFHV RI JHQHWLF FRGH  ,Q D ZRUOG
VKDSHGE\QDWXUDODQGVH[XDOVHOHFWLRQWZRDQGRQO\WZRIRUFHVUHDOO\PDWWHU2QHRI

WKHPLVIRRG7KHRWKHULVVH[ 7KHVHHGLVERWK,WLVERWKPHDQVRISURGXFWLRQ

DQGDVJUDLQ>RUIUXLW@WKHSURGXFW 7KHVHHGLWVHOILVDPHUHFKDWWHOEXWWKHJHQHWLF
LQIRUPDWLRQ LW FRQWDLQV LV FRQFHSWXDOO\ LQGHSHQGHQW  $ JHQRPH LV DW RQFH D VHW RI
LQVWUXFWLRQVIRUDVVHPEOLQJDQGRSHUDWLQJDQRUJDQLVPDQGDG\QDPLFUHFRUGRIWKDW

RUJDQLVPVHYROXWLRQDU\KLVWRU\ 7KHVWDQGDUGOHJDOGLVWLQFWLRQEHWZHHQFKDWWHODQG
LQWHOOHFWXDO SURSHUW\ ZKLFK FRUUHVSRQGV WR WKH GLVWLQFWLRQ EHWZHHQ SKHQRW\SHV DQG
JHQRW\SHVH[SODLQVZK\PHUHSRVVHVVLRQRIWKHVWDWLRQHU\RQZKLFKDOHWWHULVZULWWHQ

GRHVQRWHQWLWOHWKHSRVVHVVRUWRTXRWHRUSDUDSKUDVHWKHOHWWHULWVHOI ,QHFRQRPLFDV
ZHOODVELRORJLFDOWHUPVWKHSKHQRW\SLFDOLQIRUPDWLRQFRQWDLQHGLQDVLQJOHRUJDQLVP
LVTXLWHGLVWLQFWIURPWKDWRUJDQLVPVJHQRW\SH:KHUHDVFRQVXPSWLRQRIDSK\VLFDO
VSHFLPHQ SUHFOXGHV DQ\ RWKHU XVH JHQHWLF LQIRUPDWLRQ UHVHPEOHV D QRQULYDOURXV
SXEOLF JRRG LQ WKDW D VLQJOH XVH GRHV QRW SUHFOXGH LQGHSHQGHQW XVH E\ D GLIIHUHQW

SDUW\ 

7KH)ODYU6DYUWRPDWRWKHILUVWWUDQVJHQLFDOO\PRGLILHGRUJDQLVPDSSURYHG

E\WKH)RRGDQG'UXJ$GPLQLVWUDWLRQIRUKXPDQFRQVXPSWLRQ YLYLGO\LOOXVWUDWHVWKH
GLVWLQFWLRQ EHWZHHQ SKHQRW\SHV DQG JHQRW\SHV  &DOJHQH ,QF LQWURGXFHG LQWR


 -LP&KHQ/DZDVD6SHFLHVRI/DQJXDJH$FTXLVLWLRQ:$6+8/4Q  


6HH JHQHUDOO\ *(2))5(< ) 0,//(5 7+( 0$7,1* 0,1' +2: 6(;8$/ &+2,&( 6+$3(' 7+(
(92/87,21 2) +80$1 1$785(    GLVWLQJXLVKLQJ EHWZHHQ QDWXUDO DQG VH[XDO VHOHFWLRQ DV
HYROXWLRQDU\IRUFHV 


 -$&. 5$/3+ ./233(1%85* -5 ),567 7+( 6((' 7+( 32/,7,&$/ (&2120< 2) 3/$17
%,27(&+12/2*<DW  


 6HH JHQHUDOO\ $172,1( '$1&+,1 7+( '(/3+,& %2$7 :+$7 *(120(6 7(// 86 $OLVRQ
4XD\OHWUDQVO 


 6HH 6DOLQJHU Y 5DQGRP +RXVH ,QF  )G   G &LU  VXSSOHPHQWHG  )G 
G&LU FHUWGHQLHG86  


 6HH&KULVWRSKHU'6WRQH:KDWWR'R$ERXW%LRGLYHUVLW\3URSHUW\5LJKWV3XEOLF*RRGVDQGWKH
(DUWKV%LRORJLFDO5LFKHV6&$//5(9  


 6HH&DOJHQH,QF5HTXHVWIRU$GYLVRU\2SLQLRQ)HG5HJ 0D\ 6WDWHPHQW


RI3ROLF\)RRGV'HULYHG)URP1HZ3ODQW9DULHWLHV)HG5HJ 0D\ 6HHJHQHUDOO\
-XGLWK(%HDFK1R.LOOHU7RPDWRHV(DVLQJ)HGHUDO5HJXODWLRQRI*HQHWLFDOO\(QJLQHHUHG3ODQWV
)22' '58*/-  

@

7+(5( 61268&+7+,1*$6%,23,5$&<



WRPDWRHV D JHQH WKDW SURGXFHV DV PHVVHQJHU ULERQXFOHLF DFLG P51$  DQ
DQWLVHQVH FRS\ RI WKH SRO\JDODFWXURQDVH JHQH ZKLFK LQ WXUQ VXSSUHVVHV WKH
SURGXFWLRQ RI DQ HQ]\PH  WKDW LV DVVRFLDWHG ZLWK WKH EUHDNGRZQ RI SHFWLQ D

FRQVWLWXHQW RI WKH FHOO ZDOO LQ WRPDWR IUXLW   7KH LQWURGXFHG JHQH GLUHFWHG WKH
SURGXFWLRQ RIFRPSOHPHQWDU\51$WKDWZRXOGELQGLWVHOIWRP51$WKDWRUGLQDULO\
JRYHUQV WKH SURGXFWLRQ RI SRO\JDODFWXURQDVH WKH HQ]\PH DVVRFLDWHG ZLWK WKH
GHFRPSRVLWLRQ RI SHFWLQ   7RPDWRHV ZLWK ORZHU OHYHOV RI SRO\JDODFWXURQDVH KDYH D
ORQJHUVKHOIOLIHEHFDXVHWKHLUFHOOZDOOVUHPDLQLQWDFWIRUDORQJHUSHULRGRIWLPH

,Q SODLQ (QJOLVK &DOJHQH WULFNHG WKH WRPDWR LQWR DEDQGRQLQJ LWV RULJLQDO
JHQHWLF LQVWUXFWLRQV DV D GHOLYHU\ YHKLFOH IRU VHHGV DQG DFFHSWLQJ QHZ FRPPDQGV
EHWWHUVXLWHGWRVKHOIOLIHZLWKLQKXPDQNLWFKHQV1DWXUDOVHOHFWLRQW\SLFDOO\GRHVQRW

\LHOGWUDLWVWKDWDUHXVHIXOWRKXPDQVEXWLQLPLFDOWRWKHRUJDQLVPVZHOOEHLQJ ,QWKH
WRPDWRV QDWXUDO VWDWH IDLOXUH WR GHFRPSRVH LV OHWKDO WR UHSURGXFWLYH VXFFHVV  7KDW
VDPH WUDLW KRZHYHU HQKDQFHG WKH )ODYU 6DYUV YDOXH WR KXPDQV$VZLWKKRJVDQG

R\VWHUVEDGVH[PDNHVJRRGHDWLQJ 


 &DOJHQH  )HG 5HJ DW  VHH DOVR (Q]R %LRFKHP ,QF Y &DOJHQH ,QF  )G 
 )HG&LU  KROGLQJWKDW&DOJHQHV)ODYU6DYUWRPDWRGLGQRWLQIULQJHSDWHQWVRQWKHXVHRI
DQWLVHQVHWHFKQRORJ\LQ(VFKHULFKLDFROLEDFWHULD 7KH)'$ULJKWO\UHIHUUHGWRWKHWRPDWRDVDIUXLWQRW
YHJHWDEOH/RYHRYHUJROGELRORJ\RYHUODZ%XWWKH6XSUHPH&RXUWGLVDJUHHV



%RWDQLFDOO\ VSHDNLQJ WRPDWRHV DUH WKH IUXLW RI D YLQH MXVW DV DUH FXFXPEHUV
VTXDVKHV EHDQV DQG SHDV  %XW LQ WKH FRPPRQ ODQJXDJH RI WKH SHRSOH ZKHWKHU
VHOOHUV RU FRQVXPHUV RI SURYLVLRQV DOO WKHVH DUH YHJHWDEOHV ZKLFK DUH JURZQ LQ
NLWFKHQJDUGHQVDQGZKLFKZKHWKHUHDWHQFRRNHGRUUDZDUHOLNHSRWDWRHVFDUURWV
SDUVQLSV WXUQLSV EHHWV FDXOLIORZHU FDEEDJH FHOHU\ DQG OHWWXFH XVXDOO\ VHUYHG DW
GLQQHULQZLWKRUDIWHUWKHVRXSILVKRUPHDWVZKLFKFRQVWLWXWHWKHSULQFLSDOSDUWRI
WKHUHSDVWDQGQRWOLNHIUXLWVJHQHUDOO\DVGHVVHUW


1L[Y+HGGHQ86  


 &I:D\QH/DZ -DQ6DOLFN>$UWLFOHRQDQWKURSRJHQLFPHGLDWLRQRIQDWXUDOVHOHFWLRQLQWKHVQRZ


ORWXV 6DXVVXUHDODQLFHSV 31$6-XO\@7XOLSPDQLDLQVHYHQWHHQWKFHQWXU\+ROODQGSURYLGHV
D SDUWLDO H[FHSWLRQ$YLUXVWUDQVPLWWHGE\WKHSHDFKSRWDWRDSKLG0\]XVSHUVLFDHFDXVHVWKHWXOLSWR
EUHDN LQWR PXOWLSOH FRORUV  7KLV YLUXV LV WKH RQO\ NQRZQ LQVWDQFH RI D SODQW GLVHDVH ZKLFK JUHDWO\
LQFUHDVHV WKH YDOXH RI WKH LQIHFWHG SODQW  $11$ 3$925' 7+( 78/,3 7+( 6725< 2) $ )/2:(5
7+$7 +$6 0$'( 0(1 0$'    FI .HLWK 6DXQGHUV HW DO 7KH (DUOLHVW5HFRUGHG3ODQW9LUXV
'LVHDVH  1$785(    UHSRUWLQJ WKDW D SRHP DWWULEXWHG WR DQ HLJKWK FHQWXU\ -DSDQHVH
HPSUHVV UHFRUGV WKH V\PSWRPV RI D YLUDO GLVHDVH WKDW WXUQV (XSDWRULXP PDNLQRL D VWULNLQJ \HOORZ LQ
VXPPHU 


 6HH ([ SDUWH $OOHQ  8634G  3DWHQW  7UDGHPDUN 2II   UHFRJQL]LQJ D SRO\SORLG
R\VWHU DV SDWHQWDEOH VXEMHFW PDWWHU EXW GHQ\LQJ WKH SDWHQW IRU IDLOXUH WR VDWLVI\ WKH REYLRXVQHVV
UHTXLUHPHQW RI  86&   DIIG ZLWKRXW RSLQLRQ  )G  )HG &LU    >(@[SRVLQJ
QHZO\ IHUWLOL]HG R\VWHU HJJV WR H[WUHPH ZDWHU SUHVVXUH GLVUXSWV WKH QRUPDO DOORFDWLRQ RI FKURPRVRPHV
GXULQJ FHOO GLYLVLRQ OHDYLQJ  R\VWHUV ZLWK WKUHH FRSLHV RI HDFK FKURPRVRPH LQVWHDG RI WKH QRUPDO



&*(25*(/$:5(9,(:

>9RO



  1DWLRQDO FRQWURO RYHU WKH SK\VLFDO OD\HU  /HW XV UHWXUQ WR WKH EDVLF
ELRSLUDF\QDUUDWLYHWKHEHWWHUWRDSSO\WKHVHLQVLJKWVDERXWSKHQRW\SHVDQGJHQRW\SHV
6XSSRVHWKDWDUHVHDUFKHUZRUNLQJIRUDQRUWKHUQSKDUPDFHXWLFDOFRPSDQ\KDUYHVWVD
IHZVSHFLPHQVRIDUDUHDQGSRWHQWLDOO\YDOXDEOHSODQWIURPLWVQDWLYHVRLODQGSDFNV
WKRVH VSHFLPHQV LQ KHU OXJJDJH  7KH DFW RI KDUYHVWLQJ WKRVH VSHFLPHQV
XQTXHVWLRQDEO\UHSUHVHQWVDWDNLQJRIWKDWSODQWZLWKLQWKHPHDQLQJRIWKH8QLWHG

6WDWHV(QGDQJHUHG6SHFLHV$FW 7KDWVWDWXWHKRZHYHUDSSHDUVWRKDYHQRWHUULWRULDO

HIIHFW RXWVLGH WKH 8QLWHG 6WDWHV   (YHQ LI WKH (QGDQJHUHG 6SHFLHV $FW FRXOG EH
FRQVWUXHG VR WKDW LW RYHUFRPHV WKH XVXDO SUHVXPSWLRQ DJDLQVW H[WUDWHUULWRULDO

DSSOLFDWLRQ RI $PHULFDQ ODZ  SULYDWH OLWLJDQWV ZRXOG IDFH IRUPLGDEOH EDUULHUV WR

HQIRUFLQJWKH$FW 8QOHVVWKHELRORJLFDOKRWVSRWIURPZKLFKWKLVSODQWLVKDUYHVWHG
KDSSHQVWRIDOOZLWKLQWKHMXULVGLFWLRQDOUHDFKRIWKH8QLWHG6WDWHVVRPHRWKHUVRXUFH
RIODZPXVWVXSSO\UHVWULFWLRQVRQWDNLQJVRIWKDWSODQW

2QH SHUWLQHQW VRXUFH RI ODZ LV WKH &RQYHQWLRQ RQ %LRORJLFDO 'LYHUVLW\ DQ
LQWHUQDWLRQDODJUHHPHQWDLPHGDWSURPRWLQJWKHFRQVHUYDWLRQRIELRORJLFDOGLYHUVLW\
WKH VXVWDLQDEOH XVH RI LWV FRPSRQHQWV DQG WKH IDLU DQG HTXLWDEOH VKDULQJ RI WKH

EHQHILWV DULVLQJ RXW RI WKH XWLOL]DWLRQ RI JHQHWLF UHVRXUFHV   $UWLFOH  RI WKH
&RQYHQWLRQJUDQWVVWDWHVWKHVRYHUHLJQULJKWWRH[SORLWWKHLURZQUHVRXUFHVSXUVXDQW
WR WKHLU RZQ HQYLURQPHQWDO SROLFLHV VXEMHFW WR WKH UHVSRQVLELOLW\ WR HQVXUH WKDW
DFWLYLWLHVZLWKLQWKHLUMXULVGLFWLRQRUFRQWUROGRQRWFDXVHGDPDJHWRWKHHQYLURQPHQW

 EH\RQG WKH OLPLWV RI QDWLRQDO MXULVGLFWLRQ   7KURXJK WKLV VLPSOHSURFODPDWLRQ

WZR7KLVPDNHVWKHR\VWHUVVWHULOHDQGDOVRHOLPLQDWHVWKHLUQRUPDOWZRPRQWKUHSURGXFWLYHF\FOH
ZKLFKLQWXUQSHUPLWVWKHR\VWHUVWREHKDUYHVWHG\HDUURXQG5REHUW30HUJHV,QWHOOHFWXDO3URSHUW\
LQ +LJKHU /LIH )RUPV 7KH 3DWHQW 6\VWHP DQG &RQWURYHUVLDO 7HFKQRORJLHV  0' / 5(9 
   IRRWQRWHVRPLWWHG 


 6HH  86&  D  %  &    GHFODULQJ LW XQODZIXO IRU DQ\ SHUVRQ VXEMHFW WR WKH
MXULVGLFWLRQ RI WKH 8QLWHG 6WDWHV WR  WDNH >DQ HQGDQJHUHG@ VSHFLHV ZLWKLQ WKH 8QLWHG 6WDWHV RU WKH
WHUULWRULDOVHDRIWKH8QLWHG6WDWHVRUXSRQWKHKLJKVHDV FILG   7KHWHUPWDNHPHDQV
WRKDUDVVKDUPSXUVXHKXQWVKRRWZRXQGNLOOWUDSFDSWXUHRUFROOHFWRUWRDWWHPSWWRHQJDJHLQDQ\
VXFKFRQGXFW 


 6HH /XMDQ Y 'HIHQGHUV RI :LOGOLIH  86     6WHYHQV - FRQFXUULQJ LQ WKH
MXGJPHQW 


   6HH HJ ((2& Y $UDELDQ $P 2LO &R  86     )ROH\ %URV Y )LODUGR 
86  0XUUD\Y7KH&KDUPLQJ%HWV\86 &UDQFK   


 6HH'HIHQGHUVRI:LOGOLIH86DW


 &RQYHQWLRQRQ%LRORJLFDO'LYHUVLW\DUW,/0  >KHUHLQDIWHU&%'@




 ,G DUW  DFFRUG 5LR 'HFODUDWLRQ RQ (QYLURQPHQW DQG 'HYHORSPHQW DGRSWHG -XQH   
,/0   SULQFLSOH 

@

7+(5( 61268&+7+,1*$6%,23,5$&<



WKH &RQYHQWLRQ RQ %LRORJLFDO 'LYHUVLW\ H[WLQJXLVKHV DQ\ SUHH[LVWLQJ FODLP LQ
LQWHUQDWLRQDO ODZ WKDW JHQHWLF UHVRXUFHV EHORQJ WR WKH KHULWDJH RI PDQNLQG RU

RWKHUZLVH OLH ZLWKLQ D JOREDO SXEOLF GRPDLQ   $W WKH VDPH WLPH E\ UHFRJQL]LQJ
VRYHUHLJQ FRQWURO RYHU QDWXUDO UHVRXUFHV WKH &RQYHQWLRQ SODFHV WKH RQXV IRU
SUHYHQWLQJWKHGHSOHWLRQRIDFRPPHUFLDOO\YDOXDEOHHQGDQJHUHGVSHFLHVVTXDUHO\RQ
QDWLRQDOJRYHUQPHQWVDQGRQGRPHVWLFHQYLURQPHQWDOODZ

7KH &RQYHQWLRQ RQ %LRORJLFDO 'LYHUVLW\ UHYLOHG E\ WKH 8QLWHG 6WDWHV
JRYHUQPHQW EHFDXVH LW DOOHJHGO\ UHTXLU>HV@ RSHQ DFFHVV WR UHVHDUFK DFWLYLWLHV DQG

