279 109 4MB
English Pages [582] Year 2012
7KH)XWXUHRI 3RVW+XPDQ3HUIRUPLQJ$UWV
7KH)XWXUHRI 3RVW+XPDQ3HUIRUPLQJ$UWV
$3UHIDFHWRD1HZ7KHRU\ RIWKH%RG\DQGLWV3UHVHQFH %\
3HWHU%DRIX
&$0%5,'*(6&+2/$56 38%/,6+,1*
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV $3UHIDFHWRD1HZ7KHRU\RIWKH%RG\DQGLWV3UHVHQFH E\3HWHU%DRIX 7KLVERRNILUVWSXEOLVKHG &DPEULGJH6FKRODUV3XEOLVKLQJ %DFN&KDSPDQ6WUHHW1HZFDVWOHXSRQ7\QH1(;;8. %ULWLVK/LEUDU\&DWDORJXLQJLQ3XEOLFDWLRQ'DWD $FDWDORJXHUHFRUGIRUWKLVERRNLVDYDLODEOHIURPWKH%ULWLVK/LEUDU\ &RS\ULJKWE\3HWHU%DRIX
$OOULJKWVIRUWKLVERRNUHVHUYHG1RSDUWRIWKLVERRNPD\EHUHSURGXFHGVWRUHGLQDUHWULHYDOV\VWHP RUWUDQVPLWWHGLQDQ\IRUPRUE\DQ\PHDQVHOHFWURQLFPHFKDQLFDOSKRWRFRS\LQJUHFRUGLQJRU RWKHUZLVHZLWKRXWWKHSULRUSHUPLVVLRQRIWKHFRS\ULJKWRZQHU ,6%1 ;,6%1
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 7R7KRVHLQWKH)XWXUH:RUOGEH\RQGWKH%RG\DQGLWV3UHVHQFH LQ3HUIRUPLQJ$UWV
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB %22.6$/62%@ DW WKH 'DUPVWDGW ,QWHUQDWLRQDO 6XPPHU &RXUVHV IRU 1HZ 0XVLF LQ WKH EHJLQQLQJ RI WKH V$FFRUGLQJWRKLVGHILQLWLRQ DSURFHVVLVVDLGWREHDOHDWRULFLILWV FRXUVH LV GHWHUPLQHG LQ JHQHUDO EXW GHSHQGV RQ FKDQFH LQ GHWDLO «$PHULFDQ FRPSRVHU -RKQ &DJH V 0XVLF RI &KDQJHV LV
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
RIWHQ FRQVLGHUHG WKH ILUVW SLHFH WR EH FRQFHLYHG ODUJHO\ WKURXJK UDQGRP SURFHGXUHVWKRXJKKLVLQGHWHUPLQDF\LVRIDGLIIHUHQWRUGHUIURP0H\HU (SSOHU VFRQFHSW´:.Y'5DQGHO +RZHYHUIRUWKHFULWLFV³FKDQFHPXVLF´KDVVRPHPDMRUSUREOHPV )RU LQVWDQFH RQH PDMRU FULWLFLVP RI ³FKDQFH PXVLF´ LV WKDW LW LV WRR UDGLFDO WR WKH SRLQW WKDW PDQ\ RI LWV SLHFHV DUH QRW SOHDVDQW WR KHDU %\ FRQWUDVW ³*UHHN SKLORVRSKHUV DQG PHGLHYDO WKHRULVWV LQ PXVLF GHILQHG PXVLF DV WRQHV RUGHUHG KRUL]RQWDOO\ DV PHORGLHV DQG YHUWLFDOO\ DV KDUPRQLHV 0XVLF WKHRU\ ZLWKLQ WKLV UHDOP LV VWXGLHG ZLWK WKH SUHVXSSRVLWLRQ WKDW PXVLF LV RUGHUO\ DQG RIWHQ SOHDVDQW WR KHDU´ :. D
7KH6RFLHWDO$UJXPHQW 7KH WKLUG WKHRUHWLFDO DSSURDFK LV FDOOHG LQ WKH DEVHQFH RI EHWWHU ZRUGVWKHVRFLHWDODUJXPHQWZKLFKIRFXVHVUHODWLYHO\VSHDNLQJRIFRXUVH PRUHRQWKHVRFLHWDODVSHFWVRISHUIRUPLQJDUWV ,Q WKLV VHQVH WKH ZRUG ³VRFLHWDO´ LQ WKH WLWOH RI WKH DUJXPHQW LV VXJJHVWLYH EHFDXVH LW UHIHUV WR WKH VRFLHWDO DVSHFWV RI SHUIRUPLQJ DUWV VR XQGHUVWRRG /LNH WKH PHQWDO DQG QDWXUDO DUJXPHQWV²WKH VRFLHWDO DUJXPHQW KDV GLIIHUHQWLVVXHVRIFRQFHUQDQGGLIIHUHQWGHIHQGHUVRIWKHDUJXPHQWRIIHU WKHLU RZQ GLVWLQFWLYH VWDQGV RQ WKH LVVXHV GHSHQGLQJ RQ WKHLU RZQ LQWHUHVWV )RULOOXVWUDWLRQFRQVLGHUWZRPDMRUYHUVLRQVRIWKHVRFLHWDODUJXPHQW QDPHO\ D PXVLFDO LQGXVWU\ DQG E GHPRFUDWLF LQFOXVLRQ²WR EH VXPPDUL]HGLQZKDWIROORZVLQWKDWRUGHU 0XVLFDO,QGXVWU\ 7KH ILUVW YHUVLRQ RI WKH VRFLHWDO DUJXPHQW KDV WR GR ZLWK ³PXVLFDO LQGXVWU\´ LQ LWV WUHDWPHQW RI SHUIRUPLQJ DUWV DV D EXVLQHVV LQ WHUPV RI VHOOLQJZHOORUQRW 7KH WHUP ³PXVLFDO LQGXVWU\´ WKHQ UHIHUV WR WKH ³PXVLF EXVLQHVV´ ZKLFK³VHOOVFRPSRVLWLRQVUHFRUGLQJVDQGSHUIRUPDQFHVRIPXVLF$PRQJ WKHPDQ\LQGLYLGXDOVDQGRUJDQL]DWLRQVWKDWRSHUDWHZLWKLQWKHLQGXVWU\DUH WKH PXVLFLDQV ZKR FRPSRVH DQG SHUIRUP WKH PXVLF WKH FRPSDQLHV DQG SURIHVVLRQDOV ZKRFUHDWHDQG VHOOUHFRUGHG PXVLFHJ PXVLFSXEOLVKHUV SURGXFHUVVWXGLRVHQJLQHHUVUHFRUGODEHOVUHWDLODQGRQOLQHPXVLFVWRUHV SHUIRUPDQFH ULJKWV RUJDQL]DWLRQV WKRVH WKDW SUHVHQW OLYH PXVLF SHUIRUPDQFHV ERRNLQJ DJHQWV SURPRWHUV PXVLF YHQXHV URDG FUHZ SURIHVVLRQDOV ZKR DVVLVW PXVLFLDQV ZLWK WKHLU FDUHHUV WDOHQW PDQDJHUV
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
EXVLQHVV PDQDJHUV HQWHUWDLQPHQW ODZ\HUV WKRVH ZKR EURDGFDVW PXVLF VDWHOOLWH DQG EURDGFDVW UDGLR MRXUQDOLVWV HGXFDWRUV PXVLFDO LQVWUXPHQW PDQXIDFWXUHUVDVZHOODVPDQ\RWKHUV´:.Z ,QWKHHDUOLHUWLPHVOLNH³WKHODWHWKFHQWXU\DQGHDUO\WKFHQWXU\ WKHPXVLFLQGXVWU\ZDVGRPLQDWHGE\WKHSXEOLVKHUVRIVKHHWPXVLF%\WKH PLGGOH RI WKH FHQWXU\ UHFRUGV KDG VXSSODQWHG VKHHW PXVLF DV WKH ODUJHVW SOD\HU LQ WKH PXVLF EXVLQHVV LQ WKH FRPPHUFLDO ZRUOG SHRSOH EHJDQ VSHDNLQJ RI WKH UHFRUGLQJ LQGXVWU\ DV D ORRVH V\QRQ\P RI WKH PXVLF LQGXVWU\ 6LQFH VDOHV RI UHFRUGHG PXVLF KDYH GURSSHG RII VXEVWDQWLDOO\ZKLOHOLYHPXVLFKDVLQFUHDVHGLQLPSRUWDQFH´:.Z (&-6HDEURRN +RZHYHU IRU WKH FULWLFV ³WKH PXVLFDO LQGXVWU\´ KDV VRPH PDMRU SUREOHPV )RULQVWDQFHRQHPDMRUFULWLTXHRI³WKHPXVLFDOLQGXVWU\´LVWKDWLWLV GRPLQDWHGE\DIHZROLJRSROLHVIRUJUHHGDQGFRQWURO 0RUH SUHFLVHO\ ³IRXU PDMRU FRUSRUDWH ODEHOV GRPLQDWH UHFRUGHG PXVLF²8QLYHUVDO 0XVLF *URXS 6RQ\ 0XVLF (QWHUWDLQPHQW :DUQHU 0XVLF *URXS DQG (0,²HDFK RI ZKLFK FRQVLVWV RI PDQ\ VPDOOHU FRPSDQLHV DQG ODEHOV VHUYLQJ GLIIHUHQW UHJLRQV DQG PDUNHWV 7KH OLYH PXVLF LQGXVWU\ LV GRPLQDWHG E\ /LYH 1DWLRQ WKH ODUJHVW SURPRWHU DQG PXVLFYHQXHRZQHU/LYH1DWLRQLVDIRUPHUVXEVLGLDU\RI&OHDU&KDQQHO &RPPXQLFDWLRQVZKLFKLVWKHODUJHVWRZQHURIUDGLRVWDWLRQVLQWKH8QLWHG 6WDWHV2WKHULPSRUWDQWPXVLFLQGXVWU\FRPSDQLHVLQFOXGH&UHDWLYH$UWLVWV $JHQF\ D PDQDJHPHQW DQG ERRNLQJ FRPSDQ\ DQG $SSOH ,QF ZKLFK UXQVWKHZRUOG VODUJHVWPXVLFVWRUHWKHL7XQHV6WRUH ´:.Z62 ': 'HPRFUDWLF,QFOXVLRQ 7KH VHFRQG YHUVLRQ RI WKH VRFLHWDO DUJXPHQW KDV WR GR ZLWK ZKDW , ZDQW WR FDOO DV GHPRFUDWLF LQFOXVLRQ IRU WKH WROHUDQFH RI GLYHUVH DUWLVWLF VW\OHV 7KHWHUP³GHPRFUDWLFLQFOXVLRQ´KHUHUHIHUVWRWKHPRGHUQVKLIWIURP DULVWRFUDWLFHOLWLVPLQSHUIRUPLQJDUWVLQWKHROGHUGD\VWRZDUGVDQHZHUD IRUGLIIHUHQWVRFLDOFODVVHVDQGUDFLDOHWKQLFJURXSV )RU LQVWDQFH ³>W@KH WK FHQWXU\ ZDV D SHULRG RI JURZWK IRU WKH SHUIRUPLQJDUWVIRUDOOVRFLDOFODVVHV´ZLWK³WHFKQLFDODGYDQFHVVXFKDVWKH LQWURGXFWLRQ RI JDVOLJKW WR WKHDWUHV EXUOHVTXH PLQVWUHO GDQFLQJ DQG YDULHW\ WKHDWHU ,Q EDOOHW ZRPHQ PDNH JUHDW SURJUHVV LQ WKH SUHYLRXVO\ PDOHGRPLQDWHGDUW«5K\WKPDQGEOXHVDFXOWXUDOSKHQRPHQRQRIEODFN
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
$PHULFD FDPH WR SURPLQHQFH LQ WKH HDUO\ WK FHQWXU\ LQIOXHQFLQJ D UDQJHRIODWHUSRSXODUPXVLFVW\OHVLQWHUQDWLRQDOO\´:. +RZHYHU IRU WKH FULWLFV ³GHPRFUDWLF LQFOXVLRQ´ KDV VRPH PDMRU SUREOHPV )RU LQVWDQFH RQH PDMRU FULWLTXH RI ³GHPRFUDWLF LQFOXVLRQ´ LV WKDW LWV WROHUDQFHRIDQ\VW\OHGRHVQRWQHFHVVDULO\PHDQKLJKHU³TXDOLW\´ ,QIDFWDV,DOUHDG\ZHQWWRJUHDWOHQJWKVWRVKRZLQ)+&&KV RQH RI WKH PRVW VHULRXV SUREOHPV LQ FRQWHPSRUDU\ PDVV FXOWXUH LQGXVWU\ LV LWV OHYHOLQJRII HIIHFW LQ DQ HUD ZKHQ WKH DQ\WKLQJJRHV PHQWDOLW\GRPLQDWHV
7KH&XOWXUDO$UJXPHQW 7KH IRXUWK WKHRUHWLFDO DSSURDFK LV FDOOHG LQ WKH DEVHQFH RI EHWWHU ZRUGV WKH FXOWXUDO DUJXPHQW ZKLFK IRFXVHV UHODWLYHO\ VSHDNLQJ RI FRXUVHPRUHRQWKHFXOWXUDODVSHFWVRISHUIRUPLQJDUWV 7KHUHIRUH WKH ZRUG ³FXOWXUDO´ LQ WKH WLWOH RI WKH DUJXPHQW LV VXJJHVWLYH EHFDXVH LW UHIHUV WR WKH IRFXV RQ WKH FXOWXUDO DVSHFWV RI SHUIRUPLQJDUWVVRXQGHUVWRRG /LNH WKH PHQWDO QDWXUDO DQG VRFLHWDO DUJXPHQWV²WKH FXOWXUDO DUJXPHQW KDV GLIIHUHQW LVVXHV RI FRQFHUQ DQG GLIIHUHQW GHIHQGHUV RI WKH DUJXPHQW RIIHU WKHLU RZQ GLVWLQFWLYH VWDQGV RQ WKH LVVXHV GHSHQGLQJ RQ WKHLURZQLQWHUHVWV )RULOOXVWUDWLRQFRQVLGHUWZRPDMRUYHUVLRQVRIWKHFXOWXUDODUJXPHQW QDPHO\D PRUDOLW\SOD\DQGE DHVWKHWLFUHODWLYLVP²WREHVXPPDUL]HG LQZKDWIROORZVLQWKDWRUGHU 0RUDOLW\3OD\ 7KH ILUVW YHUVLRQ RI WKH FXOWXUDO DUJXPHQW KDV WR GR ZLWK ³PRUDOLW\ SOD\´IRUWKHSUHDFKLQJRIPRUDOLW\LQSHUIRUPLQJDUWV 7KH WHUP ³PRUDOLW\ SOD\´ UHIHUV WR ³D W\SH RI DOOHJRU\ LQ ZKLFK WKH SURWDJRQLVWLVPHWE\SHUVRQLILFDWLRQVRIYDULRXVPRUDODWWULEXWHVZKRWU\ WRSURPSWKLPWRFKRRVHDJRGO\OLIHRYHURQHRIHYLO7KHSOD\VZHUHPRVW SRSXODULQ(XURSHGXULQJWKHWKDQGWKFHQWXULHV+DYLQJJURZQRXWRI WKHUHOLJLRXVO\EDVHGP\VWHU\SOD\VRIWKH0LGGOH$JHVWKH\UHSUHVHQWHGD VKLIWWRZDUGVDPRUHVHFXODUEDVHIRU(XURSHDQWKHDWUH´:.P ,Q PRUDOLW\SOD\VWKHUHLVRIWHQ ³DSURWDJRQLVW ZKRUHSUHVHQWVHLWKHU KXPDQLW\ DV D ZKROH RU D VPDOOHU VRFLDO VWUXFWXUH 6XSSRUWLQJ FKDUDFWHUV DUH SHUVRQLILFDWLRQV RI JRRG DQG HYLO 7KLV DOLJQPHQW RI FKDUDFWHUV SURYLGHVWKHSOD\¶VDXGLHQFHZLWKPRUDOJXLGDQFH0RUDOLW\SOD\VDUHWKH UHVXOWRIWKHGRPLQDQWEHOLHIRIWKHWLPHSHULRGWKDWKXPDQVKDGDFHUWDLQ
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
DPRXQW RI FRQWURO RYHU WKHLU SRVWGHDWK IDWH ZKLOH WKH\ ZHUH RQ HDUWK´ :.P3.LQJ +RZHYHUIRUWKHFULWLFV³PRUDOLW\SOD\´KDVVRPHPDMRUSUREOHPV )RU LQVWDQFH RQH PDMRU FULWLFLVP RI ³PRUDOLW\ SOD\´ LV WKDW WKH LQGRFWULQDWLRQ RI PRUDOLW\ YLRODWHV WKH ERXQGDU\ RI DHVWKHWLF DXWRQRP\ )RU LOOXVWUDWLRQ LQ WKH &KULVWLDQ WUDGLWLRQ PRUDOLW\ SOD\ RIWHQ SURSDJDWHV WKHPDLQWKHPHWKDW³0DQEHJLQVLQLQQRFHQFHPDQIDOOVLQWRWHPSWDWLRQ 0DQUHSHQWVDQGLVVDYHG7KHFHQWUDODFWLRQLVWKHVWUXJJOHRI0DQDJDLQVW WKH VHYHQ GHDGO\ VLQV WKDW DUH SHUVRQLILHG LQWR UHDO FKDUDFWHUV´ :. P53RWWHU3.LQJ $HVWKHWLF5HODWLYLVP $QG WKH VHFRQG YHUVLRQ RI WKH FXOWXUDO DUJXPHQW KDV WR GR ZLWK ³DHVWKHWLFUHODWLYLVP´LQLWVFULWLTXHRIDHVWKHWLFXQLYHUVDOLW\ 7KHWHUP³DHVWKHWLFUHODWLYLVP´UHIHUVWR³WKHSKLORVRSKLFDOYLHZWKDW WKH MXGJHPHQW RI EHDXW\ LV UHODWLYH WR LQGLYLGXDOV FXOWXUHV WLPH SHULRGV DQG FRQWH[WV DQG WKDW WKHUH DUH QR XQLYHUVDO FULWHULD RI EHDXW\´ :. [ $HVWKHWLF UHODWLYLVP LV LQ IDFW ³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´:.[ +RZHYHU IRU WKH FULWLFV ³DHVWKHWLF UHODWLYLVP´ KDV VRPH PDMRU SUREOHPV )RULQVWDQFHRQH PDMRUFULWLTXHRI ³DHVWKHWLFUHODWLYLVP´LVWKDWLWLV QRWVRREYLRXVWKDW³REMHFWLYLVWDFFRXQWV´RIEHDXW\DUHUHDOO\LPSRVVLEOH $ JRRG H[DPSOH LV ,PPDQXHO .DQW ZKR ³DUJXHG WKDW WKH MXGJPHQW RI EHDXW\ GHVSLWH WKH VWDQGDUGV RI ZKLFK EHLQJ XQLTXH WR LQGLYLGXDOV LV D XQLYHUVDOO\SUDFWLFHGIXQFWLRQRIWKHPLQG´:.[
7KH7UDQVGLVFLSOLQDU\$UJXPHQW $QGILIWKO\XQOLNHWKHSUHYLRXVIRXUDUJXPHQWVYL]WKHPHQWDOWKH QDWXUDOWKHVRFLHWDODQGWKHFXOWXUDO ²WKHILIWKRQHWREHLQWURGXFHGKHUH FDQEHFDOOHGLQWKHDEVHQFH RIEHWWHU ZRUGVDJDLQWKHWUDQVGLVFLSOLQDU\ DUJXPHQW ZKLFK OHDUQV IURP DOO RWKHU WKHRUHWLFDO DSSURDFKHV ZKLFK
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
LQFOXGH WKH SUHYLRXV IRXU DUJXPHQWV DQG DOVR RWKHU H[DPSOHV DV ZLOO EH LQWURGXFHG LQ WKH UHVW RI WKLV ERRN ZLWKRXW KRZHYHU IDYRULQJ DQ\ RI WKHPQRUWU\LQJWRLQWHJUDWHWKHPDVWKH\DUHQRWQHFHVVDULO\FRPSDWLEOH ZLWK HDFK RWKHU DV WKH LQWURGXFWLRQ RI WKH WKHRUHWLFDO GHEDWH LQ WKH SUHYLRXVVXEVHFWLRQVKDVVKRZQ
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²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
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
DV\PPHWU\ SULQFLSOH W WKH WZHQWLHWK WKHVLV WKH VRIWQHVVKDUGQHVV SULQFLSOHX WKHWZHQW\ILUVWWKHVLVWKHVHULRXVQHVVSOD\IXOQHVVSULQFLSOH Y WKHWZHQW\VHFRQGWKHVLVWKHUHJUHVVLRQSURJUHVVLRQSULQFLSOHZ WKH WZHQW\WKLUG WKHVLV WKH VDPHQHVVGLIIHUHQFH SULQFLSOH [ WKH WZHQW\ IRXUWK WKHVLV WKH VWDELOLW\UHDFWLRQ SULQFLSOH DQG \ WKH WZHQW\ILIWK WKHVLV WKH SRVWKXPDQ WUDQVGLVFLSOLQDULQHVV²WR EH DGGUHVVHG LQ &KDSWHU )RXU %HFDXVH RI WKH ODVW WKHVLV RQ ³WKH SRVWKXPDQ WUDQVGLVFLSOLQDULQHVV´ WKHZRUG³WUDQVGLVFLSOLQU\´LQWKHWLWOHRIP\WKHRU\LVVXJJHVWLYHEHFDXVH LWFDOOVIRUWKHQHHGWRWUDQVFHQGDOOKLWKHUWRH[LVWLQJDSSURDFKHVE\IXWXUH DGYDQFHG KXPDQV DQG ODWHU SRVWKXPDQV IRU WKH VHYHQ JUHDW WUDQVIRUPDWLRQVRISHUIRUPLQJDUWVLQWKHIXWXUHZRUOGDVZLOOEHGLVFXVVHG LQWKHFRQFOXGLQJFKDSWHU&KDSWHU)RXU :LWK WKLV FODULILFDWLRQ LQ PLQG²WKH VHPLQDO SURMHFW KHUH LI VXFFHVVIXO ZLOO IXQGDPHQWDOO\ FKDQJH WKH ZD\ WKDW ZH WKLQN DERXW WKH ERG\DQGLWVSUHVHQFHLQSHUIRUPLQJDUWVIURPWKHFRPELQHGSHUVSHFWLYHV RI WKH PLQG QDWXUH VRFLHW\ DQG FXOWXUH ZLWK HQRUPRXV LPSOLFDWLRQV IRU WKHKXPDQIXWXUHDQGZKDW,RULJLQDOO\FDOOHGLWV³SRVWKXPDQ´IDWH
7KHRU\DQG0HWD7KHRU\ 7KH WUDQVGLVFLSOLQDU\ DUJXPHQW RU WKH WUDQVGLVFLSOLQDU\ WKHRU\ RI SHUIRUPLQJDUWVSUHVXSSRVHVVRPHNLQGRIPHWDWKHRU\LQVSHFLDOUHODWLRQ WR PHWKRGRORJ\ DQG RQWRORJ\²MXVW DV DOO WKHRULHV HLWKHU H[SOLFLWO\ RU LPSOLFLWO\UHTXLUHWKHLURZQYHUVLRQVRIPHWDWKHRU\
0HWD7KHRU\ $VVRRIWHQFODULILHGLQP\SUHYLRXVERRNV²WKHRU\DQGPHWDWKHRU\ EURDGO\ VSHDNLQJ FDQ EH IXUWKHU FODVVLILHG LQWR GLIIHUHQW FDWHJRULHV DV VKRZQEHORZ 2Q7KHRU\ ²([LQUHODWLRQWRWKHPLQG ²([LQUHODWLRQWRQDWXUH ²([LQUHODWLRQWRVRFLHW\ ²([LQUHODWLRQWRFXOWXUH 2Q0HWD7KHRU\ ²([LQUHODWLRQWRPHWKRGRORJ\
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
²([LQUHODWLRQWRRQWRORJ\ (DFK FDWHJRU\ LQ LWV WXUQ FDQ WKHQ EH IXUWKHU VXEGLYLGHG LQWR GLIIHUHQW OHYHOVRIDQDO\VLV²ZKLFKZLOOEHHODERUDWHGLQWKHQH[WWZRVHFWLRQVDQG VXPPDUL]HGLQ7DEOH :LWK WKLV UHPLQGHU LQ PLQG , DOUHDG\ SURSRVHG LQ P\ SUHYLRXV ERRNV P\ GLVWLQFWLYH FRQWULEXWLRQ WR PHWDWKHRU\ QDPHO\ PHWKRGRORJ\ OLNH ³WKHRU\ RI PHWKRGRORJLFDO KROLVP´ ³FRPSOH[ WKHRU\ RI GDWD DQDO\VLV´ DQG ³FULWLFDOGLDOHFWLF WKHRU\ RI IRUPDO VFLHQFH´ IRU LQVWDQFH DQG RQWRORJ\ OLNH ³WKHRU\ RI H[LVWHQWLDO GLDOHFWLFV´ DQG ³FRQWUDVWLYH WKHRU\RIUDWLRQDOLW\´IRULQVWDQFH 7KH QH[W WZR VHFWLRQV DUH WR LQWURGXFH P\ PHWDWKHRU\²HVSHFLDOO\ H[LVWHQWLDO GLDOHFWLFV DQG VRSKLVWLFDWHG PHWKRGRORJLFDO KROLVP UHVSHFWLYHO\²WR EH UHSHDWHG RIWHQ YHUEDWLP ZLWK RQO\ D IHZ XSGDWHG UHYLVLRQV IURPP\SUHYLRXVZRUNVDVWKLVLVVRPHWKLQJWKDW,RIWHQGRLQ HDFK QHZ ERRN RI PLQH DV DQ LQWURGXFWLRQ WR VRPH EDFNJURXQG LQIRUPDWLRQIRUWKHFRQYHQLHQFHRIWKHUHDGHUV ,QWKHSURFHVV,VKDOODOVRLQWURGXFHP\QXPHURXVQHZWKHRULHVRUWR EHH[DFWRIWKHPLQERRNVVRIDUDVRI-XO\ LQUHODWLRQWRWKH IRXUFDWHJRULHVRIWKHPLQGQDWXUHVRFLHW\DQGFXOWXUHLQWKHFRQWH[WRI WKHRU\DVDOVRVXPPDUL]HGLQ7DEOH
$8QLILHG7KHRU\RI(YHU\WKLQJ ,QWKHHQGP\GLVWLQFWLYHFRQWULEXWLRQWRERWKPHWDWKHRU\DQGWKHRU\ VHUYHV DV D IRXQGDWLRQ WR XQLI\ DOO GRPDLQV RI NQRZOHGJH IRU DQ RYHUDUFKLQJ XQGHUVWDQGLQJ RI DOO IRUPV RI UHDOLW\ E\ ZD\ RI VRPH RQWRORJLFDOSULQFLSOHVDWWKHPHWDWKHRUHWLFDOOHYHODQGWKHFRPSUHKHQVLYH SHUVSHFWLYHV RI WKH PLQG QDWXUH VRFLHW\ DQG FXOWXUH DW WKH WKHRUHWLFDO OHYHO²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³XQLILHG´GRHVQRWKDYHWRPHDQDQLQWHJUDWLYH DSSURDFKLQDQDUURZVHQVHQRUDV\VWHPVDSSURDFKLQDEURDGRQHERWK
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
RIZKLFK,KDYHFULWLFDOO\UHEXNHGLQP\SUHYLRXVERRNV ZKLOHOHDUQLQJ IURPWKHP 7KLVRYHUDUFKLQJSURMHFWFRQVLVWLQJRIQXPHURXVWKHRULHVRIPLQHDV ZLOOEHVXPPDUL]HGLQWKHQH[WVHFWLRQ WKXVFRQVWLWXWHVP\JUDQGXQLIHG WKHRU\RIHYHU\WKLQJLQWKHZRUOGDQGEH\RQG
7KH/RJLFRI([LVWHQWLDO'LDOHFWLFV 7RVWDUWWKH RQWRORJ\ RI H[LVWHQWLDO GLDOHFWLFV FDQ EH VXPPDUL]HG LQ WKLVVHFWLRQ²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²DJDLQ RIWHQ YHUEDWLP 7KLVPHDQVWKDWIRUWKRVHUHDGHUVZKRKDGUHDGVRPHRIP\SUHYLRXV ERRNVWKHVXPPDU\EHORZLVUHDOO\QRWPXFKQHZDOPRVWYHUEDWLPZLWK RQO\VRPHXSGDWHGUHYLVLRQV %XW IRU WKRVH ZKR KDYH QHYHU UHDG P\ SUHYLRXV ERRNV LW LV D JRRG UHYLHZRIWKHP
7KH&RQFHSWLRQRI([LVWHQWLDO'LDOHFWLFVRU,WV2QWLFV 7KLVRQWRORJ\ ZDVRULJLQDOO\ GHVLJQDWHGDV ³H[LVWHQWLDOGLDOHFWLFV´LQ %H\RQG &DSLWDOLVP WR 3RVW&DSLWDOLVP KHUHLQ DEEUHYLDWHG DV %&3& DOWKRXJKLWZDVDOUHDG\DQDO\]HGLQRWKHUERRNVRIPLQHOLNHWKHYROXPHV RI7KH)XWXUHRI+XPDQ&LYLOL]DWLRQ)+& 7KH)XWXUHRI&DSLWDOLVPDQG 'HPRFUDF\ )&' 7KH )XWXUH RI 3RVW+XPDQ &RQVFLRXVQHVV )3+& DQGWKHYROXPHVRI%H\RQG'HPRFUDF\WR3RVW'HPRFUDF\%'3' /HVW DQ\ FRQIXVLRQ RFFXUV LW LV LPSRUWDQW WR VWUHVV DW WKH RXWVHW WKDW WKH ZRUG H[LVWHQWLDO LQ ³H[LVWHQWLDO GLDOHFWLFV´ KDV QRWKLQJ WR GR ZLWK ([LVWHQWLDOLVP ZKLFK , UHEXNHG LQ )+& )&' DQG DOVR )3+& ,QVWHDG
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
WKH ZRUG KHUH PHUHO\ UHIHUV WR WKH H[LVWHQFH RI LQWHOOLJHQW OLIH ERWK SULPLWLYHDQGDGYDQFHG LQDEURDGVHQVH 6RPH%DVLF&RQFHSWV 7KH FRQFHSWLRQ RI H[LVWHQWLDO GLDOHFWLFV RU LWV RQWLFV PDNHV XVH RI GLIIHUHQW FRQFHSWV OLNH ³VHWV´ ³HOHPHQWV´ ³UHODWLRQV´ ³RSHUDWLRQV´ ³IXQFWLRQV´ ³WUXWK YDOXHV´ ³D[LRPV´ ³SRVWXODWHV´ DQG ³SULQFLSOHV´²DV VKRZQ LQ 7DEOH ZKLFK DUH LPSRUWDQW IRU WKH XQGHUVWDQGLQJ RI DQ\ ORJLFRIRQWRORJ\ 7KDW FODULILHG²H[LVWHQWLDO GLDOHFWLFV DV D ODQJXDJH RI RQWRORJ\ FDQ EH DQDO\]HG LQ GLIIHUHQW ZD\V WKDW D ODQJXDJH DV DQ DQDORJ\ LV RIWHQ DQDO\]HG QDPHO\ LQ UHODWLRQ WR SKRQRORJ\ ³WKH VWXG\ RI SDWWHUQV RI D ODQJXDJH V VRXQGV´ SKRQHWLFV ³WKH VWXG\ RI WKH SK\VLFDO DVSHFWV RI VRXQGV RI KXPDQ ODQJXDJH´ PRUSKRQRORJ\ ³WKH VWXG\ RI WKH LQWHUQDO VWUXFWXUH RI ZRUGV´ V\QWD[ ³WKH VWXG\ RI KRZ ZRUGV FRPELQH WR IRUP JUDPPDWLFDO VHQWHQFHV´ VHPDQWLFV ³WKH VWXG\ RI WKH PHDQLQJ RI ZRUGV >OH[LFDO VHPDQWLFV@ DQG IL[HG ZRUG FRPELQDWLRQV >SKUDVHRORJ\@´ DQG SUDJPDWLFV³WKHVWXG\RIKRZXWWHUDQFHVDUHXVHG«OLWHUDOO\ILJXUDWLYHO\ RURWKHUZLVH«LQFRPPXQLFDWLYHDFWV´ :. %XWVLQFHP\WKHRU\RIH[LVWHQWLDOGLDOHFWLFVPDNHVXVHRIWKH(QJOLVK ODQJXDJHIRUFRPPXQLFDWLRQKHUHLWGRHVQRWSURSRVHDQHZZD\WRPDNH WKH SDWWHUQV RI D ODQJXDJH¶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³WKHGLOHPPDRIRQWRORJ\´DVLQWURGXFHGHDUOLHULQ6HF RI7KH)XWXUHRI3RVW+XPDQ.QRZOHGJH)3+. $ JRRG SRLQW RI GHSDUWXUH FRQFHUQV ZKDW , ZDQW WR FDOO WKH RQWLF GLVSXWHRQKRZWRXQGHUVWDQGWKHYHU\QDWXUHRIRQWRORJ\ 7UDGLWLRQDOO\ VFKRODUV LQ WKH ILHOG XVHG WR VWXG\ WKH FRQFHSWLRQ RI RQWRORJ\LQWHUPVRILWVHQWLWLHVHJPDWHULDOREMHFWVDEVWUDFWQXPEHUV SURSHUWLHVHJGXUDWLRQSOXUDOLW\ DQGUHODWLRQVKLSVHJFDXVDWLRQ
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7KLV LV D JRRG VWDUWLQJ SRLQW EXW LW VXIIHUV IURP GLIIHUHQW SUREOHPV &RQVLGHU WKUHH H[DPSOHV RI ELDV EHORZ ZKLFK DUH TXLWH FRPPRQ LQ WKH OLWHUDWXUH DQG WKH UHFHQW YHUVLRQ RI WUHDWLQJ FRQFHSWV DQG SULQFLSOHV LQ RQWRORJ\ RQ WKH EDVLV RI ³SOXUDOLW\´ ³G\QDPLVP´ ³GXUDWLRQ´ ³LQWHUDFWLRQ´ ³OLIH´ ³FRQVFLRXVQHVV´ DQG ³YROLWLRQ´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³PHWKRG´²LWFRQFHUQVKRZRQWRORJ\LVWREHVWXGLHG,Q WKLV VHQVH WKH ZRUG PHWKRG KHUH VKRXOG QRW EH FRQIXVHG ZLWK WKH GLIIHUHQWXVDJHRIWKHVDPHWHUP PHWKRG DVDWHFKQLTXHRILQYHVWLJDWLRQLQ WKHFRQWH[WRIPHWKRGRORJ\DVDOUHDG\LQWURGXFHGLQ6HFRI)3+. ,Q UHODWLRQ WR ³VWUXFWXUH´²LW FRQFHUQV ZKDW WKH JHQHUDO SDWWHUQV RI HQWLWLHVSURSHUWLHVDQGUHODWLRQVKLSVDUH ,Q UHODWLRQ WR ³SURFHVV´²LW FRQFHUQV KRZ WKHVH JHQHUDO SDWWHUQV FKDQJHRYHUWLPH ,Q UHODWLRQ WR ³DJHQF\´²LW FRQFHUQV KRZ DJHQF\ DIIHFWV DQ\ FKDQJH RI WKHVH JHQHUDO SDWWHUQV RYHU WLPH ZLWKRXW SXWWLQJ KRZHYHU WRR PXFK HPSKDVLVRQWKHUROHRIKXPDQDJHQF\ $QG LQ UHODWLRQ WR ³RXWFRPH´²LW FRQFHUQV ZKDW WKH RXWSXWV RI WKLV FKDQJHRYHUWLPHDUH
7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFVRU,WV2QWRPHWKRGRORJ\ DQG2QWRORJLF 7KHV\QWD[RIH[LVWHQWLDOGLDOHFWLFVDQDORJRXVO\VSHDNLQJUHIHUVKHUH WRWKHVWUXFWXUHRIDQRQWRORJ\ZKLFKFDQEHVWXGLHGE\ZD\RIFRPELQLQJ LGHDV LQWR FRPSOH[ UHODWLRQVKLSV OLNH RQWRORJLFDO SULQFLSOHV WR GHSLFW UHDOLW\LQWKHZRUOG²DQGFDQEHDQDO\]HGLQVHYHQVXEVHFWLRQVQDPHO\
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
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²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²VRLWLVOHVV YDJXHLQEHLQJFOHDUHUDERXWWKHWKLQJLQTXHVWLRQ F 7KLUGO\ DQ RQWRORJLFDO SULQFLSOH FDQQRW EH GHULYHG IURP RWKHU RQHV²DVLILWLVDFKLOGSDUHQWUHODWLRQVKLS ,Q WKLV VHQVH WKH FRQYHQLHQFHLQFRQYHQLHQFH SDLU FDQQRW EH DQ RQWRORJLFDOSULQFLSOHEHFDXVHLWFDQEHGHULYHGIURPRWKHURQHVOLNHWKH VORZQHVVTXLFNQHVVSULQFLSOHIRULQVWDQFH )RU LQVWDQFH VRPHWKLQJ ZKLFK LV FRQYHQLHQW DOUHDG\ LPSOLHV WKDW LW FDQEHREWDLQHGTXLFNO\UDWKHUWKDQVORZO\ ²DOOWKLQJVFRQVLGHUHG G )RXUWKO\ DQ RQWRORJLFDO SULQFLSOH FDQQRW EH WULYLDO RU SDURFKLDO ²DVLILWLVRQO\RQHFRPSRQHQWFRPSHWLQJZLWKRWKHURQHVIRU LQFOXVLRQLQDVHW ,Q WKLV VHQVH WKH FRQVLVWHQF\LQFRQVLVWHQF\ SDLU FDQQRW EH DQ RQWRORJLFDOSULQFLSOHEHFDXVHLWVYDOLGLW\LVOLPLWHGRUSDURFKLDO DVLWFDQ
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
EHHDVLO\FKDOOHQJHGDQGUHSODFHGE\RSSRVLQJPDMRUQRWPLQRU WKHRULHV HJWKHFRUUHVSRQGHQFHWKHRU\RIWUXWKWKHSUDJPDWLFWKHRU\RIWUXWKWKH VHPDQWLFWKHRU\RIWUXWKWKH GLVFORVHGQHVVWKHRU\RIWUXWKDQG ZKDWQRW QRWMXVWLQDFFRUGDQFHWRWKHFRQVLVWHQF\RUFRKHUHQFH WKHRU\RIWUXWKIRU FRQVLVWHQF\ 7KXVWKHFRQVLVWHQF\DUJXPHQWLVRQO\RQHDPRQJGLIIHUHQWRSSRVLQJ DUJXPHQWVLQUHODWLRQWRWKHORJLFRIZKDWFRQVWLWXWHV³WUXWK´ H $QGILIWKO\DQRQWRORJLFDOSULQFLSOHFDQQRWEHRQHVLGHGWKDWLV SDUWRIRQHVLGHFDWHJRU\ RIDGLDOHFWLFSDLU ,Q WKLV VHQVH WKH H[WURYHUVLRQLQWURYHUVLRQ SDLU FDQQRW EH DQ RQWRORJLFDOSULQFLSOHVLQFHLWLVSDUWRIWKHVLGHFDWHJRU\ RI³QRUPDOLW\´ LQ WKH QRUPDOLW\DEQRUPDOWL\ SDLU EHFDXVH ERWK H[WURYHUVLRQ DQG LQWURYHUVLRQDUHWZRGLIIHUHQW³QRUPDO´SHUVRQDOLW\WUDLWVLQSV\FKRORJ\ ,Q DGGLWLRQ WKH QRUPDOLW\DEQRUPDOLW\ SDLU LV DOUHDG\ UHODWHG WR WKH V\PPHWU\DV\PPHWU\ SULQFLSOH WKH GHQVLW\HPSWLQHVV SULQFLSOH WKH FRQYHQWLRQQRYHOW\SULQFLSOHDQGWKHVDPHGLIIHUHQFHSULQFLSOHDVZLOOEH H[SODLQHGLQWKHVHFWLRQRQ³WKHSULQFLSOHVDVIDPLO\UHVHPEODQFHV´ODWHU $OWKRXJK WKHVH H[DPSOHV DUH QRW H[KDXVWLYH WKH\ LOOXVWUDWLYH WKH VHOHFWLYHQHVVRIDQ\RQWRORJLFDOSULQFLSOHWREHH[LVWHQWLDOO\GLDOHFWLF )XUWKHU&ODULILFDWLRQVRQ&ODVVLILFDWLRQ /HVW DQ\ PLVXQGHUVWDQGLQJ FDUHOHVVO\ RFFXUV VRPH IXUWKHU FODULILFDWLRQV RQ FODVVLILFDWLRQ VKRXOG EH PDGH KHUH DQG VXPPDUL]HG LQ 7DEOH D )LUVWO\WKHWRWDOQXPEHU RIRQWRORJLFDOSULQFLSOHVLV XQNQRZQWR EH GLVFRYHUHG ODWHU DV RXU NQRZOHGJH RI WKH ZRUOG EHFRPHV PRUH DGYDQFHG &RQVHTXHQWO\ WKH SULQFLSOHV DV LQWURGXFHG LQ P\ ERRNV DUH QRW H[KDXVWLYH ZLWK QHZ RQHV EHLQJ DGGHG ZKHQHYHU PRUH RI WKHP DUH GLVFRYHUHGLQODWHUUHVHDUFK $WOHDVWIXWXUHJHQHUDWLRQVFDQSLFNXSZKHUH,OHDYHRIIDQGFRQWLQXH WKHGLVFRYHU\ ,QWKLVVHQVHP\ZRUNVKRXOGEHWUHDWHGDVDSLRQHHULQJHIIRUWIRUWKH GHYHORSPHQW RI D V\VWHPDWLF FRPSUHKHQVLYH DQDO\VLV RI D QHZ JHQHUDO RQWRORJ\IRUWKHIXWXUHRINQRZOHGJH E 6HFRQGO\WKHSULQFLSOHVDUHQRWULJLGO\FODVVLILHGDVWKH\FDQEH UHFODVVLILHGLQDGLIIHUHQWZD\ )RU LQVWDQFH WKH SUHFLVHQHVVYDJXHQHVV SULQFLSOH LV FODVVLILHG XQGHU WKH FDWHJRU\ RI ³VWUXFWXUH´ EXW FDQ EH UHFODVVLILHG XQGHU WKH FDWHJRU\ RI ³PHWKRG´DOWKRXJKLQVRGRLQJLWKDVDGLIIHUHQWPHDQLQJLQWKHFRQWH[W RIPHWKRG
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
7KH VDPH ORJLF DSSOLHV WR WKH VDPHGLIIHUHQFH SULQFLSOH XQGHU WKH FDWHJRU\ RI ³RXWFRPH´ ZKLFK FDQ EH UHFODVVLILHG XQGHU WKH FDWHJRU\ RI ³VWUXFWXUH´DOWKRXJKLQVRGRLQJRQFHPRUHLWKDVDGLIIHUHQWPHDQLQJLQ WKHFRQWH[WRIVWUXFWXUH F 7KLUGO\WKHSULQFLSOHVDUHWREHXQGHUVWRRGWRJHWKHUQRWWKDWHDFK SULQLFSOHLVWREHWUHDWHGLQGHSHQGHQWO\RIRWKHUV$IWHUDOOWKHSULQFLSOHV DUHPXWXDOO\FRQVWUDLQLQJLQWKDWWKH\ZRUNWRJHWKHUDVDZKROH G )RXUWKO\ WKH SULQFLSOHV DUH UHOHYDQW WR DOO VXEMHFW PDWWHUV EXW VRPH SULQFLSOHV DUH UHODWLYHO\ VSHDNLQJ RI FRXUVH PRUH XVHIXO WR VRPH VXEMHFW PDWWHUV WKDQ RWKHUV XQGHU FHUWDLQ FRQGLWLRQV²DV LPSOLHG LQ WKH V\PPHWU\DV\PPHWU\SULQFLSOH H $QG ILIWKO\ WKH SULQFLSOHV FRQVWLWXWH RQO\ WZR OHYHOV RI DQDO\VLV WKLVWLPHDWWKHRQWRORJLFDODQGPHWKRGRORJLFDOOHYHOV²ZKLOHRWKHUOHYHOV RIDQDO\VLVIURPWKHSHUVSHFWLYHVRIWKHPLQGQDWXUHVRFLHW\DQGFXOWXUH DUHDOVRQHHGHGLQRUGHUWRXQGHUVWDQGUHDOLW\LQLWVWRWDOLW\DVH[SODLQHG LQWKHVHFWLRQRQ³VRSKLVWLFDWHGPHWKRGRORJLFDOKROLVP´VRDVWRDYRLGWKH GXDOGDQJHUVRIUHGXFWLRQLVPDQGUHYHUVHUHGXFWLRQLVP 2QWRPHWKRGRORJ\ :LWKWKHVHVHOHFWLRQFULWHULDDQGFODULILFDWLRQVLQPLQG²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