WKHUHE\ HIIHFWLYHO\ WUDQVIHU>V@ WHFKQRORJ\ DW WKH H[SHQVH RI LQWHOOHFWXDO SURSHUW\ 
SURYLGHV DQ H[WUHPHO\ XQOLNHO\ SODWIRUP IRU FUHGLEOH DOOHJDWLRQV RI ELRSLUDF\
,QWHUQDWLRQDO FRRSHUDWLYH ELRGLYHUVLW\ JURXSV F FRPPHUFLDO SDUWQHUVKLSV LQYROYLQJ
PXOWLQDWLRQDO OLIH VFLHQFHV FRPSDQLHV DQG QDWLRQDO JRYHUQPHQWV LQ FRXQWULHV ULFK LQ

ELRORJLFDO GLYHUVLW\ F RZH WKHLU H[LVWHQFH WR WKH &RQYHQWLRQ   7KH &RQYHQWLRQ
UHTXLUHV WKDW DOO FRQWUDFWLQJ SDUWLHV >L@GHQWLI\ FRPSRQHQWV RI ELRORJLFDO GLYHUVLW\
WDNH VSHFLDO FDUH LQ PRQLWRULQJ WKRVH >FRPSRQHQWV@ UHTXLULQJ XUJHQW FRQVHUYDWLRQ
PHDVXUHVDQGWKRVHZKLFKRIIHUWKHJUHDWHVWSRWHQWLDOIRUVXVWDLQDEOHXVHDQGLGHQWLI\
DQGPRQLWRUDFWLYLWLHVZKLFKKDYHRUDUHOLNHO\WRKDYHVLJQLILFDQWDGYHUVHLPSDFWVRQ

WKH FRQVHUYDWLRQ DQG VXVWDLQDEOH XVH RI ELRORJLFDO GLYHUVLW\   7KH FDSDFLW\EXLGLQJ
LPSHWXV VXSSOLHG E\ WKLV UHTXLUHPHQW WRFDWDORJDQGPRQLWRUELRGLYHUVLW\UHLQIRUFHV
WKHQDWLRQDOFRQWUROFRQIHUUHGE\DUWLFOHRIWKH&RQYHQWLRQ)HDUIXOWKDWH[WLQFWLRQV
ZLOO RXWSDFH WKH UHVHDUFK DQG UHFRYHU\ HIIRUWV RI SRRUO\ WUDLQHG HTXLSSHG DQG



 6HHHJ(GJDU-$VHEH\ -LOO'.HPSHQDDU%LRGLYHUVLW\3URVSHFWLQJ)XOILOOLQJWKH0DQGDWHRI


WKH %LRGLYHUVLW\ &RQYHQWLRQ  9$1' - 75$161$7/ /     7RGD\ VRXUFH
FRXQWULHVUHMHFWWKHFRPPRQKHULWDJHIUDPHZRUN 2QWKHFRPPRQKHULWDJHSULQFLSOHLQLQWHUQDWLRQDO
ODZ VHH JHQHUDOO\ .(0$/ %$6/$5 7+( &21&(37 2) 7+( &20021 +(5,7$*( 2) 0$1.,1' ,1
,17(51$7,21$/ /$:     $&+,0 /(5&+ 9(5)h*81*65(&+7( 81' %,2/2*,6&+(
9,(/)$/7  


 *ROGPDQ VXSUD QRWH  DW   6HH JHQHUDOO\ 5REHUW ) %ORPTXLVW 5DWLILFDWLRQ 5HVLVWHG
8QGHUVWDQGLQJ$PHULFDV5HVSRQVHWRWKH&RQYHQWLRQRQ%LRORJLFDO'LYHUVLW\*2/'(1
*$7(8/5(9  


 6HH HJ $VHEH\  .HPSHQDDU VXSUD QRWH  DW  6DUDK $ /DLUG &RQWUDFWV IRU
%LRGLYHUVLW\ LQ %,2',9(56,7< 35263(&7,1* 86,1* *(1(7,& 5(6285&(6 )25 6867$,1$%/(
'(9(/230(17 :DOWHU95HLGHG >KHUHLQDIWHU%,2',9(56,7<35263(&7,1*@&KDUOHV5
0F0DQLV ,QWHOOHFWXDO 3URSHUW\ *HQHWLF 5HVRXUFHV DQG 7UDGLWLRQDO .QRZOHGJH 3URWHFWLRQ 7KLQNLQJ
*OREDOO\ $FWLQJ /RFDOO\  &$5'2=2 - ,17/  &203 /     .ULVWHQ 3HWHUVRQ
5HFHQW,QWHOOHFWXDO3URSHUW\7UHQGVLQ'HYHORSLQJ&RXQWULHV+$59,17//-  
7KH OHDGLQJ H[DPSOH RI DQ LQWHUQDWLRQDO FRRSHUDWLYH ELRGLYHUVLW\ JURXS LV &RVWD 5LFDV ,QVWLWXWR
1DFLRQDOGH%LRGLYHUVLGDG ,1%LR HVWDEOLVKHGLQFRRSHUDWLRQZLWK0HUFN


 &%'VXSUDQRWHDUW



&*(25*(/$:5(9,(:

>9RO

ILQDQFHG GRPHVWLF ELRORJLVWV QHDUO\ DOO FRXQWULHV ZHOFRPH IRUHLJQ ELRSURVSHFWRUV 


2Q WKH RWKHU KDQG VRPH VRXUFH FRXQWULHV KDYH EHJXQ WR UHVWULFW FROOHFWLRQ E\
WUDGLWLRQDO LQWHUPHGLDULHV VXFK DV ERWDQLFDO JDUGHQV LQ DQ HIIRUW WR UHWDLQ ORFDO
FRQWURO EXLOG GRPHVWLF VFLHQWLILF LQIUDVWUXFWXUH DQG FDSWXUH SURILWV IURP WKH YDOXH

DGGHGSKDVHVRIFRPPHUFLDOELRSURVSHFWLQJ 

7KH ODUJHU SRLQW LV WKDW VRXUFH FRXQWULHV H[HUW FRPSOHWH FRQWURO RYHU WKH
SK\VLFDO SKHQRW\SLFDO OD\HU RI LQIRUPDWLRQ LQ ELRSURVSHFWLQJ  6XEMHFWLQJ JHQHWLF
UHVRXUFHVWRQDWLRQDOVRYHUHLJQW\PHDQVTXLWHVLPSO\WKDWDFFHVVWRWKRVHUHVRXUFHV
UHVWV HQWLUHO\ XQGHU WKH FRQWURO RI QDWLRQDO JRYHUQPHQWV  $FFXVDWLRQV WKDW
FRPPHUFLDO GHYHORSPHQW LV LQIOLFWLQJ HQYLURQPHQWDO GDPDJH WKRXJK MXVWLILDEOH WR

VRPH GHJUHH  VKRXOG QRW EH ODLG DW WKH IHHW RI QRUWKHUQ ELRSURVSHFWRUV  /RFDO
JRYHUQPHQWV QRW IRUHLJQ ELRSURVSHFWRUV KROG SULPDU\ UHVSRQVLELOLW\ IRU
HQYLURQPHQWDOGDPDJHDWWULEXWDEOHWRWKHFROOHFWLRQRIELRORJLFDOVSHFLPHQV/DXULH
$QQH:KLWWIRULQVWDQFHEODPHVSKDUPDFHXWLFDOFRPPHUFLDOL]DWLRQIRUGHSOHWLRQRI
DUDUHSODQW3LORFDUSXVMDERUDQGLXVHGLQWKHWUDGLWLRQDOPHGLFLQHRIWKH.D\DSRDQG

*XDMDMDUDSHRSOHVRI%UD]LO ,IMDERUDQGLEXVKHVDUHLQGHHGEHLQJRYHUKDUYHVWHGIRU
WKHLUSKDUPDFRORJLFDOO\DFWLYHOHDYHVWKHGHSOHWLRQVKRXOGQRWEHEODPHGRQ0HUFN
 &RPSDQ\  5HVSRQVLELOLW\ IRU WKLV SODQWV GHFOLQH GRHV QRW UHVW ZLWK WKH
PXOWLQDWLRQDO SKDUPDFHXWLFDO FRPSDQ\ PHUHO\ EHFDXVH LW KDV GHYHORSHG DQ DQWL
JODXFRPDGUXJIURPMDERUDQGL5DWKHUWKHJRYHUQPHQWRI%UD]LOLVDFFRXQWDEOHIRU
LWVIDLOXUHWRFRQWURODFFHVVWRMDERUDQGLLQLWVQDWXUDOUDQJHRURWKHUZLVHWRUHJXODWHLWV

KDUYHVW %\WKHWHUPVRIDUWLFOHRIWKH&RQYHQWLRQRQ%LRORJLFDO'LYHUVLW\HLWKHU
%UD]LO KDV IDLOHG WR H[HUFLVH SURSHUO\ LWV VRYHUHLJQ ULJKW WR H[SORLW  UHVRXUFHV




F7KH,QWHUOLQNLQJ

 6HH9DQGDQD'DWH*OREDO'HYHORSPHQWDQG,WV(QYLURQPHQWDO5DPLILFDWLRQV

RI (FRORJLFDOO\ 6XVWDLQDEOH 'HYHORSPHQW DQG ,QWHOOHFWXDO 3URSHUW\ 5LJKWV  *2/'(1 *$7( 8/
5(9  


 6HH -XOLH 0 )HLQVLOYHU %LRGLYHUVLW\ 3URVSHFWLQJ 3URVSHFWV DQG 5HDOLWLHV LQ 35263(&76 ,1
%,2',9(56,7<35263(&7,1* $+=DNULHG 


 %LRSURVSHFWRUV DQWKURSRORJLVWV RU MRXUQDOLVWV KDYH EHHQ NQRZQ WR HQJDJH LQ GHOLEHUDWH
PLVFRQGXFW  6HH 3$75,&. 7,(51(< '$5.1(66 ,1 (/ '25$'2 +2: 6&,(17,676 $1'
-2851$/,676 '(9$67$7(' 7+( $0$=21    (YHQ FDVXDO KLNLQJ DIIHFWV WKH GLVWULEXWLRQ DQG
SRSXODWLRQ RI ZLOGOLIH  6HH )UDQFHVFD 2UWL] &DQGLGDWH &RQVHUYDWLRQ $JUHHPHQWV DV D 'HYROXWLRQDU\
5HVSRQVHWR([WLQFWLRQ*$/5(9  FI0DXVROIY%DEELWW)G
WK &LU   XSKROGLQJ VQRZPRELOLQJ UHVWULFWLRQV LQ 9R\DJHXUV 1DWLRQDO 3DUN RQ WKH EDVLV RI
ELRORJLFDO RSLQLRQV WKDW VKRZHG DGYHUVH LPSDFWV IURP VQRZPRELOLQJ RQ JUD\ ZROYHV   6HH JHQHUDOO\
'DYLG60D\7RXULVPDQGWKH(QYLURQPHQW1$75(6 (197  


 6HH/DXULH$QQ:KLWW,QGLJHQRXV3HRSOHV,QWHOOHFWXDO3URSHUW\DQGWKH1HZ,PSHULDO6FLHQFH
2./$&,7<8/5(9  


 6HH 'HQQLV - .DUMDOD %LRWHFK 3DWHQWV DQG ,QGLJHQRXV 3HRSOHV Q XQSXEPVGDWHG6HSW
 

@



7+(5( 61268&+7+,1*$6%,23,5$&<

SXUVXDQWWR>LWV@RZQHQYLURQPHQWDOSROLFLHVRULWKDVVKLUNHGWKHUHVSRQVLELOLW\WR
HQVXUH WKDW DFWLYLWLHV ZLWKLQ >LWV@ MXULVGLFWLRQ RU FRQWURO GR QRW FDXVH GDPDJH WR WKH
HQYLURQPHQW:KDWHYHUWKHPHULWVRI%UD]LOVEHKDYLRUZLWKUHVSHFWWRMDERUDQGLWKH
IDFW UHPDLQV WKDW QDWLRQDO JRYHUQPHQWV LQ PXFK RI WKH ELRGLYHUVLW\ EHOW URXWLQHO\
LJQRUH RU HYHQ RSSRVH ELRGLYHUVLW\ FRQVHUYDWLRQ DQG WKH ZHOIDUH RI LQGLJHQRXV

FRPPXQLWLHV )HZLIDQ\GHYHORSLQJQDWLRQVVKDUHWKH8QLWHG6WDWHVGHGLFDWLRQWR
ELRGLYHUVLW\FRQVHUYDWLRQOHWDORQHWKH8QLWHG6WDWHVUHVRXUFHVIRUHQIRUFLQJODZVWKDW
FDQEHDVH[SHQVLYHDQGSROLWLFDOO\XQSRSXODUDVWKH(QGDQJHUHG6SHFLHV$FW

7KHWUXWKLVWKDWQDWLRQDODQGLQWHUQDWLRQDOODZVRQELRGLYHUVLW\FRQVHUYDWLRQ
KDYH KLVWRULFDOO\ LPSRVHG YHU\ WLJKW OLPLWV RQ KDUYHVWLQJ DQG WUDIILFNLQJ LQ ELRORJLFDO
VSHFLPHQV6HFWLRQRIWKH(QGDQJHUHG6SHFLHV$FWIODWO\SURKLELWVWKHWDN>LQJ@RI

DQ\SURWHFWHGVSHFLHV 7KHWHUPWDNHLQWXUQPHDQVWRKDUDVVKDUPSXUVXH
KXQWVKRRWZRXQGNLOOWUDSFDSWXUHRUFROOHFWRUWRDWWHPSWWRHQJDJHLQDQ\VXFK

FRQGXFW   6HFWLRQ  VR XQHTXLYRFDOO\ FRQGHPQV WKH KDUYHVWLQJ RI SURWHFWHG
RUJDQLVPVWKDWIHZLIDQ\OLWLJDWHG(6$FDVHVGLVFXVVWKLVDVSHFWRIWKHVWDWXWH2QHRI
WKH PRVW SURPLQHQW UHSRUWHG FDVHV LQYROYLQJ DQ DWWHPSW WR KDUYHVW D PHPEHU RI D


SURWHFWHGVSHFLHV DFWXDOO\DURVHXQGHUWKH0DULQH0DPPDO3URWHFWLRQ$FWRI 

UDWKHUWKDQWKH(6$ 

$W WKH LQWHUQDWLRQDO OHYHO WUDIILF LQ JRRGV GHULYHG IURP HQGDQJHUHG VSHFLHV
UHPDLQVWKHVLQJOHDFWRIELRGLYHUVLW\GHVWUXFWLRQRQZKLFKWKHJOREDOFRPPXQLW\KDV
UHDFKHG D SXQLWLYH FRQVHQVXV  7KH &RQYHQWLRQ RQ ,QWHUQDWLRQDO 7UDGH LQ

(QGDQJHUHG 6SHFLHV &,7(6   QRZ LQ LWV IRXUWK GHFDGH ZRXOG UHSUHVHQW D PDMRU
VWHSWRZDUGFRQVHUYLQJELRGLYHUVLW\DVORQJDVRQHLVZLOOLQJWRRYHUORRNWKHIDFWWKDWLW
GRHVQRWZRUN'XULQJWKHVWKHH[WHQVLRQRI&,7(6WRDOODVSHFWVRIWUDGHDQG
UHVHDUFK LQ RUFKLGV LPPHGLDWHO\ LQFUHDVHG WKH GHVLUH IRU WKH SODQWV UDLVHG WKHLU
PDUNHW YDOXH GUDPDWLFDOO\ DQG OHG WR HYHQ PRUH FROOHFWLQJ RI UDUH RUFKLG VSHFLHV

IURPWKHZLOG <HWWKHWUHDW\UDLVHGQROHJDOEDUULHUVWRGHYHORSHUVDQGIDUPHUVZKR


 6HH HJ 0LFKDHO 'RYH &HQWHU 3HULSKHU\ DQG %LRGLYHUVLW\ $ 3DUDGR[ RI *RYHUQDQFH DQG D
'HYHORSPHQWDO

&KDOOHQJH

LQ

9$/8,1*

/2&$/

.12:/('*(

,1',*(1286

3(23/(

$1'

,17(//(&78$/ 3523(57< 5,*+76  6WHSKHQ % %UXVK  'RUUHQ 6WDELQVN\ HGV   +HDOG
VXSUDQRWHDW


 6HH86&  




 ,G  


 6HH8QLWHG6WDWHVY+D\DVKL)G WK&LU 




 86&  




 &I 8QLWHG 6WDWHV Y 0F.LWWULFN  )G  WK &LU   XSKROGLQJ (6$ SHQDOWLHV OHYLHG
DJDLQVWDUDQFKHUZKRVKRWDQGGHFDSLWDWHGDJUD\ZROI FHUWGHQLHG86  


 867  HQWHUHGLQWRIRUFH-XO\




 (5,& +$16(1 25&+,' )(9(5 $ +257,&8/785$/ 7$/( 2) /29( /867 $1' /81$&< 



&*(25*(/$:5(9,(:

>9RO

ZRXOGIORRG>FULWLFDO@KDELWDWZLWKDK\GURHOHFWULFGDPORJLWOHYHOWKHKLOOVLGHVRID
URDGEXLOGDJROIFRXUVHRQWKHVLWHRUEXUQWKHMXQJOHWRWKHJURXQGIRUDJULFXOWXUDO

SXUSRVHV 1RWVXUSULVLQJO\QRUHOLDEOHGDWD>VKRZ@WKDW&,7(6DQGVLPLODUHIIRUWV
KD>YH@ UHGXFHG VPXJJOLQJ VDYHG DQ\ RUFKLG VSHFLHV IURP H[WLQFWLRQ KHOSHG SURWHFW

RUFKLGKDELWDWVRUHYHQVDOYDJHGRUFKLGSODQWVIDFLQJFHUWDLQGHVWUXFWLRQ 7KDW
FRQWUROOHGKDUYHVWVIRUSURILWVKRXOGRXWSHUIRUPGLUHFWUHJXODWLRQLQWDPLQJWKHLYRU\