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
2QWRORJLF :LWK WKLV FODULILFDWLRQ RI WKH UHODWLRQVKLS EHWZHHQ RQWRPHWKRGRORJ\ DQG RQWRORJLF LQ PLQG ZKLFK LV FRPSDUDEOH WR WKH UHODWLRQVKLS EHWZHHQ PHWKRGRORJ\ DQG RQWRORJ\ DV GHVFULEHG LQ 6HF RI )3+. ²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²RULQDPRUHHOHJDQWWHUPWKHG\QDPLFVRIVSDFH WLPHLQ)& ,Q7KH)XWXUHRI&RPSOH[LW\)& ,DGGHGWKUHHPRUHSULQFLSOHVRQ WRSRIWKHWKUHHDIRUHPHQWLRQHGQDPHO\G WKHSDUWLDOLW\WRWDOLW\SULQFLSOH RQWKHUHODWLRQVKLSVEHWZHHQSDUWVDQGZKROHH WKHRUGHUFKDRVSULQFLSOH RQWKHSDWWHUQRIWKLQJVDQGI WKHSUHGLFWDELOLW\XQSUHGLFWDELOLW\SULQFLSOH RQWKHRFFXUUHQFHRIWKLQJV²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²ZLWK WKH ILUVW WZR LQ UHODWLRQ WR VWUXFWXUH DQG WKH WKLUGLQUHODWLRQWRSURFHVV
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
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³PHWKRG´²YL] WKH IRUPDOQHVV LQIRUPDOQHVV SULQFLSOH WKH DEVROXWHQHVVUHODWLYHQHVV SULQFLSOH WKH SDUWLDOLW\WRWDOLW\ SULQFLSOH WKH SUHGLFWDELOLW\XQSUHGLFWDELOLW\ SULQFLSOH WKH H[SOLFDELOLW\LQH[SOLFDELOLW\ SULQFLSOH DQG WKH ILFWLRQ UHDOLW\SULQFLSOH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
ILYH SULQFLSOHV LQ WKH FDWHJRU\ RI ³VWUXFWXUH´²YL] WKH ILQLWHQHVV WUDQVILQLWHQHVV SULQFLSOH WKH VLPSOHQHVVFRPSOLFDWHGQHVV SULQFLSOH WKH SUHFLVHQHVVYDJXHQHVV SULQFLSOH WKH RSHQQHVVKLGGHQQHVV SULQFLSOHDQGWKHGHQVHQHVVHPSWLQHVVSULQFLSOH IRXU SULQFLSOHV LQ WKH FDWHJRU\ RI ³SURFHVV´²YL] WKH FKDQJH FRQVWDQF\SULQFLSOHWKHVORZQHVVTXLFNQHVVSULQFLSOHWKHRUGHUFKDRV SULQFLSOHDQGWKHH[SDQVLRQFRQWUDFWLRQSULQFLSOH VL[ SULQFLSOHV LQ WKH FDWHJRU\ RI ³DJHQF\´²YL] WKH WKHRU\SUD[LV SULQFLSOHWKHFRQYHQWLRQQRYHOW\SULQFLSOHWKHV\PPHWU\DV\PPHWU\ SULQFLSOH WKH HYROXWLRQWUDQVIRUPDWLRQ SULQFLSOH WKH VRIWQHVV KDUGQHVVSULQFLSOHDQGWKHVHULRXVQHVVSOD\IXOQHVVSULQFLSOH WKUHHSULQFLSOHVLQWKHFDWHJRU\RI³RXWFRPH´²YL]WKHUHJUHVVLRQ SURJUHVVLRQSULQFLSOHWKHVDPHGLIIHUHQFHSULQFLSOHDQGWKHVWDELOLW\ UHDFWLRQSULQFLSOH 7KHUHFDQEHPRUHWKDQWZHQW\IRXUSULQFLSOHVLQH[LVWHQWLDOGLDOHFWLFVEXW WKH\DUHZKDW,KDYHGLVFRYHUHGVRIDUDVVXPPDUL]HGLQ7DEOH 7KH3ULQFLSOHVDV6KRUW&XWV LQ D QRQ (XFOLGHDQ JHRPHWU\@ DQG FXUYHG VSDFHWLPH WHOOV PDWWHU KRZ WR EHKDYH«6SDFH FRQWUDFWV QHDU PDVV DQG GLODWHV DZD\ IURP LW 7LPH GLODWHV QHDU PDVV DQG FRQWUDFWV DZD\ IURP LW &ORFNV SRVLWLRQHG IDUWKHUDZD\IURPWKHPDVVRIWKHHDUWKUXQIDVWHUWKDQFORFNVFORVHUWR WKHHDUWK´/6KODLQ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
7DEOH7KH7KHRUHWLFDO'HEDWHRQ6SDFH7LPH 3DUW,, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 3HWHU%DRIX¶V3HUVSHFWLYDO7KHRU\RI6SDFH7LPH ²VSDFHDQGWLPHFDQEHXQGHUVWRRGIURPPXOWLSOHSHUVSHFWLYHVEHWKH\ LQ UHODWLRQ WR FXOWXUH VRFLHW\ QDWXUH DQG WKH PLQG ZLWK HDFK SHUVSHFWLYH UHYHDOLQJ VRPHWKLQJ DERXW WKH QDWXUH RI VSDFHWLPH DQG VLPXOWDQHRXVO\GHOLPLWLQJLWVYLHZ7KLVLVVXEMHFWWR³WKHUHJUHVVLRQ SURJUHVVLRQSULQFLSOH´LQH[LVWHQWLDOGLDOHFWLFV ²HDFKSHUVSHFWLYHRIVSDFHDQGWLPHH[LVWVLQVRFLHW\DQGFXOWXUHZLWK JRRG UHDVRQV ZLWK VRPH EHLQJ PRUH VXFFHVVIXO DQG KHJHPRQLF GRPLQDQW WKDQRWKHUV7KLVLVVXEMHFWWR³WKHV\PPHWU\DV\PPHWU\ SULQFLSOH´LQH[LVWHQWLDOGLDOHFWLFV ²VSDFHDQGWLPHZLOOQRWODVWWREHHYHQWXDOO\VXSHUVHGHGDOWHUHG E\ SRVWKXPDQV LQ GLIIHUHQW IRUPV HJVWUHWFKLQJVKULQNLQJ VSDFHWLPH HQJLQHHULQJ PRUH GLPHQVLRQV RI VSDFHWLPH DQG PDQLSXODWLQJ PXOWLYHUVHV EH WKH\ KHUH LQ WKLV XQLYHUVH RU LQ PXOWLYHUVHV 7KXV HYHQ WKH SK\VLFDO H[LVWHQFH RI VSDFHWLPH FDQQRW ODVW IRUHYHU ZLWK HYHU PRUH WUDQVIRUPDWLRQV LQ WKH SURFHVV 7KLV LV VXEMHFW WR ³WKH FKDQJHFRQVWDQF\SULQFLSOH´LQH[LVWHQWLDOGLDOHFWLFV ²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²DQGIRU WKDWPDWWHUWKHUHVWRI)3+67
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH0DLQ5HDVRQVIRU$OWHULQJ6SDFH7LPH BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 7KH1HHGWR0DNH1HZ(QHUJ\0DWWHU ²([PDQLSXODWLQJPROHFXODUERQGVIRUQHZPDWHULDOV ²([FUHDWLQJQDQRWHFKQRORJLHVRQWKHDWRPLFVFDOH ²([HQJLQHHULQJWKHDWRPLFQXFOHXV ²([UHVWUXFWXULQJPRVWHOHPHQWDU\SDUWLFOHV ²([LQYHQWLQJQHZIRUPVRIPDWWHUDQGHQHUJ\ 7KH1HHGWR&UHDWH1HZ6SDFH7LPH ²([FUHDWLQJ³ZDUSGULYH´DVLQVFLHQFHILFWLRQ IRUVSDFHWUDYHO ²([FUHDWLQJ³SRFNHWXQLYHUVHV´ 7KH1HHGWR&RQTXHUWKH&RVPRVXQWR0XOWLYHUVHV ²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
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
7DEOH7KH7HFKQRORJLFDO)URQWLHUVRIWKH0LFUR:RUOG BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 7\SH,0LQXV ²([EXLOGLQJVWUXFWXUHVDQGPLQLQJ 7\SH,,0LQXV ²([SOD\LQJZLWKWKHJHQHWLFPDNHXSVRIOLYLQJWKLQJV 7\SH,,,0LQXV ²([PDQLSXODWLQJPROHFXODUERQGVIRUQHZPDWHULDOV 7\SH,90LQXV ²([FUHDWLQJQDQRWHFKQRORJLHVRQWKHDWRPLFVFDOH 7\SH90LQXV ²([HQJLQHHULQJWKHDWRPLFQXFOHXV 7\SH9,0LQXV ²([UHVWUXFWXULQJPRVWHOHPHQWDU\SDUWLFOHV 7\SH0LQXV ²([DOWHULQJWKHVWUXFWXUHRIVSDFHWLPH BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV$VDOUHDG\LQGLFDWHGLQ6HFRI)3+&WKHSUREOHPZLWKWKLV PLFURFODVVLILFDWLRQ IURP %DUURZ¶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
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH)LQLW\7UDQVILQLW\DQG,QILQLW\ 3DUW, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
,QILQLW\ ²7KH WHUP ³LQILQLW\´ ZKLFK LV ³V\PEROLFDOO\ UHSUHVHQWHG ZLWK ´ GHULYHV IURP WKH /DWLQ LQILQLWDV RU ³XQERXQGHGQHVV´ WR UHIHU WR ³VHYHUDO GLVWLQFW FRQFHSWV²XVXDOO\ OLQNHG WR WKH LGHD RI ZLWKRXW HQG ²ZKLFK DULVH LQ SKLORVRSK\ PDWKHPDWLFV DQG WKHRORJ\´ :. F ²,QWKHFRQWH[WRIPDWKHPDWLFV³LQILQLW\´LVRIWHQ³WUHDWHGDVLILWZHUH D QXPEHU LH LW FRXQWV RU PHDVXUHV WKLQJV DQ LQILQLWH QXPEHU RI WHUPV EXW LW LV D GLIIHUHQW W\SH RI QXPEHU IURP WKH UHDO QXPEHUV ,QILQLW\ LV UHODWHG WR OLPLWV«ODUJH FDUGLQDOV«SURMHFWLYH JHRPHWU\ H[WHQGHG UHDO QXPEHUV DQG WKH DEVROXWH ,QILQLWH´ IRU LQVWDQFH :. F 7UDQVILQLW\ ²7RDYRLGFRQIXVLRQP\XVDJHRIWKHZRUG³WUDQVILQLWH´DVXVHGKHUH LQ WKH RQWRORJLFDO SULQFLSOH LV QRW WKH VDPH DV WKH RQH ZKLFK ZDV RULJLQDOO\ FRLQHG E\ *HRUJ &DQWRU WR UHIHU WR ³FDUGLQDO QXPEHUV RU RUGLQDO QXPEHUV WKDW DUH ODUJHU WKDQ DOO ILQLWH QXPEHUV \HW QRW QHFHVVDULO\DEVROXWHO\LQILQLWH´LQWKH PLQGRI*RG DVRSSRVHGWR ³UHODWLYH´LQILQLW\LQWKHPLQGRI0DQ :.G ,QRWKHUZRUGV IRU&DQWRUWKHUHDUHWZRNLQGVRILQILQLW\³DEVROXWH´DQG³UHODWLYH´² ZLWK ³UHODWLYH´ LQILQLW\ RU ³WUDQVILQLW\´ LQ WKH PLQG RI 0DQ EHLQJ GHSHQGHQW RQ ³DEVROXWH´ LQILQLW\ LQ WKH PLQG RI *RG IRU LWV H[LVWHQFH ²%\FRQWUDVWP\XVDJHRIWKHZRUG³WUDQVILQLWH´KHUHGLIIHUVUDGLFDOO\ IURPWKHRQHXVHGE\&DQWRUDQGRWKHUPDWKHPDWLFLDQV DQGLVPRUH OLPLWHGLQOLJKWRIWKHSUREOHPVFRQIURQWLQJDQ\DWWHPSWWRXQGHUVWDQG WKHLGHDRILQILQLW\EHLWE\LQWXLWLRQLPDJLQDWLRQDQGFRQFHSWLRQDV DOUHDG\VKRZQLQWKHSUHYRXVWKUHHVXEVHFWLRQV ²:LWK WKLV FODULILFDWLRQ LQ PLQG , DOORZ QXPEHUV ZKLFK FDQ EH PDQ\ WLPHV ODUJHU²RU VPDOOHU IRU WKDW PDWWHU²WKDQ WKH ILQLWH WKLQJV WKDW ZH HQFRXQWHU LQ GDLO\ OLIH EXW WKH\ GR QRW KDYH WR EH UHODWHG WR WKH LGHDRILQILQLW\DWDOOZKLFKPD\QRWH[LVW BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
7DEOH)LQLW\7UDQVILQLW\DQG,QILQLW\ 3DUW,, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
7UDQVILQLW\FRQW¶G ²2IFRXUVHWKHUHPD\EHVRPHERUGHUOLQHFDVHVLQZKLFKLWLVQRWFOHDU ZKHWKHUWKHQXPEHULQTXHVWLRQLVWUDQVILQLWHLQP\XVDJH RUVLPSO\ DPDWKHPDWLFDOFRQYHQLHQFH$JRRGH[DPSOHRIDERUGHUOLQHFDVHLV WKH3ODQFNXQLWRIOHQJWKIRU³WKHVPDOOHVWVSDFHSRVVLEO\PHDVXUHGLQ QDWXUH´ZKLFKLV³OHVVWKDQELOOLRQWKVRIWULOOLRQWKVRIWULOOLRQWKVRIDQ LQFK´ RU VRPHWKLQJ OLNH î í PHWHUV 3 %DRIX D 1 0F$OHHU:.9'&RUEHWW ²7KH LGHDV FRQFHUQLQJ V\PPHWU\ DQG GLPHQVLRQV LQ WKH H[DPSOHV DERYH ZHUHDGGUHVVHGLQ&KDSWHU7KUHHDQG&KDSWHU)RXURI)3+* )RU QRZ LW VXIILFHV WR IXUWKHU DGG WKDW LW LV PLQGERJJOLQJ WR HYHQ FRQFHLYH RU LPDJLQH H[WUHPH QXPEHUV OLNH WKH 3ODQFN XQLW RI OHQJWK RURWKHUV 'RHVLWUHDOO\H[LVWDWDOO"2ULVLWPHUHO\DPDWKHPDWLFDO FRQYHQLHQFHWRGHVFULEHDSK\VLFDOVLWXDWLRQWKDWWKHKXPDQPLQGGRHV QRWXQGHUVWDQGSURSHUO\" ²,Q DQ\ HYHQW ³WUDQVILQLW\´ LQ P\ XVDJH FDQ EH XVHG DV D IXUWKHU H[WHQVLRQRIQXPEHU WRWKHILQLWHQXPEHUVLQGDLO\OLIH²DOEHLWZLWK VRPHERUGHUOLQHFDVHVLQPLQG )LQLW\ ²,W UHIHUV WR QXPEHUV ZKLFK DUH ERXQGHG WKDW LV ZLWK DQ HQG HVSHFLDOO\ WKRXJK QRW H[FOXVLYHO\ LQ UHODWLRQ WR WKLQJV LQ HYHU\GD\ OLIH BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 6RXUFH)URP6HFDQG6HFRI)3+*
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH7KHRUHWLFDO6SHFXODWLRQVRI0XOWLYHUVHV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB ³%DE\8QLYHUVHV´([$QGUH/LQGHDQGRWKHUV ²([ ,Q D IODW XQLYHUVH WKHRU\ ³HYHQ LI RXU SDUW RI LW HYHQWXDOO\ FROODSVHV«VRPH VSRWV LQ WKH FRVPRV ZRXOG VXGGHQO\ VWDUW LQIODWLQJ RQ WKHLU RZQ FUHDWLQJ EUDQGQHZ EDE\ XQLYHUVHV ´ 3 %DRIX ³3DUDOOHO8QLYHUVHV´([6WHSKHQ+DZNLQJDQGRWKHUV ²([ ,Q TXDQWXP FRVPRORJ\ WKHUH DOORZV WKH H[LVWHQFH RI LQILQLWH QXPEHUVRISDUDOOHOXQLYHUVHVZLWKWXQQHOLQJDPRQJWKHP0.DNX +DZNLQJODWHUUHYLVHGKLVYLHZVRQWKLV ³3RFNHW8QLYHUVHV´([$ODQ*XWK ²([³$VWKHSRFNHWXQLYHUVHVOLYHRXWWKHLUOLYHVDQGUHFROODSVHRU GZLQGOHDZD\QHZXQLYHUVHVDUHJHQHUDWHGWRWDNHWKHLUSODFH:KLOH OLIHLQRXUSRFNHWXQLYHUVHZLOOSUHVXPDEO\GLHRXWOLIHLQWKHXQLYHUVH DV D ZKROH ZLOO WKULYH IRU HWHUQLW\´ $ *XWK 3 %DRIX ³%UDQH:RUOGV´([:DUUHQ6LHJHO/LVD5DQGDOODQGRWKHUV ²([2XUXQLYHUVHLVVWXFNRQDPHPEUDQHRIVSDFHWLPHHPEHGGHGLQ D ODUJHU FRVPRV ZLWK GLIIHUHQW EUDQH ZRUOGV FRQQHFWLQJ DQGRU FROOLGLQJZLWKHDFKRWKHU BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV7KHVHH[DPSOHVDUHVROHO\LOOXVWUDWLYHQRWH[KDXVWLYH DQGVRPHRI WKH LWHPV FDQ EH UHFODVVLILHG VRPHZKHUH HOVH 1RU DUH WKH\ DOZD\V PXWXDOO\H[FOXVLYH6LQFHWKH\DUHJHQHUDOLWLHVH[FHSWLRQVDUHH[SHFWHG 6RXUFH)URP7DEOHRI)3+&
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
7DEOH7KH&RQIXVLRQEHWZHHQ³0DQ\:RUOGV´DQG³0XOWLYHUVH´ 3DUW, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB )LUVW3UREOHP ²7KHILUVWSUREOHPLQWKLVVHFRQGFRQIXVLRQFRQFHUQVDGHEDWHEHWZHHQ WKH ³PDQ\ZRUOGV´ LQWHUSUHWDWLRQ RI TXDQWXP PHFKDQLFV E\ +XJK (YHUHWW DQGRWKHUVDQGWKH&RSHQKDJHQLQWHUSUHWDWLRQE\1LHOV %RKU DQG :HUQHU +HLVHQEHUJ RQ WKH HIIHFWV RI TXDQWXP VWDWHV DIWHU LQWHUDFWLQJ ZLWK DQ H[WHUQDO HQYLURQPHQW HJ E\ D PHDVXULQJ REVHUYHU ²2Q WKH RQH KDQG WKH &RSHQKDJDQ LQWHUSUHWDWLRQ RI TXDQWXP PHFKDQLFVLVPRUHLQGHWHUPLQLVWLFLQLWVFRQFHUQZLWKWKHSUREDELOLWLHV RIWKHRXWFRPHVRIDZDYHIXQFWLRQDIWHULQWHUDFWLQJZLWKDQH[WHUQDO HQYLURQPHQW HJ E\ D PHDVXULQJ REVHUYHU XVLQJ OLJKW WR GHWHFW IRU H[DPSOH ³DQ HOHFWURQ LQ D SDUWLFXODU UHJLRQ DURXQG WKH QXFOHXV DW D SDUWLFXODU WLPH´ :. H (DFK ZDYH IXQFWLRQ IRU WKH VWDWH RI D SDUWLFOHUHIHUVWR³DPDWKHPDWLFDOUHSUHVHQWDWLRQXVHGWRFDOFXODWHWKH SUREDELOLW\IRULWWREHIRXQGLQDORFDWLRQRUVWDWHRIPRWLRQ´:. I $QG WKH ³ZDYHIXQFWLRQ FROODSVH´ PHDQV WKDW ³WKH DFW RI PHDVXUHPHQWFDXVHVWKHFDOFXODWHGVHWRISUREDELOLWLHVWR FROODSVH WR WKHYDOXHGHILQHGE\WKHPHDVXUHPHQW´:.I ²2Q WKH RWKHU KDQG WKH (YHUHWW¶V LQWHUUSHWDWLRQ LV PRUH GHWHUPLQLVWLF LQ UHMHFWLQJ ³WKH REMHFWLYH UHDOLW\ RI ZDYHIXQFWLRQ FROODSVH´ DQG ³LQVWHDG H[SODLQLQJ WKH VXEMHFWLYH DSSHDUDQFH RI ZDYHIXQFWLRQ FROODSVHZLWKWKHPHFKDQLVPRITXDQWXPGHFRKHUHQFH´:.J 7KHZRUGV³TXDQWXPGHFRKHUHQFH´KHUHUHIHUVWR³WKHPHFKDQLVPE\ ZKLFK TXDQWXP V\VWHPV LQWHUDFW ZLWK WKHLU HQYLURQPHQWV WR H[KLELW SUREDELOLVWLFDOO\DGGLWLYHEHKDYLRU´LQVXFKDZD\WKDW³WKHTXDQWXP QDWXUH RI WKH V\VWHP LV VLPSO\ OHDNHG LQWR WKH HQYLURQPHQW´ :. J )RU H[DPSOH ³>D@V D UHVXOW RI DQ LQWHUDFWLRQ WKH ZDYH IXQFWLRQV RI WKH V\VWHP DQG WKH PHDVXULQJ GHYLFH EHFRPH HQWDQJOHG ZLWKHDFKRWKHU'HFRKHUHQFHKDSSHQVZKHQGLIIHUHQWSRUWLRQVRIWKH V\VWHP V ZDYHIXQFWLRQ EHFRPH HQWDQJOHG LQ GLIIHUHQW ZD\V >LWDOLF DGGHG@ZLWKWKHPHDVXULQJGHYLFH´:.J 7KXVIRU(YHUHWW WKH DSSHDUDQFH RI ³ZDYHIXQFWLRQ FROODSVH´ FDQ EH H[SODLQHG E\ ³TXDQWXPGHFRKHUHQFH´IRUTXDQWXPVWDWHVWREUDQFKRXWLQGLIIHUHQW LQGHSHQGHQWZRUOGVDIWHULQWHUDFWLQJZLWKDQH[WHUQDOHQYLURQPHQW BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH7KH&RQIXVLRQEHWZHHQ³0DQ\:RUOGV´DQG³0XOWLYHUVH´ 3DUW,, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
)LUVW3UREOHPFRQW¶G ²D@FFRUGLQJ WR UHODWLYLW\ \RX FDQ RQO\ PRYH WKURXJKWLPHLQRQHGLUHFWLRQ´12 6HFRQG3UREOHP ²7KH VHFRQG SUREOHP FRQFHUQV ³WLPH GLODWLRQ XQGHU WKH 7KHRU\ RI *HQHUDO 5HODWLYLW\´ZKLFK XQLILHVVSDFHWLPH ZLWK PDVVHQHUJ\LQD JHQHUDOWKHRU\ WKHVDPHUHVXOWRIWLPHGLODWLRQRFFXUV ²)RU LQVWDQFH ZKHQ ³RQH FORFN LV GHHSHU LQ D JUDYLW\ ZHOO WKDQ WKH RWKHU´DUHVXOWLVWKDW³WKHFORFNGHHSHULQWKHZHOO´ZLOO³WLFN«PRUH VORZO\ WKLV HIIHFW PXVW EH WDNHQ LQWR DFFRXQW ZKHQ FDOLEUDWLQJ WKH FORFNVRQWKHVDWHOOLWHVRIWKH*OREDO3RVLWLRQLQJ6\VWHPDQGLWFRXOG OHDG WR VLJQLILFDQW GLIIHUHQFHV LQ UDWHV RI DJLQJ IRU REVHUYHUV DW GLIIHUHQWGLVWDQFHVIURPDEODFNKROH´:.L ²0RUH SUHFLVHO\ E\ ZD\ RI DQRWKHU H[DPSOH ³LW KDV EHHQ FDOFXODWHG WKDWXQGHUJHQHUDOUHODWLYLW\DSHUVRQFRXOGWUDYHOIRUZDUGLQWLPHDW D UDWH IRXU WLPHV WKDW RI GLVWDQW REVHUYHUV E\ UHVLGLQJ LQVLGH D VSKHULFDO VKHOO ZLWK D GLDPHWHU RI PHWHUV DQG WKH PDVV RI -XSLWHU )RU VXFK D SHUVRQ HYHU\ RQH VHFRQG RI WKHLU SHUVRQDO WLPH ZRXOG FRUUHVSRQGWRIRXUVHFRQGVIRUGLVWDQWREVHUYHUV2IFRXUVHVTXHH]LQJ WKHPDVVRIDODUJHSODQHWLQWRVXFKDVWUXFWXUHLVQRWH[SHFWHGWREH ZLWKLQRXUWHFKQRORJLFDOFDSDELOLWLHVLQWKHQHDUIXWXUH´:.L 5*RWW ²7KH SRLQW KHUH KRZHYHU LV WKDW WLPH WUDYHO LQWR WKH IXWXUH LQ WKLV VHQVH LV DOORZHG WKHRUHWLFDOO\ VSHDNLQJ EXW LQ D YHU\ OLPLWHG ZD\ IURPWKHWKHRU\RIUHODWLYLW\%XWRQHFDQDOVRDVN:KDWLIWKHWKHRU\ RIUHODWLYLW\ZHUHZURQJ":HOOLQWKDWFDVHWKHUHZRXOGEHDQHHGWR ILQGDEHWWHUWKHRU\WRH[SODLQWLPHWUDYHOLQWRWKHIXWXUH BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 6RXUFH)URP6HFRI)3+*
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
7DEOH7KH3UREOHPVRI7LPH7UDYHOLQWRWKH3DVW 3DUW, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
)LUVW3UREOHP ²7KH ILUVW SUREOHP FRQFHUQV WKH IDVWHUWKDQOLJKWVSHHG VLQFH LQ DFFRUGDQFH WR WKH WKHRU\ RI VSHFLDO UHODWLYLW\ ZKHQ DQ REMHFW JRHV IDVWHU WKDQ WKH VSHHG RI OLJKW VRPHWKLQJ ZHLUG FDQ KDSSHQ LQ WKDW LQVWHDG RI KDYLQJ WKH FORFN FOLFNLQJ PRUH VORZO\ LW LV PRYLQJ EDFNZDUGLQUHODWLRQWRVRPHLQHUWLDOIUDPHRIUHIHUHQFH²ZKLFKWKHQ UDLVLHVWKHLVVXHRIZKHWKHUWLPHWUDYHOLQWRWKHSDVWLVSRVVLEOHDWDOO ²%XWWKHSUREOHPKHUHLVDERXWWKHYLRODWLRQRIWKHODZRIFDVXDOLW\,Q HYHU\GD\ ODQJXDJH DQ H[FHOOHQW LOOXVWUDWLRQ RI FDXVDOLW\ YLRODWLRQ LV WKDWVXSSRVH\RXWUDYHOEDFNLQWRWKHSDVWDQGWKHQNLOO\RXUSDUHQWV WKLVWKHQPHDQVWKDW\RXFRXOGQRWKDYHEHHQERUQ%XWWKLVLVQRWWUXH VLQFH\RXDUHDOLYH ²J@HQHUDOUHODWLYLW\GHVFULEHVWKHXQLYHUVHXQGHUD V\VWHPRIILHOGHTXDWLRQV«DQGWKHUHH[LVWVROXWLRQVWRWKHVHHTXDWLRQV WKDW SHUPLW ZKDW DUH FDOOHG FORVHG WLPHOLNH FXUYHV DQG KHQFH WLPH WUDYHOLQWRWKHSDVW«7KHILUVWRIWKHVHZDVSURSRVHGE\.XUW*|GHOD VROXWLRQ NQRZQ DV WKH *|GHO PHWULF EXW KLV DQG PDQ\ RWKHUV H[DPSOH UHTXLUHV WKH XQLYHUVH WR KDYH SK\VLFDO FKDUDFWHULVWLFV WKDW LW GRHVQRWDSSHDUWRKDYH´:.L.7KRUQH ²%XW WKHQ WKH SUREOHP QRZ EHFRPHV ³:KHWKHU JHQHUDO UHODWLYLW\ IRUELGV FORVHG WLPHOLNH FXUYHV IRU DOO UHDOLVWLF FRQGLWLRQV LV XQNQRZQ´:.L 7KLUG3UREOHP ²7KH WKLUG SUREOHP FRQFHUQV ZRUPKROHV DQG UHODWHG RQHV DQG ³>Z@RUPKROHV DUH D K\SRWKHWLFDO ZDUSHG VSDFHWLPH ZKLFK DUH DOVR SHUPLWWHG E\ WKH (LQVWHLQ ILHOG HTXDWLRQV RI JHQHUDO UHODWLYLW\ DOWKRXJKLWZRXOGEHLPSRVVLEOHWRWUDYHOWKURXJKDZRUPKROHXQOHVV LW ZDV ZKDW LV NQRZQ DV D WUDYHUVDEOH ZRUPKROH´ :. L 0 9LVVHU ,Q RWKHU ZRUGV ³D ZRUPKROH LV D K\SRWKHWLFDO WRSRORJLFDO IHDWXUH RI VSDFHWLPH WKDW LV IXQGDPHQWDOO\ D VKRUWFXW WKURXJK VSDFH DQG WLPH 6SDFHWLPH FDQ EH YLHZHG DV D ' VXUIDFH DQG ZKHQ IROGHG RYHU D ZRUPKROH EULGJH FDQ EH IRUPHG $ ZRUPKROH KDV DW OHDVW WZR PRXWKV ZKLFK DUH FRQQHFWHG WR D VLQJOH WKURDWRUWXEH,IWKHZRUPKROHLVWUDYHUVDEOHPDWWHUFDQ WUDYHO IURP RQHPRXWKWRWKHRWKHUE\SDVVLQJWKURXJKWKHWKURDW´:.M ²%XWWKHSUREOHPKHUHLVWKUHHIROGDVVKRZQLQZKDWIROORZV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
7DEOH7KH3UREOHPVRI7LPH7UDYHOLQWRWKH3DVW 3DUW,,, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
7KLUG3UREOHPFRQW¶G ²7KHILUVWSDUWRIWKHSUREOHPLVWKDW³WKHUHLVQRREVHUYDWLRQDOHYLGHQFH IRUZRUPKROHV´:.M ²7KH VHFRQG SDUW RI WKH SUREOHP LV WKDW LW LV QRW FOHDU KRZ H[DFWO\ ZRUPKROHVDQGEODFNKROHV IRUWKDW PDWWHU FRXOGDOORZ WLPHWUDYHO LQWRWKHSDVWDWDOO ²$QG WKH WKLUG SDUW RI WKH SUREOHP LV WKDW LI XVLQJ ZRUPKROHV DQG EODFNKROHVIRUWKDWPDWWHU WRWUDYHOLQWRWKHSDVWUHTXLUHVVRPHWKLQJ WRJRIDVWHUWKDQOLJKWWRRWKHQWKLVUDLVHVDQRWKHULVVXHFRQFHUQLQJWKH WZRSUREOHPVDVSUHYLRXVO\LQGLFDWHGLQWKHVXEVHFWLRQRQWKHIDVWHU WKDQOLJKWVSHHG )RXUWK3UREOHP ²7KH IRXUWK SUREOHP LV WKDW VRPH SK\VLFLVWV KDYH DUJXHG WKDW HYHQ VKRXOG WLPH WUDYHO LQWR WKH SDVW EH SRVVLEOH E\ ZD\ RI WKHVH WKUHH PHWKRGVWKHSHUVRQVWLOOZRXOGQRWUHWXUQWRWKHVDPHSDVWKLVWRU\WKDW KHH[DFWO\H[SHULHQFHGEHIRUHEXWLQDGLIIHUHQWRQH:.L ²,Q RWKHU ZRUGV ³VWULFWO\ VSHDNLQJ´ WLPH WUDYHO LQWR WKH SDVW LV QRW ³UHDOO\´ SRVVLEOH LQ OLJKW RI WKHVH FULWLFLVPV VR WKHUH LV QR QHHG WR ZRUU\ WKDW RQH FRXOG WUDYHO LQWR WKH SDVW DQG NLOO RQH¶V SDUHQW DV D ZD\WRYLRODWHWKHODZRIFDVXDOLW\ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 6RXUFH)URP6HFRI)3+*
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH7KH&RQFHSWXDO'LPHQVLRQVRI&RQVFLRXVQHVV DQG2WKHU0HQWDO6WDWHV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 2Q+HUHGLW\DQG7LPH ²+HUHGLW\DQGWKH(QYLURQPHQW ²7KH3DVWDQGWKH3UHVHQW 2Q/D\HUVRI0HQWDO6WDWHVDQG$EQRUPDOLW\ ²&RQVFLRXVQHVV8QFRQVFLRXVQHVVDQG3UHFRQVFLRXVQHVV ²1RUPDOLW\DQG3DUDQRUPDOLW\ 2Q2UJDQLFLW\DQG0RWLYDWLRQ ²0HFKDQLFLW\DQG2UJDQLFLW\ ²3ULPDU\0RWLYDWLRQVDQG0XOWLSOH0RWLYDWLRQV 2Q2WKHU0RVWO\(SLVWHPLF &RQVLGHUDWLRQV ²6\QWKHVLVDQG$QDO\VLV ²6LWXDWLRQDQGWKH6XEMHFW ²3URFHVVDQG2XWFRPH ²5HDVRQLQJDQG2WKHU0RGHVRI7KLQNLQJ ²0HWD&RQFHSWXDO1RPLQDOLVPDQG5HDOLVP BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV7KHVHH[DPSOHVDUHVROHO\LOOXVWUDWLYHQRWH[KDXVWLYH DQGVRPH RI WKH LWHPV FDQ EH UHFODVVLILHG VRPHZKHUH HOVH 1RU DUH WKH\ DOZD\V PXWXDOO\H[FOXVLYH6LQFHWKH\DUHJHQHUDOLWLHVH[FHSWLRQVDUHH[SHFWHG 6RXUFHV )URP )3+& $ UHFRQVWUXFWLRQ EXW ZLWK P\ RZQ FRQWULEXWLRQ RULJLQDOO\ IURP */LQG]H\ &+DOO ,QWURGXFWLRQ WR 7KHRULHV RI 3HUVRQDOLW\17KH@ EUDLQ >LV@ FDSDEOH RI D IXOO UDQJH RI EHKDYLRUV DQG SUHGLVSRVHG WR QRQH´ DQG-HVVH-DFNVRQZKREODPHVZKLWHUDFLVPIRUWKHIDLOXUHRI EODFNV WR FORVH WKH DFKLHYHPHQW JDS EHWZHHQ ZKLWHV DQG EODFNV LQ $PHULFD 7KH ZRUNVRQGHSHQGHQF\WKHRU\LQLQWHUQDWLRQDOSROLWLFDO HFRQRP\ZLWKD0DU[LDQLQIOXHQFH DQGRQWKH3URWHVWDQWZRUNHWKLF E\0D[:HEHU DOVRSRLQWWRWKLVHQYLURQPHQWDOGLUHFWLRQ 7KH*HQHWLF$SSURDFK ²7KHVLV ,W IRFXVHV LQVWHDG UHODWLYHO\ VSHDNLQJ DJDLQ RQ KHUHGLWRU\ IDFWRUVHJJHQHVDQGHYROXWLRQ LQH[SODLQLQJWKHDFKLHYHPHQWJDS DPRQJ LQGLYLGXDOV DQG IRU WKDW PDWWHU FRXQWULHV RU UHJLRQV ZKHQ FRQWUDVWHGZLWKWKHHQYULRQPHQWDOIDFWRUV ²'LVFRXUVH ([DPSOHV DUH +DQV (\VHQFN DQG :LOOLDP 6KHOGRQ LQ FRQVWLWXWLRQDO SV\FKRORJ\ .RQUDG /RUHQ] LQ KLV ZRUN RQ LQQDWH DJJUHVVLYH KXPDQ QDWXUH *DU\ 0DUFXV RQ WKH FRPSOH[LWLHV RI KXPDQ WKRXJKW E\ D WLQ\ QXPEHU RI JHQHV DQG 5REHUW 3ORPLQ WRJHWKHUZLWK0LFKDHO2ZHQDQG3HWHU0F*XIILQRQWKHJHQHWLFEDVLV RIFRPSOH[KXPDQEHKDYLRUV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH7KH7KHRUHWLFDO'HEDWHRQ1DWXUHYV1XUWXUH 3DUW,, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
7KH&RPSURPLVH$SSURDFK ²7KHVLV ,W VHHNV WKH PLGGOHRIWKHURDG DUJXPHQW LQ UHJDUG WR QDWXUH DQGQXUWXUHDQGUHJDUGVDOOGLIIHUHQFHVDPRQJLQGLYLGXDOVDQGJURXSV DV WKH UHVXOW RI WKH PL[WXUH RI ERWK QDWXUH DQG QXUWXUH PRUH RU OHVV HTXDOO\ ²'LVFRXUVH([DPSOHVLQFOXGH&0XUUD\DQG5+HUUQVWHLQ³,WVHHPV KLJKO\OLNHO\WRXVWKDWERWKJHQHVDQGHQYLURQPHQWKDYHVRPHWKLQJWR GRZLWKWKLVLVVXH´ DQG'DQ 'HQQHWW³6XUHO\ HYHU\RQHNQRZV WKDW WKHQDWXUHQXUWXUHGHEDWHZDVUHVROYHGORQJDJRDQGQHLWKHUVLGHZLQV VLQFHHYHU\WKLQJ±LV±D±PL[WXUH±RI±ERWK±DQGLW¶V±DOO±YHU\ FRPSOLFDWHG«´ 7KH7UDQVFHQGHQW$SSURDFK ²7KHVLV ,W JRHV EH\RQG ERWK QDWXUH DQG QXUWXUH ZLWKRXW KRZHYHU FRPPLWWLQJ WKH FRPSURPLVH IDOODF\ LQ VKRZLQJ WKHLU FORVHO\ LQWHUWZLQHG LQWHUDFWLRQV LQ SURGXFLQJ WKH EHKDYLRUDO GLIIHUHQFHV DV RIWHQVHHQLQLQGLYLGXDOKXPDQHQGHDYRUVRQWKHPLFURVFDOHDQGIRU WKDWPDWWHULQFRXQWU\RUUHJLRQDO HQGHDYRUVRQWKHPDFURRQH²LQ WKHFRQWH[WRIP\ILYHWKHVHVQDPHO\D WKHFRPSURPLVHIDOODF\E QRRSSUHVVLRQZLWKRXWVHOIRSSUHVVLRQF QRVXFFHVVZLWKRXWIDLOXUH G WKH IDFWRU RI UDQGRPQHVV DQG H WKH SRVWKXPDQ YLVLRQ WR EH HODERUDWHGLQ&KDSWHU6L[ ²'LVFRXUVH 3HWHU %DRIX SURSRVHG WKLV DSSURDFK RQ WKH EDVLV RI KLV ³WKHRU\ RI FRQWUDVWLYH DGYDQWDJHV´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
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
7DEOH3K\VLFDO&KDOOHQJHVWR+\SHU6SDWLDO&RQVFLRXVQHVV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 7KH8QGHUVWDQGLQJRID+LJKHU'LPHQVLRQDO:RUOGRI6SDFH7LPH ²([IRUWUDGLWLRQDODVSHFWVRIVSDFHWLPHHJOHQJWKZLGWKEUHDGWK DQGWLPH SOXVPRUHQHZGLPHQVLRQVLQWKHRU\RIK\SHUVSDFHZLWK SURIRXQG LPSOLFDWLRQV IRU SUDFWLFDO DSSOLFDWLRQV WR QHZ IRUPV RI FRQVFLRXVQHVV 7KH0DVWHULQJRI'DUN0DWWHUDQG'DUN(QHUJ\ ²([³RUGLQDU\PDWWHU´HJDWRPVPROHFXOHV DVDPHUHRIWKH XQLYHUVH ZLWK PDGH RI ³FROG GDUN PDWWHU´ DQG WKH UHVW DERXW RI P\VWHULRXV ³GDUN HQHUJ\´ ZLWK IXQGDPHQWDO VLJQLILFDQFH WR TXHVWLRQV DERXW WKH OLPLW RI WKH VSHHG RI HQHUJ\ RU LQIR WKH DYDLODELOLW\RIHQHUJ\IRUXVHDQGWKHQDWXUHRIVSDFHWLPHMXVWWRFLWH VRPHH[DPSOHV 7KH([SORUDWLRQRI0XOWLYHUVHV ²([WKHRUHWLFDOVSHFXODWLRQRIRWKHUXQLYHUVHVHJ³EDE\XQLYHUVHV´ ³JDWHZD\V´ LQ EODFN KROHV ³ZDYH IXQFWLRQ RI WKH XQLYHUVH´ ³PDQ\ ZRUOGV´ ³EUDQH ZRUOGV´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
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH7KH7KHRU\RI)ORDWLQJ&RQVFLRXVQHVV 3DUW, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB $WWKH0LFUR3K\VLFDO/HYHO ²([LQWHOOLJHQWOLIHZLWKRXWWKHKXPDQSK\VLFDOFKHPLFDOV\VWHP $WWKH&KHPLFDO/HYHO ²([VSDFHUDGLDWLRQDQGWR[LQV $WWKH%LR3V\FKRORJLFDO/HYHO ²([H[RELRORJLFDOHYROXWLRQLQGHHSVSDFH ²([JHQHWLFHQJLQHHULQJRIQHZEHLQJV $WWKH,QVWLWXWLRQDO/HYHO ²([SRVWFDSLWDOLVP ²([SRVWGHPRFUDF\ $WWKH2UJDQL]DWLRQDO/HYHO ²([OHVVOHJDOIRUPDOLVWLFURXWLQHV $WWKH6WUXFWXUDO/HYHO ²([DOLHQIRUPVRIYLROHQFH $WWKH&XOWXUDO/HYHO ²([WUDQVFHQGLQJIUHHGRP ²([WUDQVFHQGLQJHTXDOLW\ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
7DEOH7KH7KHRU\RI)ORDWLQJ&RQVFLRXVQHVV 3DUW,, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB $WWKH&RVPRORJLFDO/HYHO ²([SDUDOOHOXQLYHUVHV ²([SRFNHWXQLYHUVHV $WWKH6\VWHPLF/HYHO ²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²DQGRULJLQDOO\IURP)&'
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH7KH3RWHQWLDORI8QIROGLQJ8QFRQVFLRXVQHVV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 6XSHULRU6HQVHV ²7KURXJKVSDFH ([FODLUVHQWLHQFHLQIHHOLQJ ([FODLUYR\DQFHLQVHHLQJ ([FODLUDXGLHQFHLQKHDULQJ ([FODLUDXVWDQFHLQWDVWLQJ ([FODLUDOLHQFHLQVPHOOLQJ ([FODLUFRJQL]DQFHLQNQRZLQJ ²7KURXJKWLPH ([SUHFRJQLWLRQLQNQRZLQJ SUHVHQWLPHQWLQIHHOLQJ ([UHWURFRJQLWLRQLQNQRZLQJ UHWURVHQWLPHQWLQIHHOLQJ 6XSHULRU&RQWDFWV ²:LWKOLYLQJPLQGV ([WHOHSDWK\ ²:LWKWKHGHDG ([PHGLXPVKLS ²:LWKRWKHUOLYLQJHQWLWLHV ([WHOHNLQHVLV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV7KHFDWHJRULHVDQGH[DPSOHVDUHVROHO\LOOXVWUDWLYHQRWH[KDXVWLYH DQG WKH FRPSDULVRQ LV UHODWLYH QRW DEVROXWH QRU DUH WKH\ QHFHVVDULO\ PXWXDOO\ H[FOXVLYH $QG VRPH FDQ EH HDVLO\ UHFODVVLILHG HOVHZKHUH $V JHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFH$VXPPDU\RI&KRI)3+8
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
7DEOH7KH)XWXUH([SORUDWLRQRI8QIROGLQJ8QFRQVFLRXVQHVV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB ,QWKH&RQWH[WRI1DWXUH ²([WKHKLJKHUGLPHQVLRQDOVSDFHWLPHLQK\SHUVSDFHWKHRU\ ²([WKHSDUWLFOHZDYHLQWHUDFWLRQVLQTXDQWXPPHFKDQLFV ²([WKHVWXG\RIEUDLQZDYHVLQHOHFWURPDJQHWLFWKHRU\ ,QWKH&RQWH[WRIWKH0LQG ²([WKHXQFRQVFLRXVIDQWDVLHVLQSV\FKRDQDO\VLV ²([WKHPLQGDOWHULQJGUXJVLQELRFKHPLVWU\ ²([WKHPDQLSXODWLRQRIQHXUDODFWLYLW\LQQHXURELRORJ\ ,QWKH&RQWH[WRI&XOWXUH ²([WKHFRUUHODWLRQEHWZHHQDQRPDORXVH[SHULHQFHDQG PRUDOUHOLJLRXVDHVWKHWLFLQWHUHVWVLQFXOWXUHVWXGLHV ²([WKHUROHRIP\WKVDQGODQJXDJHLQHSLVWHPRORJ\ ,QWKH&RQWH[WRI6RFLHW\ ²([GLIIHUHQWRUJDQL]DWLRQDODJHQGDVLQDQRPDORXVUHVHDUFK ²([WKHVFKRODUO\GLYLGHRQDQRPDORXVVWXG\ ²([LQWHUHVWVDQGSURSDJDQGDLQLQVWLWXWLRDQOUHVHDUFK ²([WKHWUDQVIRUPDWLYHSRZHURIWHFKQRORJ\LQUHVHDUFKRQ VRFLDOV\VWHPV ²([WKHQDWXUDODQGQRQQDWXUDOVHOHFWLRQRIRWKHUZRUOGVLQ H[RELRORJ\ ²([WKHUROHRIWKHSRVWKXPDQFRQVFLRXVPLQGLQTXDOLWDWLYH GHPRJUDSK\ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH H[DPSOHV LQ HDFK FDWHJRU\ DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH DQG WKH FRPSDULVRQ LV UHODWLYH QRW DEVROXWH QRU DUH WKH\ QHFHVVDULO\ PXWXDOO\ H[FOXVLYH $QG VRPH FDQ EH HDVLO\ UHFODVVLILHG HOVHZKHUH$VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFH$VXPPDU\RI&KVRI)3+8LQFRQMXQFWLRQZLWKWKHUHVWRI WKHERRN
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH&UHDWLYH7HFKQLTXHVDQG7UDLWV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
&UHDWLYH7HFKQLTXHV ²&RPSUHKHQVLYHQHVV ([%URDGQHVVRI6FRSH ([,Q'HSWK$QDO\VLV ([0XOWLIDFHWHG7D[RQRP\ ([1XPHURXV7KHRULHV ²$UUDQJHPHQW ([6HSDUDWLRQRU6XEWUDFWLRQ ([&RPELQDWLRQRU$GGLWLRQ ([5HSODFHPHQW ([$FFRPPRGDWLRQ ([5HYHUVDO ([6WUHWFKLQJ ²6HUHQGLSLW\ ([3OD\ ([&KDQFH &UHDWLYH7UDLWV ²2SHQQHVV5LVN ([$ELOLW\WRZHOFRPHQHZLGHDVRUWRGRQHZWKLQJVZLWKULVN ²'LVFLSOLQH ([$ELOLW\WRVDFULILFHZKDWHYHULWWDNHVWRVXFFHHG ²5HVLOLHQFH&RQILGHQFH ([$ELOLW\WRWDNHIDLOXUHVWRPLQGQRWWRKHDUW ²7UXVW ([$ELOLW\WRFRRSHUDWHZLWKRWKHUVIRUWHDPZRUNLIQHFHVVDU\ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH H[DPSOHV LQ WKH FDWHJRULHV DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH DQG WKH FRPSDULVRQ LV UHODWLYH QRW DEVROXWH QRU DUH WKH\ QHFHVVDULO\ PXWXDOO\ H[FOXVLYH $QG VRPH FDQ EH HDVLO\ UHFODVVLILHG HOVHZKHUH$VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFH)URP6HFRI)3+&7)RUPRUHGHWDLOVDOVRUHDGWKHUHVWRIWKH ERRN
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
7DEOH7KH'HVLUDELOLW\RI&UHDWLYLW\DQG,WV'DUN6LGHV 3DUW, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
,Q5HODWLRQWR,QVWUXPHQWDO5DWLRQDOLW\ ²'HVLUDELOLW\ ([)RUWKHVDNHRIHIILFLHQF\DQGHIIHFWLYHQHVVLQWKLVFDSLWDOLVWHUD RIRXUWLPH ²8QGHVLUDELOLW\ ([:KDW0D[:HEHU FDOOHGWKH³LURQFDJH´RIFDSLWDOLVP ZKHUH OLYH WKH ³VHQVXDOLVWV ZLWKRXW KHDUW VSHFLDOLVWV ZLWKRXW VSLULW´²RUVRPHWKLQJZKLFKWKH)UDQNIXUW6FKRROKDVIRUFHIXOO\ DVNHGXVWREHIUHHGIURP ,Q5HODWLRQWR6XEVWDQWLYH5DWLRQDOLW\ ²'HVLUDELOLW\ ([ )RU WKH VDNH RI *RG WKH .LQJ 0RWKHUODQG RU RWKHU FRPSDUDEOHLGHDOV ²8QGHVLUDELOLW\ (['RPLQDWLRQDQGRSSUHVVLRQRIYDULRXVIRUPV²VRPHWKLQJ ZKLFKWKHPRGHUQVKDGVWUXJJOHGWRIUHHWKHPVHOYHVIURPLQWKH ILUVWSODFHVLQFHWKHGDZQRIPRGHUQLW\ ,Q5HODWLRQWR$XWRQRPRXV5DWLRQDOLW\ ²'HVLUDELOLW\ ([)RUWKHVDNHRILWVHOIWKHDXWRQRP\RIFUHDWLYHHQGHDYRU ²8QGHVLUDELOLW\ ([7KHGHFDGHQFHRILWVRZQGHJHQHUDWLRQHJWKHGRQZVLGHVRI SRVWPRGHUQLVPLQRXUSRVWPRGHUQWLPHVRUZKDW1LHW]VFKHRQFH FDOOHG WKH XQEHDUDEOH ³XQUHDOLW\´ DQG ³IDOVHQHVV´ RI WKH DXWRQRPRXVDUWLVW¶V³LQQHUPRVWH[LVWHQFH´²DQGLQRWKHUFDVHV WKH SDLQIXO VXIIHULQJ IURP GLIIHUHQW PHQWDO LOOQHVVHV IRU WKRVH KLJKO\FUHDWLYHLQGLYLGXDOV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
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²DQGIRUWKDWPDWWHU)&' 6RXUFH)URP6HFRI)3+&7)RUPRUHGHWDLOVDOVRUHDGWKHUHVWRIWKH ERRN
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
7DEOH3RVWKXPDQ,VP3RVW+XPDQLVPDQG7UDQV+XPDQLVP BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
3RVW+XPDQLVP ²7KH QHRORJLVP ³SRVWKXPDQ´ XVHG LQ P\ ERRNV VKRXOG QRW EH FRQIXVHG ZLWK DQRWKHU WHUP ZKLFK ORRNV VLPLODU EXW KDV D WRWDOO\ GLIIHUHQW PHDQLQJ LQ WKH OLWHUDWXUH RI SRVWPRGHUQLVP QDPHO\ ³SRVW KXPDQLVP´²ZKLFK FRQVWLWXWHV D FULWLTXH RI ³KXPDQLVP´ DV WUDGLRQDOO\XQGHUVWRRGHVSHFLDOO\WKRXJKQRWH[FOXVLYHO\LQUHODWLRQ WR WKH LGHD RI SURJUHVV LQ VFLHQFH DQG UHDVRQ LQ WKH (QOLJKWHQPHQW SURMHFW :. ²0\ ZRUNV UHMHFW WKH SURMHFW RI ³SRVWPRGHUQLVP´ DQG SURSRVH WKH IXWXUHZRUOGRIZKDW,RULJQDOO\FDOOHG³DIWHUSRVWPRGHUQLW\´LQ)+& DQG)&'IRULQVWDQFH
7UDQV+XPDQLVP ²$OVR WKH QHRORJLVP ³SRVWKXPDQ´ XVHG LQ P\ ERRNV VKRXOG QRW EH FRQIXVHGZLWKDVLPLODUWHUPZKLFKLVXVHGWRFKDPSLRQWKHLGHRORJ\ RI WHFKQRORJ\ IRU WKH IWXUXH FRH[LVWHQFH EHWZHHQ KXPDQV DQG F\ERUJVLQ³WUDQVKXPDQLVP´:.D ²,QVWHDG P\ WHUP ³SRVWKXPDQ´ LQ UHODWLRQ WR ³SRVWKXPDQLVP´ DOVR UHMHFWV ³WUDQVKXPDQLVP´ HVSHFLDOO\ WKRXJK QRW H[FOXVLYHO\ LQ UHODWLRQ WR WKH SURPLVHV RI WHFKQRORJ\ DQG UHIHUV WR VRPHWKLQJ HOVH DOWRJHWKHUWKDWLVWKHIXWXUHH[WLQFWLRQRIKXPDQVDQGLWVSRVWKXPDQ VXFFHVVRUVLQGHHSVSDFHDQGEH\RQGXQWRPXOWLYHUVHV ²&KDSWHU 7ZR RI P\ ERRN RQ HWKLFV %(3( SURYLGHV D PRUH FRPSUHKHQVLYHFULWLTXHRIWUDQVKXPDQLVP
3RVWKXPDQ,VP ²:LWK WKHVH WZR FODULILFDWLRQV LQ PLQG WKH ³SRVWKXPDQV´ DV HQYLVLRQHGLQP\ERRNV FDQWDNHGLIIHUHQWIRUPVDQG,SURSRVHGLQ P\ GLIIHUHQW ERRNV VRPH RI WKHP VXFK DV ³XQIROGLQJ XQFRQVFLRXVQHVV´ ³IORDWLQJ FRQVFLRXVQHVV´ ³K\SHUVSDWLDO FRQVFLRXVQHVV´ ³WKLQNLQJ PDFKLQHV´ ³WKLQNLQJ URERWV´ ³JHQHWLFDOO\ DOWHUHGVXSHULRUEHLQJV´³F\ERUJV´DQGRWKHUVDVDOUHDG\DQDO\]HGLQ P\SUHYLRXVZRUNV ²7KH\ZLOOHYROYHLQFRQMXQFWLRQZLWKRWKHUYLVLRQVRIPLQHLQUHODWLRQ WRQDWXUHVRFLHW\DQGFXOWXUH BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 6RXUFHV)URP 6HFRI)3+(DQGDOVR%(3( )RUPRUHGHWDLOVDOVR UHDGWKHUHVWRIWKHERRNVDQGRWKHUERRNVRIPLQH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH7KUHH*UHDW)XWXUH7UDQVIRUPDWLRQVRIWKH0DUWLDO%RG\ 3DUW, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
9LUWXDO%DWWOH ²([YLUWXDOILJKW ²([YLUWXDOPHPRU\ 7KH+\SHU0DUWLDO%RG\ ²,QUHODWLRQWRWKHSK\VLFDOGLPHQVLRQ ([VWULNLQJHJSXQFKLQJNLFNLQJWUDSSLQJDFXSUHVVXUHVWULNLQJ DQGVRRQLQDQDPD]LQJZD\ ([JUDSSLQJHJWKURZLQJSLQQLQJMRLQWORFNLQJDQGVRRQLQDQ DPD]LQJZD\ ([UXQQLQJDQGZDONLQJHJRQGLIIHUHQWVXUIDFHV ([MXPSLQJHJWKURXJKZDOOVWUHHVHWF ([IO\LQJHJWKURXJKVSDFH ([HQGXULQJSDLQHJDEVRUELQJSXQFKHVNLFNVDQGVRRQLQDQ DPD]LQJZD\ ([XVLQJH[WUHPHO\DGYDQFHGKLWHFKZHDSRQV ([KHDOLQJHJZLWKVSHFLDOHQHUJ\HWF ([HQWHULQJHJLQWRGLIIHUHQWGLPHQVLRQVRIVSDFH ([ VHQVLQJ HJ LQ H[WUDRUGLQDU\ ZD\V WKURXJK VSDFH DQG WLPH HWF ([ZHDULQJKLWHFKVXLWVIRUGHIHQVLYHDQGRIIHQVLYHSXUSRVHVHJ OLNHDKLWHFKDUPRU ²,QUHODWLRQWRWKHPHQWDOGLPHQVLRQ ([WKHDELOLW\WRUHOD[WKHPDUWLDOERG\LQDZD\WKDWFXUUHQWKXPDQV FDQQRW ([WKHDELOLW\WRFRQFHQWUDWHWKHPDUWLDOPLQGLQDZD\WKDWFXUUHQW KXPDQVDUHQRWDFFXVWRPHGWR ([WKHDELOLW\WREUHDWKHDQGEHWLPHO\LQSUHSDULQJWKHPDUWLDOERG\ IRUILJKWLQJLQDZD\WKDWFXUUHQWKXPDQVDUHQRWJRRGDW
7KH3RVW0DUWLDO)ORDWLQJ0LQG ²([WKHPLQGZLWKRXWWKHKXPDQERG\ ²([WKHTXHVWIRUVSLULWXDOLW\EH\RQGPDUWLDODUWV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
7DEOH7KUHH*UHDW)XWXUH7UDQVIRUPDWLRQVRIWKH0DUWLDO%RG\ 3DUW,, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH H[DPSOHV LQ WKH FDWHJRULHV DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH DQG WKH FRPSDULVRQ LV UHODWLYH QRW DEVROXWH QRU DUH WKH\ QHFHVVDULO\ PXWXDOO\ H[FOXVLYH $QG VRPH FDQ EH HDVLO\ UHFODVVLILHG HOVHZKHUH$VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFH)URP6HFRI)3+0$6HHWH[WIRUFLWDWLRQV
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH7KUHH*UHDW)XWXUH7UDQVIRUPDWLRQVRIWKH6H[XDO%RG\ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 9LUWXDO3OHDVXUH ²([YLUWXDO6H[ ²([YLUWXDO5HFDOO
7KH+\SHU6H[XDO%RG\ ²,QUHODWLRQWRWKHSK\VLFDOGLPHQVLRQ ([ WKH DELOLW\ WR SHUIRUP GLIIHUHQHW VH[XDO SRVLWLRQV ZLWKRXW WKH YDULRXVSK\VLFDOOLPLWDWLRQVWKDWKXPDQVFXUUHQWO\KDYH ([WKHDELOLW\WRSURGXFHXQXVXDODPRXQWRIVH[XDOHQHUJ\WRHQGXUH LQVH[XDODFWVLQDZD\WKDWKXPDQVFXUUHQWO\FDQQRW ([WKHDELOLW\WRHQJDJHLQPXOWLSOHVH[XDOH[SHULHQFHVFRPSDUDEOH WR EXW GLIIHUHQW IURP QRQKXPDQ VH[XDOLW\ HJ KHUPDSKURGLWH PRQRHFLRXV VH[VZLWFKLQJ DQG PDQ\ RWKHU W\SHV WKDW FXUUHQW KXPDQVFDQQRW ²,QUHODWLRQWRWKHPHQWDOGLPHQVLRQ ([WKHDELOLW\WRUHOD[WKHVH[XDOERG\LQDZD\WKDWFXUUHQWKXPDQV DUHQRWDFFXVWRPHGWR ([WKHDELOLW\WRFRQFHQWUDWHWKHVH[XDOPLQGLQDZD\WKDWFXUUHQW KXPDQVDUHQRWJRRGDW ([WKHDELOLW\WREUHDWKHDQGEHSDWLHQWLQSUHSDULQJWKHVH[XDOERG\ IRUVH[XDOLW\LQDZD\WKDWFXUUHQWKXPDQVDUHQRWDEOHWR
7KH3RVW6H[XDO)ORDWLQJ0LQG ²([WKHPLQGZLWKRXWWKHKXPDQERG\ ²([WKHTXHVWIRUVSLULWXDOLW\EH\RQGVH[XDOLW\ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH H[DPSOHV LQ WKH FDWHJRULHV DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH DQG WKH FRPSDULVRQ LV UHODWLYH QRW DEVROXWH QRU DUH WKH\ QHFHVVDULO\ PXWXDOO\ H[FOXVLYH $QG VRPH FDQ EH HDVLO\ UHFODVVLILHG HOVHZKHUH$VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFH)URP6HFRI)3+66HHWH[WIRUPRUHLQIR
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
7DEOH7KH7ULQLW\RI3UH0RGHUQLW\ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
3UH)UHH6SLULWHG3UH0RGHUQLW\3UH0RGHUQLVP DQG ,WV,QWHUQDO6SOLW ²&RPSHWLQJ ZRUOGYLHZV DQG YDOXHV ERWK ZLWKLQ DQG EHWZHHQ OLQHDU FHQWULFHJ,VODPLF&KULVWLDQ-XGDLF,PSHULDO5RPDQ DQGF\FOLFDO FHQWULFHJ&RQIXFLDQ7DRLVW+LQGXDQG%XGGKLVW RULHQWDWLRQV ²&RPSDUHPRGHUQLVPZLWKSUHPRGHUQLVPKHUHLQUHODWLRQWRWKHVHYHQ GLPHQVLRQV RI KXPDQ H[LVWHQFH OLNH WKH WUXH DQG WKH KRO\ HJ GLIIHUHQW YHUVLRQV RI HSLVWHPLF GRJPDV DQG UHOLJLRXV VXSHUVWLWLRQV WKH HYHU\GD\ DQG WKH WHFKQRORJLFDO HJGLIIHUHQW YHUVLRQV RI QRQ WHFKQRSKLOLVP DQG QRQFRQVXPHULVP WKH EHDXWLIXOVXEOLPH HJ GLIIHUHQW YHUVLRQV RI DHVWKHWLF QRQDXWRQRP\ DQG WKH JRRG DQG WKH MXVWHJGLIIHUHQWYHUVLRQVRIPRUDOSDUWLFXODULVP 3UH&DSLWDOLVW3UH0RGHUQLW\3UH0RGHUQL]DWLRQ DQG ,WV2ZQ'LVFRQWHQWV ²&RPSHWLQJ YHUVLRQV RI VRFLHWDO DUUDQJHPHQWV HJ IHXGDOLVP PRQDUFKLVPDQGWKHKRO\RUGHU +HJHPRQLF3UH0RGHUQLW\DQG,WV&RXQWHUYDLOLQJ)RUFHV ²'LIIHUHQWSRZHUFHQWHUVDQGWKHLUHQHPLHVHJWKH5RPDQ(PSLUH DQGWKH³EDUEDULDQKRUGHV´WKH³+RO\&UXVDGHV´DQGWKH0XVOLPVWKH 0LGGOH .LQJGRP DQG WKH LQYDGLQJ WULEHV GLIIHUHQW VRFLDO FDVWHV LQ ,QGLDDQGZDUULQJ*UHHNFLW\VWDWHV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH H[DPSOHV LQ HDFK FDWHJRU\ DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH QRU QHFHVVDULO\ PXWXDOO\ H[FOXVLYH DQG WKH FRPSDULVRQ LV UHODWLYHQRWDEVROXWH $VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV$OVRLWGRHV QRWPDWWHUZKDWWKH³EDVH´HUDLVLQWKHDQDO\VLVRIDQ\WULQLW\$QGLQWKH SUHVHQW FRQWH[W WKH ³EDVH´ HUD LV PRGHUQLW\ IRU LQVWDQFH ZLWK LWV ³IUHH VSLULWHG PRGHUQLW\´ DQG WKH RWKHU WZR SDUWV 6R IRU SUHPRGHUQLW\ WKH WULQLW\ WDNHV WKH IRUP RI VD\ ³SUHIUHHVSLULWHG SUHPRGHUQLW\´ WRJHWKHU ZLWKWKHRWKHUWZRSDUWV 6RXUFHV)URP&KRI%&,9DQGDOVRWKHYROXPHVRI)+&
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH7KH7ULQLW\RI0RGHUQLW\ 3DUW, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
)UHH6SLULWHG0RGHUQLW\0RGHUQLVP DQG,WV,QWHUQDO6SOLW ²2QWKH7UXHDQGWKH+RO\ 7KH IUHHGRP IURP WKH GRJPDV RI WKH SDVW WR WKH EHWWHU XQGHUVWDQGLQJRIDQGXQLRQZLWKWKHZRUOGDQGVHOI&KRI)+& $OWHUQDWLYHGLVFRXUVHVDERXWWKHWUXHHJDQWLVFLHQFHGLVFRXUVHV DQGWKHKRO\QRQPDLQVWUHDPWKHRORJLHV &KRI)+& ²2QWKH7HFKQRORJLFDODQGWKH(YHU\GD\ 7KH IUHHGRP IURP OLIH KDUVKQHVV WR WKH KLJKHU WHFKQRSKLOLF FRQVXPHULVWLFOLIHIRUP&KRI)+& $OWHUQDWLYH GLVFRXUVHV DERXW WKH HYHU\GD\ HJ WUDQVFHQGHQWDO PLQGVHWV DQGWKHWHFKQRORJLFDOHJ$UFDGLDQLVP &KRI)+& ²2QWKH*RRGDQGWKH-XVW 7KH IUHHGRP IURP WKH WKHRDULVWRFUDWLF W\UDQQ\ WR WKH PRUDO XQLYHUVDOLW\IRUDMXVWVRFLHW\&KRI)+& $OWHUQDWLYH GLVFRXUVHV DERXW WKH MXVW HJ &RPPXQLVP $QDUFKLVP DQG WKH JRRG HJ 1D]LVP)DVFLVP DQG =DUDWKXVWULDQLVP &KVRI)+& ²2QWKH%HDXWLIXODQGWKH6XEOLPH 7KHIUHHGRPIURPWKHH[WHUQDOGLVWRUWLRQRIDHVWKHWLFSOHDVXUHWRWKH ERXQGOHVVLQILQLW\RIWRWDOLW\LQDUWLVWLFDXWRQRP\&KRI)+& $OWHUQDWLYHGLVFRXUVHVDERXWWKHEHDXWLIXOVXEOLPHHJNLWVFKDQG KLVWRULFDODYDQWJDUGLVP &KRI)+& &DSLWDOLVW0RGHUQLW\0RGHUQL]DWLRQ DQG,WV2ZQ'LVFRQWHQWV ²'XULQJWKH,QGXVWULDO5HYROXWLRQ ([0DU[RQWKHLQVWLWXWLRQRILQHTXDOLW\&KRI)+& ²'XULQJWKH0RGHUQ5DWLRQDO,QVWUXPHQWDO(SRFK ([:HEHURQWKHSROLWLFVRIVRIWOLEHUDOLQVWLWXWLRQV&KRI)+& ²'XULQJWKH*UHDW'HSUHVVLRQ ([.H\QHVRQWKHP\WKRIWKHIUHHPDUNHW&KVRI)+& ²'XULQJWKH&ROG:DU ([/DVFKRQWKHQDUFLVVLVWLFFXOWXUHLQGXVWU\&KVRI)+& BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
7DEOH7KH7ULQLW\RI0RGHUQLW\ 3DUW,, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB +HJHPRQLF0RGHUQLW\DQG,WV&RXQWHUYDLOLQJ)RUFHV ²7KH/HJDFLHVRI&RORQLDOLVPDQG,PSHULDOLVP ([(XURSHDQFRORQL]DWLRQRIPRVWRIWKHPRGHUQZRUOG&KRI )+& ²7KH6WUXJJOHIRU'HFRORQLDOL]DWLRQ ([7KHFRXQWHUYDLOLQJIRUFHVRIUHVHQWPHQWUHFKDQWPHQW DQGUHJLRQDOLVP&KV RI)+& BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH H[DPSOHV LQ HDFK FDWHJRU\ DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH QRU QHFHVVDULO\ PXWXDOO\ H[FOXVLYH DQG WKH FRPSDULVRQ LV UHODWLYHQRWDEVROXWH $VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFHV)URPWKHYROXPHVRI)+&²DQGDOVRIURP)&'
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH7KH7ULQLW\RI3RVW0RGHUQLW\ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB )UHH6SLULWHG3RVWPRGHUQLW\3RVWPRGHUQLVP DQG,WV,QWHUQDO6SOLW ²2QWKH7UXHDQGWKH+RO\ 3RVWPRGHUQSHUIRUPDWLYHWXUQIRUNQRZLQJDQGLWVHQHPLHV&KRI )+& 3RVWPRGHUQFRPSDUDWLYHWKHRORJ\DQGLWVRSSRQHQWV&KRI)+& ²2QWKH7HFKQRORJLFDODQGWKH(YHU\GD\ 3RVWPRGHUQ FRUSRUDWH WHFKQRORJLFDO PLQGVHW DQG LWV DGYHUVDULHV &KRI)+& 3RVWPRGHUQSRVWPDWHULDOLVPDQGLWVFULWLFV&KRI)+& ²2QWKH*RRGDQGWKH-XVW 3RVWPRGHUQSROLWLFVRIGLIIHUHQFHDQGLWVIRHV&KRI)+& ²2QWKH%HDXWLIXODQGWKH6XEOLPH 3RVWPRGHUQGHFRQVWUXFWLRQDQGLWVGLVVHQWHUV&KRI)+& &DSLWDOLVW3RVWPRGHUQLW\3RVWPRGHUQL]DWLRQ DQG,WV2ZQ 'LVFRQWHQWV ²'XULQJWKH3RVW&ROG:DUDQG%H\RQG ([ SRVW)RUGLVP DQG LWV VKRUWFRPLQJV &K RI )+& &KV RI )&' +HJHPRQLF3RVWPRGHUQLW\DQG,WV&RXQWHUYDLOLQJ)RUFHV ²7KH'HEDWHRQWKH*OREDO9LOODJH ([XQLFLYLOL]DWLRQDOLVPYVPXOWLFLYLOL]DWLRQDOLVP&KRI)+& ²7KH5HVLVWDQFH0RYHPHQW ([ UHFKDQWPHQW DQG WKH SROLWLFV RI FLYLOL]DWLRQDO FODLPV HJ ,VODPLF &RQIXFLDQ DQG RWKHU HWKRV LQ UHODWLRQ WR WKH 6DPH &K RI)+&&KRI)&' ([ UHVHQWPHQW DQG WKH SROLWLFV RI UHVXUJHQFH HJ WKH ULVLQJ &KLQHVHVXSHUSRZHUWKHJURZLQJ(8DQGRWKHUSOD\HUVLQUHODWLRQ WRWKH86DQGKHUDOOLHV &KRI)+&&KRI)&' ([ UHJLRQDOLVP DQG WKH SROLWLFV RI LQHTXDOLW\ HJ WUDQV RU LQWHU QDWLRQDO EORFV WKH 1RUWK6RXWK GLYLGH 1*2¶V &K RI )+& &KRI)&' BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH H[DPSOHV LQ HDFK FDWHJRU\ DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH QRU QHFHVVDULO\ PXWXDOO\ H[FOXVLYH DQG WKH FRPSDULVRQ LV UHODWLYHQRWDEVROXWH $VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFHV)URP)&'DQGWKHYROXPHVRI)+&
&KDSWHU,QWURGXFWLRQ²7KH%HDXW\RI3HUIRUPLQJ$UWV
7DEOH7KH7ULQLW\RI$IWHU3RVWPRGHUQLW\ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB )UHH6SLULWHG$IWHU3RVWPRGHUQLW\$IWHU3RVWPRGHUQLVP DQG ,WV,QWHUQDO6SOLW ²7KHGLVFRXUVHRIQDNHGFRQWLQJHQF\&KRI)&'&KRI)3+& 3RVW&DSLWDOLVW$IWHU3RVWPRGHUQLW\$IWHU3RVWPRGHUQL]DWLRQ DQG,WV2ZQ'LVFRQWHQWV ²'LIIHUHQWYHUVLRQVRISRVWFDSLWDOLVPDQGSRVWGHPRFUDF\DQG WKHLUHQHPLHV&KRI)&'&KVRI)3+& +HJHPRQLF$IWHU3RVWPRGHUQLW\DQG,WV&RXQWHUYDLOLQJ)RUFHV ²7KH&\FOLFDO3URJUHVVLRQRI+HJHPRQ\LQ0XOWLYHUVHV&KVRI )&'&KRI)3+& BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH H[DPSOHV LQ HDFK FDWHJRU\ DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH QRU QHFHVVDULO\ PXWXDOO\ H[FOXVLYH DQG WKH FRPSDULVRQ LV UHODWLYHQRWDEVROXWH $VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFHV)URP)&'DQGDOVR)+&
3$577:2 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 7KH%RG\
&+$37(5 7+(%2'LQ WKH UXOH@ DUH REWDLQHG E\ FRPELQLQJ UHVXOWV IURP WZR GLIIHUHQW VWXGLHV ZKLFK SRVVLEO\ FDQQRW EH FRPELQHG´ ³,W UHODWHV RQO\ WR WKH FRPPXQLFDWLRQ RI SRVLWLYH YHUVXV QHJDWLYH HPRWLRQV´ ³,WUHODWHVRQO\WRZRPHQDVPHQGLGQRWSDUWLFLSDWHLQWKHVWXG\´ ³2WKHUW\SHVRIQRQYHUEDOFRPPXQLFDWLRQHJERG\SRVWXUHZHUHQRW LQFOXGHGLQWKHVWXGLHV´ 6XUHO\WKHUHFDQEHRWKHUSUREOHPVLQWKHWZRVWXGLHVEXWWKHVHILYHDUH LOOXVWUDWLYHHQRXJKIRUWKHSUHVHQWSXUSRVH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7KLUGO\VWLOODQRWKHUPDLQFULWLFLVPRIWKHXVHRIIDFLDOH[SUHVVLRQVLQ SHUIRUPLQJ DUWV LV WKDW WKH HYLGHQFHV VR IDU LQ WKH OLWHUDWXUH DUH UDWKHU LQFRQVLVWHQW )RULQVWDQFH³RWKHUVWXGLHVKDYHDQDO\]HGWKHUHODWLYHFRQWULEXWLRQRI YHUEDO DQG QRQYHUEDO VLJQDOV«2QH LQ XVLQJ YLGHR WDSHV VKRZQ WR WKHVXEMHFWVDQDO\]HGWKHFRPPXQLFDWLRQRIVXEPLVVLYHGRPLQDQWDWWLWXGH DQG IRXQG WKDW DOO W\SHV RI QRQYHUEDO FXHV FRPELQHG²HVSHFLDOO\ ERG\ SRVWXUH²KDG WLPHV WKH HIIHFW RI YHUEDO FXHV 2Q WKH RWKHU KDQG DQRWKHU LQ GHDOLQJ ZLWK WKH FRPPXQLFDWLRQ RI KDSS\VDG PRRG IRXQGWKDWKHDULQJZRUGVVSRNHQLQD IODW YRLFHZDVDERXWWLPHVPRUH LQIOXHQWLDO WKDQ IDFLDO H[SUHVVLRQV VHHQ LQ D ILOP ZLWK QR VRXQG 7KXV GLIIHUHQW VWXGLHV PD\ UHDFK YHU\ GLIIHUHQW FRQFOXVLRQV GHSHQGHQW RQ PHWKRGRORJ\´:.]0$UJ\OH&+VHH $QG IRXUWKO\ RQH DGGLWLRQDO PDLQ FULWLFLVP RI WKH XVH RI IDFLDO H[SUHVVLRQV LQ SHUIRUPLQJ DUWV LV WKDW WKHUH DUH GLIIHUHQW ZD\V RU LQWHUSUHWDWLRQV DERXWWKHXVHRIIDFLDOH[SUHVVLRQVLQSHUIRUPLQJDUWV )RULQVWDQFHLQWKH,QGLDQH[DPSOHDIRUHFLWHG ³WKHH[SUHVVLRQVXVHG LQ .XGL\DWWDP RU .DWKDNDOL DUH H[WUHPHO\ H[DJJHUDWHG WKHDWULFDO H[SUHVVLRQV7KHRSSRVLWHRIWKLVLQWHUSUHWDWLRQLV%DODVDUDVZDWKL VVFKRRO RIVXEWOHDQGXQGHUVWDWHGDEKLQD\DRIWKHGHYDGDVLV´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
&KDSWHU7KH%RG\ZLWK/LPLWV
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³WKH H[SUHVVLRQV XVHG LQ .XGL\DWWDP RU .DWKDNDOL DUH H[WUHPHO\H[DJJHUDWHGWKHDWULFDOH[SUHVVLRQV´ WKHUHLVUHODWLYHQHVVHJ ZKDWLVDSSURSULDWHIRUWKHH[SUHVVLRQVXVHGLQ.XGL\DWWDPRU.DWKDNDOLWR EH ³H[WUHPHO\ H[DJJHUDWHG´ LV QRW QHFHVVDULO\ VR IRU ³%DODVDUDVZDWKL V VFKRRO´ ZKLFK LQVWHDG XVH ³VXEWOH DQG XQGHUVWDWHG DEKLQD\D RI WKH GHYDGDVLV´ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH SUHGLFWDELOLW\XQSUHGLFWDELOLW\ SULQFLSOH LI WKHUH LV SUHGLFWDELOLW\HJWKHSUHGLFWDEOHWHQGHQF\RIWKHWKUHHHOHPHQWVWRRFFXU LQ DQ\ IDFHWRIDFH FRPPXQLFDWLRQ WKHUH LV XQSUHGLFWDELOLW\ HJ WKH PRUH GLIILFXOW WDVN WR SUHGLFW H[DFWO\ WKH H[WHQW WR ZKLFK WKH ZHLJKW RI HDFK RI WKH WKUHH HOHPHQWV LQ DQ\ IDFHWRIDFH FRPPXQLFDWLRQ ZLOO EH LQ DQ\ SDUWLFXODU FRQYHUVDWLRQ LQ OLJKW RI WKH FRQIOLFWLQJ LQFRQVLVWHQW ILQGLQJV RQ QRQYHUEDO FRPPXQLFDWLRQ $QG WKH UHYHUVH GLUHFWLRQ DOVR KROGVWUXH ,Q UHODWLRQ WR WKH H[SOLFDELOLW\LQH[SOLFDELOLW\ SULQFLSOH LI WKHUH LV H[SOLFDELOLW\ HJ WKH H[SODQDWLRQ WKDW WKH 5DVD PHWKRG LV TXLWH GLYHUVH EHFDXVHWKHUHDUHGLIIHUHQWVFKRROVDERXWWKHZD\VLQZKLFKUDVDVDUHWREH XVHG LQ ,QGLDQ SHUIRUPLQJ DUWV WKHUH LV LQH[SOLFDELOLW\ HJ WKH ODFN RI VXIILFLHQW H[SODQDWLRQ RI ZKLFK ZD\V DUH PRUH SUHIHUDEOH WKDQ RWKHUV RQ DQ\SDUWLFXODURFFDVLRQRUZK\WKH5DVDPHWKRGLVQHFHVVDULO\GHVLUDEOHDW DOO ZKHQ FRQWUDVWHG ZLWK RWKHUV LQ GLIIHUHQW FXOWXUHV OLNH WKH :HVWHUQ RQH $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH ILFWLRQUHDOLW\ SULQFLSOH LI WKHUH LV ILFWLRQ HJ WKH ILFWLRQDODVSHFWRI³WKHUXOH´ZKHQLWVDGYRFDWHVH[DJJHUDWH E\FODLPLQJWKDW³QRQYHUEDOHOHPHQWVLQDOOVHQVHVFRQYH\WKHEXONRIWKH PHVVDJH´ EHFDXVH ³WKLV LV KRZ KLV >0HKUDELDQ¶V@ FRQFOXVLRQV DUH IUHTXHQWO\PLVLQWHUSUHWHG´ WKHUHLVUHDOLW\HJWKHUHDOLVWLFDVSHFWRI³WKH UXOH´ ZKHQ LW LV FRUUHFWO\ LQWHUSUHWHG WKDW ³WKLV DQG RWKHU HTXDWLRQVUHJDUGLQJUHODWLYHLPSRUWDQFHRIYHUEDODQGQRQYHUEDOPHVVDJHV ZHUH GHULYHG IURP H[SHULPHQWV GHDOLQJ ZLWK FRPPXQLFDWLRQV RI IHHOLQJV DQGDWWLWXGHV´VR³XQOHVVDFRPPXQLFDWRULVWDONLQJDERXWWKHLUIHHOLQJVRU
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
DWWLWXGHV WKHVH HTXDWLRQV DUH QRW DSSOLFDEOH´ $QG WKH UHYHUVH GLUHFWLRQ DOVRKROGVWUXH ,Q UHODWLRQ WR WKH ILQLWHQHVVWUDQVILQLWHQHVV SULQFLSOH LI WKHUH LV ILQLWHQHVVHJWKHILQLWHQXPEHURI³WKHUXOH´ZLWKHDFKRI WKH WKUHH QXPEHUV IRU HDFK RI WKH WKUHH HOHPHQWV LQ DQ\ IDFHWRIDFH FRPPXQLFDWLRQ WKHUHLVWUDQVILQLWHQHVVHJWKHWUDQVILQLWHQXPEHURIDOO WKHSRVVLEOHFRQYHUVDWLRQVDPRQJKXPDQVLQKLVWRU\ZKLFKFDQEHVWXGLHG E\ UHVHDUFK RQ IDFHWRIDFH FRPPXQLFDWLRQ $QG WKH UHYHUVH GLUHFWLRQ DOVRKROGVWUXH ,Q UHODWLRQ WR WKH SUHFLVHQHVVYDJXHQHVV SULQFLSOH LI WKHUH LV SUHFLVHQHVVHJWKHSUHFLVHLGHQWLILFDWLRQRI³WKHUXOH´IRU HDFK RI WKH WKUHH HOHPHQWV LQ DQ\ IDFHWRIDFH FRPPXQLFDWLRQ WKHUH LV YDJXHQHVVHJWKHYDJXHQHVVLQWKHLGHQWLILFDWLRQRI ³WKH UXOH´VLQFHLWLVQRWFOHDUZK\WKHUHPXVWEHWKHVHQXPEHUVVRH[DFWO\DV WKHFULWLFVSRLQWHGRXWWKDW³WKHILJXUHVDUHREWDLQHGE\FRPELQLQJUHVXOWV IURPWZRGLIIHUHQWVWXGLHVZKLFKSRVVLEO\FDQQRWEHFRPELQHG´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³EDVHGRQWKHMXGJPHQWRIWKHPHDQLQJRIVLQJOHWDSHUHFRUGHG ZRUGVLHDYHU\DUWLILFLDOFRQWH[W´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