WUDGHDQGGHWHUULQJWKHSRDFKLQJRIHOHSKDQWV SURYLGHVDVLQJXODUO\SRZHUIXOUHEXNH
RI&,7(6

,Q VKRUW UHVSRQVLELOLW\ IRU DOOHJHG ELRSLUDF\ LQ WKH SK\VLFDO VXEOD\HU IDOOV
VTXDUHO\RQWKHQDWLRQDOJRYHUQPHQWDVVHUWLQJVRYHUHLJQW\RYHUFRPPHUFLDOO\YDOXDEOH
VSHFLHV LQ WKHLU QDWXUDO KDELWDW  8QGHU WKH &RQYHQWLRQ RQ %LRORJLFDO 'LYHUVLW\
LQGLYLGXDO FRPSRQHQWV RI WKH ELRVSKHUH GR QRW FRQVWLWXWH D VKDUHG  KHULWDJH RI
PDQNLQG  7KH\ IDOO XQGHU WKH VRYHUHLJQ FRQWURO RI LQGLYLGXDO QDWLRQV ZKLFK FDQ
EODPHRQO\WKHPVHOYHVIRUDQ\IDLOXUHWRVRIWHQWKHHQYLURQPHQWDOLPSDFWRIVHHNLQJ
DQGKDUYHVWLQJELRORJLFDOVSHFLPHQV


1DWLRQDOYDULDWLRQLQWKHSDWHQWDELOLW\RIJHQHWLFLQIRUPDWLRQ:LWKLQWKH
ORJLFDO VXEOD\HU JHQHWLF LQIRUPDWLRQ HPSKDWLFDOO\ GRHV OHQG LWVHOI WR RZQHUVKLS DV
LQWHOOHFWXDOSURSHUW\7REHVXUHSDWHQWODZGHQLHVSURWHFWLRQWRVFLHQWLILFSULQFLSOHV

GHHPHG WR EH ODZV RI QDWXUH   7KLV GRFWULQH OLNHZLVH EORFNV WKH SDWHQWLQJ RI D
QDWXUDOO\RFFXUULQJRUJDQLVP7KH8QLWHG6WDWHVKLVWRULFDOO\GHQLHGSDWHQWSURWHFWLRQ
WRDOOQDWXUDOO\RFFXUULQJVXEVWDQFHVHYHQWKRVHWKDWKDGEHHQLVRODWHGDQGSXULILHGE\

KXPDQ DJHQF\   7KH 6XSUHPH &RXUW UHYHUVHG FRXUVH UDGLFDOO\ LQ  ZLWK
 


 ,GDW


 ,GDW


 6HH (':$5' %$5%,(5 (7 $/ (/(3+$176 (&2120,&6 $1' ,925<    )5$1&(6
&$,51&5266&267,1* 7+( ($57+7+( &+$//(1*(6 )25 *29(510(176 7+( 23325781,7,(6
)25%86,1(66  0LFKDHO-*OHQQRQ+DV,QWHUQDWLRQDO/DZ)DLOHGWKH(OHSKDQW"$0

-,17//  


 6HH)XQN%URV6HHG&RY.DOR,QRFXODQW&R86  VHHDOVR3DUNH'DYLV 


&RY+.0XOIRUG) 6'1<  +DQG-  GHQ\LQJSDWHQWDELOLW\WRSURGXFWVRI
QDWXUH DQG WR PHUH GLVFRYHULHV RI VFLHQWLILF SULQFLSOHV  FI &RQYHQWLRQ RQ WKH *UDQW RI (XURSHDQ
3DWHQWVDGRSWHGDW0XQLFK2FWDUW  D 8176,/0>KHUHLQDIWHU
(XURSHDQ 3DWHQW &RQYHQWLRQ@ H[FOXGLQJ GLVFRYHULHV VFLHQWLILF WKHRULHV DQG PDWKHPDWLFDO PHWKRGV
IURP WKH GHILQLWLRQ RI LQYHQWLRQV ZKLFK DUH VXVFHSWLEOH RI LQGXVWULDO DSSOLFDWLRQ ZKLFK DUH QHZ DQG
ZKLFKLQYROYHDQLQYHQWLYHVWHS 


 6HH /LQGD - 'HPDLQH  $DURQ ;DYLHU )HOOPHWK 5HLQYHQWLQJ WKH 'RXEOH +HOL[ $ 1RYHO DQG
1RQREYLRXV5HFRQFHSWXDOL]DWLRQRIWKH%LRWHFKQRORJ\3DWHQW67$1/5(9  

@

7+(5( 61268&+7+,1*$6%,23,5$&<



'LDPRQG Y &KDNUDEDUW\  WKH FHOHEUDWHG FDVH WKDW XSKHOG D SDWHQW RQ D
3VHXGRPRQDV EDFWHULXP WKDW KDG EHHQ JHQHWLFDOO\ DOWHUHG WR GHJUDGH VHYHUDO
FRPSRQHQWV RI FUXGH RLO  7RGD\ ZH QR ORQJHU DVN ZKHWKHU OLIH IRUPV FDQ EH
SDWHQWHGEXWPHUHO\KRZIDUWKRVHULJKWVFDQDQGVKRXOGH[WHQG3ODQWEUHHGHUVLQ



WKH8QLWHG6WDWHVFDQVHFXUHSDWHQWV SODQWSDWHQWV SODQWYDULHW\FHUWLILFDWHV DQGF
LQVRIDU DV JHQHWLF HQJLQHHULQJLQYROYHVWKHPDQLSXODWLRQRIELRORJLFDOLQIRUPDWLRQDW

WKHPROHFXODUOHYHO FSHUKDSVHYHQFRS\ULJKWV 7KHWUDGHVHFUHWODZVRIWKHVWDWHV

SURYLGHDGGLWLRQDOSURWHFWLRQIRUFHUWDLQK\EULGFURSV 6LQFHWKH3DWHQW2IILFH

KDVURXWLQHO\JUDQWHGXWLOLW\SDWHQWVIRUWUDQVJHQLFDQLPDOV 

$WWKHLQWHUQDWLRQDOOHYHOQDWLRQDOGHFLVLRQVWRUHFRJQL]HSULYDWHRZQHUVKLSRI




 86  




 6HH 3DWHQW $FW RI    86&    -(0 $J 6XSSO\ ,QF Y 3LRQHHU +L%UHG
,QWO,QF6&W  'LDPRQGY&KDNUDEDUW\86  ([SDUWH+LEEHUG
8634  FI,QUH.UDW])G &&3$  KROGLQJWKDWDFRPSRXQGSXULILHG
IURP VWUDZEHUULHV FDQ EH SDWHQWHG HYHQ WKRXJK D QRQSXULILHG IRUP RI WKDW FRPSRXQG H[LVWV LQ
VWUDZEHUULHV 


 6HH 3ODQW 3DWHQW $FW RI   86&    <RGHU %URWKHUV ,QF Y &DOLIRUQLD
)ORULGD3ODQW&RUS)G WK&LU FHUWGHQLHG86  3DQ$PHULFDQ
3ODQW&RY0DWVXL)6XSS 1'&DO 


 6HH 3ODQW 9DULHW\ 3URWHFWLRQ $FW RI   86&    $VJURZ 6HHG &R Y
:LQWHUERHU86  ,PD]LR1XUVHU\,QFY'DQLD*UHHQKRXVHV)G )HG&LU
 6HHJHQHUDOO\-LP&KHQ7KH3DUDEOHRIWKH6HHGV,QWHUSUHWLQJWKH3ODQW9DULHW\3URWHFWLRQ$FW
LQ)XUWKHUDQFHRI,QQRYDWLRQ3ROLF\0,11-/6&, 7(&+ IRUWKFRPLQJ 


 6HH 'DQ / %XUN &RS\ULJKWDELOLW\ RI 5HFRPELQDQW '1$ 6HTXHQFHV  -85,0(75,&6 - 
  ,UYLQJ .D\WRQ &RS\ULJKW LQ /LYLQJ *HQHWLFDOO\ (QJLQHHUHG :RUNV  *(2 :$6+ / 5(9
   'RUHHQ 0 +RJOH &RPPHQW &RS\ULJKW IRU ,QQRYDWLYH %LRWHFKQRORJLFDO 5HVHDUFK $Q
$WWUDFWLYH $OWHUQDWLYH WR 3DWHQW RU 7UDGH 6HFUHW 3URWHFWLRQ  +,*+ 7(&+ /-    'RQQD
6PLWK &RPPHQW &RS\ULJKW 3URWHFWLRQ IRU WKH ,QWHOOHFWXDO 3URSHUW\ 5LJKWV WR 5HFRPELQDQW
'HR[\ULERQXFOHLF $FLG $ 3URSRVDO  67 0$5<6 /-     %XW VHH ,9(5 3 &223(5
%,27(&+12/2*< $1' 7+( /$:    GLVSXWLQJ WKH FRS\ULJKWDELOLW\ RI '1$ VHTXHQFHV 
81,7(' 67$7(6 &21*5(66 2)),&( 2) 7(&+12/2*< $66(660(17 3$7(17,1* /,)(   
QRWLQJWKH&RS\ULJKW2IILFHVXQRIILFLDOSRVLWLRQWKDWQXFOHLFDFLGVHTXHQFHVDUHQRWFRS\ULJKWDEOH 


 6HHHJ3LRQHHU+L%UHG,QWO,QFY+ROGHQV)RXQG6HHGV,QF)G WK&LU 




 6HHHJ3KLOLS/HGHU 7LPRWK\$6WHZDUW7UDQVJHQLF1RQ+XPDQ0DPPDOV863DWHQW1R


 LVVXHG$SULO VHHDOVR3ROLF\RQ3DWHQWLQJRI$QLPDOV2II*D]3DW2II
  RXWOLQLQJSURFHGXUHVIRUDQLPDOSDWHQWV 5HEHFFD'UHVVHU(WKLFDODQG/HJDO,VVXHVLQ3DWHQWLQJ
1HZ $QLPDO /LIH -85,0(75,&6 -  0HUJHV,QWHOOHFWXDO3URSHUW\LQ+LJKHU/LIH)RUPV
VXSUD QRWH  7KRPDV 7UDLDQ 0RJD 7UDQVJHQLF $QLPDOV DV ,QWHOOHFWXDO 3URSHUW\ 2U WKH 3DWHQWHG
0RXVH 7KDW 5RDUHG   - 3$7  75$'(0$5. 2)) 62&<    .HYLQ : 2&RQQRU
3DWHQWLQJ$QLPDOVDQG2WKHU/LYLQJ7KLQJV6&$//5(9  3DXO%OXQW1RWH6HOHFWLYH
%UHHGLQJDQGWKH3DWHQWLQJRI/LYLQJ2UJDQLVPV6<5$&86(/5(9  



&*(25*(/$:5(9,(:

>9RO

JHQHWLF FRGH LV JRYHUQHG E\ WKH :RUOG 7UDGH 2UJDQL]DWLRQV $QQH[ RQ 7UDGH

5HODWHG $VSHFWV RI ,QWHOOHFWXDO 3URSHUW\ 5LJKWV 75,36    75,36 UHTXLUHV :72
PHPEHUVWRDZDUGSDWHQWVIRUDQ\LQYHQWLRQVZKHWKHUSURGXFWVRUSURFHVVHVLQ
DOOILHOGVRIWHFKQRORJ\SURYLGHGWKDWWKH\DUHQHZLQYROYHDQLQYHQWLYHVWHSDQGDUH

FDSDEOH RI LQGXVWULDO DSSOLFDWLRQ   7KH DJUHHPHQW KRZHYHU GRHV SHUPLW LWV
PHPEHUV WR IRUJR SDWHQWV RQ SODQWV DQG DQLPDOV RWKHU WKDQ PLFURRUJDQLVPV RU
HVVHQWLDOO\ ELRORJLFDO SURFHVVHV IRU WKH SURGXFWLRQ RI SODQWV RU DQLPDOV RWKHU WKDQ

QRQELRORJLFDODQGPLFURELRORJLFDOSURFHVVHV $VDUHVXOWWKHHOLJLELOLW\RIJHQHWLF
LQIRUPDWLRQIRUSDWHQWSURWHFWLRQYDULHVFRQVLGHUDEO\DFURVVQDWLRQDOERXQGDULHV

$OWKRXJKWKH8QLWHG6WDWHVKDVHQWKXVLDVWLFDOO\HPEUDFHGLQWHOOHFWXDOSURSHUW\
RQJHQHWLFLQIRUPDWLRQRWKHUFRXQWULHVKDYHDGRSWHGPRUHUHVWULFWLYHSROLFLHV,QGLD
WRQDPHSHUKDSVWKHPRVWUHVWULFWLYHH[DPSOHKDVFKRVHQQRWWRJUDQWELRWHFKQRORJ\

SDWHQWV (YHQZLWKLQWKH1RUWK$WODQWLFDOOLDQFHWKH8QLWHG6WDWHVLVVWULNLQJO\OLEHUDO
RQWKHLVVXHRIELRWHFKQRORJ\SDWHQWV+DUYDUG8QLYHUVLW\VFHOHEUDWHG2QFRPRXVH

SDWHQW  FRYHULQJDPRXVHWUDQVJHQLFDOO\DOWHUHGWREHHVSHFLDOO\SURQHWRFDQFHU KDV
KLJKOLJKWHGGLIIHUHQFHVEHWZHHQWKHSDWHQWODZVRIWKH8QLWHG6WDWHVDQGWKRVHRILWV
FORVHVWDOOLHV7KH6XSUHPH&RXUWRI&DQDGDVXUSULVLQJO\UHIXVHGLQWRXSKROGD

SDWHQWRQ+DUYDUGV2QFRPRXVH 7KH&DQDGLDQGHFLVLRQZDVDOOWKHPRUHVWULNLQJ
EHFDXVH LW UHVWHG VROHO\ RQ WKH &DQDGLDQ 3DWHQW $FW ZKRVH GHILQLWLRQ RI SDWHQWDEOH

VXEMHFWPDWWHULVDOPRVWLGHQWLFDOZLWKWKDWRIWKH8QLWHG6WDWHV3DWHQW$FW 


 6HH $QQH[ & WR WKH *HQHUDO $JUHHPHQW RQ 7DULIIV DQG 7UDGH 8UXJXD\ 5RXQG :RUOG 7UDGH
2UJDQL]DWLRQGRQHDW0DUUDNHVK$SULO,/0  UHSULQWHGLQ:25/'75$'(
25*$1,=$7,21
1(*27,$7,216

7+(

5(68/76

2)

7+(

858*8$<

5281'

2)

08/7,/$7(5$/

75$'(

   >KHUHLQDIWHU 75,36@ VHH DOVR )LQDO $FW (PERG\LQJ WKH 5HVXOWV RI WKH

8UXJXD\5RXQGRI0XOWLODWHUDO7UDGH1HJRWLDWLRQVGRQHDW0DUUDNHVK$SULO,/0
  


 75,36VXSUDQRWHDUW  VHHDOVRLGDUW   0HPEHUVVKDOOJLYHHIIHFWWRWKHSURYLVLRQV


RI WKLV $JUHHPHQW   75,36 H[SUHVVO\ SHUPLWV D PHPEHU WR GHHP WKH WHUPV LQYHQWLYH VWHS DQG
FDSDEOH RI LQGXVWULDO DSSOLFDWLRQ  WR EH V\QRQ\PRXV ZLWK WKH WHUPV QRQREYLRXV DQG XVHIXO
UHVSHFWLYHO\  ,G DUW    Q  8WLOLW\DQGQRQREYLRXVQHVVRIFRXUVHDUHWKHEDVLFUHTXLUHPHQWVIRU
SDWHQWDELOLW\LQ$PHULFDQODZ6HH86&  


 75,36VXSUDQRWHDUW  E 


 6HH *HRUJH . )RVWHU 2SSRVLQJ )RUFHV LQ D 5HYROXWLRQ LQ ,QWHUQDWLRQDO 3DWHQW 3URWHFWLRQ 7KH
86 DQG ,QGLD LQ WKH 8UXJXD\ 5RXQG DQG ,WV $IWHUPDWK  8&/$ - ,17/ /  )25(,*1 $)) 
  


 6HH 3KLOLS /HGHU  7LPRWK\ $ 6WHZDUW 7UDQVJHQLF 1RQ+XPDQ 0DPPDOV 86 3DWHQW 1R
 LVVXHG $SULO     6HH JHQHUDOO\ 7+( /$%25$725< 0286( +DQV +HGULFK HG
 


 6HH+DUYDUG&ROOHJHY&DQDGD6&&


 &RPSDUH 3DWHQW $FW 56& FK 3    DXWKRUL]LQJ SDWHQWV IRU DQ\ QHZ DQG XVHIXO DUW

@

7+(5( 61268&+7+,1*$6%,23,5$&<




&RQWURYHUV\RYHUWKH2QFRPRXVHDOVRLQVSLUHGWKH(XURSHDQ8QLRQWRDGRSW
D %LRWHFKQRORJ\ 'LUHFWLYH WKDW SXUSRUWHG WR FODULI\ NH\ SURYLVLRQV RI WKH (XURSHDQ

3DWHQW&RQYHQWLRQ ,QDGGLWLRQWREDUULQJSDWHQWVRQLQYHQWLRQVWKHSXEOLFDWLRQRU

H[SORLWDWLRQRIZKLFKZRXOGEHFRQWUDU\WRRUGUHSXEOLFRUPRUDOLW\ WKH(XURSHDQ
3DWHQW &RQYHQWLRQ GHQLHV SDWHQWV IRU SODQW RU DQLPDO YDULHWLHV RU HVVHQWLDOO\

ELRORJLFDO SURFHVVHV IRU WKHSURGXFWLRQRISODQWVRUDQLPDOV 2QWKHRWKHUKDQG

PLFURELRORJLFDOSURFHVVHVRUWKHSURGXFWVWKHUHRIPD\EHSDWHQWHG 

7KH(XURSHDQ%LRWHFKQRORJ\'LUHFWLYHKDQGHGGRZQLQ-XO\SHUPLWV
SDWHQWV RQ ELRORJLFDO PDWHULDO PRUH SUHFLVHO\ GHILQHG DV DQ\ PDWHULDO FRQWDLQLQJ
JHQHWLF LQIRUPDWLRQ DQG FDSDEOH RI UHSURGXFLQJ LWHOI RU EHLQJ UHSURGXFHG LQ D

ELRORJLFDO V\VWHP   7R EH HOLJLEOH IRU D SDWHQW VXFK ELRORJLFDO PDWHULDO PXVW EH
LVRODWHGIURPLWVQDWXUDOHQYLURQPHQWRUSURGXFHGE\PHDQVRIDWHFKQLFDOSURFHVV

HYHQLILWSUHYLRXVO\RFFXUUHGLQQDWXUH 3ODQWVDQGDQLPDOVPD\EHSDWHQWHG
XQGHU (XURSHDQ ODZ EXW RQO\ LI WKH WHFKQLFDO IHDVLELOLW\ RI WKH LQYHQWLRQ LV QRW

FRQILQHG WR D SDUWLFXODU SODQW RU DQLPDO YDULHW\   7KH (XURSHDQ V\VWHP RI
&RPPXQLW\SODQWYDULHW\ULJKWVWKXVSURYLGHVWKHVROHDQGH[FOXVLYHSURSHUW\ULJKW

IRUSODQWYDULHWLHVXQGHUWKHODZRIWKH(XURSHDQ8QLRQ %HFDXVHWKH(XURSHDQ
3DWHQW &RQYHQWLRQV EDU RQ SDWHQWV IRU SODQW  YDULHWLHV DSSOLHHV WR DOO SODQW
YDULHWLHV LUUHVSHFWLYH RI WKHZD\LQZKLFKWKH\ZHUHSURGXFHGQR(XURSHDQSDWHQW
PD\EHJUDQWHGIRUSODQWYDULHWLHVFRQWDLQLQJJHQHVLQWURGXFHGLQWRDQDQFHVWUDOSODQW

E\ UHFRPELQDQW JHQH WHFKQRORJ\   7KRXJK IUDPHG DV D KDUGIRXJKW FRPSURPLVH
SURFHVVPDFKLQHPDQXIDFWXUHRUFRPSRVLWLRQRIPDWWHURUDQ\QHZDQGXVHIXOLPSURYPHQWLQDQ\DUW
SURFHVV PDFKLQH PDQXIDFWXUH RU FRPSRVLWLRQ RI PDWWHU  ZLWK  86&    DXWKRUL]LQJ
SDWHQWV IRU DQ\ QHZ DQG XVHIXO SURFHVVPDFKLQHPDQXIDFWXUHRUFRPSRVLWLRQRIPDWWHURUDQ\QHZ
DQG XVHIXO LPSURYHPHQW WKHUHRI   6HH JHQHUDOO\ 0DUJR$%DJOH\3DWHQW)LUVW$VN4XHVWLRQV/DWHU
0RUDOLW\ DQG %LRWHFKQRORJ\ LQ 3DWHQW /DZ  :0  0$5< / 5(9    SUDLVLQJ WKH
&DQDGLDQ 2QFRPRXVH GHFLVLRQ IRU YHVWLQJ FKRLFHV RYHU SDWHQWDEOH VXEMHFW PDWWHU ZLWK WKH FRUUHFW
LQVWLWXWLRQDODFWRUWKHOHJLVODWXUH 


 6HH&RXQFLO'LUHFWLYH(&RQWKH/HJDO3URWHFWLRQRI%LRWHFKQRORJLFDO,QYHQWLRQV2-
/ >KHUHLQDIWHU(XURSHDQ%LRWHFKQRORJ\'LUHFWLYH@


 (XURSHDQ3DWHQW&RQYHQWLRQVXSUDQRWHDUW D 


 ,GDUW D 




















,G
(XURSHDQ%LRWHFKQRORJ\'LUHFWLYHVXSUDQRWHDUW D 
,GDUW
,GDUW HPSKDVLVDGGHG 
6HH&RPPXQLW\3ODQW9DULHW\5LJKWV6\VWHP&RXQFLO5HJ (& 1R2- / 

DUW>KHUHLQDIWHU(XURSHDQ3ODQW9DULHW\5HJXODWLRQ@




7UDQVJHQLF SODQW129$57,6 ,, * (%$ (XURSHDQ 3DWHQW 2IILFH (QODUJHG %G RI



&*(25*(/$:5(9,(:

>9RO

EHWZHHQRSSRQHQWVRIELRWHFKQRORJLFDOSDWHQWVDQGEXVLQHVVLQWHUHVWVIHDULQJWKHIOLJKW

RI ELRWHFKQRORJLFDO WDOHQW DQG LQQRYDWLYH FDSLWDO IURP (XURSH  WKH %LRWHFKQRORJ\

'LUHFWLYH KDV VSDUNHG ILHUFH GHEDWH ZLWKLQ WKH (XURSHDQ 8QLRQ   )UDQFH DQG WKH
1HWKHUODQGV LQ SDUWLFXODU SUHIHU D PRUH UHVWULFWLYH DSSURDFK WR ELRWHFKQRORJ\

SDWHQWV 

:LWKLQ WKH LQWHUQDWLRQDO OHJDO IUDPHZRUN JRYHUQLQJ LQWHOOHFWXDO SURSHUW\
LQGLYLGXDOQDWLRQVHQMR\FRQVLGHUDEOHIUHHGRPWRJUDQWRUGHQ\SDWHQWSURWHFWLRQWR
JHQHWLF LQIRUPDWLRQ  7KRXJK FKDUDFWHUL]HG DV EXQGOHV RI LQWDQJLEOH ULJKWV SDWHQWV
UHPDLQDSHFXOLDUO\WHUUHVWULDOIRUPRISURSHUW\7KH\DUHYDOLGRQO\LQWKHFRXQWU\
WKDWLVVXHVWKHP7KHUHVLPSO\LVQROHJDOVXSSRUWIRUFRQWUDU\DVVHUWLRQVVXFKDVWKH
UXUDOOHJHQGWKDWDQ$PHULFDQSDWHQWRQD]DGLUDFKWLQ WKHSHVWLFLGHWKDW:5*UDFH
GHULYHGIURPQHHP ZRXOGIRUELGWUDGLWLRQDOXVHVRIQHHPLQ,QGLD$OWKRXJK75,36
GRHV UHTXLUH LWV PHPEHUV WR SURYLGH IRU WKH SURWHFWLRQ RI SODQW YDULHWLHV HLWKHU E\

SDWHQWVRUE\DQHIIHFWLYHVXLJHQHULVV\VWHP WKDWDFFRUGREOLJHVQRFRXQWU\WRJUDQW
DQLPDO SDWHQWV  &DQDGD DQG WKH (XURSHDQ 8QLRQ WKHUHIRUH UHPDLQ IUHH WR DGRSW
VWULNLQJO\ GLIIHUHQW SROLFLHV YLVjYLV WKH 8QLWHG 6WDWHV RQ WKH +DUYDUG RQFRPRXVH
DQGDZLGHUDQJHRIRWKHUELRWHFKQRORJLFDOLQYHQWLRQV

7KH H[LVWHQFH RI OHJDO GLYHUVLW\ DFURVV QDWLRQDO ERXQGDULHV JRHV D ORQJ ZD\
WRZDUGQHJDWLQJWKHDVVHUWLRQWKDWWKHDYDLODELOLW\RISDWHQWVRQJHQHWLFLQIRUPDWLRQSHU
VH UHSUHVHQWV ELRSLUDF\  1DWLRQDO JRYHUQPHQWV H[HUW DOPRVW DV PXFK FRQWURO RYHU
ELRWHFKRORJ\ SDWHQWV XQGHU 75,36 DV WKH\ GR RYHU WKH FROOHFWLRQ RI ELRORJLFDO
VSHFLPHQVXQGHUWKH&RQYHQWLRQRQ%LRORJLFDO'LYHUVLW\,QDOOHYHQWVHDFKQDWLRQV
SDWHQWV ORVH OHJDO YLJRU XSRQ FURVVLQJ LQWHUQDWLRQDO ERXQGDULHV  7KH ZLQGRZ RI
RSSRUWXQLW\ IRU XQIDLU H[SORLWDWLRQ RI JHQHWLF PDWHULDO WUDFHDEOH WR GHYHORSLQJ
$SSHDO

'HF



 

DYDLODEOH

RQOLQH

DW

KWWSOHJDOHXURSHDQSDWHQW

RIILFHRUJGJSGIJH[SGI! 




6HH

*5$(0(

%

',1:22',(

:,//,$0

2

+(11(66(<

6+,5$

3(5/0877(5

,17(51$7,21$/$1'&203$5$7,9(3$7(17/$:  




6HH%DJOH\VXSUDQRWH-DVPLQH&&KDPEHUV3DWHQW(OLJLELOLW\RI%LRWHFKQRORJLFDO,QYHQWLRQV

LQWKH8QLWHG6WDWHV(XURSHDQG-DSDQ+RZ0XFK3DWHQW3ROLF\,V3XEOLF3ROLF\"*(2:$6+
,17/ / 5(9     /\GLD 1HQRZ &RPPHQW 7R 3DWHQW RU QRW WR 3DWHQW 7KH (XURSHDQ
8QLRQV1HZ%LRWHFK'LUHFWLYH+286-,17//  




6HH .LQJGRP RI WKH 1HWKHUODQGV Y (XURSHDQ 3DUOLDPHQW  &RXQFLO &DVH  2- & 

(XURSHDQ &W -XVWLFH   'RQQD 0 *LWWHU ,QWHUQDWLRQDO &RQIOLFWV RYHU 3DWHQWLQJ +XPDQ '1$
6HTXHQFHVLQWKH8QLWHG6WDWHVDQGWKH(XURSHDQ8QLRQ$Q$UJXPHQWIRU&RPSXOVRU\/LFHQVLQJDQG
D)DLU8VH([HPSWLRQ1<8/5(9  




75,36 VXSUD QRWH  DUW   E  FI -RKDQQD 6XWKHUODQG 75,36 &XOWXUDO 3ROLWLFV DQG /DZ

5HIRUP  3520(7+(86     REVHUYLQJ WKDW :72 QHJRWLDWLRQV RYHU 75,36 OHIW QR
UHFRUGVDGGUHVVLQJWKHFKDUDFWHULVWLFVRIDQHIIHFWLYHVXLJHQHULVV\VWHP 

@

7+(5( 61268&+7+,1*$6%,23,5$&<



FRXQWULHVLVQDUURZLQGHHG


&)URP*HQHVWR0HPHV7KH$SSOLFDWLRQ6XEOD\HU
DQGWKH/HJDO6WDWXVRI(WKQRELRORJLFDO.QRZOHGJH


  *HQHV YHUVXV PHPHV  2UJDQLVPV H[KLELW VWDUNO\ GLYHUJHQW HFRQRPLF
FKDUDFWHULVWLFV ZKHQ VHUYLQJ DV FKDWWHOV DQG DV FDUULHUV RI FKHPLFDO RU JHQHWLF
LQIRUPDWLRQ  $ KDUYHVWHG RUJDQLVP FDQ SURYLGH XVHIXO LQIRUPDWLRQ HLWKHU DV D
FKHPLFDOEOXHSULQWRUDVDVRXUFHRIJHQHVDQGWUDLWVIRUIXUWKHUPDQLSXODWLRQWKURXJK

FRQYHQWLRQDO EUHHGLQJ RU WUDQVJHQLF HQJLQHHULQJ   3URWHLQV DQG JHQHV LQ RWKHU

ZRUGV DUH QRQULYDOURXV QRQH[FOXVLYH JRRGV   8QOLNH FKDWWHOV WKHVH W\SHV RI
LQIRUPDWLRQ DUH SXEOLF JRRGV LQ WKH VHQVH WKDW D VLQJOH XVH GRHV QRW SUHFOXGH

LQGHSHQGHQWXVHE\DGLIIHUHQWSDUW\ /LNHSXEOLFJRRGVVXFKDVQDWLRQDOGHIHQVH
LQWHOOHFWXDO JRRGV RIWHQ GR QRW HQFRPSDVV QDWXUDO SK\VLFDO EDUULHUV WKDW H[FOXGH
SRWHQWLDO FRQVXPHUV PD\ EH KHOG E\ PRUH WKDQ RQH SHUVRQ DW D WLPH FDQ EH
GLVWULEXWHGDWPLQLPDORUQRQH[LVWHQWFRVWDQGRQFHGLVFORVHGIDFHQRUHDOEDUULHUV

WRIUHHDSSURSULDWLRQ ,QVWDUNFRQWUDVWZLWKWKHULYDOURXVQDWXUHRIPRVWSURSHUW\
ZKHUHE\SRVVHVVLRQE\RQHSDUW\UHVXOWVLQDJDLQWKDWSUHFLVHO\FRUUHVSRQGVWRWKH
ORVVHQGXUHGE\>DQ@RWKHUSDUW\XVHRIDQRQULYDOURXVJRRGE\RQHHQWLW\GRHV

QRWGLPLQLVKWKHXVHDQGHQMR\PHQWRIRWKHUV 

([DPLQLQJ WKH ERXQGDU\ EHWZHHQ SKHQRW\SH DQG JHQRW\SH WKXV JLYHV XV D
JOLPSVHDWWKHFHQWUDOG\QDPLFRIWKHELRSLUDF\QDUUDWLYH$VLQJOHVDPSOHRIDUDUH
UDLQIRUHVW SODQW FDQ EH WUDQVIRUPHG E\ D QRUWKHUQ OLIH VFLHQFHV FRPSDQ\ LQWR D
OXFUDWLYH GUXJ RU SODQW YDULHW\ DQG WKH SK\VLFDO PHDQV RUGLQDULO\ XVHG WR FRQILQH
FKDWWHOVFDQVFDUFHO\VWHPWKHRXWZDUGIORZRILQIRUPDWLRQDQGZHDOWK:RUVHVWLOO
ZKDWLVWUXHRIDSODQWVSHFLPHQLVDOVRWUXHRIWULEDOORUH7KHYDOXDEOHSDFNDJHDW
LVVXH LQ PDQ\ LQVWDQFHV RI DOOHJHG ELRSLUDF\ DFWXDOO\ FRQVLVWV RI WZR GLVWLQFW
FRPSRQHQWVWKHFKHPLFDODQGJHQHWLFLQIRUPDWLRQHQFRGHGLQDELRORJLFDOVSHFLPHQ
SOXV HWKQRELRORJLFDO NQRZOHGJH RI WKH WUDLWV DQG WUDGLWLRQDO XVHV RI WKDW VSHFLHV




6HH5RJHU$6HGMR3URSHUW\5LJKWV*HQHWLF5HVRXUFHVDQG%LRWHFKQRORJLFDO&KDQJH-/ 

(&21  




6HH :LOOLDP 0 /DQGHV  5LFKDUG $ 3RVQHU $Q (FRQRPLF $QDO\VLV RI &RS\ULJKW /DZ  -

/(*$/678'  




6HH &KULVWRSKHU ' 6WRQH :KDW WR 'R $ERXW %LRGLYHUVLW\ 3URSHUW\ 5LJKWV 3XEOLF *RRGV DQG

WKH(DUWKV%LRORJLFDO5LFKHV6&$//5(9  




'DQ/%XUN3URWHFWLRQRI7UDGH6HFUHWVLQ2XWHU6SDFH$FWLYLW\$6WXG\LQ)HGHUDO3UHHPSWLRQ

6(721+$///5(9  




$ODEDPD3RZHU&RY)&&)G WK&LU 



&*(25*(/$:5(9,(:

>9RO

&ODLPV RI ELRSLUDF\ RIWHQ VWUHVV WKH VRFLRORJLFDO FRPSRQHQW WR WKH H[FOXVLRQ RI WKH

ELRORJLFDORUHOVHWUHDWWKHWZRFRPSRQHQWVDVLIWKH\ZHUHLQVHSDUDEOH %XWJHQHWLF
LQIRUPDWLRQLVUHDGLO\GLVWLQJXLVKHGIURPFRPPXQDONQRZOHGJHRISODQWVDQGDQLPDOV

$ VRFLRORJLFDOO\ RULHQWHG VWUDLQ LQ FRQWHPSRUDU\ ELRORJ\ SLRQHHUHG E\
5LFKDUG'DZNLQVGLVWLQJXLVKHVVKDUSO\EHWZHHQJHQHVDQGPHPHV$PHPHLVD
XQLW RI FXOWXUDO WUDQVPLVVLRQ VXFK DV WXQHV LGHDV FDWFKSKUDVHV FORWKHV IDVKLRQV

ZD\VRIPDNLQJSRWVRURIEXLOGLQJDUFKHV 7KHVRFLRORJLFDOHTXLYDOHQWRIDJHQH
WKHPHPHDVDQHZNLQGRIUHSOLFDWRULV>DOUHDG\@DFKLHYLQJHYROXWLRQDU\FKDQJH

DWDUDWHWKDWOHDYHVWKHROGJHQHSDQWLQJIDUEHKLQG (YHU\HWKQRELRORJLFDOWDOHLVD
PHPH HDVLO\ VHYHUHG IURP WKH FKHPLFDO DQG JHQHWLF LQIRUPDWLRQ WKDW LQVSLUHG LW

(YHQOHJDOFRQFHSWVDUHPHPHV $V,KDYHMXVWGHPRQVWUDWHGWKHJHQHPD\TXDOLI\
IRU SURWHFWLRQ DV D IRUP RI LQWHOOHFWXDO SURSHUW\  7KH PHPH GHVHUYHV VHSDUDWH
HFRQRPLFDQGOHJDOFRQVLGHUDWLRQ


3URWHFWLQJHWKQRELRORJLFDONQRZOHGJHDVWUDGHVHFUHWV$UWLFOH M RIWKH
&RQYHQWLRQRQ%LRORJLFDO'LYHUVLW\H[KRUWVLWVFRQWUDFWLQJSDUWLHVWRUHVSHFWSUHVHUYH
DQG PDLQWDLQ NQRZOHGJH LQQRYDWLRQV DQG SUDFWLFHV RI LQGLJHQRXV DQG ORFDO
FRPPXQLWLHV HPERG\LQJ WUDGLWLRQDO OLIHVW\OHV UHOHYDQW IRU WKH FRQVHUYDWLRQ DQG

VXVWDLQDEOH XVH RI ELRORJLFDO GLYHUVLW\   7KH &RQYHQWLRQ DOVR HQFRXUDJH>V@ WKH
HTXLWDEOH VKDULQJ RI WKH EHQHILWV DULVLQJ IURP WKH XWLOL]DWLRQ RI VXFK NQRZOHGJH

LQQRYDWLRQVDQGSUDFWLFHV $OWKRXJKWKHVHH[KRUWDWLRQVDUHELQGLQJRQO\LQVRIDUDV
WKH DFWLRQV DW LVVXH DUH SRVVLEOH DSSURSULDWH DQG SURSHUO\ >V@XEMHFW WR >WKH@