&KDSWHU7KH%RG\ZLWK/LPLWV
H[LVWHQFHRIGLIIHUHQWSUREOHPVLQWKHHYHU QHZ ZD\VWR XQGHUVWDQG QRQ YHUEDO FRPPXQLFDWLRQ DV VKRZQ LQ WKH SUREOHPV LQ WKH VWXGLHV E\ 0HKUDELDQ DV SRLQWHG RXW E\ WKH FULWLFV $QG WKH UHYHUVH GLUHFWLRQ DOVR KROGVWUXH ,QUHODWLRQWRWKHRUGHUFKDRVSULQFLSOHLIWKHUHLVRUGHUHJWKHPRUH RU OHVV RUGHUO\ SDWWHUQ RI D IDFHWRIDFH FRPPXQLFDLWRQ ZKHQ WKH WKUHH HOHPHQWV PRYH LQ WKH VDPH GLUHFWLRQ DQG VXSSRUW HDFK RWKHU WKHUH LV FKDRV HJ WKH PRUH RU OHVV FKDRWLF SDWWHUQ RI D IDFHWRIDFH FRPPXQLFDLWRQ ZKHQ WKH WKUHH HOHPHQWV PRYH LQ FRQIOLFWLQJ GLUHFWLRQV DQGGRQRWVXSSRUWHDFKRWKHU $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH VORZQHVVTXLFNQHVV SULQFLSOH LI WKHUH LV VORZQHVV HJ WKH UHODWLYHO\ VORZHU VSHHG RI FHUWDLQ HPRWLRQV OLNH ³IHDU DQG VXUSULVH´ WR EH FRUUHFWO\ LGHQWLILHG LQ WKH VWXGLHV E\ (NPDQ WKHUH LV TXLFNQHVV HJ WKH UHODWLYHO\ IDVWHU VSHHG RI FHUWDLQ HPRWLRQV OLNH ³MR\´ DQG ³DQJHU´ WR EH FRUUHFWO\ LGHQWLILHG LQ WKH VWXGLHV E\ (NPDQ $QG WKH UHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHH[SDQVLRQFRQWUDFWLRQSULQFLSOHLIWKHUHLVH[SDQVLRQ HJWKHUHODWLYHO\PRUHGHYHORSHGDELOLW\RIDQDFWRULQWKH5DVDPHWKRG WR FRQYH\ ³ HPSDWKHWLF HPRWLRQV´ ZLWK KLV IDFLDO H[SUHVVLRQV WKHUH LV FRQWUDFWLRQ HJ WKH UHODWLYHO\ OHVV GHYHORSHG DELOLW\ RI DQ DFWRU LQ WKH 5DVDPHWKRGWREHFRPH³DOLYLQJEUHDWKLQJHPERGLPHQWRIDFKDUDFWHU´ QRW MXVW WR FRQYH\ ³HPRWLRQ´ DV LV WKH FDVH LQ WKH :HVWHUQ 6WDQLVODYVNL PHWKRG :.DD $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH WKHRU\SUD[LV SULQFLSOH LI WKHUH LV WKHRU\ HJ WKH WKHRUHWLFDOFRQVWUXFWLRQRI³UDVD´LQ,QGLDQDHVWKHWLFV WKHUHLVSUD[LVHJ WKH SUDFWLFDO DSSOLFDWLRQ RI ³UDVD´ LQ ,QGLDQ DHVWKHWLFV WR WKH ILHOG RI ,QGLDQSHUIRUPLQJDUWVOLNHWKH,QGLDQFODVVLFDOGDQFHDQGWKHDWUHVXFKDV WKH RQHV RI %KDUDWDQDW\DP NDWKDN .XFKLSXGL 2GLVVL 0DQLSXUL .XGL\DWWDP .DWKDNDOL DQG RWKHUV $QG WKH UHYHUVH GLUHFWLRQ DOVR KROGV WUXH ,QUHODWLRQWRWKHFRQYHQWLRQQRYHOW\SULQFLSOHLIWKHUHLVFRQYHQWLRQ HJ WKH FRQYHQWLRQDO ZLVGRP RI ,QGLDQ SHUIRUPLQJ DUWV DV VKRZQ LQ 5XNPLQL 'HYL V SXULWDQLVWLF LQWHUSUHWDWLRQV DQG DSSOLFDWLRQV RI 6ULQJDUD UDVD WKHUH LV QRYHOW\ HJ WKH DOWHUQDWLYH QRYHO FKDOOHQJH WR WKH FRQYHQWLRQDO ZLVGRP RI ,QGLDQ SHUIRUPLQJ DUWV E\ WKH QHZ LGHD RI %DODVDUDVZDWKL V VFKRRO RI VXEWOH DQG XQGHUVWDWHG DEKLQD\D RI WKH GHYDGDVLV´ZKLFK³FRQGHPQHG5XNPLQL'HYL VSXULWDQLVWLFLQWHUSUHWDWLRQV DQG DSSOLFDWLRQV RI 6ULQJDUD UDVD´ $QG WKH UHYHUVH GLUHFWLRQ DOVR KROGV WUXH ,Q UHODWLRQ WR WKH HYROXWLRQWUDQVIRUPDWLRQ SULQFLSOH LI WKHUH LV HYROXWLRQ HJ WKH QDWXUDO HYROXWLRQ RI KXPDQV WR GDQFH DURXQG LQ WKH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
VWDWHRIQDWXUHDOEHLWLQDSULPLWLYHZD\ WKHUHLVWUDQVIRUPDWLRQHJWKH WHFKQLFDO WUDQVIRUPDWLRQ RI KXPDQ DELOLW\ WR GDQFH E\ WKH LQYHQWLRQ RI V\VWHPDWLF PHWKRGV OLNH WKH ,QGLDQ 5DVD PHWKRG DQG WKH :HVWHUQ 6WDQLVODYVNLPHWKRG $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHV\PPHWU\DV\PPHWU\SULQFLSOHLIWKHUHLVV\PPHWU\ HJWKHH[LVWHQFHRIGLIIHUHQWZD\VRIGRLQJWKHDWUH WKHUHLVDV\PPHWU\ HJWKHSRSXODULW\RIWKH5DVDPHWKRGLQ,QGLDQSHUIRUPLQJDUWV²EXWWKH SRSXODULW\ RI WKH 6WDQLVODYVNL PHWKRG LQ :HVWHUQ SHUIRUPLQJ DUWV $QG WKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHVRIWQHVVKDUGQHVVSULQFLSOHLIWKHUHLVVRIWQHVVHJ WKHDSSUHFLDWLRQRI0HKUDELDQ¶VILQGLQJVRQQRQYHUEDOFRPPXQLFDWLRQDV VKRZQ LQ WKHLU DGRSWLRQ E\ KLV DGYRFDWHV ³WKURXJKRXW KXPDQ FRPPXQLFDWLRQVHPLQDUVZRUOGZLGH´ WKHUHLVKDUGQHVVHJWKHFULWLTXH RI 0HKUDELDQ¶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¶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³HDFK UDVD DFFRUGLQJ WR 1ƗW\DVƗVWUD KDV D SUHVLGLQJ GHLW\´²EXW WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI WKH 6WDQLVODYVNL PHWKRG LQ :HVWHUQ SHUIRUPLQJ DUWV IRU D UHODWLYHO\ PRUH VHFXODU
&KDSWHU7KH%RG\ZLWK/LPLWV
ZRUOGYLHZ ZLWKRXW DQ\ FRQQHFWLRQ WR D SUHVLGLQJ GHLW\ :. DD $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH $QG LQ UHODWLRQ WR WKH VWDELOLW\UHDFWLRQ SULQFLSOH LI WKHUH LV VWDELOLW\ HJ WKH UHODWLYHO\ PRUH VWDEOH FRQGLWLRQ RI WKH 5DVD PHWKRG ZKHQ ³%KDUDWD 0XQL HQXQFLDWHG WKH HLJKW 5DVDV LQ WKH 1ƗW\DVƗVWUD DQ DQFLHQW ZRUN RI GUDPDWLF WKHRU\´ DQG LW LV UHDG\ IRU XVH E\ RWKHUV WKHUH LV UHDFWLRQHJWKH5DVDPHWKRGKDVVLQFHWKHQXQGHUJRQHIXUWKHUFKDQJHV RYHUWKHDJHVDVGLIIHUHQWVFKRROVLQ,QGLDJLYHLWDGLIIHUHQWLQWHUSUHWDWLRQ OLNH WKH GLIIHUHQW RSSRVLQJ RQHV RI %KDUDWDQDW\DP NDWKDN .XFKLSXGL 2GLVVL 0DQLSXUL .XGL\DWWDP .DWKDNDOL DQG RWKHUV $QG WKH UHYHUVH GLUHFWLRQDOVRKROGVWUXH
7KH%RG\0DNHXSDQG7KHDWUH $QRWKHU ZD\ WR HYDOXDWH WKH SRVVLELOLW\ DQG GHVLUDELOLW\ RI WKH ERG\ IURP WKH SHUVSHFWLYH RI WKH PLQG LV WR H[SORUH WKH ERG\ PDNHXS DQG WKHDWUH 7KH ZRUG³PDNHXS´LQWKHFRQWH[WRISHUIRUPLQJDUWVUHIHUVWRWKDW ZKLFK LV XVHG ³WR DVVLVW LQ FUHDWLQJ WKH DSSHDUDQFH RI WKH FKDUDFWHUV WKDW DFWRUVSRUWUD\´:.J 7KHDWUH PDNHXS KDV FRPH D ORQJ ZD\ LQGHHG )RU LQVWDQFH LQ WKH ROGHUGD\VWKHDWUHPDNHXSZDVFRQILQHGZLWKLQ³RQHRYHUDOOIDFHFRORU´ ZKLFKKDVHYROYHGVLQFHWKHQWR³DPXOWLGLPHQVLRQDOFUDIW´RIWRGD\:. J 7KLV HYROXWLRQ KDV PXFK WR GR ZLWK WKH DGYDQFH LQ WHFKQRORJ\ IRU LQVWDQFH ³RULJLQDOO\ WKHDWUHV XVHG FDQGOHV DQG RLO ODPSV WKHVH WZR VRXUFHV RI OLJKW ZHUH GLP DQG DOORZHG IRU FUXGH XQUHDOLVWLF PDNHXS DSSOLFDWLRQV 2QFH JDV OLJKWLQJ OLPHOLJKW DQG HOHFWULF OLJKW ZHUH LQWURGXFHG WR WKHDWUHV D QHHG HPHUJHG IRU QHZ PDNHXS PDWHULDOV DQG PRUH VNLOOIXO DSSOLFDWLRQ WHFKQLTXHV ,Q /XGZLJ /HLFKQHU D :DJQHULDQ RSHUD VLQJHU EHJDQ FRPPHUFLDOO\ SURGXFLQJ D QRQWR[LF JUHDVHSDLQW VWLFN HDVLQJ WKH DSSOLFDWLRQ RI PDNHXS´ :. J %2( 7KHDWUH PDNHXS KDV WKXV PDGH PDMRU DGYDQFHV LQ LWV KLVWRU\ FRQVLGHUIRULOOXVWUDWLRQWKUHHRIWKHPEHORZ 7KHDWUH0DNHXSDQGWKH$SSDUHQW6KDSH 7KH ILUVW PDMRU DGYDQFH LQ WKHDWUH PDNHXS WR EH LQWURGXFHG KHUH FRQFHUQV³WKHDSSDUHQWVKDSHRIDQDFWRU¶VIDFH´:.J 7KLV FKDQJH LV SRVVLEOH EHFDXVH ³WKURXJK WKH XVH RI PDNHXS VSHFLILFDOO\KLJKOLJKWLQJDQGVKDGLQJWKHDSSDUHQWVKDSHRIDQDFWRU¶VIDFH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
FDQEHFKDQJHG%\KLJKOLJKWLQJWKHIDFH VSURWUXGLQJERQHVWKHIHDWXUHV EHFRPH SURQRXQFHG VKDGRZLQJ FDYLWLHV FDQ DGG GHSWK 6DJJLQJ MRZOV IRUHKHDG ZULQNOHV H\H SRXFKHV DQG SURPLQHQW YHLQV FDQ EH FUHDWHG E\ PDQLSXODWLQJ KLJKOLJKWVDQGVKDGRZV´:.J 5 &RUVRQ0 :HVWPRUH 7KH ZRUG³KLJKOLJKW´DERYHUHIHUVWR ³DEDVH PDNHXSWKDW LVDWOHDVW WZR VKDGHV OLJKWHU WKDQ WKH EDVH ,W LV DSSOLHG RQ WKH EULGJH RI WKH QRVH FKHHNERQHVDQGDUHDVXQGHUWKHH\HVDQGEHORZWKHEURZV:.J 0:HVWPRUH ,Q FRQWUDVW WKH ZRUG ³VKDGRZ´ UHIHUV WR ³D FRORU WZR VKDGHV GHHSHU WKDQ WKH EDVH´ ZKLFK ³SURYLGHV GHSWK DQG GHILQLWLRQ 7KLV GHSWK LV FRPPRQO\XVHGRQWKHH\HVRFNHWVWRWKLQWKHVLGHVRIWKHQRVHWRVKDOORZ WKH FKHHNV DQG WR PLQLPL]H KHDYLQHVV XQGHU WKH FKLQ´ :. J 0 :HVWPRUH 7KHDWUH0DNHXSDQG/LJKWLQJ 7KH VHFRQG PDMRU DGYDQFH LQ WKHDWUH PDNHXS WR EH LQWURGXFHG KHUH FRQFHUQV³OLJKWLQJ´IRUPDNHXS:.J /LJKWLQJ LV LPSRUWDQW IRU WKHDWUH PDNHXS EHFDXVH ³OLJKWLQJ FRQWUROV PDNHXS WR D KLJK GHJUHH 0DNHXS FDQ ORVH LWV HIIHFWLYHQHVV GXH WR LQFRUUHFWVWDJHOLJKWLQJ&RQYHUVHO\VNLOOIXOOLJKWLQJFDQJUHDWO\DLGWKHDUW RI PDNHXS &ORVH FRPPXQLFDWLRQ EHWZHHQ WKH OLJKWLQJ GLUHFWRU DQG WKH PDNHXS DUWLVW LV FUXFLDO IRU WKH EHVW SRVVLEOH HIIHFW´ :. J 9 .HKRH 7KHUHIRUH³XQGHUVWDQGLQJOLJKW VHIIHFWRQPDNHXSDQGYDULRXVVKDGHV DQG SLJPHQWV LV LPSRUWDQW ZKHQ GHVLJQLQJ D SHUIRUPHU¶V PDNHXS 7KH IROORZLQJDUHDPRQJWKHEDVLFUXOHVRIOLJKWQRWKLQJKDVFRORUXQWLOOLJKWLV UHIOHFWHGIURPLWDQREMHFWDSSHDUVEODFNZKHQDOORIWKHOLJKWLVDEVRUEHG DQREMHFWDSSHDUVZKLWHZKHQDOORIWKHOLJKWLVUHIOHFWHG,IFHUWDLQUD\VDUH DEVRUEHGDQGRWKHUVDUHUHIOHFWHGWKHUHIOHFWHGUD\VGHWHUPLQHWKHFRORU´ :.J5&RUVRQ ³3LQN WHQGV WR JUD\ WKH FRRO FRORUV DQG LQWHQVLI\ WKH ZDUP RQHV D@QFHVWRUV WR PRGHUQ KRQH\EHHV´ ZKLFK ³SHUIRUPHG H[FLWDWRU\ PRYHPHQWV´ OLNH ³VKDNLQJ ]LJ]DJJLQJ EX]]LQJ DQG FUDVKLQJ LQWR QHVWPDWHV´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³FRUUHFWO\WUDQVODWH WKHGDQFHODQJXDJH IURPWKH ZDJJOHGDQFHWRVXFFHVVIXOO\IRUDJH´ VLQFH WKH FULWLFV KDG TXHVWLRQHG )ULVFK¶V VWXG\ $QG WKH UHYHUVH GLUHFWLRQ DOVR KROGVWUXH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
,Q UHODWLRQ WR WKH H[SOLFDELOLW\LQH[SOLFDELOLW\ SULQFLSOH LI WKHUH LV H[SOLFDELOLW\ HJ WKH H[SODQDWLRQ E\ )ULVFK WKDW ZDJJOH GDQFH RFFXUV EHFDXVH ³VXFFHVVIXO IRUDJHUV FDQVKDUH ZLWKWKHLUKLYH PDWHVLQIRUPDWLRQ DERXWWKHGLUHFWLRQDQGGLVWDQFHWRSDWFKHVRIIORZHUV\LHOGLQJQHFWDUDQG SROOHQ WR ZDWHU VRXUFHV RU WR QHZ KRXVLQJ ORFDWLRQV´ WKHUH LV LQH[SOLFDELOLW\ HJ WKH ODFN RI VXIILFLHQW H[SODQDWLRQ E\ )ULVFK RI ZK\ ³LQ DQ H[SHULPHQW RQ WKH KRQH\EHH $SLV PHOOLIHUD PRVW LQGLYLGXDOV ZKR WKRURXJKO\ IROORZHG D ZDJJOH GDQFH LJQRUHG WKH UHVRXUFH GLUHFWLRQ DQG ORFDWLRQ LQIRUPDWLRQ´ DQG ³LQVWHDG RI WKH IRUDJHUV UHWXUQHG WR IRUDJLQJ DUHDV WKH\ KDG SUHYLRXV NQRZOHGJH RI´ $QG WKH UHYHUVH GLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH ILFWLRQUHDOLW\ SULQFLSOH LI WKHUH LV ILFWLRQ HJ WKH ILFWLRQDO DVSHFW RI )ULVFK¶V VWXG\ ZKHQ KH ³LQVLVWHG RQ WKH GLUHFW FRQQHFWLRQ EHWZHHQ WKH GDQFH ODQJXDJH DQG WKH ZDJJOH GDQFH´ EXW ³UHFHQWFULWLFLVPKROGVWKDWSRWHQWLDO IRUDJHUVQHHGQRWFRUUHFWO\WUDQVODWH WKHGDQFHODQJXDJHIURPWKHZDJJOHGDQFHWRVXFFHVVIXOO\IRUDJH´ WKHUH LVUHDOLW\HJWKHUHDOLVWLFDVSHFWRI)ULVFK¶VVWXG\ZKHQIRUH[DPSOH³LQ WURSLFDO ]RQHV LQIRUPDWLRQ DERXW IRUDJH ORFDWLRQ PLJKW EH PRUH YDOXDEOH WKDQ LQ WHPSHUDWH ]RQHV´ VR ³WKH GLUHFW FRQQHFWLRQ EHWZHHQ WKH GDQFH ODQJXDJH DQG WKH ZDJJOH GDQFH´ LV VWURQJHU $QG WKH UHYHUVH GLUHFWLRQ DOVRKROGVWUXH ,Q UHODWLRQ WR WKH ILQLWHQHVVWUDQVILQLWHQHVV SULQFLSOH LI WKHUH LV ILQLWHQHVVHJWKHILQLWHQXPEHURIGLIIHUHQWNLQGVRIZDJJOHGDQFHOLNH WKHORQJHUYHUVLRQDQGWKHVKRUWHUYHUVLRQNQRZQDV³URXQGGDQFH´ WKHUH LVWUDQVILQLWHQHVVHJWKHWUDQVILQLWHQXPEHURIDOOWKHKRQH\EHHVZKLFK KDYHHYHUHQJDJHGLQZDJJOHGDQFHLQKLVWRU\ $QGWKHUHYHUVHGLUHFWLRQ DOVRKROGVWUXH ,Q UHODWLRQ WR WKH SUHFLVHQHVVYDJXHQHVV SULQFLSOH LI WKHUH LV SUHFLVHQHVV HJ WKH SUHFLVH LGHQWLILFDWLRQ RI IRXU PDMRU ZD\V LQ ZKLFK ³EHHVWKDWIROORZDZDJJOHGDQFHFDQVXFFHVVIXOO\IRUDJHZLWKRXWGHFRGLQJ WKH GDQFH ODQJXDJH LQIRUPDWLRQ´ LQ WKH DUWLFOH DIRUHFLWHG WKHUH LV YDJXHQHVVHJWKHYDJXHQHVVLQWKHLGHQWLILFDWLRQRIWKHIRXUPDMRUZD\V LQZKLFK³EHHVWKDWIROORZDZDJJOHGDQFHFDQVXFFHVVIXOO\IRUDJHZLWKRXW GHFRGLQJWKHGDQFHODQJXDJHLQIRUPDWLRQ´LQWKHDUWLFOHDIRUHFLWHGVLQFHLW LVQRWFOHDUZK\WKHUHPXVWEHRQO\IRXUPDMRUZD\VQRWILYHVL[VHYHQ DQGVRRQ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH VLPSOHQHVVFRPSOLFDWHGQHVV SULQFLSOH LI WKHUH LV VLPSOHQHVVHJWKHUHODWLYHO\VLPSOHDQDO\VLVRIZDJJOHGDQFHE\)ULVFK WKHUHLVFRPSOLFDWHGQHVVHJWKHUHODWLYHO\PRUHFRPSOLFDWHGDQDO\VLVRI ZDJJOHGDQFHE\FKDOOHQJLQJWKHFODLPVDQGDVVXPSWLRQVDVVKRZQLQWKH
&KDSWHU7KH%RG\ZLWK/LPLWV
SUREOHPVSRLQWHGRXWE\WKHFULWLFVDVFLWHG $QGWKHUHYHUVHGLUHFWLRQDOVR KROGVWUXH ,QUHODWLRQWRWKHRSHQQHVVKLGGHQQHVVSULQFLSOHLIWKHUH LVRSHQQHVV HJWKHRSHQH[SORUDWLRQRIGDQFHODQJXDJHDQGZDJJOHGDQFHE\)ULVFK WKHUHLV KLGGHQQHVVHJ WKH KLGGHQELDVLQ )ULVFK¶V VWXG\VLQFH IRUWKH FULWLFV ZDJJOH GDQFH LV QRW UHDOO\ D ³ODQJXDJH´ RU ³GLDOHFW´ DV LWV UHVHDUFKHUVFODLPHG $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHGHQVHQHVVHPSWLQHVVSULQFLSOHLIWKHUHLVGHQVHQHVV HJ WKH UHODWLYHO\ GHQVHU FRQFHQWUDWLRQ RI KRQH\ EHHV LQ ³WKH WKLFNHVW EXVWOHRIWKHKLYH´ZKHUHD³URXQGGDQFH´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³DQFHVWRUVWRPRGHUQKRQH\EHHV´ZKHQHYHUWKH\ VHQWLQIRUPDWLRQ³WRHQFRXUDJHRWKHUQHVWPDWHVWR IRUDJH´ E\SHUIRUPLQJ ³H[FLWDWRU\ PRYHPHQWV´ WKHUH LV FKDRV HJ WKH PRUH RU OHVV FKDRWLF QDWXUH RI ³DQFHVWRUV WR PRGHUQ KRQH\EHHV´ ZKHQ WKH\ ³SHUIRUPHG H[FLWDWRU\ PRYHPHQWV´ OLNH ³VKDNLQJ ]LJ]DJJLQJ EX]]LQJ DQG FUDVKLQJ LQWRQHVWPDWHV´ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH VORZQHVVTXLFNQHVV SULQFLSOH LI WKHUH LV VORZQHVV HJ WKH UHODWLYHO\ VORZHU VSHHG RI KRQH\ EHHV WR IRUDJH LQ ³WURSLFDO KDELWDWV«LI ZDJJOH GDQFLQJ LV SUHYHQWHG´ WKHUH LV TXLFNQHVV HJ WKH UHODWLYHO\TXLFNHUVSHHGRIKRQH\EHHVWRIRUDJHLQ³WURSLFDOKDELWDWV«LI ZDJJOHGDQFLQJ´LVSHUIRUPHG $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHH[SDQVLRQFRQWUDFWLRQSULQFLSOHLIWKHUHLVH[SDQVLRQ HJ WKH UHODWLYHO\ PRUH GHYHORSHG DELOLW\ RI KRQH\ EHHV WR GDQFH LQ D ZDJJOHZD\ WKHUHLVFRQWUDFWLRQHJWKHUHODWLYHO\OHVVGHYHORSHGDELOLW\ RI KRQH\ EHHV LQ HQJDJH LQ ³H[FLWDWRU\ PRYHPHQWV´ OLNH ³VKDNLQJ ]LJ ]DJJLQJ EX]]LQJ DQG FUDVKLQJ LQWR QHVWPDWHV´ ZKLFK ³>D@QFHVWRUV WR PRGHUQKRQH\EHHV´RIWHQGLG $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH WKHRU\SUD[LV SULQFLSOH LI WKHUH LV WKHRU\ HJ WKH WKHRUHWLFDO FRQVWUXFWLRQ RI ZDJJOH GDQFH E\ )ULVWFK LQ EHHNHHSLQJ DQG HWKRORJ\ WKHUH LV SUD[LV HJ WKH SUDFWLFDO DSSOLFDWLRQ RI WKH VWXG\ RI ZDJJOH GDQFH WR WKH ILHOG RI FRPSXWLQJ VFLHQFH OLNH WKH ³RSWLPL]DWLRQ
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
DOJRULWKPV´ E\ ³XVLQJ EHH ZDJJOH GDQFH EHKDYLRU IRU HIILFLHQW IDXOW WROHUDQWURXWLQJ´ :.GG*&ULQD+:HGGH $QGWKH UHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHFRQYHQWLRQQRYHOW\SULQFLSOHLIWKHUHLVFRQYHQWLRQ HJ WKH FRQYHQWLRQDO ZLVGRP DERXW ZDJJOH GDQFH E\ )ULVFK WKHUH LV QRYHOW\ HJ WKH DOWHUQDWLYH QRYHO FKDOOHQJH WR WKH FRQYHQWLRQDO ZLVGRP DERXW ZDJJOH GDQFH E\ WKH QHZ LGHD WKDW ³SRWHQWLDO IRUDJHUV QHHG QRW FRUUHFWO\ WUDQVODWH WKH GDQFH ODQJXDJH IURP WKH ZDJJOH GDQFH WR VXFFHVVIXOO\IRUDJH´ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH HYROXWLRQWUDQVIRUPDWLRQ SULQFLSOH LI WKHUH LV HYROXWLRQ HJ WKH QDWXUDO HYROXWLRQ RI DQLPDOV WR GDQFH LQ WKH VWDWH RI QDWXUHOLNHWKHZDJJOHGDQFHE\KRQH\EHHV WKHUHLVWUDQVIRUPDWLRQHJ WKH WHFKQLFDO WUDQVIRUPDWLRQ RI WKH ZDJJOH GDQFH E\ WKH LQYHQWLRQ RI WKH ³RSWLPL]DWLRQ DOJRULWKPV´ ZKLFK XVH ³EHH ZDJJOH GDQFH EHKDYLRU IRU HIILFLHQW IDXOWWROHUDQW URXWLQJ´ LQ FRPSXWLQJ VFLHQFH $QG WKH UHYHUVH GLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHV\PPHWU\DV\PPHWU\SULQFLSOHLIWKHUHLVV\PPHWU\ HJ WKH H[LVWHQFH RI GLIIHUHQW ZD\V WR GDQFH WKHUH LV DV\PPHWU\ HJ WKHSRSXODULW\RIZDJJOHGDQFHDPRQJKRQH\EHHV²EXWWKHSRSXODULW\RI ³VKDNLQJ ]LJ]DJJLQJ EX]]LQJ DQG FUDVKLQJ LQWR QHVWPDWHV´ DPRQJ ³>D@QFHVWRUVWRPRGHUQKRQH\EHHV´ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGV WUXH ,QUHODWLRQWRWKHVRIWQHVVKDUGQHVVSULQFLSOHLIWKHUHLVVRIWQHVVHJ WKH DSSUHFLDWLRQ RI )ULVFK¶V VWXG\ DV VKRZQ LQ LWV DSSOLFDWLRQ E\ UHVHDUFKHUVLQFRPSXWLQJVFLHQFHIRUWKH³RSWLPL]DWLRQDOJRULWKPV´ZKLFK XVH³EHHZDJJOHGDQFHEHKDYLRUIRUHIILFLHQWIDXOWWROHUDQWURXWLQJ WKHUH LVKDUGQHVVHJWKHFULWLTXHRI)ULVFK¶VVWXG\DVVKRZQLQWKHSUREOHPV SRLQWHG RXW E\ WKH FULWLFV DV FLWHG $QG WKH UHYHUVH GLUHFWLRQ DOVR KROGV WUXH ,Q UHODWLRQ WR WKH VHULRXVQHVVSOD\IXOQHVV SULQFLSOH LI WKHUH LV VHULRXVQHVV HJ WKH VHULRXV EXVLQHVV RI ZRUNHU EHHV WR IRUDJH WKHUH LV SOD\IXOQHVVHJWKHSOD\IXO SDUWRIKRQH\EHHV ZKHQWKH\GDQFHDURXQG WKH ZDJJH GDQFH RI D ZRUNHU EHH ZKLFK ³LQIHFWV WKH VXUURXQGLQJ EHHV WKRVH VLWWLQJ QH[W WR WKH GDQFHU VWDUW WULSSLQJ DIWHU KHU DOZD\V WU\LQJ WR NHHS WKHLU RXWVWUHWFKHG IHHOHUV RQ FORVH FRQWDFW ZLWK WKH WLS RI KHU DEGRPHQ´ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH UHJUHVVLRQSURJUHVVLRQ SULQFLSOH LI WKHUH LV UHJUHVVLRQ HJ WKH UHJUHVVLRQ PDGH E\ WKH VWXG\ RI ZDJJOH GDQFH DV VKRZQLQWKHSUREOHPVRI)ULVFK¶VVWXG\SRLQWHGRXWE\WKHFULWLFV WKHUHLV SURJUHVVLRQ HJ WKH SURJUHVV PDGH E\ WKH VWXG\ RI ZDJJOH GDQFH DV
&KDSWHU7KH%RG\ZLWK/LPLWV
VKRZQ LQ LWV FRQWULEXWLRQ WR D EHWWHU XQGHUVWDQGLQJ RI EHH GDQFH DIRUHFLWHG $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH VDPHGLIIHUHQFH SULQFLSOH LI WKHUH LV VLPLODULW\ LQ RXWFRPH HJ WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV UHJDUGOHVV RI ZKHWKHU WKLV EH GRQH E\ ZD\ RI ZDJJOHGDQFHE\DZRUNHUEHHIRUIRUDJLQJRUE\ZD\RIZDJJOHGDQFHE\ VXUURXQGLQJ EHHV IRU SDUWLFLSDWLRQ WKHUH LV GLIIHUHQFH LQ RXWFRPH HJ WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI ZDJJOH GDQFH E\ D ZRUNHU EHH IRU IRUDJLQJ IRU D UHODWLYHO\ PRUH VHULRXV ZRUNDKROLF WLPH²EXW WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI ZDJJOH GDQFHE\VXUURXQGLQJEHHVIRUSDUWLFLSDWLRQIRUDUHODWLYHO\PRUHUHOD[HG MR\IXOWLPH $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH $QG LQ UHODWLRQ WR WKH VWDELOLW\UHDFWLRQ SULQFLSOH LI WKHUH LV VWDELOLW\ HJWKHUHODWLYHO\PRUHVWDEOHFRQGLWLRQRIDVSHFLILFIRUPRIGDQFHRQFH LW LV HYROYHG IRU VRPH EHHV OLNH ³VKDNLQJ ]LJ]DJJLQJ EX]]LQJ DQG FUDVKLQJ LQWR QHVWPDWHV´E\ ³>D@QFHVWRUVWR PRGHUQ KRQH\EHHV´ WKHUHLV UHDFWLRQ HJ WKH VSHFLILF IRUP RI GDQFH FDQ WKHQ HYROYH RYHU WLPH WR IXUWKHUFKDQJHVOLNHWKHZDJJOHGDQFHRIFRQWHPSRUDU\KRQH\EHHV $QG WKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH
7KH%RG\$QLPDOVDQG0XVLF $QRWKHU ZD\ WR HYDOXDWH WKH SRVVLELOLW\ DQG GHVLUDELOLW\ RI WKH ERG\ IURPWKHSHUVSHFWLYHRIQDWXUHLVWRH[SORUHWKHERG\DQLPDOVDQGPXVLF $ JRRG VWDUWLQJ SRLQW LV ³]RRPXVLFRORJ\´ ZKLFK LV ³D ILHOG RI PXVLFRORJ\ DQG ]RRORJ\ RU PRUH VSHFLILFDOO\ ]RRVHPLRWLFV =RRPXVLFRORJ\LVWKHVWXG\RIWKHPXVLFRIDQLPDOVRUUDWKHUWKHPXVLFDO DVSHFWV RI VRXQG RU FRPPXQLFDWLRQ SURGXFHG DQG UHFHLYHG E\ DQLPDOV =RRPXVLFRORJ\PD\EHGLVWLQJXLVKHGIURPHWKQRPXVLFRORJ\WKHVWXG\RI KXPDQ PXVLF =RRPXVLFRORJ\ LV PRVW RIWHQ ELRPXVLFRORJLFDO DQG ELRPXVLFRORJ\LVRIWHQ]RRPXVLFRORJLFDO´:.II $QLPDO0XVLFDQGLWV6WXG\ )RU VRPH VFKRODUV ³,EQ DO+D\WKDP V 7UHDWLVH RQ WKH ,QIOXHQFH RI 0HORGLHV RQ WKH 6RXOV RI $QLPDOV LQ WKH WK FHQWXU\ ZDV WKH HDUOLHVW WUHDWLVH GHDOLQJ ZLWK WKH HIIHFWV RI PXVLF RQ DQLPDOV ,Q WKH WUHDWLVH KH GHPRQVWUDWHV KRZ D FDPHO V SDFH FRXOG EH KDVWHQHG RU UHWDUGHG ZLWK WKH XVHRI PXVLFDQGVKRZVRWKHUH[DPSOHVRI KRZ PXVLFFDQDIIHFWDQLPDO EHKDYLRXU DQG DQLPDO SV\FKRORJ\ H[SHULPHQWLQJ ZLWK KRUVHV ELUGV DQG UHSWLOHV7KURXJKWRWKHWKFHQWXU\DPDMRULW\RIVFKRODUVLQWKH:HVWHUQ
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
ZRUOG FRQWLQXHG WR EHOLHYH WKDW PXVLF ZDV D GLVWLQFWO\ KXPDQ SKHQRPHQRQEXWH[SHULPHQWVVLQFHWKHQKDYHYLQGLFDWHG,EQDO+D\WKDP V YLHZWKDWPXVLFGRHVLQGHHGKDYHDQHIIHFWRQDQLPDOV´:.II& 3ORWW /DWHU ³]RRPXVLFRORJLVW 'DULR 0DUWLQHOOL GHVFULEHV WKH VXEMHFW RI ]RRPXVLFRORJ\ DV WKH DHVWKHWLF XVH RI VRXQG FRPPXQLFDWLRQ DPRQJ DQLPDOV *HRUJH+HU]RJ DVNHG GRDQLPDOVKDYHPXVLF" )UDQoRLV %HUQDUG 0kFKH V 0XVLTXH 0\WKH 1DWXUH RX OHV 'DXSKLQV G $ULRQ LQFOXGHV D VWXG\ RI RUQLWKRPXVLFRORJ\ «1LFRODV 5XZHW V /DQJDJH 0XVLTXH 3RpVLH «VKRZV WKDW ELUG VRQJV DUH RUJDQL]HG DFFRUGLQJ WR D UHSHWLWLRQWUDQVIRUPDWLRQ SULQFLSOH 2QH SXUSRVH RI WKH ERRNZDVWR EHJLQWRVSHDNRIDQLPDOPXVLFVRWKHUWKDQZLWKWKHTXRWDWLRQ PDUNV « DQG KH LV FUHGLWHG E\ 'DULR 0DUWLQHOOL ZLWK WKH FUHDWLRQ RI ]RRPXVLFRORJ\´:.II&3ORWW $JRRGH[DPSOHRIPXVLFDOFRPSRVLWLRQVZLWKWKHLPLWDWLRQRIDQLPDO VRXQGV LV WKH ZRUN E\ 6KLQML .DQNL ZKR ³FRPSRVHV PXVLF IRU GROSKLQV DFFRUGLQJ WR FRQYHQWLRQV IRXQG LQ GROSKLQ PXVLF RU IRXQG WR SOHDVH GROSKLQV LQ KLV 0XVLF IRU 'ROSKLQV 8OWUDVRQLF ,PSURYLVDWLRQDO &RPSRVLWLRQ IRU 8QGHUZDWHU 8OWUDVRQLF /RXGVSHDNHUV ´ :. II 2WKHU FRPSRVHUV ZKR ³KDYH HYRNHG RU LPLWDWHG DQLPDO VRXQGV LQ FRPSRVLWLRQV´LQFOXGH³-HDQ3KLOLSSH5DPHDX V7KH+HQ &DPLOOH 6DLQW6DsQV V &DUQLYDO RI WKH $QLPDOV 2OLYLHU 0HVVLDHQ V &DWDORJXH RI WKH %LUGV DQG 3DXOLQH 2OLYHURV V (O 5HOLFDULR GH ORV$QLPDOHV ´:.II $GGLWLRQDO H[DPSOHV LQFOXGH ³$ODQ +RYKDQHVV V $QG *RG &UHDWHG *UHDW:KDOHV *HRUJH&UXPE V9R[%DODHQDH9RLFHRIWKH:KDOH *DEULHO 3DUH\RQ V ,QYHQWLRQ RYHU WKH 6RQJ RI WKH 9LUHR $WULFFDSLOOXV DQG.KD3LMSLFKWOL.XLNDWO $OVR³WKHLFDURVVDFUHGKHDOLQJVRQJVDQGFKDQWV VXQJE\D\DKXDVFD KHDOHUVRUVKDPDQLFSUDFWLWLRQHUVDPRQJ$PD]RQLDQWULEHVDUHHYRFDWLYH RI PDQ\RIWKHVRXQGVRIELUGVDQLPDOVDQGLQVHFWVRIWKHMXQJOH´:. II $QLPDO0XVLFDQGWKH&DVHRI:KDOH6RQJ $ JRRG LOOXVWUDWLRQ RI DQLPDO PXVLF WR EH GHVFULEHG LQ GHWDLO KHUH LV ³ZKDOH VRQJ´ ZKLFK UHIHUV WR ³WKH SDWWHUQ RI UHJXODU DQG SUHGLFWDEOH VRXQGV PDGH E\ VRPH VSHFLHV RI ZKDOHV QRWDEO\ WKH +XPSEDFN :KDOH´ DVVXPPDUL]HGLQ7DEOH :.JJ $IWHUDOO³PDULQHPDPPDOVVXFKDVZKDOHVGROSKLQVDQGSRUSRLVHV DUHPXFKPRUHGHSHQGHQWRQVRXQGIRUFRPPXQLFDWLRQDQGVHQVDWLRQWKDQ
&KDSWHU7KH%RG\ZLWK/LPLWV
DUH ODQG PDPPDOV EHFDXVH RWKHU VHQVHV DUH RI OLPLWHG HIIHFWLYHQHVV LQ ZDWHU 6LJKW LV OHVV HIIHFWLYH IRU PDULQH PDPPDOV EHFDXVH RI WKH ZD\ ZDWHU DEVRUEV OLJKW 6PHOO DOVR LV OLPLWHG DV PROHFXOHV GLIIXVH PRUH VORZO\LQZDWHUWKDQLQDLUZKLFKPDNHVVPHOOLQJOHVVHIIHFWLYH+RZHYHU WKH VSHHG RI VRXQG LV URXJKO\ IRXU WLPHV JUHDWHU LQ ZDWHU WKDQ LQ WKH DWPRVSKHUHDWVHDOHYHO´:.JJ :LWK WKLV GHSHQGHQFH RQ VRXQG LQ PLQG²VRPH ZKDOHV HVSHFLDOO\ ³WKH +XPSEDFN :KDOH DQG WKH VXEVSHFLHV RI %OXH :KDOH IRXQG LQ WKH ,QGLDQ 2FHDQ DUH NQRZQ WR SURGXFH D VHULHV RI UHSHWLWLRXV VRXQGV DW YDU\LQJIUHTXHQFLHV7KLVLVNQRZQDVZKDOHVRQJ0DULQHELRORJLVW3KLOLS &ODSKDPGHVFULEHVWKHVRQJDV SUREDEO\WKHPRVWFRPSOH[LQWKHDQLPDO NLQJGRP ´:.JJ3&ODSKDP +RZHYHU ³PDOH KXPSEDFN ZKDOHV SHUIRUP WKHVH YRFDOL]DWLRQV RQO\ GXULQJWKHPDWLQJVHDVRQDQGVRLWLVEHOLHYHGWKHSXUSRVHRIVRQJVLVWR DLG VH[XDO VHOHFWLRQ :KHWKHU WKH VRQJV DUH D FRPSHWLWLYH EHKDYLRU EHWZHHQ PDOHVVHHNLQJWKHVDPH PDWHD PHDQVRIGHILQLQJWHUULWRU\RUD