QDWLRQDO OHJLVODWLRQ RI D FRQWUDFWLQJ SDUW\  WKH &RQYHQWLRQ UHPDLQV WKH RQO\




6HH HJ 67(3+(1 $ +$16(1 (7 $/ 75$',7,21$/ .12:/('*( $1' ,17(//(&78$/

3523(57<$+$1'%22.21 ,668(6$1' 237,216)25 75$',7,21$/ .12:/('*( +2/'(56,1


3527(&7,1* 7+(,5 ,17(//(&78$/ 3523(57< $1' 0$,17$,1,1* %,2/2*,&$/ ',9(56,7< 
  :LQRQD /D'XNH 7UDGLWLRQDO (FRORJLFDO .QRZOHGJH DQG (QYLURQPHQWDO )XWXUHV  &2/2 -
,17/ (197/ /  32/<    1DRPL 5RKW$UULD]D 2I 6HHGV DQG 6KDPDQV 7KH
$SSURSULDWLRQ RI WKH 6FLHQWLILF DQG 7HFKQLFDO .QRZOHGJH RI ,QGLJHQRXV DQG /RFDO &RPPXQLWLHV 
0,&+-,17//  








5,&+$5''$:.,167+(6(/),6+*(1( QHZHG 
,G FI (':$5' 2 :,/621 &216,/,(1&( 7+( 81,7< 2) .12:/('*(   

SURSRVLQJ WKH XQLILFDWLRQ RI WKH PHPH FRQFHSW ZLWK QRGH>V@ RI VHPDQWLF PHPRU\ UHFRJQL]HG LQ
QHXURVFLHQFH 




6HH 0LFKDHO 6 )ULHG 7KH (YROXWLRQ RI /HJDO &RQFHSWV 7KH 0HPHWLF 3HUVSHFWLYH 

-85,0(75,&6-  












&%'VXSUDQRWHDUW M 
,G
,G

@

7+(5( 61268&+7+,1*$6%,23,5$&<



LQWHUQDWLRQDO WUHDW\ WKDW VSHFLILFDOO\ DFNQRZOHGJHV WKH UROH RI WUDGLWLRQDO NQRZOHGJH
LQQRYDWLRQVDQGSUDFWLFHVLQELRGLYHUVLW\DQGVXVWDLQDEOHGHYHORSPHQWDQGH[SOLFLWO\
DGPRQLVKHV LQGLYLGXDO FRXQWULHV WR SURYLGH VRPH IRUP RI SURWHFWLRQ IRU WUDGLWLRQDO

NQRZOHGJHZKHWKHUWKURXJKLQWHOOHFWXDOSURSHUW\RURWKHUPHDQV 

([LVWLQJ ODZV RQ LQWHOOHFWXDO SURSHUW\ DW ERWK WKH QDWLRQDO DQG WKH
LQWHUQDWLRQDO OHYHO FDQ EH PRGLILHG VR WKDW WKH\ WUDGLWLRQDO DV ZHOO DV VFLHQWLILF

NQRZOHGJH   7KH DELOLW\ WR FKDQJH LQWHOOHFWXDO SURSHUW\ ODZV VKRXOG FRPH DV QR
VXUSULVH  ,QWHOOHFWXDO SURSHUW\ LQ DQ\IRUPLVDFUHDWXUHRISRVLWLYHODZFRQVFLRXVO\

FUDIWHGWRDFKLHYHRQHUHJXODWRU\JRDORUDQRWKHU 

4XLWH DUJXDEO\ D ZRUNDEOH PRGHO IRU SURWHFWLQJ HWKQRELRORJLFDO NQRZOHGJH
DOUHDG\ H[LVWV IRU PDQ\ IRUPV RI WUDGLWLRQDO PD\ VDWLVI\ FHUWDLQ HOHPHQWV RI WKH

GHILQLWLRQ RI WUDGH VHFUHWV   $ IDLUO\ PRGHVW FRQFHSWXDO H[WHQVLRQ RI FRQYHQWLRQDO
GHILQLWLRQV RI WUDGH VHFUHWV HDVLO\ HPEUDFHV HWKQRELRORJLFDO NQRZOHGJH  7KH
5HVWDWHPHQW RI 7RUWV IRUPXODWLRQ KDV ZRQ WKH 6XSUHPH &RXUWV HQGRUVHPHQW RQ
PXOWLSOHRFFDVLRQV


>$@ WUDGH VHFUHW PD\ FRQVLVW RI DQ\ IRUPXOD SDWWHUQ GHYLFH RU
FRPSLODWLRQRILQIRUPDWLRQZKLFKLVXVHGLQRQHVEXVLQHVVDQGZKLFK
JLYHVKLPDQRSSRUWXQLW\WRREWDLQDQDGYDQWDJHRYHUFRPSHWLWRUVZKR
GRQRWNQRZRUXVHLW,WPD\EHDIRUPXODIRUDFKHPLFDOFRPSRXQG
DSURFHVVRIPDQXIDFWXULQJWUHDWLQJRUSUHVHUYLQJPDWHULDOVDSDWWHUQ

IRUDPDFKLQHRURWKHUGHYLFHRUDOLVWRIFXVWRPHUV

6LPLODUO\WKH8QLIRUP7UDGH6HFUHWV$FWSURWHFWVDIRUPXODSDWWHUQFRPSLODWLRQ
SURJUDP GHYLFH PHWKRG WHFKQLTXH RU SURFHVV DV ORQJ DV WKH LQIRUPDWLRQ LQ




*UDKDP'XWILHOG75,365HODWHG$VSHFWVRI7UDGLWLRQDO.QRZOHGJH&$6(:5(6-,17//

  




6HH HJ ,17(//(&78$/ 3523(57< 5,*+76 )25 ,1',*(1286 3(23/(6 $ 6285&( %22.

7RP *UHDYHV HG   *5$+$0

'87),(/' &$1 7+( 75,36 $*5((0(17 3527(&7

%,2/2*,&$/ $1' &8/785$/ ',9(56,7<"   '$55(// $ 326(<  *5$+$0 '87),(/'
%(<21' ,17(//(&78$/ 3523(57<72:$5' 75$',7,21$/ 5(6285&( 5,*+76)25 ,1',*(1286
3(23/(6$1'/2&$/&20081,7,(6  'DYLG5'RZQHV+RZ,QWHOOHFWXDO3URSHUW\&RXOG%HD
7RRO WR 3URWHFW 7UDGLWLRQDO .QRZOHGJH  &2/80 - (197/ /    5REHUW . 3DWHUVRQ 
'HQQLV 6 .DUMDOD /RRNLQJ %H\RQG ,QWHOOHFWXDO 3URSHUW\ LQ 5HVROYLQJ 3URWHFWLRQ RI WKH ,QWDQJLEOH
&XOWXUDO+HULWDJHRI,QGLJHQRXV3HRSOHV&$5'2=2-,17/ &203/  




6HH /OR\G / :HLQUHE &RS\ULJKW IRU )XQFWLRQDO ([SUHVVLRQ  +$59 / 5(9  

 




6HH *HOYLQD 5RGULJXH] 6WHYHQVRQ 1RWH 7UDGH 6HFUHWV 7KH 6HFUHW WR 3URWHFWLQJ ,QGLJHQRXV

(WKQRELRORJLFDO 0HGLFLQDO .QRZOHGJH1<8-,17// 32/  






5(67$7(0(17 2) 72576  FRPPHQW E  DFFRUGHJ5XFNHOVKDXVY0RQVDQWR&R

86  .HZDQHH2LO&RY%LFURQ&RUS86  



&*(25*(/$:5(9,(:

>9RO

TXHVWLRQQRWRQO\GHULYHVLQGHSHQGHQWHFRQRPLFYDOXHDFWXDORUSRWHQWLDOIURPQR
EHLQJ JHQHUDOO\ NQRZQ WR DQG QRW EHLQJ UHDGLO\ DVFHUWDLQDEOH E\ SURSHU PHDQV E\
RWKHUSHUVRQVZKRFDQREWDLQHFRQRPLFYDOXHIURPLWVGLVFORVXUHRUXVHEXWDOVRLV
WKH VXEMHFW RI HIIRUWV WKDW DUH UHDVRQDEOH XQGHU WKH FLUFXPVWDQFHV WR PDLQWDLQ LWV

VHFUHF\ 

0RUHUHFHQWO\WKH5HVWDWHPHQW 7KLUG RI8QIDLU&RPSHWLWLRQKDVVLPSOLILHG
WKHVHGHILQLWLRQVLQWRDVLQJOHEULHIVHQWHQFH$WUDGHVHFUHWLVDQ\LQIRUPDWLRQWKDW
FDQEHXVHGLQWKHRSHUDWLRQRIDEXVLQHVVRURWKHUHQWHUSULVHDQGWKDWLVVXIILFLHQWO\
YDOXDEOH DQG VHFUHW WR DIIRUG DQ DFWXDO RU SRWHQWLDO HFRQRPLF DGYDQWDJH RYHU

RWKHUV   $ VFKHPH WR SURWHFW WUDGLWLRQDO NQRZOHGJH PLJKW EHJLQ E\ H[FLVLQJ WKH
ZRUGV DQG VHFUHW IURP WKLV GHILQLWLRQ  7R EH HOLJLEOH IRU SURSULHWDU\ SURWHFWLRQ
WUDGLWLRQDO NQRZOHGJH PXVW FRQWDLQ VRPH LQIRUPDWLRQ WKDW FDQ EH XVHG LQ WKH
RSHUDWLRQ RI D EXVLQHVV RU RWKHU HQWHUSULVH DQG WKDW LV VXIILFLHQWO\ YDOXDEOH  WR
DIIRUGDQDFWXDORUSRWHQWLDOHFRQRPLFDGYDQWDJHRYHURWKHUV

7KHUHTXLUHPHQWRIVHFUHF\XQGHUWUDGHVHFUHWODZQHHGQRWPHHWWKHWHVWRI

QRYHOW\ XQGHU SDWHQW ODZ   (YHQ ZKHUH QR SDWHQW FRXOG LVVXH WUDGH VHFUHW

SURWHFWLRQPD\EHDYDLODEOH 5HFRJQLWLRQRIDWUDGHVHFUHWGRHVQRWGHSHQGXSRQDQ
LQYHQWLYHVWHSDUHTXLUHPHQWRISDWHQWODZWKDWWUDGLWLRQDONQRZOHGJHUDUHO\LIHYHU

VDWLVILHV :KHQWKHUHFLSLHQWRINQRZOHGJHHQMR\VDOLFHQVLQJDUUDQJHPHQWRUVRPH
RWKHUEXVLQHVVUHODWLRQVKLSZLWKLWVRULJLQDWRUWKHODZRIWUDGHVHFUHWVUHDGLO\LPSRVHV

D GXW\ WR UHVSHFW LWV FRQILGHQWLDOLW\   7KH SURWHFWLRQV RI  WUDGH VHFUHW ODZ DUH
PRVW HIIHFWLYH DWWKHGHYHORSPHQWDOVWDJHEHIRUHDSURGXFWKDVEHHQPDUNHWHGDQG

WKHWKUHDWRIUHYHUVHHQJLQHHULQJEHFRPHVUHDO $WUDGHVHFUHWODZKRZHYHUGRHV
QRW RIIHU SURWHFWLRQ DJDLQVW GLVFRYHU\ E\ IDLU DQG KRQHVW PHDQV VXFK DV E\
LQGHSHQGHQWLQYHQWLRQDFFLGHQWDOGLVFORVXUHRUE\VRFDOOHGUHYHUVHHQJLQHHULQJWKDW
LV E\ VWDUWLQJ ZLWK WKH NQRZQ SURGXFW DQG ZRUNLQJ EDFNZDUG WR GLYLQH WKH SURFHVV

ZKLFKDLGHGLQLWVGHYHORSPHQWRUPDQXIDFWXUH 








81,)25075$'(6(&5(76$&7   DPHQGHG 8/$  


5(67$7(0(17 7+,5'  2) 81)$,5 &203(7,7,21    DFFRUG HJ 5HLQJROG Y

6ZLIWVKLSV,QF)G WK&LU 












6HH:5*UDFH &RY+DUJDGLQH)G WK&LU 


6HH$URQVRQY4XLFN3RLQW3HQFLO&R86  
&I'RULV(VWHOOH/RQJ7KH,PSDFWRI)RUHLJQ,QYHVWPHQWRQ,QGLJHQRXV&XOWXUH$Q,QWHOOHFWXDO

3URSHUW\ 3HUVSHFWLYH  1& - ,17/ /  &20 5(*     DUJXLQJWKDWIRONNQRZOHGJH
UDUHO\H[KLELWVWKHVRUWRILQYHQWLYHVWHSWKDWSDWHQWODZGHPDQGV 




6HHHJ.HZDQHH2LO&RY%LFURQ&RUS86 Q  /HDU,QFY$GNLQV

86  








%RQLWR%RDWV,QFY7KXQGHU&UDIW%RDWV,QF86  
.HZDQHH2LO86DW

@

7+(5( 61268&+7+,1*$6%,23,5$&<





  7KH FDVH DJDLQVW SURWHFWLQJ HWKQRELRORJLFDO NQRZOHGJH  6LPSO\ EHFDXVH
HWKQRELRORJLFDO NQRZOHGJH FDQ EH SURWHFWHG WKURXJK VRPH IRUP RI LQWHOOHFWXDO
SURSHUW\ KRZHYHU GRHV QRW PHDQ WKDW LW VKRXOG EH VR SURWHFWHG  7KH XOWLPDWH
TXHVWLRQLVZKHWKHUHWKQRELRORJLFDONQRZOHGJHGHVHUYHVSURSULHWDU\SURWHFWLRQ7KH
KDUVK UHDOLW\ LV WKDW WKHUH LV QR HFRQRPLFDOO\ MXVWLILDEOH UHDVRQ IRU SURWHFWLQJ
HWKQRELRORJLFDONQRZOHGJHDVSURSHUW\(WKQRELRORJLFDONQRZOHGJHDOUHDG\OLHVLQD
SXEOLFGRPDLQRIVRUWVDOEHLWSHUKDSVDYHU\VPDOOSXEOLFFRQVLVWLQJRIWKHPHPEHUV

RIDQLQGLJHQRXVWULEHZKRVHFXOWXUHLWVHOILVHQGDQJHUHG %LRSLUDF\E\VSUHDGLQJ
NQRZOHGJH RI DQ RUJDQLVPV XVHIXO SURSHUWLHV LV ORFDOO\ REMHFWLRQDEOH EXW JOREDOO\

EHQHILFLDO   2QFH LGHDV HQWHU D JOREDO SXEOLF GRPDLQ WKH\ VKRXOG VWD\  7KRPDV
-HIIHUVRQWKHILUVWDGPLQLVWUDWRURISDWHQWVLQWKH8QLWHG6WDWHVREVHUYHG+HZKR
UHFHLYHVDQLGHDIURPPHUHFHLYHVLQVWUXFWLRQKLPVHOIZLWKRXWOHVVHQLQJPLQHDVKH

ZKROLJKWVKLVWDSHUDWPLQHUHFHLYHVOLJKWZLWKRXWGDUNHQLQJPH 

7KH LQWHOOHFWXDO SURSHUW\ ODZV RI WKH 8QLWHG 6WDWHV IRUELG PHDVXUHV WKDW
SXUSRUW WR UHPRYH LGHDV IURP WKH SXEOLF GRPDLQ DQG WR UHDVVLJQ WKHP WR D SULYDWH
RZQHU  &RQJUHVV PD\ QRW DXWKRUL]H WKH LVVXDQFH RI SDWHQWV ZKRVH HIIHFWV DUH WR
UHPRYH H[LVWHQW NQRZOHGJH IURP WKH SXEOLF GRPDLQ RU WR UHVWULFW IUHH DFFHVV WR

PDWHULDOV DOUHDG\ DYDLODEOH   $ FRQWUDU\ DSSURDFK HIIHFWLYHO\ DVVXPHV WKDW WKH
SXEOLF LQWHUHVW LQ IUHH DFFHVV WR FXOWXUDO LQIRUPDWLRQ LV HQWLUHO\ ZRUWKOHVV DQG WKDW
DXWKRUV >DQG LQYHQWRUV@ DV D FODVV VKRXOG UHFHLYH D ZLQGIDOO VROHO\ EDVHG RQ

FRPSOHWHGFUHDWLYHDFWLYLW\ $VWKH6XSUHPH&RXUWUHFRJQL]HGWZHOYHGHFDGHVDJR


,W ZDV QHYHU WKH REMHFW RI >WKH SDWHQW@ ODZV WR JUDQW D PRQRSRO\ IRU
HYHU\WULIOLQJGHYLFHHYHU\VKDGRZRIDVKDGHRIDQLGHDZKLFKZRXOG
QDWXUDOO\ DQG VSRQWDQHRXVO\ RFFXU WR DQ\ VNLOOHG PHFKDQLF RU
RSHUDWRU LQ WKH RUGLQDU\ SURJUHVV RI PDQXIDFWXUHV  6XFK DQ
LQGLVFULPLQDWHFUHDWLRQRIH[FOXVLYHSULYLOHJHVWHQGVUDWKHUWRREVWUXFW
WKDQWRVWLPXODWHLQYHQWLRQ,WFUHDWHVDFODVVRIVSHFXODWLYHVFKHPHUV
ZKR PDNH LW WKHLU EXVLQHVV WR ZDWFK WKH DGYDQFLQJ ZDYH RI
LPSURYHPHQW DQG JDWKHU LWV IRDP LQ WKH IRUP RI SDWHQWHG
PRQRSROLHVZKLFKHQDEOHWKHPWROD\DKHDY\WD[XSRQWKHLQGXVWU\




&I &%' VXSUD QRWH  DUW  M  H[KRUWLQJ DOO FRQWUDFWLQJ SDUWLHV DV SDUW RI WKHLU REOLJDWLRQ WR

FRQVHUYH ELRGLYHUVLW\ LQ VLWX WR UHVSHFW  LQGLJHQRXV NQRZOHGJH DQG WR HQFRXUDJH  HTXLWDEOH
VKDULQJRIWKHEHQHILWVGHULYHGIURPELRORJLFDOUHVRXUFHV 
















'DQ/%XUN7KH7URXEOHZLWK7UHVSDVV-60$// (0(5*,1*%86/  


6HH*UDKDPY-RKQ'HHUH&R86Q   TXRWLQJ-HIIHUVRQ 
,GDW
(OGUHGY$VKFURIW86   6WHYHQV-GLVVHQWLQJ 



&*(25*(/$:5(9,(:

>9RO

RIWKHFRXQWU\ZLWKRXWFRQWULEXWLQJDQ\WKLQJWRWKHUHDODGYDQFHPHQW

RIWKHDUW

3URWHFWLQJLQGLJHQRXVNQRZOHGJHDVLQWHOOHFWXDOSURSHUW\ZRXOGOLNHZLVHVWLIOHWKHIUHH

H[FKDQJHRILGHDVWKDWJDYHULVHWRWKLVLQIRUPDWLRQLQWKHILUVWSODFH 

0RUHRYHU WUDGH VHFUHW ODZ WKH PRGH RI LQWHOOHFWXDO SURSHUW\ PRVW RIWHQ
LQYRNHG WR H[WHQGSURSULHWDU\SURWHFWLRQWRHWKQRELRORJLFDONQRZOHGJHSURYLGHVDQ
H[FHSWLRQDOO\ SRRU YHKLFOH IRU GHOLYHULQJ LQIRUPDWLRQ RI DQ\ VRUW LQWR WKH SXEOLF
GRPDLQ  7UDGH VHFUHW ODZ E\ GHVLJQ NHHSV LQIRUPDWLRQ FRQFHDOHG  %\ FRQWUDVW
SDWHQW DQG FRS\ULJKW ODZV DUH GHVLJQHG WR GHOLYHU SULYDWHO\ KHOG LQIRUPDWLRQ LQWR
SXEOLFKDQGV3URSULHWDU\SURWHFWLRQRILGHDVVKRXOGEHGHVLJQHGWRVSXUUHOHDVHWR
WKHSXEOLFRIWKHSURGXFWVRIFUHDWLYHJHQLXVLQFLGHQWDOUHZDUGWRWKHRZQHU>LV@

D VHFRQGDU\ FRQVLGHUDWLRQ   ,QWURGXFLQJ DQ LGHD WR WKH JOREDO FRPPXQLW\ LQ WKH

EURDGHVW VHQVH LVWKHYHU\SXUSRVHRILQWHOOHFWXDOSURSHUW\ >,@QUHVSHFWWRZRUNV
DOUHDG\ FUHDWHG KRZHYHU DQ\ JUDQW RI LQWHOOHFWXDO SURSHUW\ FUHDWHV QR HFRQRPLF

LQFHQWLYH DW DOO   ,QGHHG SURWHFWLQJ H[LVWLQJ ZRUN FRQVWLWXWHV DQ HFRQRPLFDOO\

GHVWUXFWLYHSUHHPSWLYHVWULNHDJDLQVWIXWXUHLQQRYDWLRQ 


,QWHOOHFWXDO SURSHUW\ ULJKWV DUH QRW DQG VKRXOG QRW EH JLYHQ DV IDYRUV 
7KH\ DUH PHDQW WR HQFRXUDJH LQYHQWLRQ E\ UHZDUGLQJ WKH LQYHQWRU ZLWK WKH ULJKW
OLPLWHG WR D WHUP RI \HDUV  WR H[FOXGH RWKHUV IURP WKH XVH RI KLV >RU KHU@




$WODQWLF:RUNVY%UDG\86 2WWR   DFFRUG6ODZVRQY*UDQG6WUHHW33

 )5 &R  86 2WWR   3KLOOLSVY&LW\RI'HWURLW86  


7KRPSVRQY%RLVVHOLHU86  5DLOURDG6XSSO\&RY(O\ULD,URQ 6WHHO&R86
  *UHDW$WODQWLF 3DF7HD&RY6XSHUPDUNHW(TXLS&RUS86  
'RXJODV-FRQFXUULQJ 




6HH 5RVHPDU\ - &RRPEH ,QWHOOHFWXDO 3URSHUW\ +XPDQ 5LJKWV DQG 6RYHUHLJQW\ 1HZ 'LOHPPDV

LQ ,QWHUQDWLRQDO /DZ 3RVHG E\ WKH 5HFRJQLWLRQ RI ,QGLJHQRXV .QRZOHGJH DQG WKH &RQVHUYDWLRQ RI
%LRGLYHUVLW\  ,1' - */2%$/ /(* 678'     *DU\ 3 1DEKDQ 6KDULQJ WKH %HQHILWV RI
3ODQW

5HVRXUFHV

DQG

,QGLJHQRXV

6FLHQWLILF

.QRZOHGJH

LQ

9$/8,1*

/2&$/

.12:/('*(

,1',*(12863(23/($1',17(//(&78$/3523(57<5,*+76 6WHSKHQ%%UXVK 'RUHHQ


6WDELQVN\HGV 




8QLWHG 6WDWHV Y 3DUDPRXQW 3LFWXUHV ,QF  86     DFFRUG HJ 0D]HU Y6WHLQ

86  




6HH)R[)LOP&RUSY'R\DO86   7KHVROHLQWHUHVWRIWKH8QLWHG6WDWHVDQG

WKHSULPDU\REMHFWLYHLQFRQIHUULQJWKHPRQRSRO\OLHLQWKHJHQHUDOEHQHILWVGHULYHGE\WKHSXEOLFIURP
WKHODERURIDXWKRUV 








(OGUHGY$VKFURIW86   %UH\HU-GLVVHQWLQJ  HPSKDVLVLQRULJLQDO 


6HH'HQQLV6.DUMDOD7KH7HUPRI&RS\ULJKWQ*52:,1* 3$,16$'$37,1* &23<5,*+7)25

/,%5$5,(6('8&$7,21$1'62&,(7< /DXUD1*DVDZD\HG 




6HDUV5RHEXFN &RY6WLIIHO&R86  

@

7+(5( 61268&+7+,1*$6%,23,5$&<



LQYHQWLRQ   $ SDWHQW LV D SULYLOHJH ZKLFK LV FRQGLWLRQHG E\ D SXEOLF SXUSRVH D
VSXU WR LQQRYDWLRQ DQG D SURGXFW RI UHDOL]HG LQYHQWLRQ D SDWHQW LV OLPLWHG WR WKH

LQYHQWLRQZKLFKLWGHILQHV 7KHHFRQRPLFSKLORVRSK\EHKLQGERWKSDWHQWVDQG
FRS\ULJKWVLVWKHFRQYLFWLRQWKDWHQFRXUDJHPHQWRILQGLYLGXDOHIIRUWE\SHUVRQDOJDLQ
LVWKHEHVWZD\WRDGYDQFHSXEOLFZHOIDUHWKURXJKWWKHWDOHQWVRIDXWKRUVDQGLQYHQWRUV

LQ 6FLHQFH DQG XVHIXO $UWV   7KLV FRQVWLWXWLRQDO PDQGDWH FRPPLWV $PHULFDQ
LQWHOOHFWXDO SURSHUW\ ODZ WR D VWULFWO\ XWLOLWDULDQ PLVVLRQ RQH LQ ZKLFK DGYDQFLQJ
NQRZOHGJHDQGJHQHUDWLQJXVHIXOLQQRYDWLRQVWDNHSUHFHGHQFHRYHUDEVWUDFWFRQFHSWV

VXFKDVSHUVRQDODXWRQRP\DQGVHOIH[SUHVVLRQ -XVWDVWKHIRXUWHHQWKDPHQGPHQW

GLG QRW HQDFW 0U +HUEHUW 6SHQFHUV 6RFLDO 6WDWLFV  WKH SDWHQW DQG FRS\ULJKW
FODXVH RI WKH &RQVWLWXWLRQ GLG QRW HQGRUVH WKH SURSHUW\ULJKWV SKLORVRSK\ RI -RKQ

/RFNH,PPDQXHO.DQWRU*HRUJ:LOKHOP)ULHGULFK+HJHO 

$V WKH OHJDF\ RI KXPDQLW\ HWKQRELRORJLFDO NQRZOHGJH EHORQJV LQ D JOREDO
FRPPRQV7KHSULQFLSDOHFRQRPLFUDWLRQDOHMXVWLI\LQJWKHSULYDWL]DWLRQRIODQGDQG
RWKHUWDQJLEOHREMHFWVFQDPHO\ULYDOU\DPRQJFRPSHWLQJXVHUVRIDILQLWHH[KDXVWLEOH
UHVRXUFH F VLPSO\ GRHV QRW DSSO\ WR WUDGLWLRQDO NQRZOHGJH RU DQ\ RWKHU NLQG RI

LQIRUPDWLRQ JRRG>@   $ XWLOLWDULDQ DWWLWXGH WRZDUG LQWHOOHFWXDO SURSHUW\ GLFWDWHV D
YHU\VLPSOHDQVZHU)URPDQHFRQRPLFSHUVSHFWLYHWKHPRUHSHRSOHZKRFDQXVH


LQIRUPDWLRQWKHEHWWHU ,GHDVDUHDVIUHHDVWKHDLUWRFRPPRQXVH 5HMHFWLQJ
WKHUKHWRULFRIELRSLUDF\KHOSVNHHSLGHDVLQWKHSXEOLFGRPDLQ


,,, 7
1 6
7
%

, *
7
7 





+(5( 6

2

8&+

$1' 7 6$





+,1*$6

22'

+,1*

,23,5$&<
22

,G FI 7ZHQWLHWK &HQW 0XVLF &RUS Y $LNHQ  86     GHVFULELQJ FRS\ULJKW DV

GHVLJQHGWRVWLPXODWHDUWLVWLFFUHDWLYLW\IRUWKHJHQHUDOSXEOLFJRRG 












0HUFRLG&RUSY0LG&RQWLQHQW,QY&R86  
0D]HU86DW
6HHHJ<RFKDL%HQNOHU6LUHQ6RQJVDQG$PLVK&KLOGUHQ$XWRQRP\,QIRUPDWLRQDQG/DZ

1<8 / 5(9     /LQGD 5 &RKHQ  5RJHU * 1ROO ,QWHOOHFWXDO 3URSHUW\ $QWLWUXVW DQG
WKH1HZ(FRQRP\83,77/5(9  








/RFKQHUY1HZ<RUN86   +ROPHV-GLVVHQWLQJ 


)RU H[SODQDWLRQV RI WKH LPSDFW RI WKHVH SKLORVSKHUV RQ (XURSHDQ LQWHOOHFWXDO SURSHUW\ ODZ VHH

JHQHUDOO\7KRPDV)&RWWHU3UDJPDWLVP(FRQRPLFVDQGWKH'URLW0RUDO1&/5(9  
-XVWLQ+XJKHV7KH3KLORVRSK\RI,QWHOOHFWXDO3URSHUW\*(2/-  












0DUN$/HPOH\3ODFHDQG&\EHUVSDFH&$//5(9  
,G
,QWHUQDWLRQDO1HZV6HUYY$VVRFLDWHG3UHVV86   %UDQGHLV-GLVVHQWLQJ 



&*(25*(/$:5(9,(:

>9RO


6WULSSHGRILWVQRUPDWLYHSUHPLVHVOD\HUE\OD\HUWKHELRSLUDF\QDUUDWLYHORVHV
DOO DSSHDO  7KH &RQYHQWLRQ RQ %LRORJLFDO 'LYHUVLW\V HQGRUVHPHQW RI QDWLRQDO
VRYHUHLJQW\DVVLJQVQDWLRQDOJRYHUQPHQWVDOOUHVSRQVLELOLW\IRULQLWLDODFFHVVWRJHQHWLF
UHVRXUFHV$FFHVVWRSK\VLFDOELRORJLFDOVSHFLPHQVLVWKHRQHDVSHFWRIELRSURVSHFWLQJ
WKDW OLHV HQWLUHO\ ZLWKLQ WKH FRQWURO RI LQGLYLGXDO QDWLRQVWDWHV  )HZ LI DQ\ QDWLRQDO
JRYHUQPHQWVKDYHHOHFWHGWRWKURWWOHWKLVHFRQRPLFFKRNHSRLQWIRUIHDURIGHVWUR\LQJ
DOO SURVSHFWLYH SURILWV IURP WKH FRPPHUFLDO GHYHORSPHQW RI ELRORJLFDO GLYHUVLW\
:LWKLQWKHORJLFDOVXEOD\HUWKH75,36DFFRUGDOORZVWKHSULQFLSDOMXULVGLFWLRQVRIWKH
1RUWK$WODQWLFDOOLDQFH FWKH8QLWHG6WDWHV&DQDGDDQGWKH(XURSHDQ8QLRQ FWR
DGRSW UDGLFDOO\ GLYHUVH VROXWLRQV WR WKH SUREOHP RI SDWHQWLQJ JHQHWLF LQIRUPDWLRQ
'HYHORSLQJ FRXQWULHV VXFK DV ,QGLD ZKLFK DUH WKH XVXDO FRPSODLQLQJ SDUWLHV LQ
LQVWDQFHVRIDOOHJHGELRSLUDF\HQMR\DPSOHGLVFUHWLRQXQGHU75,36WRUHIXVHSDWHQWV
RQ D ZLGH UDQJH RI ELRWHFKQRORJLFDO LQYHQWLRQV  )LQDOO\ DOWKRXJK WUDGLWLRQDO
NQRZOHGJH LV VXVFHSWLEOH WRSURWHFWLRQWKURXJKDPRGLILHGIRUPRIWUDGHVHFUHWODZ
QRFRQYLQFLQJHFRQRPLFFDVHIRUVXFKSURWHFWLRQFDQEHPDGH

:LWKLQ WKH ELRSLUDF\ GHEDWH QR FRXQWU\ VWULNHV D FRQVLVWHQW SRVWXUH WRZDUG
LQWHOOHFWXDOSURSHUW\DVDOHJDOWRRO7KHVRXWKHUQFRXQWULHVWKDWXUJHUHFRJQLWLRQRI
LQWHOOHFWXDO SURSHUW\ LQ LQGLJHQRXV NQRZOHGJH DUH RIWHQ SURSRQHQWV RI ZHDNHQLQJ
SURSULHWDU\ SURWHFWLRQ RQ SKDUPDFHXWLFDOV DJULFXOWXUDO FKHPLFDOV DQG HGXFDWLRQDO

PDWHULDOV LQ WKH QDPH RI LQFUHDVHG DFFHVV   $ VWXG\ E\ WKH :RUOG ,QWHOOHFWXDO
3URSHUW\ 2UJDQL]DWLRQ :,32  IRXQG WKDW UHVSRQGHQWV LQ  OHVV GHYHORSHG
FRXQWULHV GHVSLWH WKHLU PLVJLYLQJV DERXW LQWHOOHFWXDO SURSHUW\ DV D OHJDO FRQFHSW DQG
DERXW DVSHFWV RI VSHFLILF LQWHOOHFWXDO SURSHUW\ ODZV RIWHQ H[SUHVVHG LQWHUHVW LQ
H[SORULQJ IXUWKHU WKH DFWXDO DQG SRWHQWLDOUROHRILQWHOOHFWXDOSURSHUW\LQSURWHFWLQJ

WUDGLWLRQDO NQRZOHGJH   6XEVHTXHQW :,32 SXEOLFDWLRQV KDYH FRPPLWWHG WKH
RUJDQL]DWLRQ WR WKH SURMHFW RI GHYHORSLQJ PRGHOV IRU SURWHFWLQJ JHQHWLF UHVRXUFHV

WUDGLWLRQDONQRZOHGJHDQGIRONORUHDWWKHLQWHUQDWLRQDOOHYHO 1RUWKDQGVRXWKWKH
ORFDO DWWLWXGH WRZDUG LQWHOOHFWXDO SURSHUW\ GHSHQGV RQ ZKDW LV EHLQJ SURWHFWHG DQG




6HH )UDQN (PPHUW ,QWHOOHFWXDO 3URSHUW\ LQ WKH 8UXJXD\ 5RXQG

F 1HJRWLDWLQJ 6WUDWHJLHV RI WKH

:HVWHUQ ,QGXVWULDOL]HG &RXQWULHV  0,&+ - ,17/ /     0XULD .UXJHU 1RWH
+DUPRQL]LQJ 75,3V DQG WKH &%' $ 3URSRVDO IURP ,QGLD  0,11 - */2%$/ 75$'(  
 




:25/'

,17(//(&78$/

3523(57<

25*

,17(//(&78$/

3523(57<

1(('6

$1'

(;3(&7$7,2162)75$',7,21$/.12:/('*(+2/'(56DW  




6HH HJ :25/' ,17(//(&78$/ 3523(57< 25* 0$77(56 &21&(51,1* ,17(//(&78$/

3523(57<$1'*(1(7,&5,*+7675$',7,21$/.12:/('*($1')2/./25(   :,32'RF


:2*$ 

:25/'

,17(5*29(510(17$/

,17(//(&78$/

&200,77((

21

3523(57<

25*

,17(//(&78$/

0$77(56

3523(57<

$1'

&21&(51,1*
*(1(7,&

75$',7,21$/.12:/('*($1')2/./25(   :,32'RF:2*$ 

7+(

5,*+76

@

7+(5( 61268&+7+,1*$6%,23,5$&<



ZKDWGHJUHHRISURWHFWLRQGHOLYHUVWKHJUHDWHVWEHQHILWWRORFDOLQWHUHVWV*OREDOFULHV
IRUMXVWLFHGHPDQGPRUHHWKLFDOVWDUFKWKDQWKLV>,@I\RXJRFKDVLQJUDEELWV\RX

NQRZ\RXUHJRLQJWRIDOO 

7KHUHVQRVXFKWKLQJDVELRSLUDF\DQGLWVDJRRGWKLQJWRR7KHUHDOSRLQW
RIWKHELRSLUDF\QDUUDWLYHLVWKDWWKHJOREDOVRXWKZDQWVLWVODUJHVWSRVVLEOHVKDUHRIWKH
ZRUOGVZHDOWK$VPDWWHUVVWDQGLWLVTXLWHVLPSOH7KHQRUWKLVULFKDQGWKHVRXWKLV
QRW  'HYHORSLQJ FRXQWULHV ZLOO QRW VRRQ FHDVH FODPRULQJ IRU VRPH FRPSHQVDWRU\
PHFKDQLVPZKHWKHURUQRWJURXQGHGLQWKHODZRILQWHOOHFWXDOSURSHUW\WKDWZRXOG
UHZDUG WKHLU KLVWRULFDO FRQWULEXWLRQV WR ELRORJLFDO NQRZOHGJHDQGDSSOLFDWLRQVZLWKLQ
WKHJOREDOFRPPRQV0RWLYDWHGE\SRVWFRORQLDOWKHRULHVRIREOLJDWLRQWRSHRSOHVLQ
DUHDV ORQJ H[SORLWHG E\ WKH QRUWKHUQ KHPLVSKHUH PXFK RI WKH LQWHUQDWLRQDO
FRPPXQLW\VHHNVVRPHZD\WRDOOHYLDWHWKHH[WUHPHGLVWUHVVRIWKRVHOLYLQJLQELRULFK