IOLUWLQJ EHKDYLRUIURPDPDOHWRDIHPDOHLVQRWNQRZQDQGWKHVXEMHFWRI RQJRLQJUHVHDUFK0DOHVKDYHEHHQREVHUYHGVLQJLQJZKLOHVLPXOWDQHRXVO\ DFWLQJDVDQ HVFRUW ZKDOHLQWKHLPPHGLDWHYLFLQLW\RIDIHPDOH6LQJLQJ KDVDOVREHHQUHFRUGHGLQFRPSHWLWLYHJURXSVRIZKDOHVWKDWDUHFRPSRVHG RIRQHIHPDOHDQGPXOWLSOHPDOHV´:.JJ$)UDQNHO ,Q DQ\ HYHQW ZKDOH VRQJV ³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´:.JJ ,Q ZKDOH VRQJV ³DFROOHFWLRQRIIRXURUVL[ XQLWVLVNQRZQDVDVXE SKUDVHODVWLQJSHUKDSVWHQVHFRQGV«$FROOHFWLRQRIWZRVXESKUDVHVLVD SKUDVH $ ZKDOH ZLOO W\SLFDOO\ UHSHDW WKH VDPH SKUDVH RYHU DQG RYHU IRU WZRWRIRXUPLQXWHV7KLVLVNQRZQDVDWKHPH$FROOHFWLRQRIWKHPHVLV NQRZQDVDVRQJ7KHZKDOHZLOOUHSHDWWKHVDPHVRQJZKLFKODVWXSWR RUVRPLQXWHVRYHUDQGRYHUDJDLQRYHUWKHFRXUVHRIKRXUVRUHYHQGD\V´ :.JJ ,WLVDOVRNQRZQWKDW³DOOWKHZKDOHVLQDQDUHDVLQJYLUWXDOO\WKHVDPH VRQJDWDQ\SRLQWLQWLPH´LQIDFW³WKHVDPHJHRJUDSKLFDODUHD«FDQEHDV ODUJH DV HQWLUH RFHDQ EDVLQV´ DQG ³WKH VRQJ LV FRQVWDQWO\ DQG VORZO\ HYROYLQJRYHUWLPH)RUH[DPSOHRYHUWKHFRXUVHRIDPRQWKDSDUWLFXODU
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
XQLW WKDW VWDUWHG DV DQ XSVZHHS LQFUHDVLQJ LQ IUHTXHQF\ PLJKW VORZO\ IODWWHQ WR EHFRPH D FRQVWDQW QRWH $QRWKHU XQLW PD\ JHW VWHDGLO\ ORXGHU 7KH SDFH RI HYROXWLRQ RI D ZKDOH V VRQJ DOVR FKDQJHV²VRPH \HDUV WKH VRQJPD\FKDQJHTXLWHUDSLGO\ZKHUHDVLQRWKHU\HDUVOLWWOHYDULDWLRQPD\ EHUHFRUGHG´:.JJ$)UDQNHO $QLPDO0XVLFDQGWKH&DVHRI%LUG6RQJ $ VHFRQG JRRG LOOXVWUDWLRQ RI DQLPDO PXVLF WR EH GHVFULEHG LQ GHWDLO KHUHLV³ELUGVRQJ´ZKLFKUHIHUVWR³WKHELUGVRXQGVWKDWDUHPHORGLRXVWR WKHKXPDQHDU,QRUQLWKRORJ\DQGELUGLQJUHODWLYHO\FRPSOH[ VRQJVDUH GLVWLQJXLVKHG E\ IXQFWLRQ IURP UHODWLYHO\ VLPSOH FDOOV´ DV VXPPDUL]HG LQ7DEOH :.KK ,QRWKHUZRUGVQRWDOOVRXQGVFDQOHDGWRVRQJVDQG³WKHGLVWLQFWLRQ EHWZHHQ VRQJV DQG FDOOV LV EDVHG XSRQ FRPSOH[LW\ OHQJWK DQG FRQWH[W 6RQJVDUHORQJHUDQGPRUHFRPSOH[DQGDUHDVVRFLDWHGZLWKFRXUWVKLSDQG PDWLQJ ZKLOH FDOOV WHQG WR VHUYH VXFK IXQFWLRQV DV DODUPV RU NHHSLQJ PHPEHUVRIDIORFNLQFRQWDFW´:.KK3(KUOLFK ,Q JHQHUDO ³PRVW VRQJ LV HPLWWHG E\ PDOH UDWKHU WKDQ IHPDOH ELUGV 6RQJLVXVXDOO\GHOLYHUHGIURPSURPLQHQWSHUFKHVDOWKRXJKVRPH VSHFLHV PD\VLQJZKHQIO\LQJ6RPHJURXSVDUHQHDUO\YRLFHOHVVSURGXFLQJRQO\ SHUFXVVLYH DQG UK\WKPLF VRXQGV VXFK DV WKH VWRUNV ZKLFK FODWWHU WKHLU ELOOV ,Q VRPH PDQDNLQV 3LSULGDH WKH PDOHV KDYH HYROYHG VHYHUDO PHFKDQLVPV IRU PHFKDQLFDO VRXQG SURGXFWLRQ LQFOXGLQJ PHFKDQLVPV IRU VWULGXODWLRQ QRW XQOLNH WKRVH IRXQG LQ VRPH LQVHFWV´ :. KK . %RVWZLFN )RU VRPH PXVLFRORJLVWV ³ELUGVRQJ KDV KDG D ODUJH LQIOXHQFH RQ WKH GHYHORSPHQWRIPXVLF$OWKRXJKWKHH[WHQWRIWKLVLQIOXHQFHLVLPSRVVLEOH WRJDXJHLWLVVRPHWLPHVHDV\WRVHHVRPHRIWKHVSHFLILFZD\VFRPSRVHUV KDYHLQWHJUDWHGELUGVRQJZLWKPXVLF7KHUHVHHPWREHWKUHHJHQHUDOZD\V PXVLFLDQV RU FRPSRVHUV FDQ EH DIIHFWHG E\ ELUGVRQJ´ DV VKRZQ EHORZ :.KK0+HDG6&ODUN )LUVWO\ PXVLFLDQV RU FRPSRVHUV ³FDQ EH LQIOXHQFHG RU LQVSLUHG FRQVFLRXVO\RUXQFRQVFLRXVO\ E\ELUGVRQJ´ 6HFRQGO\ ³WKH\ FDQ LQFOXGH LQWHQWLRQDO LPLWDWLRQV RI ELUG VRQJ LQ D FRPSRVLWLRQ´ 7KLUGO\³WKH\FDQLQFRUSRUDWHUHFRUGLQJVRIELUGVLQWRWKHLUZRUNV´ 2I FRXUVH LW LV QRW HDV\ WR SURYH WKH ILUVW ZD\ HVSHFLDOO\ ZKHQ WKH LQVSLUDWLRQLVXQFRQVFLRXV
&KDSWHU7KH%RG\ZLWK/LPLWV
,QUHJDUGWRWKHVHFRQGZD\³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pYHLO GHV 2LVHDX[ LV FRPSRVHG DOPRVW HQWLUHO\ RI ELUGVRQJ0DQ\RIKLVRWKHUFRPSRVLWLRQVLQFOXGLQJ4XDWXRUSRXUOD)LQ GX7HPSVVLPLODUO\LQWHJUDWHELUGVRQJ´:.KK $QG LQ UHJDUG WR WKH WKLUG ZD\ ³WKH ,WDOLDQ FRPSRVHU 2WWRULQR 5HVSLJKL ZLWK KLV 7KH 3LQHV RI 5RPH ± PD\ KDYH EHHQ WKH ILUVW WR FRPSRVH D SLHFHRI PXVLF WKDW FDOOV IRU SUHUHFRUGHG ELUGVRQJ $ IHZ\HDUVODWHU5HVSLJKLZURWH*OL8FFHOOL 7KHELUGV EDVHGRQ%DURTXH SLHFHV LPLWDWLQJ ELUGV 7KH )LQQLVK FRPSRVHU (LQRMXKDQL 5DXWDYDDUD LQ ZURWHDQRUFKHVWUDOSLHFHRIPXVLFFDOOHG&DQWXV$UFWLFXV2SXV GXEEHG &RQFHUWR IRU %LUGV DQG 2UFKHVWUD PDNLQJ H[WHQVLYH XVH RI SUH UHFRUGHGELUGVRQJVIURP$UFWLFUHJLRQVVXFKDVPLJUDWLQJVZDQV«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´:.KK 3UREOHPVZLWKWKH6WXG\RI$QLPDO0XVLF +RZHYHUWKHVWXG\RIDQLPDOPXVLFKDVLWVRZQSUREOHPV&RQVLGHU IRULOOXVWUDWLRQVRPHPDLQFULWLFLVPVEHORZDVVXPPDUL]HGLQ7DEOH )LUVWO\RQHPDLQFULWLFLVPRIWKHVWXG\RIDQLPDOPXVLFLVWKDWLWLVQRW FOHDUWRZKDWH[WHQWDQPLDOPXVLFLV³UHDOO\´PXVLF )RU LQVWDQFH -HDQ-DFTXHV 1DWWLH] DUJXHG WKDW ³LQ WKH ODVW DQDO\VLVLWLVDKXPDQEHLQJZKRGHFLGHVZKDWLVDQGLVQRWPXVLFDOHYHQ ZKHQWKHVRXQGLVQRWRIKXPDQRULJLQ,I ZHDFNQRZOHGJHWKDWVRXQGLV QRWRUJDQL]HGDQGFRQFHSWXDOL]HGWKDWLVPDGHWRIRUPPXVLF PHUHO\E\
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
LWV SURGXFHU EXW E\ WKH PLQG WKDW SHUFHLYHV LW WKHQ PXVLF LV XQLTXHO\ KXPDQ´:.II-1DWWLH] 2I FRXUVH QRW HYHU\RQH DJUHHV ZLWK WKLV YLHZ DV IRU )UDQoRLV %HUQDUG0kFKH³>L@ILWWXUQVRXWWKDWPXVLFLVDZLGHVSUHDGSKHQRPHQRQ LQ VHYHUDO OLYLQJ VSHFLHV DSDUW IURP PDQ WKLV ZLOO YHU\ PXFK FDOO LQWR TXHVWLRQ WKH GHILQLWLRQ RI PXVLF DQG PRUH ZLGHO\ WKDW RI PDQ DQG KLV FXOWXUHDVZHOODVWKHLGHDZHKDYHRIWKHDQLPDOLWVHOI´:.II 6HFRQGO\DQRWKHUPDLQFULWLFLVPRIWKHVWXG\RIDQLPDOPXVLFLVWKDW HYHQVKRXOGDQLPDOPXVLFLQIDFWEHPXVLFDQLPDOVRQJVZRXOGVWLOOEHQRW ³UHDOO\´VRQJVDWDOO )RULQVWDQFHLQWKHFDVHRI³ZKDOHVRQJV´LWLVRIWHQSRLQWHGRXWWKDW ³DFROOHFWLRQRIIRXURUVL[XQLWVLVNQRZQDVDVXESKUDVH«$FROOHFWLRQ RI WZR VXESKUDVHV LV D SKUDVH $ ZKDOH ZLOO W\SLFDOO\ UHSHDW WKH VDPH SKUDVHRYHUDQGRYHUIRUWZRWRIRXUPLQXWHV7KLVLVNQRZQDVDWKHPH$ FROOHFWLRQRIWKHPHVLVNQRZQDVDVRQJ´%XWWKHSUREOHPKHUHLV:KDW DUHWKHO\ULFVLQZKDOHVRQJVVLQFHVRQJVDUHVXSSRVHGWRKDYHO\ULFV" 7KLUGO\ VWLOO DQRWKHU PDLQ FULWLFLVP RI WKH VWXG\ RI DQLPDO PXVLF LV WKDWHYHQVKRXOGDQLPDOVRQJVLQIDFWEHVRQJVDQLPDOVRQJVZRXOGVWLOO EHQRWDVGHYHORSHGDVKXPDQRQHV )RULQVWDQFHLQWKHFDVHRIELUGVRQJVZKHQ5XZHWVKRZHGWKDW³ELUG VRQJV DUH RUJDQL]HG DFFRUGLQJ WR D UHSHWLWLRQWUDQVIRUPDWLRQ SULQFLSOH´ WKH FULWLFV FDQ VWLOO DVN :K\ LV WKH UHSHWLWLRQWUDQVIRUPDWLRQ SULQFLSOH VXIILFLHQW E\ LWVHOI DV WKH IRXQGDWLRQ RI VRQJV" $IWHU DOO VRPH VFKRODUV ³UHTXLUHVRQJVWRKDYHV\OODELFGLYHUVLW\´DQGVW\OLVWLFGLYHUVLW\ IRUWKDW PDWWHU :.KK ,QWKHFDVHRIZKDOHVRQJVWKHSUREOHPKHUHLVWKDW³DOOWKHZKDOHVLQ DQ DUHD VLQJ YLUWXDOO\ WKH VDPH VRQJ DW DQ\ SRLQW LQ WLPH´ LQ IDFW ³WKH VDPH JHRJUDSKLFDO DUHD«FDQ EH DV ODUJH DV HQWLUH RFHDQ EDVLQV´ DQG DOWKRXJK³WKHSDFHRIHYROXWLRQRIDZKDOH VVRQJDOVRFKDQJHV´LWVXIIHUV IURP WKH LQFRQVLVWHQF\ LQ WKDW ³VRPH \HDUV WKH VRQJ PD\ FKDQJH TXLWH UDSLGO\ ZKHUHDV LQ RWKHU \HDUV OLWWOH YDULDWLRQ PD\ EH UHFRUGHG´ :. JJ $ )UDQNHO ,Q FRQWUDVW KXPDQ VRQJV QRZDGD\V DUH YHU\ GLYHUVH $QG IRXUWKO\ RQH DGGLWLRQDO PDLQ FULWLFLVP RI WKH VWXG\ RI DQLPDO PXVLF LV WKDW LW LV DOVR QRW FOHDU LQ ZKDW ZD\V DQLPDO PXVLF ZRXOG EH ³EHDXWLIXO´DWDOO )RU LQVWDQFH LQ WKH FDVH RI ELUG VRQJV ³WKH ELUG VRXQGV WKDW DUH PHORGLRXV WR WKH KXPDQ HDU´ DUH FODVVLILHG DV VRQJV QRW MXVW VRXQGV :.KK 6RWKHSUREOHPKHUHLVWZRIROGLQWKDWWKHILUVWSUREOHPLV WKDW WKLV FULWHULRQ WR MXGJH DQLPDO PXVLF LV WRR DQWKURSRFHQWULF DQG WKH VHFRQG SUREOHP LV WKDW QRW HYHU\RQH DFFHSW WKH FULWHULRQ RI ³PHORGLRXV´
&KDSWHU7KH%RG\ZLWK/LPLWV
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³LQ WKH ODVW DQDO\VLV LW LV D KXPDQEHLQJZKRGHFLGHVZKDWLVDQGLVQRWPXVLFDOHYHQZKHQWKHVRXQG LVQRWRIKXPDQRULJLQ´WKDWLVLWLVHVVHQWLDOO\DQWKURSRFHQWULF $QGWKH UHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH DEVROXWHQHVVUHODWLYHQHVV SULQFLSOH LI WKHUH LV DEVROXWHQHVVHJWKHDEVROXWHYLHZRIWKRVHZKRVWXG\ELUGVRQJVLQWKDW ³WKH ELUG VRXQGV WKDW DUH PHORGLRXV WR WKH KXPDQ HDU´ DUH FODVVLILHG DV VRQJVQRWMXVWVRXQGV WKHUHLVUHODWLYHQHVVHJZKDWLVULJKWIRUWKRVHLQ ]RRPXVLFRORJLVWV WR DSSUHFLDWH ³VRXQGV WKDW DUH PHORGLRXV WR WKH KXPDQ HDU´ LV QRW QHFHVVDULO\ VR IRU RWKHUV OLNH -RKQ &DJH DQG KLV IROORZHUV WR SUHIHU FKDRWLF PXVLF QRW PHORGLRXV RQH $QG WKH UHYHUVH GLUHFWLRQ DOVR KROGVWUXH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
,QUHODWLRQWRWKHSDUWLDOLW\WRWDOLW\SULQFLSOHLIWKHUHLVSDUWLDOLW\HJ WKH SDUWLDO YLHZ RI ³DOO WKH ZKDOHV LQ DQ DUHD´ ZKLFK ³VLQJ YLUWXDOO\ WKH VDPH VRQJDWDQ\SRLQW LQ WLPH´ WKHUHLVWRWDOLW\HJWKH PRUH KROLVWLF YLHZRIDOOWKHZKDOHVDURXQGWKHZRUOGVXFKWKDWWKHZKROHLVQRWWKHVXP RILWVSDUWVWKDWLV³WKHSDFHRIHYROXWLRQRIDZKDOH VVRQJ´KDVHPHUJHQW SURSHUWLHV QRW HQWLUHO\ SUHGLFWDEOH VR WKDW ³VRPH \HDUV WKH VRQJ PD\ FKDQJH TXLWH UDSLGO\ ZKHUHDV LQ RWKHU \HDUV OLWWOH YDULDWLRQ PD\ EH UHFRUGHG´QRWUHGXFLEOHWRWKHVXPRIGLIIHUHQWVRQJVLQGLIIHUHQWDUHDV $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH SUHGLFWDELOLW\XQSUHGLFWDELOLW\ SULQFLSOH LI WKHUH LV SUHGLFWDELOLW\HJWKHSUHGLFWDEOHWHQGHQF\WKDW³DOOWKHZKDOHVLQDQDUHD VLQJYLUWXDOO\WKHVDPHVRQJDWDQ\SRLQWLQWLPH´ WKHUHLVXQSUHGLFWDELOLW\ HJ WKH PRUH GLIILFXOW WDVN WR SUHGLFW H[DFWO\ WKH H[WHQW WR ZKLFK ³WKH SDFHRIHYROXWLRQRIDZKDOH VVRQJDOVRFKDQJHV´VLQFH³VRPH\HDUVWKH VRQJPD\FKDQJHTXLWHUDSLGO\ZKHUHDVLQRWKHU\HDUVOLWWOHYDULDWLRQPD\ EH UHFRUGHG´ VR WKHUH LV D ORW RI XQFHUWDLQW\ $QG WKH UHYHUVH GLUHFWLRQ DOVRKROGVWUXH ,Q UHODWLRQ WR WKH H[SOLFDELOLW\LQH[SOLFDELOLW\ SULQFLSOH LI WKHUH LV H[SOLFDELOLW\ HJ WKH H[SODQDWLRQ WKDW ³PDOH KXPSEDFN ZKDOHV SHUIRUP WKHVHYRFDOL]DWLRQVRQO\GXULQJWKHPDWLQJVHDVRQDQGVRLWLVEHOLHYHGWKH SXUSRVHRIVRQJVLVWRDLGVH[XDOVHOHFWLRQ´ WKHUHLVLQH[SOLFDELOLW\HJ WKHODFNRIVXIILFLHQWH[SODQDWLRQRI³ZKHWKHUWKHVRQJVDUHDFRPSHWLWLYH EHKDYLRU EHWZHHQ PDOHV VHHNLQJ WKH VDPH PDWH D PHDQV RI GHILQLQJ WHUULWRU\RUD IOLUWLQJ EHKDYLRUIURPDPDOHWRDIHPDOH´VLQFHWKHVHLVVXHV DUHVWLOO³WKHVXEMHFWRIRQJRLQJUHVHDUFK´ $QGWKHUHYHUVHGLUHFWLRQDOVR KROGVWUXH ,Q UHODWLRQ WR WKH ILFWLRQUHDOLW\ SULQFLSOH LI WKHUH LV ILFWLRQ HJ WKH ILFWLRQDO DVSHFW RI ]RRPXVLFRORJ\ ZKHQ ³WKURXJK WR WKH WK FHQWXU\ D PDMRULW\RIVFKRODUVLQWKH:HVWHUQZRUOGFRQWLQXHGWREHOLHYHWKDWPXVLF ZDV D GLVWLQFWO\ KXPDQ SKHQRPHQRQ´ WKHUH LV UHDOLW\ HJ WKH UHDOLVWLF DVSHFW RI ]RRPXVLFRORJ\ ZKHQ QRZDGD\V ³H[SHULPHQWV VLQFH WKHQ KDYH YLQGLFDWHG,EQDO+D\WKDP VYLHZWKDWPXVLFGRHVLQGHHGKDYHDQHIIHFWRQ DQLPDOV´ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH ILQLWHQHVVWUDQVILQLWHQHVV SULQFLSOH LI WKHUH LV ILQLWHQHVVHJWKHILQLWHDPRXQWRIWLPHIRU³DZKDOH´WR³W\SLFDOO\UHSHDW WKH VDPH SKUDVH RYHU DQG RYHU´ WKDW LV DERXW ³WZR WR IRXU PLQXWHV´ WKHUH LV WUDQVILQLWHQHVV HJ WKH WUDQVILQLWH DPRXQW RI WLPH IRU DOO WKH ZKDOHVLQKLVWRU\WRKDYHHYHUUHSHDWHGWKHVDPHSKUDVHVRYHUDQGRYHU $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH SUHFLVHQHVVYDJXHQHVV SULQFLSOH LI WKHUH LV SUHFLVHQHVV HJ WKH SUHFLVH LGHQWLILFDWLRQ RI WKUHH SRVVLEOH IXQFWLRQV RI
&KDSWHU7KH%RG\ZLWK/LPLWV
ZKDOH VRQJV QDPHO\ ³WKH VRQJV DUH D FRPSHWLWLYH EHKDYLRU EHWZHHQ PDOHV VHHNLQJ WKH VDPH PDWH D PHDQV RI GHILQLQJ WHUULWRU\ RU D IOLUWLQJ EHKDYLRUIURPDPDOHWRDIHPDOH´ WKHUHLVYDJXHQHVVHJWKHYDJXHQHVV LQWKHLGHQWLILFDWLRQRIWKHWKUHHSRVVLEOHIXQFWLRQVRIZKDOHVRQJVVLQFHLW LVQRWFOHDUZK\WKHUHPXVWEHRQO\WKUHHSRVVLEOHIXQFWLRQVQRWIRXUILYH DQGVRRQ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH VLPSOHQHVVFRPSOLFDWHGQHVV SULQFLSOH LI WKHUH LV VLPSOHQHVV HJ WKH UHODWLYHO\ VLPSOH QDWXUH RI ZKDOH FDOOV ZKHQ FRQWUDVWHG ZLWK ZKDOH VRQJV VLQFH ³FDOOV WHQG WR VHUYH VXFK IXQFWLRQV DV DODUPVRUNHHSLQJPHPEHUVRIDIORFNLQFRQWDFW´DQGDUHOHVVFRPSOH[ WKHUH LV FRPSOLFDWHGQHVV HJ WKH UHODWLYHO\ PRUH FRPSOLFDWHG QDWXUH RI ZKDOH VRQJV ZKHQ FRQWUDVWHG ZLWK ZKDOH FDOOV VLQFH ³VRQJV DUH ORQJHU DQG PRUH FRPSOH[ DQG DUH DVVRFLDWHG ZLWK FRXUWVKLS DQG PDWLQJ´ $QG WKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHRSHQQHVVKLGGHQQHVVSULQFLSOHLIWKHUHLVRSHQQHVV HJ WKH RSHQ H[SORUDWLRQ RI WKH UHODWLRQVKLS EHWZHHQ ³WKH ELUG VRXQGV WKDW DUH PHORGLRXV WR WKH KXPDQ HDU´ DQG ³ELUG VRQJV´ E\ ]RRPXVLFRORJLVW WKHUH LV KLGGHQQHVV HJ WKH KLGGHQ ELDV LQ WKH H[SORUDWLRQ RI WKH UHODWLRQVKLS EHWZHHQ ³WKH ELUG VRXQGV WKDW DUH PHORGLRXVWRWKHKXPDQHDU´DQG³ELUGVRQJV´VLQFHQRWHYHU\RQHDFFHSW WKHFULWHULRQRI³PHORGLRXV´VRXQGVDVEHDXWLIXORUSOHDVDQWEHFDXVH-RKQ &DJHIRULQVWDQFHDQGKLVIROORZHUVSUHIHUFKDRWLFPXVLFQRWPHORGLRXV RQH $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHGHQVHQHVVHPSWLQHVVSULQFLSOHLIWKHUHLVGHQVHQHVV HJ WKH UHODWLYHO\ GHQVHU FRQFHQWUDWLRQ RI ³PHORGLRXV´ VRXQGV LQ ³ELUG VRQJV´ WKHUHLVHPSWLQHVVHJWKHUHODWLYHO\OHVVGHQVHRUPRUHHPSW\ FRQFHQWUDWLRQRI ³PHORGLRXV´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³UHJXODUDQGSUHGLFWDEOH VRXQGV´ QRWDEO\ E\ ³WKH +XPSEDFN :KDOH´ WKHUH LV FKDRV HJ WKH PRUH RU OHVV FKDRWLF QDWXUH RI FKDQFH PXVLF E\ -RKQ &DJH DQG KLV IROORZUVZLWKWKHXVHRIFKDQFHRSHUDWLRQV $QGWKHUHYHUVHGLUHFWLRQDOVR KROGVWUXH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
,Q UHODWLRQ WR WKH VORZQHVVTXLFNQHVV SULQFLSOH LI WKHUH LV VORZQHVV HJ WKH UHODWLYHO\ VORZHU VSHHG RI ³WKH SDFH RI HYROXWLRQ RI D ZKDOH V VRQJ´WRFKDQJHVLQFHLQ³VRPH\HDUV«OLWWOHYDULDWLRQPD\EHUHFRUGHG´ WKHUH LV TXLFNQHVV HJ WKH UHODWLYHO\ TXLFNHU VSHHG RI ³WKH SDFH RI HYROXWLRQRIDZKDOH VVRQJ´WRFKDQJHVLQFHLQRWKHU\HDUV³WKHVRQJPD\ FKDQJHTXLWHUDSLGO\´ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHH[SDQVLRQFRQWUDFWLRQSULQFLSOHLIWKHUHLVH[SDQVLRQ HJWKHUHODWLYHO\PRUHGHYHORSHGDELOLW\RIWKRVHVWXG\LQJELUGVRQJVWR GHDO ZLWK ³PHORGLRXV´ VRXQGV WKHUH LV FRQWUDFWLRQ HJ WKH UHODWLYHO\ OHVVGHYHORSHGDELOLW\RIWKRVHVWXG\LQJELUGVRQJVWRGHDOZLWK³FKDRWLF´ VRXQGVDVLQFKDQFHPXVLFE\-RKQ&DJH $QGWKHUHYHUVHGLUHFWLRQDOVR KROGVWUXH ,Q UHODWLRQ WR WKH WKHRU\SUD[LV SULQFLSOH LI WKHUH LV WKHRU\ HJ WKH WKHRUHWLFDO FRQVWUXFWLRQ RI ³ELUG VRQJV´ E\ ]RRPXVLFRORJLVWV WKHUH LV SUD[LV HJWKH SUDFWLFDO DSSOLFDWLRQ RI ³ELUG VRQJV´ LQ ]RRPXVLFRORJ\ WR WKH ILHOG RI HWKQRPXVLFRORJ\ DV VKRZQ LQ WKH ³WKUHH JHQHUDO ZD\V PXVLFLDQV RU FRPSRVHUV FDQ EH DIIHFWHG E\ ELUGVRQJ´ $QG WKH UHYHUVH GLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHFRQYHQWLRQQRYHOW\SULQFLSOHLIWKHUHLVFRQYHQWLRQ HJ WKH FRQYHQWLRQDO ZLVGRP WKDW ³WKURXJK WR WKH WK FHQWXU\ D PDMRULW\RIVFKRODUVLQWKH:HVWHUQZRUOGFRQWLQXHGWREHOLHYHWKDWPXVLF ZDV D GLVWLQFWO\ KXPDQ SKHQRPHQRQ´ WKHUH LV QRYHOW\ HJ WKH DOWHUQDWLYHQRYHOFKDOOHQJHWRWKHFRQYHQWLRQDOZLVGRPWKDW³PXVLFZDVD GLVWLQFWO\ KXPDQ SKHQRPHQRQ´ E\ WKH QHZ LGHD QRZDGD\V WKDW ³H[SHULPHQWVVLQFHWKHQKDYHYLQGLFDWHG,EQDO+D\WKDP VYLHZWKDWPXVLF GRHV LQGHHG KDYH DQ HIIHFW RQ DQLPDOV´ $QG WKH UHYHUVH GLUHFWLRQ DOVR KROGVWUXH ,Q UHODWLRQ WR WKH HYROXWLRQWUDQVIRUPDWLRQ SULQFLSOH LI WKHUH LV HYROXWLRQHJWKHQDWXUDOHYROXWLRQRIELUGVWRSURGXFH³VRXQGVWKDWDUH PHORGLRXVWRWKHKXPDQHDU´LQWKHVWDWHRIQDWXUH WKHUHLVWUDQVIRUPDWLRQ HJ WKH WHFKQLFDO WUDQVIRUPDWLRQ RI VRXQGV E\ WKH LQYHQWLRQ RI KXPDQ PXVLFOLNHLQFRUSRUDWLQJ³UHFRUGLQJVRIELUGVLQWRWKHLUZRUNV´DVVKRZQ LQWKHH[DPSOHVDIRUHFLWHG $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHV\PPHWU\DV\PPHWU\SULQFLSOHLIWKHUHLVV\PPHWU\ HJWKHH[LVWHQFHRIGLIIHUHQWZD\VWRPDNHPXVLF WKHUHLVDV\PPHWU\ HJ ZKDOHV QDWXUDOO\ PDNH PXVLF LQ VHD²EXW KXPDQV QDWXUDOO\ PDNH PXVLFRQODQG $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHVRIWQHVVKDUGQHVVSULQFLSOHLIWKHUHLVVRIWQHVVHJ WKHDSSUHFLDWLRQRIDQLPDOPXVLFDVVKRZQLQWKHWKUHHZD\V³FRPSRVHUV KDYHLQWHJUDWHGELUGVRQJZLWKPXVLF´ WKHUHLVKDUGQHVVHJWKHFULWLTXH
&KDSWHU7KH%RG\ZLWK/LPLWV
RI DQLPDO PXVLF DV VKRZQ LQ WKH FULWLFLVPV SRLQWHG RXW E\ WKH FULWLFV DV FLWHG $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH VHULRXVQHVVSOD\IXOQHVV SULQFLSOH LI WKHUH LV VHULRXVQHVVHJWKHVHULRXVDVSHFWRIKXPDQVWRVWXG\ELUGVRQJV WKHUH LVSOD\IXOQHVVHJWKHSOD\IXODVSHFWRIKXPDQVWRVWXG\ELUGVRQJVZKHQ WKH\ SOD\ DURXQG ZLWK GLIIHUHQW ³UHFRUGLQJV RI ELUGV LQWR WKHLU ZRUNV´ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH UHJUHVVLRQSURJUHVVLRQ SULQFLSOH LI WKHUH LV UHJUHVVLRQ HJ WKH UHJUHVVLRQ PDGH E\ ]RRPXVLFRORJ\ DV VKRZQ LQ WKH SUREOHPV DERXW ZKDOH VRQJV DQG ELUG VRQJV SRLQWHG RXW E\ WKH FULWLFV WKHUHLVSURJUHVVLRQHJWKHSURJUHVVPDGHE\]RRPXVLFRORJ\DVVKRZQ LQ LWV FRQWULEXWLRQ WR RXU XQGHUVWDQGLQJ RI ZKDOH VRQJV DQG ELUG VRQJV DIRUHFLWHG $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH VDPHGLIIHUHQFH SULQFLSOH LI WKHUH LV VLPLODULW\ LQ RXWFRPH HJ WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV UHJDUGOHVV RI ZKHWKHU WKLV EH GRQH E\ ZD\ RI DQLPDOPXVLFRUE\ZD\RIKXPDQPXVLF WKHUHLVGLIIHUHQFHLQRXWFRPH HJ WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUVE\ ZD\RIDQLPDOPXVLFIRUDOLIHZRUOGUHODWLYHO\³PXFK PRUH GHSHQGHQW RQ VRXQG IRU FRPPXQLFDWLRQ DQG VHQVDWLRQ´²EXW WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI KXPDQ PXVLF IRU D OLIHZRUOG UHODWLYHO\ PRUH GHSHQGHQW RQ GLIIHUHQWVHQVHVOLNHVLJKWVPHOOWRXFKLQJDQGVRRQQRWMXVWVRXQGIRU FRPPXQLFDWLRQDQGVHQVDWLRQ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH $QG LQ UHODWLRQ WR WKH VWDELOLW\UHDFWLRQ SULQFLSOH LI WKHUH LV VWDELOLW\ HJ WKH UHODWLYHO\ PRUH VWDEOH FRQGLWLRQ RI ZKDOH VRQJV ZKHQ ³DOO WKH ZKDOHVLQDQDUHDVLQJYLUWXDOO\WKHVDPHVRQJDWDQ\SRLQWLQWLPH´ WKHUH LVUHDFWLRQHJZKDOHVRQJVLQDQDUHDFDQOHDGWRIXUWKHUFKDQJHVODWHU EHFDXVH RI WKH HYROXWLRQ RI ZKDOH V VRQJV RYHU WLPH HYHQ WKRXJK ³VRPH \HDUV WKH VRQJ PD\ FKDQJH TXLWH UDSLGO\ ZKHUHDV LQ RWKHU \HDUV OLWWOH YDULDWLRQPD\EHUHFRUGHG´ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH
7KH%RG\DQG6RFLHW\ 7KHERG\ZKHQH[DPLQHGIURPWKHSHUVSHFWLYHRIVRFLHW\FDQFDVWD EULJKWOLJKWRQLWVSRVVLELOLW\DQGGHVLUDELOLW\LQDKXPDQO\LQWULJXLQJZD\ DQG WKLV FDQ EH VKRZQ E\ ZD\ RI WZR FDVH VWXGLHV QDPHO\ WKH ERG\ FRPHGLDQV DQG FXOW IROORZLQJ DQG WKH ERG\ SHUIRUPDQFH DQGWKHFRVPHWLFLQGXVWU\²WREHDGGUHVVHGKHUHDIWHU
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7KH%RG\&RPHGLDQVDQG&XOW)ROORZLQJ $ JRRG ZD\ WR HYDOXDWH WKH SRVVLELOLW\ DQG GHVLUDELOLW\ RI WKH ERG\ IURPWKHSHUVSHFWLYHRIVRFLHW\LVWRH[SORUHWKHERG\FRPHGLDQVDQGFXOW IROORZLQJ &RPHGLDQVDQGWKH&RPHG\%XVLQHVV 7KH WHUP ³FRPHGLDQ´ UHIHUV WR ³D SHUVRQ ZKR VHHNV WR HQWHUWDLQ DQ DXGLHQFHSULPDULO\E\PDNLQJWKHPODXJK7KLVPLJKWEHWKURXJKMRNHVRU DPXVLQJ VLWXDWLRQV RU DFWLQJ D IRRO DV LQ VODSVWLFN RU HPSOR\LQJ SURS FRPHG\$FRPHGLDQZKRDGGUHVVHVDQDXGLHQFHGLUHFWO\LVFDOOHGDVWDQG XSFRPLF´:.LL 7KHUHLV ³DSRSXODU VD\LQJ YDULRXVO\TXRWHGEXW JHQHUDOO\DWWULEXWHG WR (G :\QQ´ QDPHO\ ³$ FRPLF VD\V IXQQ\ WKLQJV D FRPHGLDQ VD\V WKLQJV IXQQ\´ ZKLFK GUDZV D GLVWLQFWLRQ EHWZHHQ KRZ PXFK RI WKH FRPHG\ FDQ EH DWWULEXWHG WR YHUEDO FRQWHQW DQG KRZ PXFK WR DFWLQJ DQG SHUVRQD´:.LL%$ (VSHFLDOO\VLQFHWKHV³DQHZZDYHRIFRPHG\FDOOHGDOWHUQDWLYH FRPHG\ KDV JURZQ LQ SRSXODULW\ ZLWK LWV PRUH RIIEHDW DQG H[SHULPHQWDO VW\OH 7KLV QRUPDOO\ LQYROYHV PRUH H[SHULHQWLDO RU REVHUYDWLRQDO UHSRUWLQJHJ$QG\.DXIPDQ$OH[HL6D\OHDQG0DOFROP+DUGHH$VIDU DVFRQWHQWLVFRQFHUQHGFRPHGLDQVVXFKDV7RPP\7LHUQDQ'HV%LVKRS DQG -RDQ 5LYHUV GUDZ RQ WKHLU EDFNJURXQG WR SRNH IXQ DW WKHPVHOYHV ZKLOHRWKHUVVXFKDV-RQ6WHZDUWDQG%LOO+LFNVKDYHYHU\VWURQJSROLWLFDO DQGFXOWXUDOXQGHUWRQHV&RQWHPSRUDU\FRPHGLDQVLQFOXGH&RQDQ2 %ULHQ DQG'DYLG/HWWHUPDQ´:.LL 2QH LQWHUHVWLQJ IHDWXUH RI WKH FRPHG\ EXVLQHVV LV ³FXOW IROORZLQJ´ ZKLFKUHIHUVWR³DJURXSRIIDQVZKRDUHKLJKO\GHGLFDWHGWRDVSHFLILFDUHD RISRSFXOWXUH«$FRPPRQFRPSRQHQWRIFXOWIROORZLQJVLVWKHHPRWLRQDO DWWDFKPHQW IDQV KDYH ZLWK WKH REMHFW RI WKH FXOW IROORZLQJ RIWHQ LGHQWLI\LQJ WKHPVHOYHV DQG RWKHU IDQV DV PHPEHUV RI D FRPPXQLW\ &XOW IROORZLQJV DUH RIWHQ DVVRFLDWHG ZLWK QLFKH PDUNHWV RU VXEFXOWXUHV´ :. WW ,QWKHFRPHG\EXVLQHVV³PDQ\FRPLFVDFKLHYHDFXOWIROORZLQJZKLOH WRXULQJ IDPRXV FRPHG\ KXEV VXFK DV WKH -XVW IRU /DXJKV IHVWLYDO LQ 0RQWUHDO WKH (GLQEXUJK )ULQJH DQG 0HOERXUQH &RPHG\ )HVWLYDO LQ $XVWUDOLD2IWHQDFRPLF VFDUHHUDGYDQFHVVLJQLILFDQWO\ ZKHQWKH\ ZLQD QRWDEOH FRPHG\ DZDUG VXFK DV WKH (GLQEXUJK &RPHG\ $ZDUG IRUPHUO\ WKH3HUULHUFRPHG\DZDUG ´:.LL
&KDSWHU7KH%RG\ZLWK/LPLWV
&RPHGLDQVDQG&XOW)ROORZLQJ /HW¶V HODERUDWH WKHVH WKUHH IDPRXV FRPHG\ KXEV DIRUHFLWHG WR XQGHUVWDQGWKHFXOWIROORZLQJLQWKHFRPHG\EXVLQHVVQDPHO\WKH-XVWIRU /DXJKVIHVWLYDOLQ&DQDGDWKH(GLQEXUJK)HVWLYDO)ULQJHLQWKH8.DQG 0HOERXUQH&RPHG\)HVWLYDOLQ$XVWUDOLD²LQZKDWIROORZVUHVSHFWLYHO\ D -XVWIRU/DXJKV 7KH ILUVW FRPHG\ IHVWLYDO WR EH LQWURGXFHG KHUH FRQFHUQV ³-XVW IRU /DXJKV´ 7KH WHUP ³-XVW IRU /DXJKV )UHQFK -XVWH SRXU 5LUH ´ UHIHUV WR ³D FRPHG\IHVWLYDOKHOGHDFK-XO\LQ0RQWUHDO4XHEHFIRXQGHGLQ,WLV WKHODUJHVWIHVWLYDORILWVNLQGLQWKHZRUOG´:.MM *LOEHUW 5R]RQ IRXQGHG WKH IHVWLYDO LQ ³DV D WZRGD\ )UDQFRSKRQHHYHQW,Q$QG\1XOPDQMRLQHGWKHIHVWLYDO VVWDIIDQG LQWURGXFHG $QJORSKRQH HYHQWV DV ZHOO XQGHU 1XOPDQ V VWHZDUGVKLS WKH IHVWLYDOLQFUHDVHGWRDIXOOPRQWKZLWK)UHQFKVSHDNLQJSHUIRUPHUVGXULQJ WKH ILUVW KDOI DQG (QJOLVK VSHDNHUV LQ WKH VHFRQG KDOI ,QWHUQDWLRQDO DQG QRQYHUEDO DFWV DFUREDWV SDQWRPLPHV HWF DUH VFDWWHUHG WKURXJKRXW WKH SURJUDP´:.MM 'XULQJWKHIHVWLYDO³HDFKGD\VWUHHWSHUIRUPHUV 1HZ9DXGHYLOOLDQV DQG RWKHU DFWV ERWK YRFDO DQG YLVXDO SHUIRUP WKURXJKRXW WKH FLW\ SDUWLFXODUO\ LQ WKH /DWLQ 4XDUWHU ²DQ DUHD NQRZQ IRU LWV WKHDWUHV FDIpV DQG ERXWLTXH VKRSSLQJ ,Q WKH HYHQLQJV WKH QLJKWFOXEV DQG OLYH YHQXH WKHDWUHV RIIHU VSHFLDO SURJUDPV VXSSRUWLQJ WKH SHUIRUPHUV $OWKRXJK -XVW IRU/DXJKVDWWUDFWVVSHFWDWRUVIURPDURXQGWKHZRUOGPDQ\RIWKRVHLQWKH DXGLHQFHDUHWDOHQWVFRXWVERRNLQJDJHQWVSURGXFHUVDQGPDQDJHUVIURP WKHHQWHUWDLQPHQWLQGXVWU\3HUIRUPLQJDWWKHIHVWLYDOLVRQHRIWKHELJJHVW RSSRUWXQLWLHV IRU XQGLVFRYHUHG WDOHQW WR VKRZFDVH WKHLU DFW LQ IURQW RI LQGXVWU\SURIHVVLRQDOV´:.MM E (GLQEXUJK)HVWLYDO)ULQJH 7KH VHFRQG FRPHG\ IHVWLYDO WR EH LQWURGXFHG KHUH FRQFHUQV ³(GLQEXUJK)HVWLYDO)ULQJH´ 7KH WHUP ³(GLQEXUJK )HVWLYDO )ULQJH 7KH )ULQJH ´ ZDV HVWDEOLVKHG ³LQ DV DQ DOWHUQDWLYH WR WKH (GLQEXUJK ,QWHUQDWLRQDO )HVWLYDO´ DQG ³WDNHVSODFHLQ6FRWODQG VFDSLWDOGXULQJIRXUZHHNVHYHU\$XJXVW´:. NN()) 7KH )ULQJH ³VWDUWHG OLIH ZKHQ HLJKW WKHDWHU FRPSDQLHV WXUQHG XS XQLQYLWHGWRWKHLQDXJXUDO(GLQEXUJK,QWHUQDWLRQDO)HVWLYDOLQ6HYHQ SHUIRUPHGLQ(GLQEXUJKRQHXQGHUWRRNDYHUVLRQRIWKHPHGLHYDOPRUDOLW\ SOD\ (YHU\PDQ LQ'XQIHUPOLQH&DWKHGUDODERXWPLOHVQRUWKDFURVVWKH ULYHU )RUWK LQ )LIH 7KHVH JURXSV DLPHG WR WDNH DGYDQWDJH RI WKH ODUJH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
WKHDWHU FURZGV H[SHFWHG DQG VKRZFDVH WKHLU RZQ PRUH DOWHUQDWLYH WKHDWHU´:.NN 7KH )ULQJH LV ZHOONQRZQ IRU ³HYHQWV IURP WKH SHUIRUPLQJ DUWV SDUWLFXODUO\ WKHDWUH DQG FRPHG\ ZKLFK KDV VHHQ VXEVWDQWLDO JURZWK LQ UHFHQW\HDUV DOWKRXJKGDQFHDQGPXVLFDOVRILJXUHVLJQLILFDQWO\LQ RI VKRZV ZHUH FRPHG\ DQG ZHUH WKHDWHU 7KHDWHU HYHQWV FDQ UDQJH IURP WKH FODVVLFV RI DQFLHQW *UHHFH :LOOLDP 6KDNHVSHDUH DQG 6DPXHO%HFNHWWWRPRGHUQZRUNVDQGLQRIVKRZVZHUHZRUOG SUHPLHUHV +RZHYHU WKHUH LV QR VHOHFWLRQ FRPPLWWHH WR DSSURYH WKH HQWULHV²LW LV DQ XQMXULHG IHVWLYDO²VR DQ\ W\SH RI HYHQW LV SRVVLEOH WKH )ULQJHRIWHQVKRZFDVHVH[SHULPHQWDOZRUNVZKLFKPLJKWQRWEHDGPLWWHG WR D PRUH IRUPDO IHVWLYDO ,Q DGGLWLRQ WR WLFNHWHG HYHQWV LQFOXGHG LQ WKH SURJUDPPH WKHUH LV DQ RQJRLQJ VWUHHW IDLU SDUWLFXODUO\ RQ WKH 5R\DO 0LOH´:.NN 7KH RUJDQL]HUV RI WKH )ULQJH DUH ³WKH )HVWLYDO )ULQJH 6RFLHW\ WKH\ SXEOLVK WKH SURJUDPPH VHOO WLFNHWV DQG RIIHU DGYLFH WR SHUIRUPHUV IURP WKH )ULQJH RIILFH RQ WKH 5R\DO 0LOH %\ ZD\ RI VFDOH )ULQJH VROG WLFNHWVIRUSHUIRUPDQFHVRIVKRZVLQYHQXHV RYHU GD\V IRU DQ DYHUDJH RI RYHU DGPLVVLRQV DQG SHUIRUPDQFHV SHU GD\ 7KHUH ZHUH DQ HVWLPDWHG SHUIRUPHUV IURP FRXQWULHV´:.NN :KDW LV LPSRUWDQW DERXW WKH )ULQJH LV WKDW LW ³KDV VSDZQHG PDQ\ QRWDEOH RULJLQDO VKRZV DQG KHOSHG NLFNVWDUW WKH FDUHHUV RI PDQ\ ZULWHUV DQG SHUIRUPHUV ,Q $ODQ %HQQHWW 'XGOH\ 0RRUH 3HWHU &RRN DQG -RQDWKDQ 0LOOHU SHUIRUPHG DW WKH 5R\DO /\FHXP WKHDWUH LQ %H\RQG WKH )ULQJHLQWURGXFLQJDQHZZDYHRI%ULWLVKVDWLUHDQGKHUDOGLQJDFKDQJHLQ DWWLWXGHVWRZDUGVSROLWLFLDQVDQGWKHHVWDEOLVKPHQW´:.NN ,Q GUDPD ³7RP 6WRSSDUG V SOD\ 5RVHQFUDQW] DQG *XLOGHQVWHUQ $UH 'HDGZDVILUVWSHUIRUPHGLQLWVIXOOYHUVLRQDWWKH)ULQJH,WKDVDOVR ODXQFKHG RU DGYDQFHG WKH FDUHHUV RI D QXPEHU RI QRWHG DFWRUV VXFK DV 'HUHN -DFREL ZKR VWDUUHG LQ D VL[WKIRUP SURGXFWLRQ RI +DPOHW ZKLFK ZDVYHU\ZHOOUHJDUGHG7KH)ULQJHVDZWKHEUHDNRXWSHUIRUPDQFHRI &UDLJ )HUJXVRQ DV %LQJ +LWOHU D SDURG\ RI DOO WKH EHUSDWULRWLF QDWLYH IRONVLQJHUVZKRVHHPHGWRLQIHFWHYHU\SXEOLFSHUIRUPDQFHLQ6FRWODQG VDZ D SURGXFWLRQ RI $QJU\ 0HQ VWDJHG DW WKH $VVHPEO\ 5RRPV XVLQJ HVWDEOLVKHG FRPHGLDQV LQ WKH UROHV RI WKH WZHOYH MXURUV ,W VWDUUHG 2ZHQ2 1HLOOLQWKHUROHPDGHIDPRXVE\+HQU\)RQGD-XURU6WHSKHQ )URVW 3KLO 1LFKRO DQG %LOO %DLOH\ DOVR IHDWXUHG´ :. NN 0 +XWFKLQV$%RURZLW]&+ $QGLQFRPHG\³WKH)ULQJHKDVSURYLGHGDSODWIRUPWKDWKDVDOORZHG WKHFDUHHUVRIPDQ\SHUIRUPHUVWREORRP,QWKHVYDULRXVPHPEHUV
&KDSWHU7KH%RG\ZLWK/LPLWV
RI WKH 0RQW\ 3\WKRQ WHDP DSSHDUHG LQ VWXGHQW SURGXFWLRQV DV VXEVHTXHQWO\GLG5RZDQ$WNLQVRQ6WHSKHQ)U\+XJK/DXULHDQG(PPD 7KRPSVRQWKHODWWHUWKUHHZLWKWKH&DPEULGJH)RRWOLJKWV$WNLQVRQ ZDVDW2[IRUG1RWDEOHFRPSDQLHVLQWKHVKDYHLQFOXGHG&RPSOLFLWH DQGWKH1DWLRQDO7KHDWUHRI%UHQW0RUHUHFHQWFRPHG\SHUIRUPHUVWRKDYH EHHQ GLVFRYHUHG LQFOXGH 5RU\ %UHPQHU )DVFLQDWLQJ $LGD 5HGXFHG 6KDNHVSHDUH &RPSDQ\ 6WHYH &RRJDQ -HQQ\ (FODLU 7KH /HDJXH RI *HQWOHPHQ$O0XUUD\DQG5LFK+DOO´:.NN F 0HOERXUQH,QWHUQDWLRQDO&RPHG\)HVWLYDO $QG WKH WKLUG FRPHG\ IHVWLYDO WR EH LQWURGXFHG KHUH FRQFHUQV ³0HOERXUQH,QWHUQDWLRQDO&RPHG\)HVWLYDO´0,&) 0,&)LV³WKHWKLUGODUJHVWLQWHUQDWLRQDOFRPHG\IHVWLYDOLQWKHZRUOG EHKLQG(GLQEXUJK V)ULQJH)HVWLYDODQG0RQWUHDO V-XVW)RU/DXJKV´DQG ³HVWDEOLVKHGLQLWWDNHVSODFHDQQXDOO\LQ0HOERXUQHRYHUIRXUZHHNV LQ $SULO W\SLFDOO\ RSHQLQJ RQ RU DURXQG $SULO )RRO V 'D\ $SULO 7KH 0HOERXUQH7RZQ+DOOKDVVHUYHGDVWKHIHVWLYDOKXEVLQFHWKHHDUO\V EXWSHUIRUPDQFHVDUHKHOGLQYHQXHVWKURXJKRXWWKHFLW\´:.OO 7KH IHVWLYDO KDV JURZQ VXEVWDQWLYHO\ VLQFH IRU LQVWDQFH ³E\ LW FRQWDLQHG RYHU VKRZV DQG ZDV EHLQJ DWWHQGHG E\ VRPH SDWURQV DQQXDOO\ ,Q LW SOD\HG KRVW WR D UHFRUG VKRZV DQG SHUIRUPHUV ERWK ORFDO DQG LQWHUQDWLRQDO LQFOXGLQJ DUWLVWV IURP WKH 86 &DQDGD WKH 8. ,UHODQG DQG &KLQD ,Q DGGLWLRQ LW DFKLHYHG DQ DWWHQGDQFH RI RYHU DQG LWV KLJKHVWHYHU ER[ RIILFH UHYHQXH RI $ PLOOLRQ UDQNLQJ LW DV $XVWUDOLD V ODUJHVW FXOWXUDO HYHQW´ :. OO&/DIIDQ0,&) ,QLWDOO\0,&)³LVPDLQO\DYHKLFOHIRUVWDQGXSDQGFDEDUHWDFWV´EXW QRZ ³LWV SURJUDPPH KDV DOVR IHDWXUHG VNHWFK VKRZV SOD\V LPSURYLVDWLRQDOWKHDWUHGHEDWHVPXVLFDOVKRZVDQGDUWH[KLELWLRQV7KHUH LVDOVRDWUDGLWLRQIRUH[SHULPHQWLQJZLWKXQXVXDOFRPHG\YHQXHVVXFKDV 5RG 4XDQWRFN V %XV WRXUV DQG WKH VLPLODU 6WRUPLQJ 0RXQW $OEHUW %\ 7UDP ZKLFK XVHG EXVHV DQG WUDPV UHVSHFWLYHO\ DV PRELOH WKHDWUHV LQ ZKLFK WKH DXGLHQFH PHPEHUV ZHUH DOVR SDVVHQJHUV´ :. OO * 0LOQH5-RKQVRQ5+DUULV ,Q DGGLWLRQ 0,&) ³DOVR SURGXFHV WKUHH IODJVKLS GHYHORSPHQW SURJUDPV ³5DZ &RPHG\±$XVWUDOLD V ELJJHVW RSHQ PLF FRPSHWLWLRQ´ ³&ODVV&ORZQV±DQDWLRQDOFRPHG\FRPSHWLWLRQIRUKLJKVFKRROVWXGHQWV´ DQG³'HDGO\)XQQ\±DQ,QGLJHQRXVFRPHG\FRPSHWLWLRQWKDWFHOHEUDWHVWKH XQLTXHKXPRXURI,QGLJHQRXV$XVWUDOLDQV7KH)HVWLYDODOVRXQGHUWDNHVDQ DQQXDO QDWLRQDO 5RDGVKRZ VKRZFDVLQJ )HVWLYDO KLJKOLJKWV LQ UHJLRQDO WRZQVDFURVV$XVWUDOLD´:.OO
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
3UREOHPVZLWKWKH&XOW)ROORZLQJRI&RPHGLDQV +RZHYHU WKH FXOW IROORZLQJ RI FRPHGLDQV KDV LWV RZQ SUREOHPV &RQVLGHUIRULOOXVWUDWLRQVRPHPDLQFULWLFLVPVEHORZ )LUVWO\ RQH PDLQ FULWLFLVP RI WKH FXOW IROORZLQJ RI FRPHGLDQV FRQFHUQV³TXDOLW\´ )RULQVWDQFH³WKHIUHHGRPWRSXWRQDQ\VKRZ´LQWKH)ULQJH³KDVOHG SHULRGLFDOO\WRFRQWURYHUV\ZKHQLQGLYLGXDOWDVWHVLQVH[XDOH[SOLFLWQHVVRU UHOLJLRQKDYHEHHQFRQWUDYHQHG7KLVKDVEURXJKWVRPHLQWRFRQIOLFWZLWK ORFDO FLW\ FRXQFLOORUV´ :. NN $QG ³RYHU WKH \HDUV WKLV DSSURDFK >WRSXWRQDQ\VKRZ@KDVOHGWRDGYHUVHFULWLFLVPDERXWWKHTXDOLW\RIWKH )ULQJH 0XFK RI WKLV FULWLFLVP FRPHV IURP LQGLYLGXDO DUWV FULWLFV LQ QDWLRQDOQHZVSDSHUVKDUGOLQHDILFLRQDGRVRIWKH(GLQEXUJK,QWHUQDWLRQDO )HVWLYDO DQG RFFDVLRQDOO\ IURP WKH (GLQEXUJK ,QWHUQDWLRQDO )HVWLYDO LWVHOI´:.NN 6HFRQGO\ DQRWKHU PDLQ FULWLFLVP RI WKH FXOW IROORZLQJ RI FRPHGLDQV FRQFHUQV³WLFNHWSULFHV´ )RULQVWDQFH³LQWKHPLGVRQO\WKHRFFDVLRQDOWRSVKRZ>LQWKH )ULQJH@FKDUJHG
SHUVHDWZKLOHWKHDYHUDJHSULFHZDV
±
LQ SULFHVZHUHIUHTXHQWO\
DQG
ZDVUHDFKHGIRUWKHILUVWWLPHLQ IRUDVKRZWKDWODVWHGKRXU6RPHRIWKHUHDVRQVWKDWDUHSXWIRUZDUGIRU WKH LQFUHDVHV LQFOXGH WKH LQFUHDVLQJ FRVWV DVVRFLDWHG ZLWK KLULQJ ODUJH YHQXHVWKHDWUHOLFHQFHVDQGUHODWHGFRVWVSOXVWKHSULFHRIDFFRPPRGDWLRQ GXULQJWKH(GLQEXUJK)HVWLYDOZKLFKLVH[SHQVLYHIRUSHUIRUPHUVDVZHOODV IRUDXGLHQFHV´:.NN 7KLV FULWLFLVP UHPDLQV HYHQ WKRXJK ³LQ UHFHQW \HDUV D GLIIHUHQW EXVLQHVV PRGHO KDV EHHQ DGRSWHG E\ WZR RUJDQLVDWLRQV 7KH )UHH )ULQJH DQG7KH/DXJKLQJ+RUVH)UHH(GLQEXUJK)ULQJH)HVWLYDOKDYHLQWURGXFHG WKHFRQFHSWRIWKHIUHHHQWU\VKRZWKRXJKWKHUHDUHFROOHFWLRQVDWWKHHQG RIHDFKSHUIRUPDQFH´:.NN 7KLUGO\ VWLOO DQRWKHU PDLQ FULWLFLVP RI WKH FXOW IROORZLQJ RI FRPHGLDQVFRQFHUQV³FRVWVWRSHUIRUPHUV´ )RULQVWDQFH³SXWWLQJRQDVKRZDWWKH)ULQJHLVFRVWO\WRSHUIRUPHUV GXHWRUHJLVWUDWLRQIHHVYHQXHKLUHFRVWRIDFFRPPRGDWLRQVDQGWUDYHOWR (GLQEXUJK7KHUHDUHJUDGXDWHGUHJLVWUDWLRQIHHVLQH[SHQVLYHYHQXHVDQG LQH[SHQVLYH DFFRPPRGDWLRQV EXW GHVSLWH WKLV IHZ VKRZV HYHQ EUHDN HYHQ´:.NN )RXUWKO\ RQH DGGLWLRQDO PDLQ FULWLFLVP RI WKH FXOW IROORZLQJ RI FRPHGLDQVFRQFHUQV³FRVWVWRYHQXHV´ )RULQVWDQFH³SXWWLQJRQVKRZV>LQWKH)ULQJH@LVFRVWO\WRYHQXHVDV ZHOO GXH WR WKHDWUH OLFHQVH IHHV ZKLFK E\ KDG ULVHQ LQ WKH SUHFHGLQJ WKUHH \HDUV DQG ZHUH HLJKW WLPHV DV KLJK DV IHHV LQ (QJOLVK
&KDSWHU7KH%RG\ZLWK/LPLWV
FLWLHVVWDUWLQJDW
IRUDYHQXHRIXSWRSHRSOHDQGULVLQJWR
IRUDYHQXHRIXSWRSHRSOH7KHVHIHHVKDYHEHHQFLWHGDVSXQLWLYH WR VPDOOHU YHQXHV DQG VLWHVSHFLILF SHUIRUPDQFHV«´ :. NN 7 &RUQZHOO $QGILIWKO\DQRWKHUDGGLWLRQDOPDLQFULWLFLVPRIWKHFXOWIROORZLQJRI FRPHGLDQVFRQFHUQV³LQFOXVLYLW\´ )RU LQVWDQFH WKH (GLQEXUJK &RPHG\ $ZDUGV ³ZHUH FULWLFLVHG IRU EHLQJ WKH VHFRQG FRQVHFXWLYH \HDU LQ ZKLFK QR IHPDOH DFWV ZHUH VKRUWOLVWHG,QWKH\ ZHUHFULWLFLVHGIRUDOOWKH QRPLQHHVEHLQJ PDOH ZKLWH(QJOLVKDQGDOOSHUIRUPLQJDWWKHVDPHYHQXH7KH3OHDVDQFH´:. PP$$NEDU6& ,QDGGLWLRQ³D6FRWWLVKDFWKDVQHYHUZRQWKHDZDUGDQGQR6FRWWLVK DFWV ZHUH QRPLQDWHG EHWZHHQ ZKHQ 3KLO .D\ DQG 'RQQD 0F3KDLO ZHUH QRPLQDWHGDQG ZKHQ .HYLQ%ULGJHV ZDV QRPLQDWHGIRU%HVW 1HZFRPHU 3KLO 1LFKRO WKH ZLQQHU LQ ZDV ERUQ LQ 6FRWODQG WR D 6FRWWLVKPRWKHUEXWVXEVHTXHQWO\JUHZXSLQ&DQDGD´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
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
VRXQGQHVVLQDV\VWHPRILGHDVDVWKH IRXQGDWLRQRIWKH)ULQJH WKHUHLV LQIRUPDOQHVV HJ WKH QRQIRUPDO H[LVWHQFH RI LQFRQVLVWHQF\ DQG XQVRXQGQHVV LQ WKH )ULQJH DV VKRZQ LQ WKH FULWLFLVP WKDW WKH )ULQJH LV VXSSRVHGWRDQDOWHUQDWLYHWRWKHRIILFLDO(GLQEXUJK,QWHUQDWLRQDO)HVWLYDO DQG \HW ³DW WLPHV LWVHOI VSURXWV D IULQJH´ EHFDXVH ³SDUWLFLSDWLQJ LQ WKH )ULQJH UHTXLUHV UHJLVWUDWLRQ SD\PHQW RI D UHJLVWUDWLRQ IHH DQG XVH RI D )ULQJH YHQXH´ VR ³VRPH DUWLVWV´ ZKR FRXOG QRW DIIRUG WKH FRVWV KDG WR ³SHUIRUP RXWVLGH RI WKH DXVSLFHV RI WKH )ULQJH HLWKHU LQGLYLGXDOO\ RU DV SDUWRIDIHVWLYDORULQDVVRFLDWLRQZLWKDYHQXHHLWKHURXWGRRUVRULQQRQ )ULQJH YHQXHV´ WR WKH SRLQW WKDW LQ WKHVH DUWLVWV JRW IHG XS DQG IRUPHG ³WKH )ULQJH RI WKH )ULQJH´ IHVWLYDO WR EH DQ DOWHUQDWLYH WR WKH )ULQJH :.NN $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH DEVROXWHQHVVUHODWLYHQHVV SULQFLSOH LI WKHUH LV DEVROXWHQHVV HJ WKH DEVROXWH ³KDUGOLQH DILFLRQDGRV RI WKH (GLQEXUJK ,QWHUQDWLRQDO )HVWLYDO´ WKHUH LV UHODWLYHQHVV HJ ZKDW LV JRRG IRU WKH (GLQEXUJK ,QWHUQDWLRQDO )HVWLYDO LV QRW QHFHVVDULO\ VR IRU WKH (GLQEXUJK )HVWLYDO )ULQJH ³OHDGLQJ WR RXWEXUVWV RI DQLPRVLW\ EHWZHHQ WKH WZR IHVWLYDOV´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³VWDUWLQJ LQ ´ VRPH SHRSOH VHW XS D QHZ IHVWLYDO WR FKDOOHQJHWKH)ULQJHQDPHO\WKH³)ULQJHRIWKH)ULQJH´IHVWLYDORUVLPSO\ ³WKH )RUHVW )ULQJH´ :. NN / *DUGQHU $QG WKH UHYHUVH GLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH H[SOLFDELOLW\LQH[SOLFDELOLW\ SULQFLSOH LI WKHUH LV H[SOLFDELOLW\HJWKHH[SODQDWLRQE\WKHRUJDQL]HUVLQWKH)ULQJHWKDWWKH )ULQJHLVGHVLUDEOHEHFDXVHRILWV³IUHHGRPWRSXWRQDQ\VKRZ´ WKHUHLV LQH[SOLFDELOLW\HJWKHODFNRIVXIILFLHQWH[SODQDWLRQE\WKHRUJDQL]HUVLQ WKH )ULQJH RI ZK\ LWV ³IUHHGRP WR SXW RQ DQ\ VKRZ´ LV QHFHVVDULO\ GHVLUDEOHVLQFHIRUWKHFULWLFV³WKLVDSSURDFK>WRSXWRQDQ\VKRZ@KDVOHG
&KDSWHU7KH%RG\ZLWK/LPLWV
WR DGYHUVH FULWLFLVP DERXW WKH TXDOLW\ RI WKH )ULQJH´ $QG WKH UHYHUVH GLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH ILFWLRQUHDOLW\ SULQFLSOH LI WKHUH LV ILFWLRQ HJ WKH ILFWLRQDODVSHFWRIWKHIDLUQHVVRIWKH(GLQEXUJK&RPHG\$ZDUGVZKHQLW KDVDKLVWRU\RIGLVFULPLQDWLRQDJDLQVWQRPLQHHVZKRDUHQRW³PDOHZKLWH (QJOLVK´ WKHUH LV UHDOLW\ HJ WKH UHDOLVWLF DVSHFW RI WKH IDLUQHVV RI WKH (GLQEXUJK&RPHG\$ZDUGVZKHQLWLV³DZD\RIVXSSRUWLQJ\RXQJWDOHQW´ E\JLYLQJWKHPDZDUGV $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH ILQLWHQHVVWUDQVILQLWHQHVV SULQFLSOH LI WKHUH LV ILQLWHQHVVHJWKHILQLWHQXPEHURIWKHFRPHG\IHVWLYDOVLQWKHZRUOGOLNH WKHWKUHH PDMRURQHVDIRUHGLVFXVVHGQDPHO\ WKH-XVW IRU /DXJKV IHVWLYDO LQ &DQDGD WKH (GLQEXUJK )HVWLYDO )ULQJH LQ WKH 8. DQG 0HOERXUQH &RPHG\)HVWLYDOLQ$XVWUDOLD WKHUHLVWUDQVILQLWHQHVVHJWKHWUDQVILQLWH QXPEHURIDOOWKHLQGLYLGXDOVZKRKDYHHYHUDWWHQGHGFRPHG\IHVWLYDOVLQ KXPDQKLVWRU\ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH SUHFLVHQHVVYDJXHQHVV SULQFLSOH LI WKHUH LV SUHFLVHQHVV HJ WKH SUHFLVH LGHQWLILFDWLRQ RI WKUHH PDMRU FRPHG\ IHVWLYDOV WKDW LV WKH -XVW IRU /DXJKV IHVWLYDO LQ &DQDGD WKH (GLQEXUJK )HVWLYDO)ULQJHLQWKH8.DQG0HOERXUQH&RPHG\)HVWLYDOLQ$XVWUDOLD LQ WKH DUWLFOH DIRUHFLWHG WKHUH LV YDJXHQHVV HJ WKH YDJXHQHVV LQ WKH LGHQWLILFDWLRQRIWKHWKUHHPDMRUFRPHG\IHVWLYDOVLQWKHDUWLFOHDIRUHFLWHG VLQFH LW LV QRW FOHDU ZK\ WKHUH PXVW EH RQO\ WKUHH PDMRU RQHV QRW IRXU ILYHDQGVRRQ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH VLPSOHQHVVFRPSOLFDWHGQHVV SULQFLSOH LI WKHUH LV VLPSOHQHVV HJ WKH UHODWLYHO\ VLPSOH DQDO\VLV RI WKH )ULQJH DV DQ DOWHUQDWLYHWRWKH(GLQEXUJK,QWHUQDWLRQDO)HVWLYDOE\LWVDGYRFDWHV WKHUH LV FRPSOLFDWHGQHVV HJ WKH UHODWLYHO\ PRUH FRPSOLFDWHG DQDO\VLV RI WKH )ULQJH DV DQ DOWHUQDWLYH WR WKH (GLQEXUJK ,QWHUQDWLRQDO )HVWLYDO E\ FKDOOHQJLQJWKHFODLPVDQGDVVXPSWLRQVDVVKRZQLQWKHSUREOHPVSRLQWHG RXWE\WKHFULWLFVDVFLWHG $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHRSHQQHVVKLGGHQQHVVSULQFLSOHLIWKHUHLVRSHQQHVV HJWKHRSHQH[SORUDWLRQRIWKHUHODWLRQVKLSEHWZHHQVXSSRUWLQJ\RXQJ WDOHQWDQGJLYLQJWKHPDZDUGVOLNHWKH(GLQEXUJK&RPHG\$ZDUGV WKHUH LV KLGGHQQHVV HJ WKH KLGGHQ ELDV LQ WKH (GLQEXUJK &RPHG\ $ZDUGV EHFDXVH RI LWV KLVWRU\ RI GLVFULPLQDWLRQ DJDLQVW QRPLQHHV ZKR DUH QRW ³PDOHZKLWH(QJOLVK´ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHGHQVHQHVVHPSWLQHVVSULQFLSOHLIWKHUHLVGHQVHQHVV HJWKHUHODWLYHO\GHQVHUFRQFHQWUDWLRQRIHYHQWVLQFRPHG\DQGWKHDWUH LQ WKH )ULQJH WKHUH LV HPSWLQHVV HJ WKHUHODWLYHO\OHVV GHQVHRU PRUH HPSW\FRQFHQWUDWLRQRIHYHQWVOLNH³PXVLFDOVKRZVDQGDUWH[KLELWLRQV´LQ WKH)ULQJH $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
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³VWDQGDUGLVHG VWUXFWXUH RI D VHTXHQFHRIMRNHVZLWKSXQFKOLQHV´ WKHUHLVFKDRVHJWKHPRUHRUOHVV FKDRWLF QDWXUH RI LPSURYLVDWLRQDO FRPHG\ ³WR SHUIRUP VSRQWDQHRXVO\´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³DOWHUQDWLYHFRPHG\´LQSHUIRUPLQJDUWV WKHUH LV SUD[LV HJ WKH SUDFWLFDO DSSOLFDWLRQ RI ³DOWHUQDWLYH FRPHG\´ LQ SHUIRUPLQJDUWVWRWKHILHOGRIIHVWLYDOVOLNHWKH)ULQJH :.NN TT $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHFRQYHQWLRQQRYHOW\SULQFLSOHLIWKHUHLVFRQYHQWLRQ HJWKHFRQYHQWLRQDO ZLVGRPRIWKH(GLQEXUJK,QWHUQDWLRQDO)HVWLYDO LQ UHJDUG WR LWV PDLQVWUHDP YLHZV DERXW SHUIRUPLQJ DUWV WKHUH LV QRYHOW\ HJ WKH DOWHUQDWLYH QRYHO FKDOOHQJH WR WKH FRQYHQWLRQDO ZLVGRP RI WKH (GLQEXUJK ,QWHUQDWLRQDO )HVWLYDO LQ UHJDUG WR LWV PDLQVWUHDP YLHZV DERXW SHUIRUPLQJDUWVE\WKHQHZLGHDRIWKH)ULQJHZKLFKLVDQ³DOWHUQDWLYH´WR WKH PDLQVWUHDP (GLQEXUJK ,QWHUQDWLRQDO )HVWLYDO $QG WKH UHYHUVH GLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH HYROXWLRQWUDQVIRUPDWLRQ SULQFLSOH LI WKHUH LV HYROXWLRQ HJ WKH QDWXUDO HYROXWLRQ RI KXPDQV WR ODXJK LQ WKH VWDWH RI QDWXUH WKHUH LV WUDQVIRUPDWLRQ HJ WKH WHFKQLFDO WUDQVIRUPDWLRQ RI KXPDQDELOLW\WRODXJKE\WKHLQYHQWLRQRIFRPHG\DQGWKHRUJDQL]DLWRQRI FRPHG\IHVWLYDOV $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH
&KDSWHU7KH%RG\ZLWK/LPLWV
,QUHODWLRQWRWKHV\PPHWU\DV\PPHWU\SULQFLSOHLIWKHUHLVV\PPHWU\ HJWKHH[LVWHQFHRIGLIIHUHQWZD\VWRRUJDQL]HFRPHG\IHVWLYDOV WKHUHLV DV\PPHWU\ HJ WKH SRSXODULW\ RI WKH (GLQEXUJK ,QWHUQDWLRQDO )HVWLYDO DPRQJ PDLQVWUHDP IDQV²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³VWDQGDUGLVHG VWUXFWXUH RI D VHTXHQFH RI MRNHVZLWKSXQFKOLQHV´²EXWWKHFRQWULEXWLRQWRWKHPROGLQJDQGFRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI DOWHUQDWLYH FRPHG\ IRU D UHODWLYHO\ PRUH UDGLFDO PLQGVHW ZLWK LWV ³IUHHGRP WR SXW RQ DQ\ VKRZ´ LQFOXGLQJ WKRVH ZLWK ³LQGLYLGXDO WDVWHV LQ VH[XDO H[SOLFLWQHVV RU UHOLJLRQ´ ZKLFK³KDYHEHHQFRQWUDYHQHG´ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH $QG LQ UHODWLRQ WR WKH VWDELOLW\UHDFWLRQ SULQFLSOH LI WKHUH LV VWDELOLW\ HJ WKH UHODWLYHO\ PRUH VWDEOH FRQGLWLRQ RI WKH (GLQEXUJK ,QWHUQDWLRQDO )HVWLYDO LQ WKH ROGHU GD\V ZKHQ LW ZDV WKH PDLQVWUHDP LQVWLWXWLRQ IRU FRPHG\IHVWLYDOV WKHUHLVUHDFWLRQHJWKHPDLQVWUHDPLQVWLWXWLRQRIWKH (GLQEXUJK,QWHUQDWLRQDO)HVWLYDOWKHQOHGWRIXUWKHUFKDQJHVLQWKHILHOGRI FRPHG\IHVWLYDOVODWHURQDVLWFDXVHGVRPHQRQPDLQVWUHDPDUWLVWVWRVHW
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
XSWKH)ULQJHDVDQDOWHUQDWLYHWRWKHPDLQVWUHDP(GLQEXUJK,QWHUQDWLRQDO )HVWLYDO $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH
7KH%RG\3HUIRUPDQFHDQGWKH&RVPHWLF,QGXVWU\ $QRWKHU JRRG ZD\ WR HYDOXDWH WKH SRVVLELOLW\ DQG GHVLUDELOLW\ RI WKH ERG\IURPWKHSHUVSHFWLYHRIVRFLHW\LVWRH[SORUHWKHERG\SHUIRUPDQFH DQGWKHFRVPHWLFLQGXVWU\ 7KH WHUP ³FRVPHWLF´ LQ ³WKH FRVPHWLF LQGXVWU\´ LV ³IURP WKH *UHHN țȠıȝȘIJȚțȒ IJȑȤȞȘ NRVPHWLNƝ WHNKQƝ PHDQLQJ WHFKQLTXH RI GUHVV DQG RUQDPHQW IURP țȠıȝȘIJȚțȩȢ NRVPƝWLNRV VNLOOHG LQ RUGHULQJ RU DUUDQJLQJ ´ DQG ³IURP țȩıȝȠȢ NRVPRV PHDQLQJ DPRQJVW RWKHUV RUGHU DQG RUQDPHQW ´:.EE 7KXV ³FRVPHWLFV DUH VXEVWDQFHV XVHG WR HQKDQFH WKH DSSHDUDQFH RU RGRU RI WKH KXPDQ ERG\ &RVPHWLFV LQFOXGH VNLQFDUH FUHDPV ORWLRQV SRZGHUVSHUIXPHVOLSVWLFNVILQJHUQDLODQGWRHQDLOSROLVKH\HDQGIDFLDO PDNHXSWRZHOHWWHVSHUPDQHQWZDYHVFRORUHGFRQWDFWOHQVHVKDLUFRORUV KDLUVSUD\VDQGJHOVGHRGRUDQWVKDQGVDQLWL]HUEDE\SURGXFWVEDWKRLOV EXEEOHEDWKVEDWKVDOWVEXWWHUVDQGPDQ\RWKHUW\SHVRISURGXFWV´:. EE &RVPHWLF,QGXVWU\DQGLWV+LVWRU\ 7KHXVHRIFRVPHWLFVKDVDORQJKLVWRU\LQERWKSRVLWLYHDQGQHJDWLYH PHDQLQJV +LVWRULFDOO\³WKHILUVWDUFKDHRORJLFDOHYLGHQFHRIFRVPHWLFVXVDJHZDV IRXQG LQ (J\SW DURXQG %& GXULQJ WKH $QFLHQW (J\SW WLPHV ZLWK VRPH RI UR\DOW\ RZQLQJ PDNHXS VXFK DV 1HIHUWLWL 1HIHUWDUL PDVN RI 7XWDQNKDPXQHWF´:.EE %\WKH0LGGOH$JHV³DOWKRXJKLWVXVHZDVIURZQHGXSRQE\&KXUFK OHDGHUV PDQ\ ZRPHQ VWLOO ZRUH FRVPHWLFV $ SRSXODU IDG IRU ZRPHQ GXULQJ WKH 0LGGOH $JHV ZDV WR KDYH D SDOHVNLQQHG FRPSOH[LRQ ZKLFK ZDVDFKLHYHGWKURXJKHLWKHUDSSO\LQJSDVWHVRIOHDGFKDONRUIORXURUE\ EORRGOHWWLQJ:RPHQ ZRXOGDOVRSXW ZKLWHOHDGSLJPHQWWKDW ZDVNQRZQ DV FHUXVH RQWKHLUIDFHVWRDSSHDUWRKDYHSDOHVNLQ´:.EE35DR +RZHYHUFRVPHWLFXVDJHZDVQRWDOZD\VUHFHLYHGZLWKDSSURYDO)RU LOOXVWUDWLRQ ³FRVPHWLF XVH ZDV IURZQHG XSRQ DW PDQ\ SRLQWV LQ :HVWHUQ KLVWRU\)RUH[DPSOHLQWKHWKFHQWXU\PDNHXSZDVXVHGSULPDULO\E\ SURVWLWXWHV DQG 4XHHQ 9LFWRULD SXEOLFO\ GHFODUHG PDNHXS LPSURSHU YXOJDUDQGDFFHSWDEOHRQO\IRUXVHE\DFWRUV:RPHQLQWKHWKFHQWXU\ OLNHG WR EH WKRXJKW RI DV IUDJLOH ODGLHV 7KH\ FRPSDUHG WKHPVHOYHV WR
&KDSWHU7KH%RG\ZLWK/LPLWV
GHOLFDWHIORZHUVDQGHPSKDVL]HGWKHLUGHOLFDF\DQGIHPLQLQLW\7KH\DLPHG DOZD\V WR ORRN SDOH DQG LQWHUHVWLQJ 6RPHWLPHV ODGLHV GLVFUHHWO\ XVHG D OLWWOH URXJH RQ WKH FKHHNV DQG XVHG EHOODGRQQD WR GLODWH WKHLU H\HV WR PDNH WKHLU H\HV VWDQG RXW PRUH 0DNHXS ZDV IURZQHG XSRQ LQ JHQHUDO HVSHFLDOO\ GXULQJ WKH V ZKHQ VRFLDO HWLTXHWWH EHFDPH PRUH ULJLG´ :.EE-3DOOLQJVWRQ ,Q SHUIRUPLQJ DUWV RQ WKH RWKHU KDQG FRVPHWLF XVDJH ZDV RIWHQ DFFHSWHG )RU LQVWDQFH ³DFWUHVVHV«ZHUH DOORZHG WR XVH PDNH XS DQG IDPRXV EHDXWLHV VXFK DV 6DUDK %HUQKDUGW DQG /LOOLH /DQJWU\ FRXOG EH SRZGHUHG 0RVW FRVPHWLF SURGXFWV DYDLODEOH ZHUH VWLOO HLWKHU FKHPLFDOO\ GXELRXV RU IRXQG LQ WKH NLWFKHQ DPLG IRRG FRORULQJV EHUULHV DQG EHHWURRW´:.EE $QG³E\WKHPLGGOHRIWKHWKFHQWXU\FRVPHWLFVZHUHLQZLGHVSUHDG XVH E\ ZRPHQ LQ QHDUO\ DOO LQGXVWULDO VRFLHWLHV DURXQG WKH ZRUOG´ :. EE &RVPHWLF,QGXVWU\DQGLWV3URGXFWV &RVPHWLFSURGXFWVFDQFRPHLQDOOVKDSHVDQGVL]HV)RULQVWDQFH³D VXEVHWRIFRVPHWLFVLVFDOOHG PDNHXS ZKLFKUHIHUVSULPDULO\WRFRORUHG SURGXFWV LQWHQGHG WR DOWHU WKH XVHU¶V DSSHDUDQFH´ DQG LWV FRPPRQ W\SHV DUHVKRZQEHORZ:.EE65HHG ³/LSVWLFNOLSJORVVOLSOLQHUOLSSOXPSHUOLSEDOPOLSFRQGLWLRQHUOLS SULPHUDQGOLSERRVWHUV´ ³)RXQGDWLRQ´²³XVHG WR VPRRWK RXW WKH IDFH DQG FRYHU VSRWV RU XQHYHQ VNLQ FRORUDWLRQ 8VXDOO\ D OLTXLG FUHDP RU SRZGHU )RXQGDWLRQSULPHUFDQEHDSSOLHGEHIRUHWRJHWDVPRRWKHUILQLVK´ ³3RZGHU´²³XVHGWRVHWWKHIRXQGDWLRQJLYLQJDPDWWHILQLVKDQGDOVR WRFRQFHDOVPDOOIODZVRUEOHPLVKHV´ ³5RXJH%OXVKRU%OXVKHU´²³XVHGWREULQJRXWWKHFRORULQWKHFKHHNV DQG PDNH WKH FKHHNERQHV DSSHDU PRUH GHILQHG 7KLV FRPHV LQ SRZGHUFUHDPDQGOLTXLGIRUPV´ ³%URQ]HU´²³XVHG WR JLYH VNLQ D ELW RI FRORU E\ DGGLQJ D JROGHQ RU EURQ]HJORZ´ ³0DVFDUD´²³XVHGWRGDUNHQOHQJWKHQDQGWKLFNHQWKHH\HODVKHV,W LVDYDLODEOHLQQDWXUDOFRORUVVXFKDVEURZQDQGEODFNEXWDOVRFRPHV LQ EROGHU FRORUV VXFK DV EOXH SLQN RU SXUSOH 7KHUH DUH PDQ\ GLIIHUHQWIRUPXODVLQFOXGLQJZDWHUSURRIIRUWKRVHSURQHWRDOOHUJLHVRU VXGGHQWHDUV2IWHQXVHGDIWHUDQH\HODVKFXUOHUDQGPDVFDUDSULPHU´
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
³(\HOLG*OXH(\H/LQHU(\H6KDGRZ(\H6KLPPHUDQG*OLWWHU(\H 3HQFLOV DV ZHOO DV 'LIIHUHQW &RORU 3HQFLOV´²³XVHG WR FRORU DQG HPSKDVL]HWKHH\HOLGVODUJHUH\HVJLYHDPRUH\RXWKIXODSSHDUDQFH ´ ³(\HEURZ 3HQFLOV &UHDPV :D[HV *HOV DQG 3RZGHUV´²³XVHG WR FRORUDQGGHILQHWKHEURZV´ ³1DLO3ROLVK´²³XVHGWRFRORUWKHILQJHUQDLOVDQGWRHQDLOV´ ³&RQFHDOHU´²³XVHGWRFRYHUDQ\LPSHUIHFWLRQVRIWKHVNLQ´ ³0DNHXS5HPRYHU´²³XVHGWRUHPRYHWKHPDNHXSSURGXFWVDSSOLHG RQWKHVNLQ,WLVXVHGIRUFOHDQLQJWKHVNLQIRURWKHUSURFHGXUHVOLNH DSSO\LQJDQ\W\SHRIORWLRQDWHYHQLQJEHIRUHWKHSHUVRQJRWRVOHHS´ 6XUHO\WKHUHFDQEHRWKHUSURGXFWVVRWKHH[DPSOHVDERYHDUHLOOXVWUDWLYH QRWH[KDXVWLYH ,QSHUIRUPLQJDUWVLWLVLQWHUHVWLQJWRQRWHWKDW³WKHFKLQPDVNNQRZQ DVFKXWWLIRU.DWKDNDOLDSHUIRUPLQJDUWLQ.HUDOD,QGLDLVFRQVLGHUHGWKH WKLFNHVWPDNHXSDSSOLHGIRUDQ\DUWIRUP´:.EE &RVPHWLF,QGXVWU\DQGLWV3URILWV %HFDXVHRIWKHORQJKLVWRU\RIFRVPHWLFXVHLWLVQRWVXUSULVLQJWKDW QRZDGD\VWKHVHOOLQJDQGEX\LQJRIFRVPHWLFSURGXFWVDUHDELJEXVLQHVV OHDGLQJWRWKHULVHRIPRGHUQ³FRVPHWLFLQGXVWU\´ ,Q SHUIRUPLQJ DUWV WKLV OXFUDWLYH EXVLQHVV RI FRVPHWLFV FDQQRW EH LJQRUHG EHFDXVH ³PRVW DFWRUV DQG VLQJHUV«KDYH WKHLU RZQ SHUIXPH OLQH VXFKDV&HOLQH'LRQ ´IRULQVWDQFH:.EE ,Q DQ\ HYHQW ³JLYHQ WKH WHFKQRORJLFDO GHYHORSPHQW DQG WKH LPSURYHPHQWRIWKHPDQXIDFWXULQJSURFHVVRIFRVPHWLFVDQGQRWOHDVWGXH WR WKH FRQVWDQWO\ LQFUHDVLQJ GHPDQG RI VXFK SURGXFWV WKLV LQGXVWU\ UHSRUWHGDQLPSRUWDQWJURZWKLQWHUPVRISURILW7KHFRVPHWLFLQGXVWU\KDV QRWRQO\JURZQRQO\LQWKH8QLWHG6WDWHVEXWDOVRLQYDULRXVSDUWVRIWKH ZRUOG ZKLFK KDYH EHFRPH IDPRXV IRU WKHLU FRVPHWLF SUHFXWV 6RPH RI WKHVHLQFOXGH)UDQFH*HUPDQ\,WDO\DQG-DSDQ´:.EE )RU LQVWDQFH LQ *HUPDQ\ ³WKH FRVPHWLF LQGXVWU\ JHQHUDWHG VDOHV RI (85ELOOLRQDWUHWDLOVDOHVLQZKLFKPDGHRI*HUPDQFRVPHWLF LQGXVWU\ WKH UG LQ WKH ZRUOG DIWHU -DSDQ DQG WKH 8QLWHG 6WDWHV $OVR LW KDV EHHQ VKRZQ WKDW LQ WKH VDPH FRXQWU\ WKLV LQGXVWU\ KDV JURZQ ZLWK QHDUO\SHUFHQWLQRQH\HDUIURPWR7KHH[SRUWVRI*HUPDQ\ LQ WKLV LQGXVWU\ UHDFKHG LQ (85 ELOOLRQ ZKHUHDV WKH LPSRUWV RI FRVPHWLFVWRWDOHG(85ELOOLRQ´:.EE ,Q -DSDQ ZKLFK LV ³WKH VHFRQG ODUJHVW PDUNHW IRU FRVPHWLFV LQ WKH ZRUOG´WKHPDUNHWWKHUHLV³ZRUWKDERXW-3L@W LV«KLJKO\ GHEDWDEOH ZKHWKHU PDJLF VKRXOG EH SHUIRUPHG IRU SHRSOH ZLWKRXWDVNLQJRUZLWKRXWEHLQJDVNHGWRGRVR(XJHQH%XUJHURSLQHGWR -DP\ ,DQ 6ZLVV 2Q RQH OHYHO LW V WKH XOWLPDWH WULYLDOL]DWLRQ RI PDJLF DFFRVWLQJVWUDQJHUVRQWKHVWUHHW ´:.JJJ
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
%HVLGHV IRU SHUIRPULQJ DUWV LQ JHQHUDO LW LV DOVR QRW FOHDU WR ZKDW H[WHQWWKHDHVWKHWLFTXDOLW\RIDSHUIRUPDQFHLVDFWXDOO\ORZHUHGZKHQWKH DXGLHQFHDUHLQYLWHGWRSDUWLFLSDWH )RXUWKO\ RQH DGGLWLRQDO PDLQ FULWLFLVP RI WKH DQDO\VLV RI FRJQLWLRQ DQG WKH DXGLHQFH LQ SHUIRUPLQJ DUWV LV WKDW VWDJH LOOXVLRQV DUH HDVLHU VDLG WKDQGRQH )RULQVWDQFHWKHPDMRUSUREOHPVZLWKVWDJHLOOXVLRQVDUHWKDW³JUDQG LOOXVLRQVDUHXVXDOO\YHU\FRVWO\DQGGXHWRWKHLUVL]HDUHGLIILFXOWWRVKLS ZKLFK ZRXOG H[SODLQ WKH SDXFLW\ RI SURIHVVLRQDO VWDJH LOOXVLRQLVWV´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³EHDXW\ LV VHHQ DV DQ H[SHULHQFH WKDW KDV QRWKLQJ WR GR ZLWK DUWLVWLF PHULW´DQG³JRRGDUWLVQRWQHFHVVDULO\EHDXWLIXO´LQVRIDUDVLWVDWLVILHVWKH FULWHULRQ RI FRJQLWLYH SURFHVVLQJ IOXHQF\ IRU ³SDWWHUQ V VLPSOLFLW\´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