DUHDVRIWKHZRUOG 7KDQNVWRWKHGHHSDQWDJRQLVPJHQHUDWHGE\HYHQWKHPHUH
SHUFHSWLRQ RI LOOLFLW DSSURSULDWLRQ RI NQRZOHGJH DQG JHUP SODVP ZLWKRXW 
SHUPLVVLRQDQGZLWKRXWFRPSHQVDWLRQWKHOLIHVFLHQFHVFRPSDQLHVRIWKHQRUWKZLOO

FRQWLQXHWRPDNHDELJWDUJHWIRUWKHGHYHORSLQJZRUOGVSROLWLFDOJULHYDQFHV 7KH
VRXWKHUQTXHVWVRLWVHHPVZLOOVWRSDWQRWKLQJVKRUWRIDIRUPDOUHTXLUHPHQWXQGHU
LQWHUQDWLRQDO ODZ WKDW LQYHQWRUV FRPSHQVDWH WUDGLWLRQDO NQRZOHGJH KROGHUV IRU

VKDULQJWKDWNQRZOHGJH 

7KH UKHWRULFDO FRQVHTXHQFHV RI WKLV DWWDFN FDQ EH TXLWH JULP IRU WKH
GHYHORSLQJ ZRUOG  0RVW REYLRXVO\ ELRSURVSHFWLQJ FRXOG FRPH WR D FRPSOHWH KDOW
*LYHQWKHUHODWLYHO\PRGHVWSURILWVUHDOL]HGIURPWKHILUVWGHFDGHVRIELRSURVSHFWLQJD
FRPSUHKHQVLYHO\ LQVWUXPHQWDO RU HFRQRPLF UDWLRQDOH IRU SURWHFWLQJ WKH ELRVSKHUH

DVDVWRUHKRXVHRIFRPPHUFLDOYDOXHDSSHDUVEH\RQGUHDFK 3DXO+HDOGFRJHQWO\
UHFRJQL]HVHYHQLIWKHPRVWDUGHQWSURSRQHQWVRIWKHELRSLUDF\QDUUDWLYHGRQRWWKDW
WKH UHSHDWHG KXUOLQJ RI ELRSLUDF\ DV D PLVOHDGLQJ HSLWKHWV ZLOO KDUGO\ FRQYLQFH
SURILWGULYHQPXOWLQDWLRQDOFRUSRUDWLRQVWRHQJDJHWKHGHYHORSLQJZRUOG

0RUHRYHUDQHPSKDVLVRQWKHWUDGLWLRQDONQRZOHGJHRIGHYHORSLQJFRXQWULHV
LQYLWHV WKH LPPHGLDWH DSSOLFDWLRQ RI WKH GHYHORSHG ZRUOGV VWDQGDUGV RI
HQYLURQPHQWDOSURWHFWLRQDQGSHUIRUPDQFHWRYDVWO\SRRUHUFRXQWULHV0XFKRIWKH




















+HDU-())(5621$,53/$1(VXSUDQRWH
+HDOGVXSUDQRWHDW
,G
%DJOH\VXSUDQRWHDWQ
0DUN6DJRII0XGGOHRU0XGGOH7KURXJK"7DNLQJV-XULVSUXGHQFH0HHWVWKH(QGDQJHUHG6SHFLHV

$FW  :0  0$5< / 5(9      )RU DQ ROGHU EXW VWLOO LQVWUXFWLYH VXUYH\ RI XWLOLWDULDQ
UDWLRQDOHVLQHQYLURQPHQWDOODZVHH0DUN6DJRII(FRQRPLF7KHRU\DQG(QYLURQPHQWDO/DZ0,&+
/5(9  



&*(25*(/$:5(9,(:

>9RO

GHYHORSLQJ ZRUOG DOUHDG\ UHJDUGV WKH HQYLURQPHQWDO LPSHUDWLYHV RI WKH GHYHORSHG

ZRUOG DV LPSHULDOLVP LQ JUHHQ GUDJ   7KH VRXWKHUQ FDPSDLJQ WR HQKDQFH WKH
SURSULHWDU\VWDWXVRILWVJHUPSODVPDQGLWVHWKQRELRORJLFDONQRZOHGJHZLOOHQJDJHQRW
RQO\WKHODZRISURSHUW\EXWDOVRWKHHQWLUHOHJDODSSDUDWXVRIWKHLQGXVWULDOL]HGZRUOG
0DQ\ WUDGLWLRQDO SUDFWLFHV PD\ DIILUPDWLYHO\ KDUP WKH HQYLURQPHQW RU DW OHDVW
FRQIOLFWZLWKJOREDOYDOXHVH[SUHVVHGWKURXJKLQWHUQDWLRQDOHQYLURQPHQWDOODZ$VLDQ

IRONPHGLFLQHGULYHVJOREDOGHPDQGIRUUKLQRFHURVKRUQVDQGEODFNEHDUFODZV 2Q


RSSRVLWHVLGHVRIWKH3DFLILF-DSDQHVHDSSHWLWHV DQG0DNDKULWXDOV FODVKZLWKWKH

,QWHUQDWLRQDO&RQYHQWLRQRQ:KDOLQJ &RQVXPHUVLQ)ORULGDZKRSUL]HWKHHJJVRI

HQGDQJHUHGVHDWXUWOHVDVDSKURGLVLDFVSD\SHUGR]HQ 

7KH XQFRPIRUWDEOH WUXWK LV WKDW WKH GHYHORSLQJ ZRUOG HQMR\V QR PRUDO
VXSHULRULW\ YLVjYLV ZHDOWKLHU FRXQWULHV RQ PDWWHUV RI HQYLURQPHQWDO HWKLFV  6PDOO
VFDOHFRPPXQLWLHVDUHVHOGRPDVKXPDQHDQGHFRORJLFDOO\VRXQGDVWKHLUDGYRFDWHV

SRUWUD\ WKHP WR EH   6PDOO ILUPV  DUH UHVSRQVLEOH IRU D PDVVLYHO\

GLVSURSRUWLRQDWHVKDUHRIZDWHUDQGDLUSROOXWLRQ $JULFXOWXUHLVHVSHFLDOO\VXVSHFW
2QH ZRXOG EH KDUG SUHVVHG WR LGHQWLI\ DQRWKHU LQGXVWU\ ZLWK DV SRRU DQ

HQYLURQPHQWDO UHFRUG DQG DV OLJKW D UHJXODWRU\ EXUGHQ   6PDOOHU IDPLO\RZQHG




6HH 5DM %KDOD 0UV :$78 DQG ,QWHUQDWLRQDO 7UDGH 6DQFWLRQV  ,17/ /$:    

%DUWUDP6%URZQ'HYHORSLQJ&RXQWULHVLQWKH,QWHUQDWLRQDO7UDGH2UGHU1,//8/5(9
  




6HHHJ:LOOLDP&DUUROO0XIIHWW5HJXODWLQJWKH7UDGHLQ%HDU3DUWVIRU8VHLQ$VLDQ7UDGLWLRQDO

0HGLFLQH0,11/5(9  




6HH -DSDQ :KDOLQJ $VVQ Y $PHULFDQ &HWDFHDQ 6RF\  86    LQWHUSUHWLQJ WKH

,QWHUQDWLRQDO :KDOLQJ &RQYHQWLRQ  .D]XR 6XPL 7KH :KDOH :DU %HWZHHQ -DSDQ DQG WKH 8QLWHG
6WDWHV3UREOHPVDQG3URVSHFWV'(19-,17// 32/<  




6HH 1RUWK 3DFLILF (DVWHUQ 6WRFN RI *UD\ :KDOHV  5(3 ,17/ :+$/,1* &2001   

DSSO\LQJWKHZKDOLQJFRQYHQWLRQVH[HPSWLRQIRUWUDGLWLRQDOXVHVRIZKDOHSURGXFWE\ORFDODERULJLQDO
LQGLJHQRXV RU QDWLYHFRPPXQLWLHVLQPHHWLQJWKHLUQXWULWLRQDOVXEVLVWHQFHDQGFXOWXUDOUHTXLUHPHQWV 
8QLWHG6WDWHVY:DVKLQJWRQ)G WK&LU 




,QWHUQDWLRQDO &RQYHQWLRQ IRU WKH 5HJXODWLRQ RI :KDOLQJ ZLWK 6FKHGXOH RI :KDOLQJ 5HJXODWLRQV

DGRSWHG'HF6WDW7,$61R8176  




6HH'DQD&DQHG\(JJVRI(QGDQJHUHG7XUWOHV)DOO3UH\WR)ORULGD'HDOHUV1<7,0(6$XJ

DW$$




0$57,1 : /(:,6 *5((1 '(/86,216 $1 (19,5210(17$/,67 &5,7,48( 2) 5$',&$/

(19,5210(17$/,60  




5LFKDUG - 3LHUFH -U 6PDOO ,V 1RW %HDXWLIXO 7KH &DVH $JDLQVW 6SHFLDO 5HJXODWRU\ 7UHDWPHQW RI

6PDOO)LUPV$'0,1/5(9  




-%5XKO)DUPV7KHLU(QYLURQPHQWDO+DUPVDQG(QYLURQPHQWDO/DZ(&2/2*< /4

   -% 5XKO 7KH (QYLURQPHQWDO /DZ RI )DUPV  <HDUV RI 0DNLQJ D 0ROH +LOO 2XW RI D
0RXQWDLQ  (197/ / 5(3    VHH DOVR -LP &KHQ *HW *UHHQ RU *HW 2XW 'HFRXSOLQJ

@

7+(5( 61268&+7+,1*$6%,23,5$&<



IDUPVURXWLQHO\XQGHUSHUIRUPWKHLUODUJHUFRUSRUDWHFRXQWHUSDUWVLQFRUHWDVNVVXFK

DV VRLO FRQVHUYDWLRQ DQG HURVLRQ FRQWURO   7KH SURSHQVLW\ WR GHVWUR\ WKH
HQYLURQPHQWIORXULVKHVLQDQ\FXOWXUDOVHWWLQJ

$Q\HQYLURQPHQWDODGYDQWDJHDORQJWKHGHYHORSPHQWDOGLYLGHIDYRUVFRXQWULHV
ZKRVH OHJDO V\VWHPV KDYH DGRSWHG WKH PRVW FRPSUHKHQVLYH DQG FRKHUHQW UXOHV IRU
PDQDJLQJWKHLUFLWL]HQVFRQWDFWZLWKWKHOLYLQJZRUOGLQDQDJHRIJURZLQJVFDUFLW\DQG
GHFOLQLQJGLYHUVLW\,QLQGXVWULDOL]HGVRFLHWLHVWKHODZKDVFRPIRUWDEO\DVVLPLODWHGWKH
DFKLHYHPHQWVRIOLIHVFLHQWLVWVDQGVKDSHGWKHLUDWWLWXGHV1DWLRQVVXFKDVWKH8QLWHG
6WDWHV URXWLQHO\ FRQIHU SDWHQWV SODQW YDULHW\ FHUWLILFDWHV DQG RWKHU LQWHOOHFWXDO
SURSHUW\ULJKWVIRUELRORJLFDOLQQRYDWLRQV:LWKHTXDOYLJRUKRZHYHUZHVWHUQQDWLRQV
DOVR VXEMHFW WKRVH VFLHQWLVWV WR ULJRURXV UHJXODWRU\ VFKHPHV LQ RUGHU WR SUHVHUYH WKH

HQYLURQPHQWDQGWRSUHYHQWHWKLFDODEXVHV ,WUHPDLQVXQFOHDUZKHWKHUWUDGLWLRQDO
NQRZOHGJH ZLOO HYHU TXDOLI\ IRU SURSULHWDU\ SURWHFWLRQ LQ WKH ZRUOGV ZHDOWKLHVW
FRXQWULHV7KRVHSUDFWLFHVKDYLQJWDNHQFHQWHUVWDJHLQDQLQWHUQDWLRQDOOHJDOGLDORJXH
GRPLQDWHG E\ DFFXVDWLRQV RI ELRSLUDF\ LW KDUGO\ VWUHWFKHV WKH LPDJLQDWLRQ WR
FRQWHPSODWH ZD\V LQ ZKLFK ZHDOWKLHU FRXQWULHV PD\ WHVW WKH GHYHORSLQJ ZRUOGV
FRPPLWPHQWWRWKHFRPSOHWHLQWHJUDWLRQRIWKHLUWUDGLWLRQVLQWRWKHSRVLWLYHODZRIWKH
JOREDOFRPPXQLW\

:KDW WKH JOREDO VRXWK DQG LWV DGYRFDWHV UHDOO\ VHHN LQ WKH VWUXJJOH RYHU
ELRSLUDF\LVDVLPSOHPHDVXUHRIMXVWLFH0DVVLYHZHDOWKWUDQVIHUVDUHZKDWWKH\VHHN
ODWHU PRGHVW REVWDFOHV WR SDWHQWV RQ ELRWHFKQRORJ\ PD\ DSSHDVH WKHVH DGYRFDWHV
ZKLOH WKH JOREDO FRPPXQLW\ SURJUHVVHV DOEHLWDWDVQDLOVSDFHWRZDUGVRPHVRUWRI
SURILWVKDULQJ VFKHPH IRU VSUHDGLQJ WKH UHZDUGV RI WKH ELRWHFKQRORJLFDO UHYROXWLRQ
5HVROYLQJ GLVSXWHV RYHU DOOHJHG ELRSLUDF\ GRHV QRW UHTXLUH VLJQLILFDQW UHYLVLRQ RI
H[LVWLQJ LQWHOOHFWXDO SURSHUW\ ODZV OHW DORQH WKH QRYHO DQG HFRQRPLFDOO\ VHQVHOHVV
VROXWLRQ RI SURSULHWDU\ VWDWXV IRU WUDGLWLRQDO NQRZOHGJH RI ELRORJLFDO SURSHUWLHV DQG
DSSOLFDWLRQV,QWKHILUVWLQVWDQFHLWPD\EHHQRXJKVLPSO\WRHQVXUHWKDWDOOHJHGDFWV
RIELRSLUDF\GRQRWIRUPWKHEDVLVIRUSDWHQWVXQGHUH[LVWLQJLQWHOOHFWXDOSURSHUW\ODZV

&OHDQVLQJ WKH FXUUHQW SDWHQW V\VWHP RI WKH WDLQW RI ELRSLUDF\ UHTXLUHV OLWWOH
PRUHWKDQDIHZPRGLILFDWLRQVWKDWZRXOGHIIHFWLYHO\GHQ\LQWHOOHFWXDOSURSHUW\ULJKWV
WR RXWVLGHUV ZKR H[SRUW DQG H[SORLW NQRZOHGJH RULJLQDOO\ GHYHORSHG ZLWKLQ D
WUDGLWLRQDOFRPPXQLW\$PHULFDQSDWHQWODZLQSDUWLFXODUFRXOGVWDQGWRXQGHUJRD
(QYLURQPHQWDOIURP(FRQRPLF2EMHFWLYHVLQ$JULFXOWXUDO5HJXODWLRQ2./$/5(9  




6HH/LQGD./HH7KH,PSDFWRI/DQGRZQHUVKLS)DFWRUVRQ6RLO&RQVHUYDWLRQ$0-$*5,&

(&21  /XWKHU7ZHHWHQ7KH(FRQRPLFVRI6PDOO)DUPV6&,(1&(


 




6HH HJ $JULFXOWXUDO 5LVN 3URWHFWLRQ $FW RI  3XE / 1R   6WDW   

$QLPDO:HOIDUH$FW86&  3ODQW3URWHFWLRQ$FW3XE/1R


6WDW  



&*(25*(/$:5(9,(:

>9RO

PRGHVWGHJUHHRIOHJLVODWLYHUHYLVLRQ$VWKH3DWHQW$FWRIQRZUHDGV>D@SDWHQW
PD\ QRW EH REWDLQHG  LI WKH GLIIHUHQFHV EHWZHHQ WKH VXEMHFW PDWWHU VRXJKW WR EH
SDWHQWHGDQGWKHSULRUDUWDUHVXFKWKDWWKHVXEMHFWPDWWHUDVDZKROHZRXOGKDYHEHHQ
REYLRXVDWWKHWLPHWKHLQYHQWLRQZDVPDGHWRDSHUVRQKDYLQJRUGLQDU\VNLOOLQWKHDUW

WRZKLFKVDLGVXEMHFWPDWWHUSHUWDLQV 3ULRUDUWLIIRXQGKDVDGHYDVWDWLQJHIIHFWRQ
DSDWHQW3ULRUDUWWKDWGHIHDWVVHFWLRQVQRYHOW\UHTXLUHPHQWFDQDOVREHXVHGWR

FUXVKDSDWHQWIRUIDLOXUHWRRYHUFRPHVHFWLRQVKXUGOHRIQRQREYLRXVQHVV 

7KHWURXEOHOLHVLQWKHGHILQLWLRQRISULRUDUW7KH3DWHQW$FWVGHILQLWLRQRI
SULRUDUWHPEUDFHVSDWHQWLQJRUSXEOLFDWLRQLQDQ\FRXQWU\EXWLQFOXGHVSXEOLFXVHRU

VDOHVROHO\LQWKLVFRXQWU\ 7REHH[DFW


$ SHUVRQ VKDOO EH HQWLWOHG WR D SDWHQW XQOHVV  WKH LQYHQWLRQ ZDV
NQRZQRUXVHGE\RWKHUVLQWKLVFRXQWU\RUSDWHQWHGRUGHVFULEHGLQD
SULQWHG SXEOLFDWLRQ LQWKLVRUDIRUHLJQFRXQWU\EHIRUHWKHLQYHQWLRQ
WKHUHRIE\WKHDSSOLFDQWIRUSDWHQWRUWKHLQYHQWLRQZDVSDWHQWHG
RUGHVFULEHGLQDSULQWHGSXEOLFDWLRQLQWKLVRUDIRUHLJQFRXQWU\RULQ
SXEOLFXVHRURQVDOHLQWKLVFRXQWU\PRUHWKDQRQH\HDUSULRUWRWKH