&KDSWHU7KH3UHVHQFHZLWK&RQVWUDLQWV
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³WKH SV\FKRORJ\ RI DUW´ IRU WKH VWXG\ RI ³WKH SHUFHSWLRQ FRJQLWLRQ DQG FKDUDFWHULVWLFV RI DUW DQG LWV SURGXFWLRQ´ WKHUH LV UHODWLYHQHVV HJ ZKDW LV DSSURSULDWH IRU ³WKH SV\FKRORJ\ RI DUW´ IRU WKH VWXG\ RI ³WKH SHUFHSWLRQ FRJQLWLRQ DQG FKDUDFWHULVWLFVRIDUWDQGLWVSURGXFWLRQ´LVQRWQHFHVVDULO\VRIRUWKHFULWLFV LQ SV\FKRDQDO\VLV IHPLQLVP DQG LQ SKHQRPHQRORJ\ DV ³WKH\ FULWLTXHG SV\FKRORJ\ IRU EHLQJ DQWLFRQWH[WXDO DQG FXOWXUDOO\ QDwYH´ $QG WKH UHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHSDUWLDOLW\WRWDOLW\SULQFLSOHLIWKHUHLVSDUWLDOLW\HJ WKHSDUWLDOYLHZRIWKH IXWXUH RIWKHVWXG\RIWKHDUWLIORRNHG ZLWKLQWKH SHUVSHFWLYH RI ³DUW SV\FKRORJ\´ WKHUH LV WRWDOLW\ HJ WKH PRUH KROLVWLF YLHZ RI WKH IXWXUH RI WKH VWXG\ RI WKH DUW VXFK WKDW WKH ZKROH LV QRW WKH VXPRILWVSDUWVWKDWLVLWVIXWXUHLVQRWUHGXFLEOHWRWKHSHUVSHFWLYHRI³WKH DUW SV\FKRORJ\´ DQG LWV FRPSHWLQJ SHUVSHFWLYHV OLNH ³SV\FKRDQDO\VLV´ ³IHPLQLVP´³SKHQRPHQRORJ\´DQG³WKHZULWLQJVRI:LWWJHQVWHLQ/\RWDUG DQG 'HUULGD´²EHFDXVH RI HPHUJHQW SURSHUWLHV DERXW LWV IXWXUH VWLOO QRW FRPSOHWHO\NQRZQ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
,Q UHODWLRQ WR WKH SUHGLFWDELOLW\XQSUHGLFWDELOLW\ SULQFLSOH LI WKHUH LV SUHGLFWDELOLW\ HJ WKH SUHGLFWDEOH WHQGHQF\ RI DUW SV\FKRORJ\ WR EH LQ GHFOLQH QRZDGD\V DV LW IDFHV FKDOOHQJHV IURP LWV FRPSHWLQJ SHUVSHFWLYHV OLNH ³SV\FKRDQDO\VLV´ ³IHPLQLVP´ ³SKHQRPHQRORJ\´DQG³WKH ZULWLQJV RI:LWWJHQVWHLQ/\RWDUGDQG'HUULGD´ WKHUHLVXQSUHGLFWDELOLW\HJWKH PRUH GLIILFXOW WDVN WR SUHGLFW H[DFWO\ WKH H[WHQW WR ZKLFK WKH FRPSHWLQJ SHUVSHFWLYHV OLNH ³SV\FKRDQDO\VLV´ ³IHPLQLVP´ ³SKHQRPHQRORJ\´ DQG ³WKH ZULWLQJV RI :LWWJHQVWHLQ /\RWDUG DQG 'HUULGD´ ZLOO UHPDLQ LQIOXHQWLDOMXVWDVDUWSV\FKRORJ\GLGQRWODVWORQJEHIRUHWKHP $QGWKH UHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH H[SOLFDELOLW\LQH[SOLFDELOLW\ SULQFLSOH LI WKHUH LV H[SOLFDELOLW\ HJ WKH H[SODQDWLRQ E\ WKRVH LQ WKH SURFHVVLQJ IOXHQF\ WKHRU\ RI DHVWKHWLF SOHDVXUH WKDW ³SHRSOH H[SHULHQFH EHDXW\´ RQ WKH EDVLV RI³WKHHDVHZLWKZKLFKLQIRUPDWLRQLVSURFHVVHGLQWKH«PLQG´ WKHUHLV LQH[SOLFDELOLW\ HJ WKH ODFN RI VXIILFLHQW H[SODQDWLRQ E\ WKRVH LQ WKH SURFHVVLQJ IOXHQF\ WKHRU\ RI DHVWKHWLF SOHDVXUH RI ZK\ LW LV QHFHVVDULO\ DSSURSULDWH WR IRFXV PRUH RQ WKH FRJQLWLYH SURFHVV RI IOXHQF\ VXFK WKDW ³EHDXW\LVVHHQDVDQH[SHULHQFHWKDWKDVQRWKLQJWRGRZLWKDUWLVWLFPHULW´ VLQFH IRUWKHFULWLFVLWGRHV QRWUHDOO\DQVZHURQHRIWKH PRVWLPSRUWDQW DHVWKHWLFTXHVWLRQV:KDWLVWKHDUWLVWLFPHULWRIDEHDXWLIXOZRUNRIDUW" $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH ILFWLRQUHDOLW\ SULQFLSOH LI WKHUH LV ILFWLRQ HJ WKH ILFWLRQDODVSHFWRISHRSOHLQWKHLUH[SHULHQFHRIEHDXW\ZKHQWKH\³GUDZ RQWKHLUVXEMHFWLYHH[SHULHQFHLQPDNLQJHYDOXDWLYHMXGJPHQWV´DFFRUGLQJ WR WKH SURFHVVLQJ IOXHQF\ WKHRU\ RI DHVWKHWLF SOHDVXUH´ WKHUH LV UHDOLW\ HJWKHUHDOLVWLFDVSHFWRISHRSOHLQWKHLUH[SHULHQFHRIEHDXW\ZKHQWKH\ HYDOXDWH ³EHDXW\´ RQ WKH EDVLV RI ³WKH HDVH ZLWK ZKLFK LQIRUPDWLRQ LV SURFHVVHG LQ WKH«PLQG´ DFFRUGLQJ WR WKH SURFHVVLQJ IOXHQF\ WKHRU\ RI DHVWKHWLFSOHDVXUH´ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH ILQLWHQHVVWUDQVILQLWHQHVV SULQFLSOH LI WKHUH LV ILQLWHQHVV HJ WKH ILQLWH QXPEHU RI WKH NLQGV RI PDJLF OLNH ³VWDJH LOOXVLRQV´³PLFURPDJLF´³VWUHHWPDJLF´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
&KDSWHU7KH3UHVHQFHZLWK&RQVWUDLQWV
DVVXPSWLRQV QRW ILYH VL[ VHYHQ DQG VR RQ $QG WKH UHYHUVH GLUHFWLRQ DOVRKROGVWUXH ,Q UHODWLRQ WR WKH VLPSOHQHVVFRPSOLFDWHGQHVV SULQFLSOH LI WKHUH LV VLPSOHQHVVHJUHODWLYHO\VLPSOHSDWWHUQVLQPXVLFDUHMXGJHGDVEHDXWLIXO EHFDXVHWKH\DUHIOXHQWLQDFFRUGDQFHWRWKHSURFHVVLQJIOXHQF\WKHRU\RI DHVWKHWLFSOHDVXUH WKHUHLVFRPSOLFDWHGQHVVHJ³YHU\FRPSOH[SDWWHUQV >LQ PXVLF@ DUH QRW MXGJHG DV EHDXWLIXO EHFDXVH WKH\ DUH GLVIOXHQW´ LQ DFFRUGDQFHWRWKHSURFHVVLQJIOXHQF\WKHRU\RIDHVWKHWLFSOHDVXUH $QGWKH UHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHRSHQQHVVKLGGHQQHVVSULQFLSOHLIWKHUH LVRSHQQHVV HJ WKH RSHQ H[SORUDWLRQ RI XVLQJ ³FXSVDQGEDOOV URXWLQH´ DQG WKH FUHDWLRQ RI ³EDE\ FKLFNV´ LQ PLFURPDJLF DV SHUIRUPHG E\ -RKQQ\ $FH 3DOPHU WKHUH LV KLGGHQQHVV HJ WKH KLGGHQ ELDV LQ WKH SHUIRUPDQFH RI ³EDE\FKLFNV´E\-RKQQ\$FH3DOPHUEHFDXVHRIKLVXVHRIGLIIHUHQWWULFNV ZLWKREMHFWVDQGKLVKDQGV $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHGHQVHQHVVHPSWLQHVVSULQFLSOHLIWKHUHLVGHQVHQHVV HJ WKH UHODWLYHO\ GHQVHU FRQFHQWUDWLRQ RI FRQFHUQV ZLWK FRJQLWLYH SURFHVVLQJIOXHQF\IRUWKRVHLQWKHSURFHVVLQJIOXHQF\WKHRU\RIDHVWKHWLF SOHDVXUH WKHUHLVHPSWLQHVVHJWKHUHODWLYHO\OHVVGHQVHRUPRUHHPSW\ FRQFHQWUDWLRQRIFRQFHUQV ZLWKWKHSKLORVRSKLFDOTXHVWLRQ FRQFHUQLQJWKH ³DUWLVWLF PHULW´ RI EHDXWL\ IRU WKRVH LQ WKH SURFHVVLQJ IOXHQF\ WKHRU\ RI DHVWKHWLFSOHDVXUH $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHFKDQJHFRQVWDQF\SULQFLSOHLIWKHUHLVFKDQJHHJ WKHHYHUQHZZD\VWRXQGHUVWDQGFRJQLWLRQLOOXVLRQDQGPDJLFDVVKRZQ LQ WKH GLIIHUHQW NLQGV RI PDJLF OLNH ³VWDJH LOOXVLRQV´ DQG ³PLFURPDJLF´ WKHUHLVFRQVWDQF\HJWKHHYHUFRQVWDQWH[LVWHQFHRIGLIIHUHQWSUREOHPV LQ WKH HYHU QHZ ZD\V WR XQGHUVWDQG FRJQLWLRQ LOOXVLRQ DQG PDJLF DV VKRZQ LQ WKH SUREOHPV DERXW ³VWDJH LOOXVLRQV´ DQG ³PLFURPDJLF´ SRLQWHGRXWE\WKHFULWLFV $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHRUGHUFKDRVSULQFLSOHLIWKHUHLVRUGHUHJWKHPRUH RU OHVV RUGHUO\ QDWXUH RI VLPSOH SDWWHUQV LQ PXVLF ZKLFK DUH ³IOXHQW´ LQ DFFRUGDQFHWRWKHSURFHVVLQJIOXHQF\WKHRU\RIDHVWKHWLFSOHDVXUH WKHUHLV FKDRVHJWKHPRUHRUOHVVFKDRWLFQDWXUHRI³YHU\FRPSOH[SDWWHUQV´LQ PXVLF ZKLFK DUH ³GLVIOXHQW´ LQ DFFRUGDQFH WR WKH SURFHVVLQJ IOXHQF\ WKHRU\RIDHVWKHWLFSOHDVXUH $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH VORZQHVVTXLFNQHVV SULQFLSOH LI WKHUH LV VORZQHVV HJ WKH UHODWLYHO\ VORZHU VSHHG RI ³JUDQG LOOXVLRQV´ WR EH PRYH DURXQG IURP RQH ORFDWLRQ WR DQRWKHU EHFDXVH RI WKHLU VL]H DQG WKH GLIILFXOW\ RI VKLSSLQJ WKHUH LV TXLFNQHVV HJ WKH UHODWLYHO\ TXLFNHU VSHHG RI ³PLFURPDJLF´WREHPRYHDURXQGIURPRQHORFDWLRQWRDQRWKHUEHFDXVHRI LWVVPDOOVL]H $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
,QUHODWLRQWRWKHH[SDQVLRQFRQWUDFWLRQSULQFLSOHLIWKHUHLVH[SDQVLRQ HJ WKH UHODWLYH H[SDQVLRQ RI WKH LQIOXHQFH RI VXFK SHUVSHFWLYHV OLNH ³SV\FKRDQDO\VLV´ ³IHPLQLVP´ ³SKHQRPHQRORJ\´ DQG ³WKH ZULWLQJV RI :LWWJHQVWHLQ /\RWDUG DQG 'HUULGD´ VLQFH WKH V LQ WKHLU FRPSHWLWLRQ ZLWK³DUWSV\FKRORJ\´ WKHUHLVFRQWUDFWLRQHJWKHUHODWLYHGHFOLQHRIWKH LQIOXHQFH RI ³DUW SV\FKRORJ\´ VLQFH WKH V LQ LWV FRPSHWLWLRQ ZLWK ³SV\FKRDQDO\VLV´ ³IHPLQLVP´ ³SKHQRPHQRORJ\´ DQG ³WKH ZULWLQJV RI :LWWJHQVWHLQ/\RWDUGDQG'HUULGD´ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGV WUXH ,Q UHODWLRQ WR WKH WKHRU\SUD[LV SULQFLSOH LI WKHUH LV WKHRU\ HJ WKH WKHRUHWLFDO FRQVWUXFWLRQ RI WKH SURFHVVLQJ IOXHQF\ WKHRU\ RI DHVWKHWLF SOHDVXUH WKHUH LV SUD[LV HJWKH SUDFWLFDO DSSOLFDWLRQ RI WKH SURFHVVLQJ IOXHQF\WKHRU\RIDHVWKHWLFSOHDVXUHWRRWKHUVILHOGVOLNH³WKHSV\FKRORJ\RI SHUFHSWLRQFRJQLWLYHSV\FKRORJ\VRFLDOSV\FKRORJ\HPSLULFDODHVWKHWLFV ZHE GHVLJQ PDUNHWLQJ ILQDQFH DQG DUFKHRORJ\´ $QG WKH UHYHUVH GLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHFRQYHQWLRQQRYHOW\SULQFLSOHLIWKHUHLVFRQYHQWLRQ HJ WKH FRQYHQWLRQDO ZLVGRP DERXW WKH ³DUWLVWLF PHULW´ RI EHDXW\ LQ DHVWKHWLFV WKHUH LV QRYHOW\ HJ WKH DOWHUQDWLYH QRYHO FKDOOHQJH WR WKH FRQYHQWLRQDOZLVGRPDERXWWKH³DUWLVWLFPHULW´RIEHDXW\LQDHVWKHWLFVE\ WKHQHZLGHDRI³WKHSURFHVVLQJIOXHQF\WKHRU\RIDHVWKHWLFSOHDVXUH´VXFK WKDW ³EHDXW\ LV VHHQ DV DQ H[SHULHQFH WKDW KDV QRWKLQJ WR GR ZLWK DUWLVWLF PHULW´ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH HYROXWLRQWUDQVIRUPDWLRQ SULQFLSOH LI WKHUH LV HYROXWLRQ HJ WKH QDWXUDO HYROXWLRQ RI KXPDQV WR KHDU VRXQGV LQ ERWK IOXHQWDQGGLVIOXHQWSDWWHUQVLQWKHVWDWHRIQDWXUH WKHUHLVWUDQVIRUPDWLRQ HJWKHWHFKQLFDOWUDQVIRUPDWLRQRIKXPDQDELOLW\WRXQGHUVWDQGVRXQGV LQ ERWK IOXHQW DQG GLVIOXHQW SDWWHUQV E\ WKH LQYHQWLRQ RI WKH SURFHVVLQJ IOXHQF\WKHRU\RIDHVWKHWLFSOHDVXUH $QGWKHUHYHUVHGLUHFWLRQDOVRKROGV WUXH ,QUHODWLRQWRWKHV\PPHWU\DV\PPHWU\SULQFLSOHLIWKHUHLVV\PPHWU\ HJ WKH H[LVWHQFH RI GLIIHUHQW VRXQGV LQ ERWK IOXHQW DQG GLVIOXHQW SDWWHUQV WKHUHLVDV\PPHWU\HJWKHSUHIHUHQFHIRUIOXHQWVRXQGSDWWHUQV E\ LQIDQWV EHFDXVH WKH\ OLNH ³FRQVRQDQW PHORGLHV´ LQ DFFRUGDQFH WR WKH SURFHVVLQJ IOXHQF\ WKHRU\ RI DHVWKHWLF SOHDVXUH²EXW WKH SUHIHUHQFH IRU GLVIOXHQWVRXQGSDWWHUQVE\-RKQ&DJHDQGKLVIROORZHUVEHFDXVHWKH\OLNH FKDRWLFPXVLF $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHVRIWQHVVKDUGQHVVSULQFLSOHLIWKHUHLVVRIWQHVVHJ WKHDSSUHFLDWLRQRIWKHVWXG\RIPXVLFFRJQLWLRQDVVKRZQLQWKHLQIOXHQFH RIWKHSURFHVVLQJIOXHQF\WKHRU\RIDHVWKHWLFSOHDVXUHLQRWKHUILHOGV WKHUH LVKDUGQHVVHJWKHFULWLTXHRIWKHVWXG\RIPXVLFFRJQLWLRQDVVKRZQLQ
&KDSWHU7KH3UHVHQFHZLWK&RQVWUDLQWV
WKH FULWLTXH LQ WKH ROGHU GD\V ZKHQ ³WKH ZD\V LQ ZKLFK PXVLF FDQ LOOXPLQDWH IXQGDPHQWDO LVVXHV LQ FRJQLWLRQ KDYH EHHQ XQGHUH[DPLQHG RU HYHQ GLVPLVVHG DV HSLSKHQRPHQDO´ :. FFF $QG WKH UHYHUVH GLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH VHULRXVQHVVSOD\IXOQHVV SULQFLSOH LI WKHUH LV VHULRXVQHVVHJWKHVHULRXVEXVLQHVVRIWKRVHLQPDJLFWRIRROWKHH\HVRI WKHDXGLHQFH WKHUHLVSOD\IXOQHVVHJWKHSOD\IXOSDUWRIWKRVHLQPDJLF ZKHQ WKH\ SOD\ DURXQG ZLWK GLIIHUHQW WHFKQLTXHV OLNH WKRVH ³VOHLJKWRI KDQGSHUIRUPDQFHVLQFOXGLQJGLFHERWWOHFDSVVXJDUFXEHVVSRQJHEDOOV SHEEOHV SHQV DQG FXSV DQG EDOOV´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³FRQVRQDQWPHORGLHV´RUE\ZD\RI³PDJLFLOOXVLRQV´ WKHUHLVGLIIHUHQFH LQ RXWFRPH HJ WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI ³FRQVRQDQW PHORGLHV´ IRU D UHODWLYHO\ PRUHFRJQLWLYHO\IOXHQWPLQGVHW²EXWWKHFRQWULEXWLRQWRWKHPROGLQJDQG FRQWURORIEHOLHIVYDOXHVDQGEHKDYLRUVE\ZD\RI³PDJLFLOOXVLRQV´IRUD UHODWLYHO\ PRUH SHUSHWXDOO\ LOOXVLYH PLQGVHW $QG WKH UHYHUVH GLUHFWLRQ DOVRKROGVWUXH $QG LQ UHODWLRQ WR WKH VWDELOLW\UHDFWLRQ SULQFLSOH LI WKHUH LV VWDELOLW\ HJ WKH UHODWLYHO\ PRUH VWDEOH FRQGLWLRQ RI DUW SV\FKRORJ\ LQ WKH ROGHU GD\V ZKHQ LW JDLQHG LQIOXHQFH DV ³DQ LQWHUGLVFLSOLQDU\ ILHOG WKDW VWXGLHV WKH SHUFHSWLRQ FRJQLWLRQ DQG FKDUDFWHULVWLFV RI DUW DQG LWV SURGXFWLRQ´ WKHUH LV UHDFWLRQ HJ WKH LQIOXHQFH RI DUW SV\FKRORJ\ WKHQ OHG WR IXUWKHU FKDQJHV ODWHU RQ ZKHQ LW IDFHG FRPSHWLQJ SHUVSHFWLYHV OLNH ³SV\FKRDQDO\VLV´ ³IHPLQLVP´ ³SKHQRPHQRORJ\´ DQG ³WKH ZULWLQJV RI :LWWJHQVWHLQ /\RWDUG DQG 'HUULGD´ VXFK WKDW ³E\ WKH V WKH FHQWUDOLW\RIDUWSV\FKRORJ\LQDFDGHP\EHJDQWRZDQH´ $QGWKHUHYHUVH GLUHFWLRQDOVRKROGVWUXH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7KH3UHVHQFH(PRWLRQVDQG$HVWKHWLFV $QRWKHU ZD\ WR HYDOXDWH WKH SRVVLELOLW\ DQG GHVLUDELOLW\ RI WKH SUHVHQFHRIWKHERG\ IURPWKHSHUVSHFWLYHRIWKHPLQGLVWRH[SORUHWKH SUHVHQFHHPRWLRQVDQGDHVWKHWLFV 7KHLVVXHDERXWHPRWLRQVDQGDHVWKHWLFVKHUHUHIHUVWR³HPRWLRQVWKDW DUH IHOW GXULQJ DHVWKHWLF DFWLYLW\ DQGRU DSSUHFLDWLRQ´ DQG ³WKH HPRWLRQ XVXDOO\FRQVWLWXWHVRQO\DSDUWRIWKHRYHUDOODHVWKHWLFH[SHULHQFHEXWPD\ SOD\DPRUHRUOHVVGHILQLWLYHUROHIRUWKDWVWDWH´:.KKK )RU LQVWDQFH LQ WKH FDVH RI PXVLF ³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´:.KKK 7KHWHUP ³DEVROXWH PXVLF´DND ³DEVWUDFW PXVLF´ LV ³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¶VVDNH DQG UHIHUV RQO\ WR LQVWUXPHQWDO PXVLF ZLWKRXW ZRUGV 7KH WK FHQWXU\ PXVLFFULWLF(GXDUG+DQVOLFNDUJXHGWKDWPXVLFFRXOGEHHQMR\HGDVSXUH VRXQGDQGIRUPWKDWLWQHHGHGQRFRQQRWDWLRQRIH[WUDPXVLFDOHOHPHQWVWR ZDUUDQWLWVH[LVWHQFH´:.KKK /HW¶VFRQVLGHUWKLVDHVWKHWLFFKDOOHQJHPRUHFORVHO\EHORZ (PRWLRQVDQGWKH$HVWKHWLF&KDOOHQJH 7KH DHVWKHWLF FKDOOHQJH DV VXPPDUL]HG DERYH FDQ EH GLVFXVVHG LQ GHWDLOKHUHDIWHUZLWKPXVLFDVDFDVHVWXG\ 7KHFODLPWKDW³PXVLFLVH[SUHVVLYHRIHPRWLRQV´RUWKDW³LWFDQHOLFLW HPRWLRQV LQ WKH OLVWHQHU´ FDQ UDLVH D QXPEHU RI GLIILFXOW TXHVWLRQV DV VKRZQEHORZ:.LLL
&KDSWHU7KH3UHVHQFHZLWK&RQVWUDLQWV
³+RZ FDQ D SLHFH RI PXVLF ZKHQ ZH FRQVLGHU SXUHO\ LQVWUXPHQWDO PXVLFZLWKRXWDQ\YRFDOVWH[WRUWLWOH DSSHDUHPRWLRQDODVDSLHFHRI PXVLFLVQRSV\FKRORJLFDODJHQW"´ ³:K\ ZRXOG ZHUHVSRQGHPRWLRQDOO\WR PXVLFNQRZLQJWKDWWKHUHLV QRERG\XQGHUJRLQJWKHHPRWLRQH[SUHVVHG"´ ³:KDWDUHSV\FKRORJLFDOPHFKDQLVPVWKDWOHDGWRWKHHPRWLRQDO UHDFWLRQLQWKHOLVWHQHU"´ ³:KDWLVWKHQDWXUHRIWKHVHHPRWLRQV"´ 1RZ³>W@KHILUVWTXHVWLRQGHDOVZLWKKRZHPRWLRQVDUHWUDQVSRUWHGLQWKH PXVLF TXHVWLRQV ZLWK HPRWLRQV LQ WKH OLVWHQHU 1RW PHQWLRQHG KHUH DUH HPRWLRQV LQ WKH FRPSRVHU RU WKH SHUIRUPHU +RZHYHU SHUFHLYLQJ D SLHFHRIPXVLFDVWREHHPRWLRQDODQGEHLQJPRYHGE\WKLVHPRWLRQPRVWO\ JRLQKDQG´:.LLL ,Q DQ\ HYHQW WKHUH DUH GLIIHUHQW DQVZHUV WR WKLV DHVWKHWLF FKDOOHQJH DERXW HPRWLRQV DQG PXVLF )RU LOOXVWUDWLRQ FRQVLGHU ILYH PDLQ DQVZHUV EHORZDVVXPPDUL]HGLQ7DEOH D $SSHDUDQFH(PRWLRQDOLVP 7KHILUVWDQVZHUWRWKHDHVWKHWLFFKDOOHQJHDERXWHPRWLRQVDQGPXVLF WREHFRQVLGHUHGKHUHFRQFHUQV³DSSHDUDQFHHPRWLRQDOLVP´ 6WHSKHQ 'DYLHV IRU LQVWDQFH XVHV WKH WHUP WR UHIHU WR ³WKH H[SUHVVLYHQHVV RI HPRWLRQV LQ PXVLF«$SSHDUDQFH HPRWLRQDOLVP KROGV WKDWPXVLFLVIRUH[DPSOHVDGLQWKHVDPH ZD\WKHSRVWXUHRIDSHUVRQLV VDGRUDZHHSLQJZLOORZLVVDG$SLHFHRIPXVLFLVQRWVDGEHFDXVHLWIHHOV VDGQHVV EXW EHFDXVH LW H[SUHVVHV VDGQHVV LW LV VDG LQ DSSHDUDQFH´ :. LLL 6R LI RQH DVNV ³:K\ GRHV VRPHWKLQJ WKDW LV QRW D SHUVRQ DSSHDU VDG"%HFDXVHZHFDQLGHQWLI\LQLWVVWUXFWXUHFHUWDLQFKDUDFWHULVWLFVWKDWZH NQRZIURPDSHUVRQ¶VH[SUHVVLRQRIVDGQHVV:HZRXOGVRPHWLPHVFDOODQ ROG KXQFKEDFNHG ODG\ VDG DOWKRXJK ZH GRQ¶W GRXEW WKDW VKH PLJKW IHHO FRPSOHWHO\GLIIHUHQWO\ EHFDXVHVKHORRNVOLNHVRPHRQHVDGZH¶YHDOUHDG\ VHHQ ,Q WKH VDPH ZD\ ZH ZRXOG FDOO D SLHFH RI PXVLF VDG EHFDXVH LWV G\QDPLF FKDUDFWHU UHVHPEOHV D SHUVRQ¶V H[SUHVVLRQ RI VDGQHVV,I D SHUVRQ GRHV QRW JLYH YHUEDO DFFRXQW RI KLV RU KHU IHHOLQJV WKH REVHUYHU FDQVWLOOQRWHWKHPIURPWKHSHUVRQ¶VSRVWXUHJDLWJHVWXUHVDWWLWXGHDQG FRPSRUWPHQW 0XVLF UHFDOOV DQ DSSHDUDQFH RI VDGQHVV HJ DFFRUGLQJ WR 'DYLHVE\DVORZDQGTXLHWGRZQZDUGPRYHPHQWXQGHUO\LQJSDWWHUQVRI XQUHVROYHG WHQVLRQ GDUN WLPEUH KHDY\ RU WKLFN KDUPRQLF EDVV WH[WXUHV´ :.LLL6'DYLHV 2IFRXUVH³QRWHYHU\ERG\DVVRFLDWHVWKHVDPHPXVLFDOIHDWXUHV ZLWK WKH VDPH HPRWLRQ $SSHDUDQFH HPRWLRQDOLVP GRHV QRW FODLP WKDW
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
PRYHPHQW LQ PXVLF JHQHUDOO\ UHVHPEOHV KXPDQ EHKDYLRXU EXW WKDW PDQ\ OLVWHQHUV KDYH WKLV SHUFHSWLRQ RI VLPLODULW\ DQG WKDW WKLV LV WKH FUXFLDO FRQQHFWLRQ WKDW FRQVWLWXWHV WKH H[SUHVVLYHQHVV RI PXVLF«'DYLHV FODLPV WKDWH[SUHVVLYHQHVVLVDQREMHFWLYHSURSHUW\RIPXVLFDQGQRWVXEMHFWLYHLQ WKH VHQVH RI EHLQJ SURMHFWHG LQWR WKH PXVLF E\ WKH OLVWHQHU 0XVLF¶V H[SUHVVLYHQHVV LV FHUWDLQO\ UHVSRQVHGHSHQGHQW LH LW LV UHDOL]HG LQ WKH OLVWHQHU¶V MXGJHPHQW +RZHYHU VXLWDEO\ VNLOOHG OLVWHQHUV GLVSOD\ D KLJK GHJUHH RI DJUHHPHQW LQ DWWULEXWLQJ HPRWLRQDO H[SUHVVLYHQHVV WR D FHUWDLQ SLHFH RI PXVLF $OWKRXJK WKLV LV DQ HPSLULFDO ILQGLQJ LW LQGLFDWHV DFFRUGLQJ WR 'DYLHV WKDW WKH H[SUHVVLYHQHVV RI PXVLF KDV WR EH VRPHZKDW REMHFWLYH ,I WKHUH ZDV QR H[SUHVVLYHQHVV LQ WKH PXVLF QR H[SUHVVLRQ FRXOG EH SURMHFWHG LQWR LW DV D UHDFWLRQ WR WKH PXVLF´ :. LLL E 3K\VLRORJLFDO$URXVDO 7KH VHFRQG DQVZHU WR WKH DHVWKHWLF FKDOOHQJH DERXW HPRWLRQV DQG PXVLFWREHFRQVLGHUHGKHUHFRQFHUQV³SK\VLRORJLFDODURXVDO´ 3DWULN-XVOLQ SURYLGHG³DIUDPHZRUNRI PHFKDQLVPV WKDWVRPH UHVHDUFKHUVEHOLHYHOHDGWRHPRWLRQVLQGXFHGE\PXVLF´DQGRQHRIWKHP KDVWRGRZLWK³SK\VLRORJLFDODURXVDO´DVVKRZQEHORZ:.LLL. 6FKHUHU ³&KDQJHVLQKHDUWUDWHEUHDWKLQJIUHTXHQF\WHPSHUDWXUHVHQVDWLRQ´ ³3DUW RI WKH ERG\¶V ZDUQLQJ V\VWHP IRU LPSRUWDQWXUJHQW HYHQWV RU GDQJHUDXGLWRU\FULWHULDIDVWORXGYHU\ORZKLJKSLWFKHGGLVVRQDQW´ ³5HOD[LQJHIIHFWVRIPXVLF´ ³%UDLQVWHPUHIOH[HVHDUO\WXUQRIIVIURPWKHDXGLWRU\SDWKZD\´ ,W³LQIOXHQFHVWKHSOHDVDQWQHVVRIDSLHFHRIPXVLFEXWPD\DOVRDIIHFW D SHUVRQ¶V VXEMHFWLYHFRJQLWLYH HYDOXDWLRQ RI D SLHFH RI WKURXJK SURSULRFHSWLYHIHHGEDFN´ ³/LVWHQHUVWU\WRHVWDEOLVKDQ RSWLPDODURXVDOOHYHO GHSHQGLQJRQWKH VLWXDWLRQ HJ 5DYH YV FDQGOHOLJKW GLQQHU DQG SHUVRQDOLW\ FKDUDFWHULVWLFV´ 6XUHO\WKHUHFDQEHRWKHUH[DPSOHVVRWKHRQHVDERYHDUHLOOXVWUDWLYH F (PRWLRQDO&RQWDJLRQ 7KHWKLUGDQVZHUWRWKHDHVWKHWLFFKDOOHQJHDERXWHPRWLRQVDQGPXVLF WREHFRQVLGHUHGKHUHFRQFHUQV³HPRWLRQDOFRQWDJLRQ´ 3DWULN -XVOLQ SURYLGHG DQRWKHU ³PHFKDQLVP´ DERXW ³HPRWLRQV LQGXFHG E\ PXVLF´ QDPHO\ ³HPRWLRQDO FRQWDJLRQ´ ZKLFK UHIHUV WR WKH ³PLPLFNLQJRIDQH[SUHVVLRQSHUFHLYHGLQWKHPXVLF´:.LLL
&KDSWHU7KH3UHVHQFHZLWK&RQVWUDLQWV
5HVHDUFKHUV KDYH ZRUNHG RQ WZR PDMRU SRVVLELOLWLHV RI HPRWLRQDO FRQWDJLRQDVVKRZQEHORZ:.LLL:-DPHV3-XVOLQ 6.RHOVFK ³%\ WDNLQJ RYHU FHUWDLQ DVSHFWV RI SK\VLRORJLFDO DURXVDO WKURXJK SURSULRFHSWLRQ´:LOOLDP-DPHV ±([ ³RXU IHHOLQJ RI WKH ERGLO\ FKDQJHV DV WKH\ RFFXU LV WKH HPRWLRQ´ ³%\PLUURULQJWKHH[SUHVVLYHQHVVRIPXVLFDV LFRQLFHPRWLRQV VORZ WHPSRORZSLWFKORZVRXQGOHYHOĺVDGQHVV´ ±([³SHUFHSWLRQRIVLPLODULW\EHWZHHQPXVLF¶VH[SUHVVLYHQHVVDQGD SHUVRQ¶VH[SUHVVLRQRIHPRWLRQV´ ±([ ³VLPLODULW\ RI PXVLF DQG HPRWLRQDO VSHHFK´ 3 -XVOLQ DQG 3 /DXNND ³PXVLFDQGVSHHFKVKDUHVRPHHPRWLRQVSHFLILFDFRXVWLF FXHVFRQFHUQLQJORXGQHVVWHPSRWLPEUHDWWDFN ´ ±([³FRQFHSWXDOL]LQJRI PXVLFDO VWUXFWXUHWKURXJK YLVXDOLPDJHU\ HJDVFHQGLQJVFDOHDV XSZDUG FUHDWLRQRILQWHUQDOODQGVFDSHVDV PXVLFDOLPDJHV´ ±([ ³SUHPRWRU UHSUHVHQWDWLRQ RI YRFDO VRXQG SURGXFWLRQ PD\ EH DFWLYDWHGE\RQO\OLVWHQLQJWRPXVLF´6.RHOVFK $JDLQWKHUHFDQEHRWKHUH[DPSOHVVRWKHRQHVDERYHDUHLOOXVWUDWLYH G 0XVLFDO([SHFWDQF\ 7KH IRXUWK DQVZHU WR WKH DHVWKHWLF FKDOOHQJH DERXW HPRWLRQV DQG PXVLFWREHFRQVLGHUHGKHUHFRQFHUQV³PXVLFDOH[SHFWDQF\´ 3DWULN -XVOLQ SURYLGHG VWLOO DQRWKHU ³PHFKDQLVP´ DERXW ³HPRWLRQVLQGXFHGE\PXVLF´QDPHO\³PXVLFDOH[SHFWDQF\´ZKLFKUHIHUV WRWKHH[SHFWDWLRQRIDOLVWHQHULQOLVWHQLQJWRDPXVLFDQGVRPHH[DPSOHV DUHLOOXVWUDWHGEHORZ:.LLL ³7KH FRXUVH RI D SLHFH RI PXVLF VRPHWLPHV YLRODWHV GHOD\V RU FRQILUPV D VNLOOHG OLVWHQHU¶V H[SHFWDWLRQ DERXW KRZ WKH SLHFH ZLOO FRQWLQXH'HSHQGHQFHRQOHDUQLQJDQGH[SHULHQFHRIOLVWHQHU ´ ³6\QWDFWLFDO UHODWLRQVKLS EHWZHHQ GLIIHUHQW SDUWV RI D SLHFH HJ KDUPRQLFSURJUHVVLRQUHSHWLWLRQRISDUWVPHORG\HWF ´ 7KH FKDQJHV DPRQJ GLIIHUHQW SDUWV RI D SLHFH RI PXVLF ³PLJKW LQIOXHQFHJHQHUDODURXVDODQGDSSUHKHQVLRQDQ[LHW\GLVDSSRLQWPHQW´ 2QFHDJDLQWKHUHFDQEHRWKHUH[DPSOHVVRWKHRQHVDERYHDUHLOOXVWUDWLYH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
H /HDUQLQJDQG0HPRU\ $QG WKH ILIWK DQVZHU WR WKH DHVWKHWLF FKDOOHQJH DERXW HPRWLRQV DQG PXVLFWREHFRQVLGHUHGKHUHFRQFHUQV³OHDUQLQJDQGPHPRU\´ 3DWULN -XVOLQ SURYLGHG RQH DGGLWLRQDO ³PHFKDQLVP´ DERXW ³HPRWLRQV LQGXFHG E\ PXVLF´ QDPHO\ ³OHDUQLQJ DQG PHPRU\´ ZKLFK UHIHUV WR WZR PHFKDQLVPV QDPHO\ ³HSLVRGLF PHPRU\´ DQG ³HYDOXDWLYH FRQGLWLRQLQJ´ ZKLFK ³DUH PRVW LQGLYLGXDO DPRQJ WKH FRPSRQHQWV PHQWLRQHG KHUH DQG DV WKH\ ODFN D GLUHFW FRQQHFWLRQ WKH\ DUH QRW EH FRQVLGHUHGSULPDU\SURFHVVHVWKDWOLQNPXVLFDQGHPRWLRQ´:.LLL ,QUHJDUGWR³HSLVRGLFPHPRU\´WKLVPHFKDQLVPUHIHUVWRVRPHWKLQJ OLNH³'DUOLQJWKH\DUHSOD\LQJRXUWXQHSKHQRPHQRQ´'DYLHV ZKLFKLV ³FHUWDLQO\RIHPLQHQWLPSRUWDQFHWRSHRSOH¶VHYHU\GD\HPRWLRQDOUHDFWLRQV WR PXVLF +RZHYHU LW LV QRW D SULPDU\ HPRWLRQDO UHDFWLRQ WR PXVLF DV WR VRPHRILWVVSHFLILFIHDWXUHVEXWDVHFRQGDU\RQH$QHPRWLRQDOUHVSRQVH HOLFLWHG E\ D SLHFH RI PXVLF RQO\ WKURXJK WKH PXVLF¶V DELOLW\ WR OLQN WR D FHUWDLQ PHPRU\ LV LQGHSHQGHQW RI ZKDW WKH PXVLF H[SUHVVHV LWVHOI 7KH VDPHVWULQJTXDUWHWPLJKWFRQMXUHXSKDSS\HPRWLRQVLQWKHZHGGLQJJXHVW DQGKRUULEOHHPRWLRQVLQDVXUYLYRUIURPDFRQFHQWUDWLRQFDPSZKRKHDUG LWWKHUH´:.LLL $QGLQUHJDUGWR³HYDOXDWLYHFRQGLWLRQLQJ´WKLVPHFKDQLVPUHIHUVWR ³PXVLFDVDFRQGLWLRQHGVWLPXOXVUHSHDWHGO\SDLUHGZLWKDQRWKHUHPRWLRQDO VWLPXOXV´DQGLV³OHVVVSHFLILFWKDQHSLVRGLFPHPRU\´DVLQ³WKH%DYDULDQ EHHUIHVWWXQH (LQ3URVLWGHU*HPXHWOLFKNHLW ´:.LLL (PRWLRQVDQG0XVLF7KHUDS\ 7KLVVWXG\RIHPRWLRQVDQGDHVWKHWLFVZLWKPXVLFDVDFDVHVWXG\KHUH LV QRW WULYLDO DV LW KDV LPSOLFDWLRQV IRU FOLQLFDO WKHUDS\ DQG D JRRG H[DPSOHLV³PXVLFWKHUDS\´ 7KHWHUP³PXVLFWKHUDS\´UHIHUVWR³DQLQWHUSHUVRQDOSURFHVVLQZKLFK D WUDLQHG PXVLF WKHUDSLVW XVHV PXVLF DQG DOO RI LWV IDFHWV²SK\VLFDO HPRWLRQDO PHQWDO VRFLDO DHVWKHWLF DQG VSLULWXDO²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´:.MMM
&KDSWHU7KH3UHVHQFHZLWK&RQVWUDLQWV
0XVLFWKHUDS\WDUJHWVGLIIHUHQWJURXSVZLWKGLIIHUHQWKHDOWKSUREOHPV )RU LOOXVWUDWLRQ FRQVLGHU VRPH H[DPSOHV EHORZ DV VXPPDUL]HG LQ 7DEOH D )RU&KLOGUHQ 7KHILUVWJURXSRILQGLYLGXDOVWREHFRQVLGHUHGKHUHIRUPXVLFWKHUDS\ KDVWRGRZLWK³FKLOGUHQ´ ,Q JHQHUDO ³WKHUH DUH WZR DSSURDFKHV WR PXVLF WKHUDS\ IRU FKLOGUHQ 7KH WKHUDS\ VHVVLRQ FDQ EH RQHRQRQH RU LQ D JURXS VHWWLQJ ERWK ZRUN YHU\ZHOOLIXVHGGHOLFDWHO\´:.MMM%XQWD ,QDQ\RIWKHWZRDSSURDFKHV³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´ :. MMM 3 1RUGRII / %XQW D ,QUHJDUGWRWKHXVHRIPXVLFDOLQVWUXPHQWV³LW¶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¶V KHDUWEHDW DW WLPHV VSHHG XS DW RWKHU WLPHV VORZ GRZQ QRW RQO\WKDWEXWRWKHUPXVLFFRQYHUVDWLRQVDQGHQYLURQPHQWDOQRLVHV´:. MMM31RUGRII E )RU6WURNH9LFWLPV 7KH VHFRQG JURXS RI LQGLYLGXDOV WR EH FRQVLGHUHG KHUH IRU PXVLF WKHUDS\KDVWRGRZLWK³VWURNHYLFWLPV´
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7RVWDUW³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´:.MMM 6+DQVHU 5HFHQWO\ ³UHVHDUFK VXJJHVWV WKDW PXVLF FDQ LQFUHDVH SDWLHQW V PRWLYDWLRQ DQG SRVLWLYH HPRWLRQV &XUUHQW UHVHDUFK DOVR VXJJHVWV WKDW ZKHQ PXVLF WKHUDS\ LV XVHG LQ FRQMXQFWLRQ ZLWK WUDGLWLRQDO WKHUDS\ LW LPSURYHV VXFFHVV UDWHV VLJQLILFDQWO\ 7KHUHIRUH LW LV K\SRWKHVL]HG WKDW PXVLF WKHUDS\ KHOSV VWURNH YLFWLPV UHFRYHU IDVWHU DQG ZLWK PRUH VXFFHVV E\ LQFUHDVLQJ WKH SDWLHQW V SRVLWLYH HPRWLRQV DQG PRWLYDWLRQ DOORZLQJ WKHP WR EH PRUH VXFFHVVIXO DQG GULYHQ WR SDUWLFLSDWH LQ WUDGLWLRQDO WKHUDSLHV´ :. MMM 6 1D\DN : 0DJHH % :KHHOHU 6.LP06FKDXHU66FKQHLGHU ,Q DGGLWLRQ ³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´:.MMM61D\DN:0DJHH %:KHHOHU F )RU2WKHU*URXSV $QG WKH WKLUG JURXS RI LQGLYLGXDOV WR EH FRQVLGHUHG KHUH IRU PXVLF WKHUDS\KDVWRGRZLWKRWKHUJURXSVZLWKGLIIHUHQWLOOQHVVHV )RULQVWDQFHLQUHJDUGWRKHDUWGLVHDVH³D&RFKUDQH UHYLHZRI FOLQLFDO WULDOV«IRXQG WKDW VRPH PXVLF PD\ UHGXFH KHDUW UDWH UHVSLUDWRU\UDWHDQGEORRGSUHVVXUHLQSDWLHQWVZLWKFRURQDU\KHDUWGLVHDVH %HQHILWV LQFOXGHG D GHFUHDVH LQ EORRG SUHVVXUH KHDUW UDWH DQG OHYHOV RI DQ[LHW\LQKHDUWSDWLHQWV´:.MMM $QGLQUHJDUGWRHSLOHSV\³UHVHDUFKVXJJHVWVWKDWOLVWHQLQJWR0R]DUW V SLDQR VRQDWD . FDQ UHGXFH WKH QXPEHU RI VHL]XUHV LQ SHRSOH ZLWK