GDWHRIWKHDSSOLFDWLRQIRUSDWHQWLQWKH8QLWHG6WDWHV

,Q RWKHU ZRUGV ZKLOH DOPRVW DOO GRPHVWLF SULRU NQRZOHGJH XVH RU LQYHQWLRQ LV
FRQVLGHUHG DJDLQVW D ODWHU 8QLWHG 6WDWHV SDWHQW DOPRVW DOO VLPLODU IRUHLJQ DFWLYLW\ LV

QRW 

7KH8QLWHG6WDWHVSROLF\RIOLPLWLQJSULRUDUWWRGRPHVWLFNQRZOHGJHLVRXWRI
VWHS ZLWK SDWHQWODZLQRWKHUGHYHORSHGFRXQWULHV7KH(XURSHDQ8QLRQFRQVLGHUV

HYLGHQFHRIIRUHLJQSXEOLFXVHLQDVVHVVLQJWKHYDOLGLW\RILWVSDWHQWV ,QGHHGRQWKH








86&  
6HH2GG]RQ3URGV,QFY-XVW7R\V,QF)G )HG&LU ,QUH%DVV

)G &&3$ 




86& D  E   6HHJHQHUDOO\*DUUHWW&RUSY8QLWHG6WDWHV)G&W

&O    'RQDOG 6 &KLVXP )RUHLJQ $FWLYLW\ ,WV (IIHFWV RQ 3DWHQWDELOLW\ 8QGHU 8QLWHG 6WDWHV
/DZ,17/5(9,1'863523 &23<5,*+7/  








86& D  E   
6KD\DQD .DGLGDO 6XEMHFW0DWWHU ,PSHULDOLVP" %LRGLYHUVLW\ )RUHLJQ 3ULRU $UW DQG WKH 1HHP

3DWHQW&RQWURYHUV\,'($-/ 7(&+  DFFRUG(PLO\0DUGHQ7KH1HHP7UHH


3DWHQW,QWHUQDWLRQDO&RQIOLFWRYHUWKH&RPPRGLILFDWLRQRI/LIH%&,17/ &203/5(9
  VHHDOVR0DUJR$%DJOH\3DWHQWO\8QFRQVWLWXWLRQDO7KH*HRJUDSKLFDO/LPLWDWLRQRQ3ULRU
$UW LQ D 6PDOO :RUOG  0,11 / 5(9     6WHYHQVRQ VXSUD QRWH  DW 
2Q WKH WHUULWRULDOLW\ RI $PHULFDQ SDWHQW ODZ VHH JHQHUDOO\ &XUWLV $ %UDGOH\ 7HUULWRULDO ,QWHOOHFWXDO
3URSHUW\5LJKWVLQDQ$JHRI*OREDOLVP9$-,17//  




6HH (XURSHDQ 3DWHQW &RQYHQWLRQ VXSUD QRWH  DUW    7KH VWDWH RI WKH DUW VKDOO EH KHOG WR

FRPSULVHHYHU\WKLQJPDGHDYDLODEOHWRWKHSXEOLFE\PHDQVRIDZULWWHQRURUDOGHVFULSWLRQE\XVHRULQ

@

7+(5( 61268&+7+,1*$6%,23,5$&<



EDVLVRIIRUHLJQSXEOLFXVH FVSHFLILFDOO\ZLGHVSUHDGDSSOLFDWLRQVRIWKHQHHPWUHHLQ
,QGLD F WKH (XURSHDQ 3DWHQW 2IILFH UHYRNHG :5 *UDFHV SDWHQW RQ 1HHPL[ D
SHVWLFLGHDQGLQVHFWUHSHOODQWGHULYHGIURPD]DGLUDFKWLQDFKHPLFDOQDWXUDOO\RFXUULQJ

LQ QHHP   5HGHILQLQJ SULRU DUW WR LQFOXGH WUDGLWLRQDO NQRZOHGJH IRXQG LQ RWKHU
FRXQWULHV ZRXOG OLPLW WKH FRPSOLFLW\ RI $PHULFDQ SDWHQW ODZ LQ LQVWDQFHV RI DOOHJHG

ELRSLUDF\ (YHQXQGHUWKHH[LVWLQJGHILQLWLRQRISULRUDUWWKH3DWHQWDQG7UDGHPDUN
2IILFHUHYRNHGDSDWHQWRQWXUPHULFDIWHUSULRUDUWRQPHGLFLQDOXVHVRIWKHVSLFHZDV
GHPRQVWUDWHG WKURXJK DQ DQFLHQW 6DQVNULW WH[W DQG D VFLHQWLILF SDSHU SXEOLVKHG LQ

E\WKH,QGLDQ0HGLFDO$VVRFLDWLRQ (OLPLQDWLQJ$PHULFDQSDWHQWODZVH[LVWLQJ
JHRJUDSKLFDOOLPLWDWLRQRQSULRUDUWZRXOGKRZHYHUVWLOODOORZLQYHQWLRQVEDVHGRQ
WUDGLWLRQDO NQRZOHGJH DQG JHQHWLF UHVRXUFHV WR EH SDWHQWDEOH DV ORQJ DV WKH\ DUH

QRYHODQGQRQREYLRXVLQYLHZRI>WKDW@SULRUDUW 

$W WKH LQWHUQDWLRQDO OHYHO 75,36 GRHV QRW UHTXLUH WKDW SDWHQW DSSOLFDWLRQV
VWDWHWKHRULJLQRIJHQHWLFPDWHULDOVRUELRORJLFDONQRZOHGJHXVHGWRLQYHQWDSURGXFW
$OWKRXJK 75,36 GLUHFWV PHPEHUV WR UHTXLUH WKDW DQ DSSOLFDQW IRU D SDWHQW VKDOO
GLVFORVHWKHLQYHQWLRQLQDPDQQHUVXIILFLHQWO\FOHDUDQGFRPSOHWHIRUWKHLQYHQWLRQWR

EH FDUULHG RXW E\ D SHUVRQ VNLOOHG LQ WKH DUW  WKH WUHDW\ LPSRVHV QR IXUWKHU
GLVFORVXUH REOLJDWLRQV RU RWKHU PDQGDWRU\ FRQGLWLRQV RQ SDWHQW DSSOLFDQWV  0RUH
FRPSUHKHQVLYHSURWHFWLRQIRUWUDGLWLRQDONQRZOHGJHOLHVHQWLUHO\EH\RQGWKHVFRSHRI
75,36 DQG HYHQ WKH PRVW DUGHQW DGYRFDWHV ODPHQW WKDW D OHJDO IUDPHZRUN IRU
SURWHFWLQJ WUDGLWLRQDO NQRZOHGJH LV KLJKO\ XQOLNHO\ WR EH LQVHUWHG LQWR 75,36

DQ\WLPHVRRQ 

:KDW LQ WKH PHDQZKLOH PLJKW JDLQIXOO\ ZDUUDQW WKH DWWHQWLRQ RI FRXQWULHV
ERWKULFKDQGSRRU"1RPDWWHUKRZXQSURILWDEOHDQGQRPDWWHUKRZPRGHVWLQLWV
LPSDFWRQELRGLYHUVLW\FRQVHUYDWLRQFRPPHUFLDOELRSURVSHFWLQJZLOOSHUVLVWIRU\HDUV
WR FRPH  ,QWHUQDWLRQDO SROLF\PDNHUV VKRXOG GHYHORS D MRLQW IUDPHZRUN IRU LWV
UHJXODWLRQ,QWHUQDWLRQDOFRRUGLQDWLRQRQFRPPHUFLDOH[SORLWDWLRQRIELRGLYHUVLW\FDQ
DQ\RWKHUZD\EHIRUHWKHGDWHRIILOLQJRIWKH(XURSHDQSDWHQWDSSOLFDWLRQ HPSKDVLVDGGHG 




6HH 'HFLVLRQ 5HYRNLQJ (XURSHDQ 3DWHQW 1R  (XU 3DWHQW 2II )HE    *HHWD

1DLU(XURSHDQ3DWHQW2IILFH5HYRNHV:5*UDFHV1HHP3DWHQW),1$1&,$/(;35(660D\
DYDLODEOH DW KWWSZZZILQDQFLDOH[SUHVVFRPIHGDLO\IHFKWP!  )UHGHULFN 1]ZLOL
0XOWLQDWLRQDOV/RVH([FOXVLYH5LJKWVRYHU1HHP7UHH$)5,&$11(:66(59 0D\ DYDLODEOH
DW:/








6HH%DJOH\VXSUDQRWHDW'RZQHVVXSUDQRWHDW
6HH ,17(51$7,21$/ ,17(//(&78$/ 3523(57< /$:  $QWKRQ\ '$PDWR  'RULV(VWHOOH

/RQJHGV 












%DJOH\VXSUDQRWHDWQ
75,36VXSUDQRWHDUW
'XWILHOGVXSUDQRWHDW



&*(25*(/$:5(9,(:

>9RO

LPSURYHWKHYHU\SURFHVVRIFROOHFWLQJUDUHVSHFLPHQV(YHQWKRXJKWKHFROODSVHRI
JOREDO ILVKHULHV KDV VKDNHQ SXEOLF FRQILGHQFH LQ RIILFLDO HIIRUWV WR DFKLHYH

VXVWDLQDELOLW\  ELWWHU H[SHULHQFH WHDFKHV WKDW WKH ODFN RI FRRUGLQDWLRQ ZRXOG EH
ZRUVH7KHVODVKDQGFROOHFWDSSURDFKRI9LFWRULDQRUFKLGKDUYHVWHUVZRXOGSUREDEO\

SUHYDLO   5DWLRQDOL]HG KDUYHVWLQJ ZRXOG OLPLW LQVWDQFHV RI WKH ZRQGHUIXOO\ XQXVXDO

DFFRPSOLVKPHQWRIGLVFRYHULQJDQGHUDGLFDWLQJLQWKHVDPHLQVWDQWDQHZVSHFLHV 

7KH LQWHUQDWLRQDO FRPPXQLW\ PLJKW DOVR IDFLOLWDWH WKH SURIHVVLRQDOL]DWLRQ RI

SDUDWD[RQRP\  HVSHFLDOO\ LQ WKH GHYHORSLQJ ZRUOG  0LOOLRQV RI VSHFLHV DZDLW
FROOHFWLRQ DQG FODVVLILFDWLRQ E\ SURSHUO\ WUDLQHG ILHOG ELRORJLVWV  7UDQVQDWLRQDO
FRRSHUDWLRQ FDQ KHOS WUDQVODWH HWKQRELRORJLFDO NQRZOHGJH LQWRWHUPVXQGHUVWRRGE\
WKH JOREDO VFLHQWLILF FRPPXQLW\  ,WV HFRQRPLF LPSDFW LV VLPSOH DQG LPPHGLDWH

6FLHQWLILFUHVHDUFKWRSXWLWEOXQWO\JHQHUDWHVMREV 7KHVFLHQFHRIV\VWHPDWLFVLV
VRODERULQWHQVLYHWKDWWKHWDVNRIFODVVLI\LQJPLOOLRQVSHFLHVZRXOGUHTXLUH

SURIHVVLRQDOOLIHWLPHV :KHWKHUIUDPHGDVFRRSHUDWLYHELRSURVSHFWLQJRUQRUWKWR
VRXWK WHFKQRORJ\ WUDQVIHU IRU WKH HQULFKPHQW RI SDUDWD[RQRP\ FRPPHUFLDOO\
RULHQWHGLQLWLDWLYHVVDWLVILHVWKH&RQYHQWLRQRQ%LRORJLFDO'LYHUVLW\VH[KRUWDWLRQWKDW
WKH LQWHUQDWLRQDO FRPPXQLW\ VKRXOG DGRSW HFRQRPLFDOO\ DQG VRFLDOO\ VRXQG
PHDVXUHV  DV LQFHQWLYHV WR FRQVHUYH ELRGLYHUVLW\ DQG WR FRQWULEXWH WR LWV

VXVWDLQDEOHGHYHORSPHQW 




6HHHJ0,&+$(/ +$55,6/$0(17 )25 $1 2&($17+( &2//$36( 2) 7+( $7/$17,& &2'

),6+(5<  &$5/ 6$),1$621* )25 $ %/8( 2&($1  /,6$ 63((5 (7 $/+22./,1(
$1'

6,1.,1* &5,6,6 ,1 0$5,1( ),6+(5,(6   + 6FRWW *RUGRQ (FRQRPLFV DQG WKH

&RQVHUYDWLRQ 4XHVWLRQ  -/  (&21    + 6FRWW *RUGRQ 7KH (FRQRPLF 7KHRU\ RI D
&RPPRQ3URSHUW\5HVRXUFH7KH)LVKHU\-32/(&21  %RE+ROPHV%LRORJLVWV6RUW
WKH /HVVRQV RI WKH )LVKHULHV &ROODSVH  6&,(1&(    'RQDOG /XGZLJ HW DO 8QFHUWDLQW\
5HVRXUFH ([SORLWDWLRQ DQG &RQVHUYDWLRQ /HVVRQV IURP +LVWRU\  6&,(1&(    $OLVRQ
5LHVHU3URSHUW\5LJKWVDQG(FRV\VWHP0DQDJHPHQWLQ86)LVKHULHV&RQWUDFWLQJIRUWKH&RPPRQV"
 (&2/2*< /4    $QWKRQ\ 6FRWW 7KH)LVKHU\7KH2EMHFWLYHVRI6ROH2ZQHUVKLS-
32/ (&21    %DUWRQ + 7KRPSVRQ -U 7UDJLFDOO\ 'LIILFXOW 7KH 2EVWDFOHV WR *RYHUQLQJ
WKH &RPPRQV  (197/ /     1LFROD .LHYHV 1RWH &ULVLV DW 6HD 6WUHQJWKHQLQJ
*RYHUQPHQW5HJXODWLRQWR6DYH0DULQH)LVKHULHV0,11/5(9  




6HH +$52/' .2232:,7=  +,/$5< .$<( 3/$17 (;7,1&7,21 $ */2%$/ &5,6,6 

 686$125/($17+(25&+,'7+,()  






%,// %5<621 $ :$/. ,1 7+( :22'6 5(',6&29(5,1* $0(5,&$ 21 7+( $33$/$&+,$1

75$,/  




6HH&+5,6723+(5 -2<&(($57+/< *22'60(',&,1(+817,1*,17+( 5$,1)25(67

 












*LEEVY%DEELWW)G WK&LU FHUWGHQLHG86  


6HH:,/621VXSUDQRWHDW
&%'VXSUDQRWHDUW

@

7+(5( 61268&+7+,1*$6%,23,5$&<




7KLV PXFK ELQGV SURSRQHQWV DQG HQHPLHV RI WKH ELRSLUDF\ QDUUDWLYH
%LRSURVSHFWLQJ UHSUHVHQWV PHUHO\ RQH RI PDQ\ WRROV QHHGHG WR VWHP WKH RQJRLQJ
GHJUDGDWLRQ RI WKH JOREDO HQYLURQPHQW  2I WKLV PXWXDOO\ GHSHQGHQW ZRUOGV
QXPHURXVHQYLURQPHQWDOSUREOHPVSHUVLVWHQWSRYHUW\PD\WXUQRXWWREHWKHPRVW

DJJUDYDWLQJ DQG GHVWUXFWLYH   :H PXVW UHPHPEHU DERYH DOO HOVH WKDW KXPDQ
GHJUDGDWLRQ DQG GHSULYDWLRQ  FRQVWLWXWH WKH JUHDWHVW WKUHDW QRW RQO\ WR QDWLRQDO

UHJLRQDODQGZRUOGVHFXULW\EXWWRHVVHQWLDOOLIHVXSSRUWLQJHFRORJLFDOV\VWHPV ,Q
HQYLURQPHQWDOSURWHFWLRQDVLQDQ\RWKHUFKDOOHQJHLQLQWHUQDWLRQDOODZ>W@KHWKUHDW

RIHFRQRPLFSXQLVKPHQWGRHVQRWGHWHUQDWLRQVZLWKQRWKLQJWRORVH 8QGHUWKH
%LRGLYHUVLW\ &RQYHQWLRQ HFRQRPLF DQG VRFLDO GHYHORSPHQW DQG HUDGLFDWLRQ RI

SRYHUW\DUHWKHILUVWDQGRYHUULGLQJSULRULWLHVRIGHYHORSLQJFRXQWULHV 

:LWKFRRSHUDWLRQDQGVRPHPHDVXUHRIJRRGIRUWXQHJOREDOQRUWKDQGJOREDO
VRXWK PD\ \HW UHVROYH WKHLU GLIIHUHQFHV  7KH GLVFDUGLQJ RI WKH ELRSLUDF\ QDUUDWLYH
ZRXOGPDNHDJRRGVWDUWRQWKLVORQJMRXUQH\,QWKHPHDQZKLOHIUXVWUDWHGSDUWLVDQV
RQERWKVLGHVRIWKLVGHEDWHPLJKWGRZHOOWRKHHGWKHZLVGRPRI0LFN-DJJHUDQGWKH
5ROOLQJ6WRQHV

<RXFDQWDOZD\VJHWZKDW\RXZDQW
<RXFDQWDOZD\VJHWZKDW\RXZDQW
<RXFDQWDOZD\VJHWZKDW\RXZDQW
%XWLI\RXWU\VRPHWLPH

\RXMXVWPLJKWILQG\RXJHWZKDW\RXQHHG






3DWULFN /RZ 7UDGH DQG WKH(QYLURQPHQW:KDW:RUULHVWKH'HYHORSLQJ&RXQWULHV"(197/

/  




-DPHV $ /HH &RQVHUYDWLRQ LQ D :RUOG LQ 6HDUFK RI D )XWXUH LQ &216(59$7,21 )25 7+(

7:(17<),567&(1785< 'DYLG:HVWHUQ 0DU\&3HDUOHGV 






7RGG 0 5RZH &RPPHQW *OREDO 7HFKQRORJ\ 3URWHFWLRQ 0RYLQJ 3DVW WKH 7UHDW\  0$54

,17(//3523/5(9  








&%'VXSUDQRWHDUW  
&RPSDUH 0LFN -DJJHU  .HLWK 5LFKDUGV <RX &DQW $OZD\V *HW :KDW <RX :DQW  $ENFR

0XVLF,QF TXRWHGLQ:LOOLDP9DQ$OVW\QH&UDFNVLQ7KH1HZ3URSHUW\$GMXGLFDWLYH'XH3URFHVV
LQWKH$GPLQLVWUDWLYH6WDWH&251(// /5(9  ZLWK0DWKHZVY(OGULGJH86
  

You might also like