&KDSWHU7KH3UHVHQFHZLWK&RQVWUDLQWV
HSLOHSV\7KLVKDVEHHQFDOOHGWKH 0R]DUWHIIHFW ´:.MMM-+XJKHV 3UREOHPVZLWKWKH6WXG\RI(PRWLRQVDQG$HVWKHWLFV +RZHYHUWKHVWXG\RIHPRWLRQVDQGDHVWKHWLFVLQSHUIRUPLQJDUWVKDV LWV RZQ SUREOHPV &RQVLGHU IRU LOOXVWUDWLRQ VRPH PDLQ FULWLFLVPV EHORZ DVVXPPDUL]HGLQ7DEOH )LUVWO\RQHPDLQFULWLFLVPRIWKHVWXG\RIHPRWLRQVDQGDHVWKHWLFVLQ SHUIRUPLQJ DUWV LV WKDW LW LV QRW FOHDU WR ZKDW H[WHQW WKH ³REMHFWLYH´ SURSHUW\RIPXVLFFDQEHPHDVXUHG )RULQVWDQFHIRUWKHFULWLFVPXVLF¶VH[SUHVVLYHQHVVLVKLJKO\OLVWHQHU GHSHQGHQW LH ³LW LV UHDOL]HG LQ WKH OLVWHQHU¶V MXGJHPHQW´ DQG WKH ³SHUFHSWLRQ RI VLPLODULW\ FDQ EH«KLJKO\ LQGLYLGXDO´ VR ZKDW LV ³REMHFWLYH´ DV FODLPHG E\ 'DYLHV UHPDLQV FRQWURYHUVLDO ,W LV QR ZRQGHU WKDW KH OHIW WKH FRQWURYHUVLDO LVVXH WR ³WKH WHVWLQJ RI PXVLF SV\FKRORJ\´ ZKLFK KRZHYHU KDV \HW WR SURYLGH DQ HPSLULFDO VXSSRUW RI WKLV ³REMHFWLYH´SURSHUW\RIPXVLF:.LLL 6HFRQGO\ DQRWKHU PDLQ FULWLFLVP RI WKH VWXG\ RI HPRWLRQV DQG DHVWKHWLFV LQ SHUIRUPLQJ DUWV LV WKDW VRPH RI LWV FODLPV DUH \HW WR EH VFLHQWLILFDOO\SURYHGRUMXVWLILHG )RU LQVWDQFH WKH ZRUN E\ 3DWULN -XVOLQ RQ ³D IUDPHZRUN RI
PHFKDQLVPV WKDW«OHDG WR HPRWLRQV LQGXFHG E\ PXVLF´ UHPDLQV FRQWURYHUVLDO EHFDXVH ³WKHUH LV PXFK GHEDWH DERXW WKHVH XQVFLHQWLILFDOO\ MXVWLILHGQRWLRQV´:.LLL 7KLUGO\ VWLOO DQRWKHU PDLQ FULWLFLVP RI WKH VWXG\ RI HPRWLRQV DQG DHVWKHWLFV LQ SHUIRUPLQJ DUWV LV WKDW WKH OLQNDJH EHWZHHQ HPRWLRQV DQG PXVLF LV QRW DV REYLRXV DV LWV DGYRFDWHV ZRXOG OLNH XV WR EHOLHYH ZLWK LPSOLFDWLRQVIRUWKHHIIHFWLYHQHVVRIPXVLFWKHUDS\ )RU LQVWDQFH IRU WKH FULWLFV LQ WKH FDVH DERXW PXVLF WKHUDS\ IRU FKLOGUHQ³ZKLOHVFLHQWLVWVKDYHGHWHUPLQHGWKDWDYDULHW\RISK\VLRORJLFDO DQG SV\FKRORJLFDO FKDQJHV RFFXU ZKHQ OLVWHQLQJ WR PXVLF EURDG FRQFOXVLRQV FDQQRW \HW EH PDGH FRQFHUQLQJ WKH UHODWLRQVKLS DQG WKH GLUHFWLRQ RI WKH UHODWLRQVKLS EHWZHHQ PXVLF DQG HPRWLRQ $GGLWLRQDOO\ WKHUHPD\EHPHGLDWLQJIDFWRUVZKLFKDIIHFWWKHVXFFHVVRIPXVLFWKHUDS\´ :.MMM$9LQN $QGIRXUWKO\RQHDGGLWLRQDOPDLQFULWLFLVPRIWKHVWXG\RIHPRWLRQV DQG DHVWKHWLFV LQ SHUIRUPLQJ DUWV LV WKDW VRPH RWKHU VWXGLHV RQ PXVLF WKHUDS\ KDG DFWXDOO\ TXHVWLRQHG WKH UHODWLRQVKLS EHWZHHQ PXVLF DQG HPRWLRQV )RU LQVWDQFH IRU WKH FULWLFV LQ WKH FDVH DERXW SDWLHQWV ZLWK KHDUW GLVHDVH ³WKH HIIHFW ZDV QRW FRQVLVWHQW DFURVV VWXGLHV DFFRUGLQJ WR -RNH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
%UDGW 3K' DQG &KHU\O 'LOHR 3K' ERWK RI 7HPSOH 8QLYHUVLW\ LQ 3KLODGHOSKLD 0XVLF GLG QRW DSSHDU WR KDYH PXFK HIIHFW RQ SDWLHQWV SV\FKRORJLFDO GLVWUHVV 7KH TXDOLW\ RI WKH HYLGHQFH LV QRW VWURQJ DQG WKH FOLQLFDOVLJQLILFDQFHXQFOHDU WKHUHYLHZHUVFDXWLRQHG´:.MMM 0RUH UHFHQW VWXGLHV DOVR TXHVWLRQHG ³WKH YDOLGLW\ RI WKH 0R]DUW (IIHFW DQGWKHVWXGLHVXQGHUJRQHWRUHDFKWKLVWKHRU\KDYHEHHQGRXEWHG GXH WR UHDVRQV VXFK DV WKH OLPLWDWLRQV LQ WKH RULJLQDO VWXG\ DQG WKH GLIILFXOW\ LQ SURYLQJ WKH HIIHFW RI 0R]DUW V PXVLF LQ VXEVHTXHQW VWXGLHV´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
&KDSWHU7KH3UHVHQFHZLWK&RQVWUDLQWV
³PHFKDQLVPV´ DERXW ³HPRWLRQV LQGXFHG E\ PXVLF´ WKHUH LV UHODWLYHQHVV HJ ZKDW LV WUXH IRU -XVOLQ LQ UHJDUG WR KLV ³PHFKDQLVPV´ LV QRW QHFHVVDULO\VRIRUE\WKHFULWLFVEHFDXVH³WKHUHLVPXFKGHEDWHDERXWWKHVH XQVFLHQWLILFDOO\ MXVWLILHG QRWLRQV´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³D&RFKUDQH UHYLHZRIFOLQLFDOWULDOV´WRDUJXHWKDWPXVLFWKHUDS\EURXJKW³EHQHILWV´ ZKLFK ³LQFOXGHG D GHFUHDVH LQ EORRG SUHVVXUH KHDUW UDWH DQG OHYHOV RI DQ[LHW\LQKHDUWSDWLHQWV´ WKHUHLVXQSUHGLFWDELOLW\HJWKHPRUHGLIILFXOW WDVNWRSUHGLFWH[DFWO\WKHH[WHQWWRZKLFKPXVLFWKHUDS\ZLOOEHHIIHFWLYH LQIXWXUHFDVHVVLQFHIRUWKHFULWLFV³WKHHIIHFWZDVQRWFRQVLVWHQWDFURVV VWXGLHV´ DQG ³PXVLF GLG QRW DSSHDU WR KDYH PXFK HIIHFW RQ SDWLHQWV SV\FKRORJLFDOGLVWUHVV´ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH H[SOLFDELOLW\LQH[SOLFDELOLW\ SULQFLSOH LI WKHUH LV H[SOLFDELOLW\HJWKHH[SODQDWLRQE\WKRVHDGYRFDWHVRIPXVLFWKHUDS\IRU FKLOGUHQ WKDW OLVWHQLQJ WR PXVLF LV GHVLUDEOH IRU FKLOGUHQ ³ZLWK FRPPXQLFDWLRQ SUREOHPV DWWHQWLRQ PRWLYDWLRQ DQG EHKDYLRUDO SUREOHPV´ WKHUHLVLQH[SOLFDELOLW\HJWKHODFNRIVXIILFLHQWH[SODQDWLRQ E\WKRVHDGYRFDWHVRIPXVLFWKHUDS\IRUFKLOGUHQRIZK\OLVWHQLQJWRPXVLF LV QHFHVVDULO\ GHVLUDEOH IRU FKLOGUHQ VLQFH IRU WKH FULWLFV ³EURDG FRQFOXVLRQV FDQQRW \HW EH PDGH FRQFHUQLQJ WKH UHODWLRQVKLS DQG WKH GLUHFWLRQ RI WKH UHODWLRQVKLS EHWZHHQ PXVLF DQG HPRWLRQ´ DQG ³DGGLWLRQDOO\WKHUHPD\EHPHGLDWLQJIDFWRUVZKLFKDIIHFWWKH VXFFHVVRI PXVLFWKHUDS\´ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH ILFWLRQUHDOLW\ SULQFLSOH LI WKHUH LV ILFWLRQ HJ WKH ILFWLRQDODVSHFWRIWKHVWXGLHVRQPXVLFWKHUDS\IRUFKLOGUHQZKHQIRUWKH FULWLFV³EURDGFRQFOXVLRQVFDQQRW\HWEHPDGHFRQFHUQLQJWKHUHODWLRQVKLS DQG WKH GLUHFWLRQ RI WKH UHODWLRQVKLS EHWZHHQ PXVLF DQG HPRWLRQ´ DQG ³DGGLWLRQDOO\WKHUHPD\EHPHGLDWLQJIDFWRUVZKLFKDIIHFWWKH VXFFHVVRI PXVLFWKHUDS\´ WKHUHLVUHDOLW\HJWKHUHDOLVWLFDVSHFWRIWKHVWXGLHVRQ PXVLFWKHUDS\IRUFKLOGUHQZKHQ³VFLHQWLVWVKDYHGHWHUPLQHGWKDWDYDULHW\ RI SK\VLRORJLFDO DQG SV\FKRORJLFDO FKDQJHV RFFXU ZKHQ OLVWHQLQJ WR
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
PXVLF´ DOWKRXJK ³WKH UHODWLRQVKLS DQG WKH GLUHFWLRQ RI WKH UHODWLRQVKLS EHWZHHQ PXVLFDQGHPRWLRQ´UHPDLQVXQFOHDU $QGWKHUHYHUVHGLUHFWLRQ DOVRKROGVWUXH ,Q UHODWLRQ WR WKH ILQLWHQHVVWUDQVILQLWHQHVV SULQFLSOH LI WKHUH LV ILQLWHQHVVHJWKHILQLWHQXPEHURIWKHDSSURDFKHVWRWKHGHEDWHDERXWWKH UHODWLRQVKLS EHWZHHQ HPRWLRQV DQG PXVLF OLNH ³DEVROXWH PXVLF´ YV ³SURJUDP PXVLF´ WKHUH LV WUDQVILQLWHQHVVHJWKHWUDQVILQLWH QXPEHURI DOO WKH LQGLYLGXDOV ZKR KDYH HYHU OLVWHQHG WR PXVLF LQ KLVWRU\ EH LW ³DEVROXWH PXVLF´ RU ³SURJUDP PXVLF´ $QG WKH UHYHUVH GLUHFWLRQ DOVR KROGVWUXH ,Q UHODWLRQ WR WKH SUHFLVHQHVVYDJXHQHVV SULQFLSOH LI WKHUH LV SUHFLVHQHVV HJ WKH SUHFLVH LGHQWLILFDWLRQ RI IRXU ³PHFKDQLVPV´ WKDW ³OHDGWRHPRWLRQVLQGXFHGE\PXVLF´E\-XVOLQ WKHUHLVYDJXHQHVVHJ WKHYDJXHQHVVLQWKHLGHQWLILFDWLRQRIWKHIRXU³PHFKDQLVPV´WKDW³OHDGWR HPRWLRQVLQGXFHGE\PXVLF´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³OLVWHQLQJ WR 0R]DUW VSLDQRVRQDWD.´DQGWKHUHGXFWLRQRI³WKHQXPEHURIVHL]XUHV LQ SHRSOH ZLWK HSLOHSV\´ DOVR NQRZQ DV WKH ³0R]DUW HIIHFW´ WKHUH LV KLGGHQQHVVHJWKHKLGGHQELDVLQWKHH[SORUDWLRQRIWKH³0R]DUWHIIHFW´ VLQFH IRU WKH FULWLFV ³WKH YDOLGLW\ RI WKH 0R]DUW (IIHFW DQG WKH VWXGLHV XQGHUJRQHWRUHDFKWKLVWKHRU\KDYHEHHQGRXEWHGGXHWRUHDVRQVVXFKDV WKHOLPLWDWLRQVLQWKHRULJLQDOVWXG\DQGWKHGLIILFXOW\LQSURYLQJWKHHIIHFW RI0R]DUW VPXVLFLQVXEVHTXHQWVWXGLHV´ $QGWKHUHYHUVHGLUHFWLRQDOVR KROGVWUXH ,QUHODWLRQWRWKHGHQVHQHVVHPSWLQHVVSULQFLSOHLIWKHUHLVGHQVHQHVV HJ WKH UHODWLYHO\ GHQVHU FRQFHQWUDWLRQ RI ³PRWLYDWLRQ DQG SRVLWLYH HPRWLRQV´ LQ D SDWLHQW LI KH UHFHLYHV ERWK PXVLF WKHUDS\ DQG WUDGLWLRQDO WKHUDS\EHFDXVH³FXUUHQWUHVHDUFKDOVRVXJJHVWVWKDWZKHQPXVLFWKHUDS\ LV XVHG LQ FRQMXQFWLRQ ZLWK WUDGLWLRQDO WKHUDS\ LW LPSURYHV VXFFHVV UDWHV VLJQLILFDQWO\´ WKHUHLVHPSWLQHVVHJWKHUHODWLYHO\OHVVGHQVHRUPRUH HPSW\FRQFHQWUDWLRQRI³PRWLYDWLRQDQGSRVLWLYHHPRWLRQV´LQDSDWLHQW
&KDSWHU7KH3UHVHQFHZLWK&RQVWUDLQWV
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³PXVLFWKHUDS\´ WKHUHLVFKDRVHJWKHPRUHRUOHVVFKDRWLFQDWXUHRIPXVLFIRUSDWLHQWVWR OLVWHQ WR LQ ³DYDQWPXVLF WKHUDS\´ ZKHQ ³PXVLF WKHUDSLVW PXVLF UHVHDUFKHU DQG H[SHULPHQWDO FRPSRVHU (QULFR &XUUHUL >@ FOLQLFDOO\ H[SORUHGWKHRULHVDQGFRQFHSWVGHYHORSHGE\WKH$PHULFDQFRPSRVHU-RKQ &DJH´ :.MMM $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH VORZQHVVTXLFNQHVV SULQFLSOH LI WKHUH LV VORZQHVV HJWKHUHODWLYHO\VORZHUVSHHGRIDPRWKHU¶VKHDUWEHDWKHDUGE\DIHWXV LQ WKH ZRPE ZKHQ WKH ³KHDUWEHDW«DW RWKHU WLPHV VORZ>V@ GRZQ´ DFFRUGLQJWR/HYLWLQ WKHUHLVTXLFNQHVVHJWKHUHODWLYHO\TXLFNHUVSHHG RI D PRWKHU¶V KHDUWEHDW KHDUG E\ D IHWXV LQ WKH ZRPE ZKHQ WKH ³KHDUWEHDW«DWWLPHVVSHHG>V@XS´DFFRUGLQJWR/HYLWLQ $QGWKHUHYHUVH GLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHH[SDQVLRQFRQWUDFWLRQSULQFLSOHLIWKHUHLVH[SDQVLRQ HJ WKH UHODWLYHO\ PRUH GHYHORSHG DELOLW\ RI D FKLOG ³WR KDQGOH DQ LQVWUXPHQW´ ZHOOEXWQRWRWKHUVVRLWLVLPSRUWDQWIRUWKH PXVLFWKHUDSLVW ³WR JLYH WKH FKLOG WKH ULJKW LQVWUXPHQW´ WKHUH LV FRQWUDFWLRQ HJ WKH UHODWLYHO\OHVVGHYHORSHGDELOLW\RIDFKLOG WRKDQGOH ³RWKHU´LQVWUXPHQWV DOWKRXJKKHFDQKDQGOHDFHUWDLQLQVWUXPHQWZHOOVRLWLVLPSRUWDQWIRUWKH PXVLFWKHUDSLVW ³WRJLYHWKHFKLOGWKHULJKWLQVWUXPHQW´ $QGWKHUHYHUVH GLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH WKHRU\SUD[LV SULQFLSOH LI WKHUH LV WKHRU\ HJ WKH WKHRUHWLFDOFRQVWUXFWLRQRIWKHUHODWLRQVKLSEHWZHHQHPRWLRQVDQGPXVLFLQ DHVWKHWLFVDQGPXVLFRORJ\ WKHUHLVSUD[LVHJWKHSUDFWLFDODSSOLFDWLRQRI WKH WKHRUHWLFDO FRQVWUXFWLRQ RI WKH UHODWLRQVKLS EHWZHHQ HPRWLRQV DQG PXVLFWRWKHILHOGRIFOLQLFDOWKHUDS\DVLQPXVLFWKHUDS\ $QGWKHUHYHUVH GLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHFRQYHQWLRQQRYHOW\SULQFLSOHLIWKHUHLVFRQYHQWLRQ HJWKHFRQYHQWLRQDO ZLVGRPDERXW³DEVROXWH PXVLF´IRULWVRZQVDNH WKHUH LV QRYHOW\ HJ WKH DOWHUQDWLYH QRYHO FKDOOHQJH WR WKH FRQYHQWLRQDO ZLVGRP DERXW ³DEVROXWH PXVLF´ IRU LWV RZQ VDNH E\ WKH QHZ LGHD RI
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
³SURJUDP PXVLF´ IRU WKH H[SUHVVLRQ RI HPRWLRQV ZLWK LPSOLFDWLRQV IRU PXVLFWKHUDS\ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH HYROXWLRQWUDQVIRUPDWLRQ SULQFLSOH LI WKHUH LV HYROXWLRQ HJ WKH QDWXUDO HYROXWLRQ RI KXPDQV WR JHW VLFN DQG UHFRYHU LQ WKH VWDWH RI QDWXUH WKHUH LV WUDQVIRUPDWLRQ HJ WKH WHFKQLFDO WUDQVIRUPDWLRQRIKXPDQDELOLW\WRJHWVLFNDQGUHFRYHUE\WKHLQYHQWLRQRI PXVLFWKHUDS\ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHV\PPHWU\DV\PPHWU\SULQFLSOHLIWKHUHLVV\PPHWU\ HJWKHH[LVWHQFHRIGLIIHUHQWZD\VWRWUHDWPXVLFEHLW³DEVROXWHPXVLF´ RU³SURJUDPPXVLF´ WKHUHLVDV\PPHWU\HJWKHSRSXODULW\RI³DEVROXWH PXVLF´DPRQJWKRVHLQ.DQWLDQDHVWKHWLFV²EXWWKHSRSXODULW\RI³SURJUDP PXVLF´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³FDWHJRULFDOLPSHUDWLYH´ ZRUOGYLHZ LQ .DQW¶V ODQJXDJH²EXW WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ZD\RISURJUDPPXVLFIRUDUHODWLYHO\PRUH³K\SRWKHWLFDOLPSHUDWLYH´ ZRUOGYLHZLQ.DQW¶VODQJXDJH $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH
&KDSWHU7KH3UHVHQFHZLWK&RQVWUDLQWV
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
7KH3UHVHQFHDQG1DWXUH 7KH SUHVHQFH RI WKH ERG\ ZKHQ H[DPLQHG IURP WKH SHUVSHFWLYH RI QDWXUHFDQUHYHDOVLWVSRVVLELOLW\DQGGHVLUDELOLW\LQDQDWXUDOIDVKLRQDQG WKLV FDQ EH VKRZQ E\ ZD\ RI WZR FDVH VWXGLHV QDPHO\ WKH SUHVHQFH FKDQFH DQG PXVLF DQG WKH SUHVHQFH SK\VLFV DQG VWDJHFUDIW²WREHDGGUHVVHGLQZKDWIROORZVUHVSHFWLYHO\
7KH3UHVHQFH&KDQFHDQG0XVLF $QH[FHOOHQWFDVHVWXG\KHUHWRXQGHUVWDQGWKHSUHVHQFHRIWKHERG\ IURP WKH SHUVSHFWLYH RI QDWXUH LV WR H[DPLQH WKH SUHVHQFH FKDQFH DQG PXVLF 7KH UHODWLRQVKLS EHWZHHQ FKDQFH DQG PXVLF LV EHVW XQGHUVWRRG LQ ³FKDQFH PXVLF´DOVR NQRZQ DV³DOHDWRULF PXVLF´RU³DOHDWRU\ PXVLF´ ² DOWKRXJK³WKHUHKDVEHHQFRQVLGHUDEOHFRQIXVLRQRIWKHWHUPV DOHDWRU\DQG LQGHWHUPLQDWHFKDQFHPXVLF ´:.Y ,Q DQ\ HYHQW WKH ZRUG ³DOHDWRU\´ LV ³IURP WKH /DWLQ ZRUG DOHD PHDQLQJ GLFH DQG UHIHUV WR ³PXVLF LQ ZKLFK VRPH HOHPHQW RI WKH FRPSRVLWLRQLVOHIWWRFKDQFHDQGRUVRPHSULPDU\HOHPHQWRIDFRPSRVHG ZRUN VUHDOL]DWLRQLVOHIWWRWKHGHWHUPLQDWLRQRILWVSHUIRUPHUV 7KHWHUP LV PRVW RIWHQ DVVRFLDWHG ZLWK SURFHGXUHV LQ ZKLFK WKH FKDQFH HOHPHQW LQYROYHVDUHODWLYHO\OLPLWHGQXPEHURISRVVLELOLWLHV´:.Y &KDQFH0XVLFDQG,WV&KDOOHQJH &KDQFH PXVLF RU DOHDWRU\ PXVLF SRVHV D FKDOOHQJH WR WUDGLWLRQDO PXVLF DV LQ ³FRQVRQDQW PHORGLHV´ EHFDXVH RI LWV VUHVV RQ FKDQFH RHSUDWLRQV 7R VWDUW FKDQFH PXVLF RU ³DOHDWRULF PXVLF´ ZDV NQRZQ WR ³(XURSHDQ FRPSRVHUV WKURXJK OHFWXUHV E\ DFRXVWLFLDQ :HUQHU 0H\HU (SSOHU DW WKH 'DUPVWDGW ,QWHUQDWLRQDO 6XPPHU &RXUVHV IRU 1HZ
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
0XVLF LQ WKH EHJLQQLQJ RI WKH V $FFRUGLQJ WR KLV GHILQLWLRQ D SURFHVV LV VDLG WR EH DOHDWRULF«LI LWV FRXUVH LV GHWHUPLQHG LQ JHQHUDO EXW GHSHQGV RQ FKDQFH LQ GHWDLO 0H\HU(SSOHU V *HUPDQ WHUPV $OHDWRULN QRXQ DQG DOHDWRULVFK DGMHFWLYH KRZHYHU ERWK PHDQ DOHDWRU\ %\ PLVWDNHQO\ UHQGHULQJ WKHP KLV WUDQVODWRU LQDGYHUWHQWO\ FUHDWHG D QHZ (QJOLVKZRUG DOHDWRULF ZKLFKTXLFNO\EHFDPHIDVKLRQDEOH´:.Y $-DFREV 7KLVGHILQLWLRQDVLGH²WKHKLVRWU\RIFKDQFHPXVLFFDQEHGDWHGEDFN ³WR DW OHDVW WKH ODWH WK FHQWXU\ ZLWK WKH JHQUH RI WKH FDWKROLFRQ H[HPSOLILHG E\ WKH 0LVVD FXLXVYLV WRQL RI -RKDQQHV 2FNHJKHP $ ODWHU JHQUHZDVWKH0XVLNDOLVFKHV:UIHOVSLHORUPXVLFDOGLFHJDPHSRSXODULQ WKHODWHWKDQGHDUO\WKFHQWXU\2QHVXFKGLFHJDPHLVDWWULEXWHGWR :ROIJDQJ $PDGHXV 0R]DUW 7KHVH JDPHV FRQVLVWHG RI D VHTXHQFH RI PXVLFDOPHDVXUHVIRUZKLFKHDFKPHDVXUHKDGVHYHUDOSRVVLEOHYHUVLRQV DQGDSURFHGXUHIRUVHOHFWLQJWKHSUHFLVHVHTXHQFHEDVHGRQWKHWKURZLQJ RIDQXPEHURIGLFH´:.Y %XW³WKHHDUOLHVWVLJQLILFDQWXVHRIDOHDWRU\IHDWXUHVLVIRXQGLQPDQ\ RI WKH FRPSRVLWLRQV RI $PHULFDQ &KDUOHV ,YHV LQ WKH HDUO\ WK FHQWXU\ +HQU\&RZHOODGRSWHG,YHV¶VLGHDVGXULQJWKHVLQVXFKZRUNVDVWKH 0RVDLF4XDUWHW6WULQJ4XDUWHW1R ZKLFKDOORZVWKHSOD\HUVWR DUUDQJH WKH IUDJPHQWV RI PXVLF LQ D QXPEHU RI GLIIHUHQW SRVVLEOH VHTXHQFHV &RZHOO DOVR XVHG VSHFLDOO\ GHYLVHG QRWDWLRQV WR LQWURGXFH YDULDELOLW\ LQWR WKH SHUIRUPDQFH RI D ZRUN VRPHWLPHV LQVWUXFWLQJ WKH SHUIRUPHUVWRLPSURYLVHDVKRUWSDVVDJHRUSOD\DGOLELWXP´:.Y 3*ULIILWKV (YHQ ³WKH )UHQFK DUWLVW 0DUFHO 'XFKDPS FRPSRVHG WZR SLHFHV EHWZHHQ DQG EDVHG RQ FKDQFH RSHUDWLRQV 2QH RI WKHVH (UUDWXP 0XVLFDO ZULWWHQ IRU WKUHH YRLFHV ZDV SXEOLVKHG LQ $PHULFDQ FRPSRVHU -RKQ &DJH V 0XVLF RI &KDQJHV LV RIWHQ FRQVLGHUHG WKH ILUVW SLHFH WR EH FRQFHLYHG ODUJHO\ WKURXJK UDQGRP SURFHGXUHV« WKRXJK KLV LQGHWHUPLQDF\ LV RI D GLIIHUHQW RUGHU IURP 0H\HU(SSOHU VFRQFHSW´:.Y'5DQGHO $OVR³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áDZVNL
&KDSWHU7KH3UHVHQFHZLWK&RQVWUDLQWV
'HSHQGLQJ RQ WKH YHKHPHQFH RI WKH WHFKQLTXH +RYKDQHVV¶V SXEOLVKHG VFRUHV DQQRWDWH WKHVH VHFWLRQV YDULRXVO\ IRU H[DPSOH DV )UHH WHPSR KXPPLQJ HIIHFW >LQ /RXVDG]DN@ DQG 5HSHDW DQG UHSHDW DG OLE EXW QRW WRJHWKHU >LQ 0HGLWDWLRQ RQ 2USKHXV@ ´ :. Y $ 5RVQHU / )LVKHU$+RYKDQHVV ,Q (XURSH FKDQFH PXVLF DOVR JDLQHG SRSXODULW\ )RU LQVWDQFH ³IROORZLQJ WKH LQWURGXFWLRQ RI WKH H[SUHVVLRQ DOHDWRU\ PXVLF E\ 0H\HU (SSOHUWKH)UHQFKFRPSRVHU3LHUUH%RXOH]>@ZDVODUJHO\UHVSRQVLEOH IRU SRSXODUL]LQJ WKH WHUP XVLQJ LW WR GHVFULEH ZRUNV WKDW JLYH WKH SHUIRUPHUFHUWDLQOLEHUWLHVZLWKUHJDUGWRWKHVHTXHQFLQJDQGUHSHWLWLRQRI SDUWV 7KH )UHQFK FRPSRVHU DQG EURDGFDVWHU 3LHUUH 6FKDHIIHU GHYHORSHG WKH WHUP MHX )UHQFK IRU SOD\ LQ UHIHUHQFH WR D WHFKQLTXH RI DOORZLQJ UDQGRPVRXQGVWRHQWHULQWRDPXVLFDOFRPSRVLWLRQ´:.Y 2WKHU (XURSHDQ H[DPSOHV LQFOXGH ³.ODYLHUVWFN ;, E\ .DUOKHLQ]6WRFNKDXVHQ ZKLFK IHDWXUHVHOHPHQWVWREH SHUIRUPHG LQD VHTXHQFH WR EH GHWHUPLQHG LQ HDFK FDVH E\ WKH SHUIRUPHU $ IRUP RI OLPLWHG DOHDWRU\ ZDV XVHG E\ :LWROG /XWRVáDZVNL EHJLQQLQJ ZLWK -HX[ 9pQLWLHQV LQ ± ZKHUH H[WHQVLYH SDVVDJHV RI SLWFKHV DQG UK\WKPV DUH IXOO\ VSHFLILHG EXW WKH UK\WKPLF FRRUGLQDWLRQ RI SDUWV ZLWKLQ WKH HQVHPEOH LV VXEMHFW WR DQ HOHPHQW RI FKDQFH /XWRVáDZVNL FDOOV WKHVH VHFWLRQV DGOLELWXP ,QVRPHZRUNVE\.U]\V]WRI3HQGHUHFNLFKDUDFWHULVWLF VHTXHQFHV DUH UHSHDWHG TXLFNO\ SURGXFLQJ D NLQG RI RVFLOODWLQJ VRXQG´ :.Y&5DH &KDQFH0XVLFDQGLWV&KDUDFWHULVWLFV &KDQFHPXVLFFDQEHDQDO\]HGLQWHUPVRILWVPDLQFKDUDFWHULVWLFVDQG DJRRGLOOXVWUDWLRQRIWKLVLVWKH ZRUNE\-RKQ &DJHRQFKDQFH PXVLFDV VKRZQ LQ WKH IROORZLQJ WKUHH PDLQ FKDUDFWHULVWLFV DQG VXPPDUL]HG LQ 7DEOH D $%UHDNZLWK+DUPRQ\ 7KH ILUVW PDLQ FKDUDFWHULWLF RI FKDQFH PXVLF ZLWK WKH ZRUN RI -RKQ &DJHDVDFDVHVWXG\KHUHKDVWRGRZLWK³EUHDNLQJDZD\ZLWKWUDGLWLRQDO KDUPRQ\´:.NNN )RULQVWDQFH³LQODWHV&DJHVWDUWHGGHYHORSLQJIXUWKHUPHWKRGV RIEUHDNLQJDZD\ZLWKWUDGLWLRQDOKDUPRQ\)RULQVWDQFHLQ6WULQJ4XDUWHW LQ )RXU 3DUWV &DJH ILUVW FRPSRVHG D QXPEHU RI JDPXWV FKRUGV ZLWK IL[HG LQVWUXPHQWDWLRQ 7KH SLHFH SURJUHVVHV IURP RQH JDPXW WR DQRWKHU,QHDFKLQVWDQFHWKHJDPXWZDVVHOHFWHGRQO\EDVHGRQZKHWKHULW FRQWDLQVWKHQRWHQHFHVVDU\IRUWKHPHORG\DQGVRWKHUHVWRIWKHQRWHVGR QRW IRUP DQ\ GLUHFWLRQDO KDUPRQ\ &RQFHUWR IRU 3UHSDUHG 3LDQR ±
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
XVHG D V\VWHP RI FKDUWV RI GXUDWLRQV G\QDPLFV PHORGLHV HWF IURP ZKLFK &DJH ZRXOG FKRRVH XVLQJ VLPSOH JHRPHWULF SDWWHUQV 7KH ODVW PRYHPHQW RI WKH FRQFHUWR KRZHYHU ZDV D VWHS WRZDUGV XVLQJ FKDQFH SURFHGXUHV ZKLFK &DJH DGRSWHG VRRQ DIWHUZDUGV´ :. Y - 3ULWFKHWW E &KDQFH2SHUDWLRQV 7KHVHFRQGPDLQFKDUDFWHULWLFRIFKDQFHPXVLFZLWKWKHZRUNRI-RKQ &DJH DV D FDVH VWXG\ KHUH KDV WR GR ZLWK ³FKDQFH RSHUDWLRQV´ IURP WKH &KLQHVHERRN,&KLQJ:.NNN 7KH XVH RI FKDQFH RSHUDWLRQV E\ &DJH FDQ EH LOOXVWUDWHG LQ WHUPV RI WKUHHFDWHJRULHV ,Q WKH ILUVW FDWHJRU\ ³DOO RI &DJH V PXVLF VLQFH ZDV FRPSRVHG XVLQJFKDQFHSURFHGXUHVPRVWFRPPRQO\XVLQJWKH,&KLQJ)RUH[DPSOH ZRUNV IURP 0XVLF IRU 3LDQR ZHUH EDVHG RQ SDSHU LPSHUIHFWLRQV WKH LPSHUIHFWLRQV WKHPVHOYHV SURYLGHG SLWFKHV DQG WKH , &KLQJ ZDV XVHG WR GHWHUPLQHWKHPHWKRGVRIVRXQGSURGXFWLRQRUWKHUK\WKPVHWF$ZKROH VHULHV RI ZRUNV ZDV FUHDWHG E\ DSSO\LQJ FKDQFH RSHUDWLRQV LH WKH , &KLQJWRVWDUFKDUWV$WODV(FOLSWLFDOLV± DQGDVHULHVRIHWXGHV (WXGHV $XVWUDOHV ± )UHHPDQ (WXGHV ± DQG (WXGHV %RUHDOHV &DJH V HWXGHV DUH DOO H[WUHPHO\ GLIILFXOW WR SHUIRUP D FKDUDFWHULVWLF GLFWDWHG E\ &DJH V VRFLDO DQG SROLWLFDO YLHZV WKH GLIILFXOW\ ZRXOG HQVXUH WKDW D SHUIRUPDQFH ZRXOG VKRZ WKDW WKH LPSRVVLEOH LV QRW LPSRVVLEOH ²WKLV EHLQJ &DJH V DQVZHU WR WKH QRWLRQ WKDW VROYLQJ WKH ZRUOG V SROLWLFDO DQG VRFLDO SUREOHPV LV LPSRVVLEOH &DJH GHVFULEHG KLPVHOI DV DQ DQDUFKLVW DQG ZDV LQIOXHQFHG E\ +HQU\ 'DYLG 7KRUHDX´ :.NNN-3ULWFKHWW'1LFKROOV03HUORII ,Q WKH VHFRQG FDWHJRU\ ³DQRWKHU VHULHV RI ZRUNV DSSOLHG FKDQFH SURFHGXUHV WR SUHH[LVWLQJ PXVLF E\ RWKHU FRPSRVHUV &KHDS ,PLWDWLRQ EDVHG RQ (ULN 6DWLH 6RPH RI 7KH +DUPRQ\ RI 0DLQH EDVHG RQ %HOFKHU DQG +\PQV DQG 9DULDWLRQV ,Q WKHVH ZRUNV &DJHZRXOGERUURZWKHUK\WKPLFVWUXFWXUHRIWKHRULJLQDOVDQGILOOLWZLWK SLWFKHVGHWHUPLQHGWKURXJKFKDQFHSURFHGXUHVRUMXVWUHSODFHVRPHRIWKH RULJLQDOV SLWFKHV Z@KDWORRNVIDLU WR WKH JRRVH VHHPV IRXO WR WKH JDQGHU´ 36DPXHOVRQ 7KH ZKROHSURFHVVRI³IDLUQHVV´LQWKLVNLQGRIWKHDWUHDOUHDG\IDYRUVWKHRWKHU VLGHRIVRFLDOFRQIOLFWVWKDWLVWKH³UXOHG´FODVV 7KLUGO\VWLOODQRWKHUPDLQFULWLFLVPRIWKHWKHDWUHRIWKHRSSUHVVHGLV WKDWLWQHJOHFWVWKHDHVWKHWLFLVVXHRISHUIRUPLQJDUWV )RULQVWDQFHWKHWKHDWUHRIWKHRSSUHVVHGIRFXVHVWRRPXFKRQVRFLDO DFWLRQ EXW WRR OLWWOH RQ DHVWKHWLFV LQ SHUIRUPLQJ DUWV OLNH WKH LVVXH FRQFHUQLQJ ZKDW UHDOO\ FRXQWV DV ³EHDXWLIXO´ ³GLVJXVWLQJ´ RU VRPHWKLQJ HOVHLQDWKHDWULFDOSHUIRUPDQFH $QG IRXUWKO\ DQ DGGLWLRQDO PDLQ FULWLFLVP RI WKH WKHDWUH RI WKH RSSUHVVHGLVWKDWLWLVLQFRQVLVWHQWLQWKDWLWVRZQWHFKQLTXHVWRGHFRQVWUXFW WKHGLVFRXUVHRIWKH³UXOLQJ´FODVVFDQEHUHIOHFWHGWRGHFRQVWUXFWLWVHOIWKH ³UXOHG´FODVV )RULQVWDQFHWKHWHFKQLTXHRI³SKRWRURPDQFH´LVVXSSRVHG³WRGHWHFW WKHSRLVRQLQILOWUDWLQJWKHSDJHVRIWKRVHSKRWRVWRULHVRUWKHFRPLFVDQG RWKHUIRUPVRIFXOWXUDODQGLGHRORJLFDOGRPLQDWLRQ´%XWWKHSUREOHPKHUH LVWKDWWKLVVDPHWHFKQLTXHFDQEHXVHGWRGHWHFWWKH³SRLVRQ´LQILOWUDWLQJ WKH RSSRVLWH VWRU\ IDYRULQJ WKH ³UXOHG´ FODVV IRU WKHLU RZQ FXOWXUDO DQG LGHRORJLFDOGRPLQDWLRQWKLVWLPHDOEHLWLQWKHUHYHUVHGLUHFWLRQ ,Q WKH HQG WKH WKHDWUH RI WKH RSSUHVVHG HQGV XS UHSODFLQJ WKH ³ROG´ FXOWXUDO DQG LGHRORJLFDO GRPLQDWLRQ E\ WKH ³UXOLQJ´ FODVV ZLWK D ³QHZ´ RQH E\ WKH ³UXOHG´ FODVV ZKLFK LV MXVW DQRWKHU IRUP RI RSSUHVVLRQ WRR
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
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³UXOLQJ´ FODVV WKHUH LV UHODWLYHQHVVHJZKDWLVULJKWIRUWKRVHLQWKHWKHDWUHRIWKHRSSUHVVHGWR ILJKWDJDLQVWWKHRSSUHVVLRQRIWKH³UXOLQJ´FODVVLVQRWQHFHVVDULO\VRIRU WKH FULWLFV VLQFH WKH WKHDWUH RI WKH RSSUHVVHG FDQ HQG XS UHSODFLQJ WKH
&KDSWHU7KH3UHVHQFHZLWK&RQVWUDLQWV
³ROG´ FXOWXUDO DQG LGHRORJLFDO GRPLQDWLRQ E\ WKH ³UXOLQJ´ FODVV ZLWK D ³QHZ´RQHE\WKH³UXOHG´FODVVZKLFKLVMXVWDQRWKHUIRUPRIRSSUHVVLRQ WRR $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHSDUWLDOLW\WRWDOLW\SULQFLSOHLIWKHUHLVSDUWLDOLW\HJ WKHSDUWLDOYLHZRIHDFKVLGHLQVRFLDOFRQIOLFWVEHLWRIWKHUXOLQJFODVVRU WKHUXOHGFODVV WKHUHLVWRWDOLW\HJWKHPRUHKROLVWLFYLHZRIWKHIXWXUH RIVRFLDOFRQIOLFWVVXFKWKDWWKHZKROHLVQRWWKHVXPRILWVSDUWVWKDWLV WKHIXWXUHRIVRFLDOFRQIOLFWVLVQRWUHGXFLEOHWRWKHVXPRIWKHFRQIOLFWLQJ YLHZVRIGLIIHUHQWVRFLDOJURXSVVLQFHWKHUHDUHHPHUJHQWSURSHUWLHVZKLFK FDQ WUDQVFHQG WKHP DOO LQ WKH ORQJ UXQ $QG WKH UHYHUVH GLUHFWLRQ DOVR KROGVWUXH ,Q UHODWLRQ WR WKH SUHGLFWDELOLW\XQSUHGLFWDELOLW\ SULQFLSOH LI WKHUH LV SUHGLFWDELOLW\HJWKHSUHGLFWDEOHWHQGHQF\RIWKRVHLQWKHWKHDWUHRIWKH RSSUHVVHG WR DFW RXW IRU ³D UHKHDUVDO RI UHYROXWLRQ´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³HQDFWPHQW´ZKLFKLV³GRQHLQDILFWLRQDOPDQQHU´ WKHUH LVUHDOLW\HJWKHUHDOLVWLFDVSHFWRIWKHWKHDWUHRIWKHRSSUHVVHGZKHQWKH VSHFWDWRUV FDQ DFW RXW ³D PRUH UHDOLVWLF GHSLFWLRQ RI WKH RSSUHVVLRQ´ EHFDXVH WKH\ ³DUH RIWHQ YLFWLPV RI WKH RSSUHVVLRQ´ LQ UHDO OLIH $QG WKH UHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH ILQLWHQHVVWUDQVILQLWHQHVV SULQFLSOH LI WKHUH LV ILQLWHQHVV HJ WKH ILQLWH QXPEHU RI WKH FDWHJRULHV RI VRFLDO JURXSV OLNH WKH ³UXOLQJ´ FODVV YV WKH ³UXOHG´ FODVV WKHUH LV WUDQVILQLWHQHVV HJ WKH WUDQVILQLWHQXPEHURIDOOWKHSRVVLELOHLQGLYLGXDOVLQKLVWRU\ZKREHORQJWR DQ\ RI WKH VRFLDO JURXSV UHJDUGOHVV RI ZKHWKHU KH LV IURP WKH ³UXOLQJ´ FODVVRUWKH³UXOHG´FODVV $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH SUHFLVHQHVVYDJXHQHVV SULQFLSOH LI WKHUH LV SUHFLVHQHVVHJWKHSUHFLVHFODVVLILFDWLRQRIWZRFRQIOLFWLQJJURXSVLQWKH WKHDWUH RI WKH RSSUHVVHG QDPHO\ WKH ³RSSUHVVRU´ DQG WKH ³RSSUHVVHG´
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
WKHUH LV YDJXHQHVV HJ WKH YDJXHQHVV LQ WKH FODVVLILFDWLRQ RI WKH WZR FRQIOLFWLQJJURXSVLQWKHWKHDWUHRIWKHRSSUHVVHGQDPHO\WKH³RSSUHVVRU´ DQGWKH³RSSUHVVHG´VLQFHLWLVQRWFOHDUZK\WKHUHPXVWEHRQO\WZRLQWKH FODVVLILFDWLRQ QRW WKUHH IRXU ILYH DQG VR RQ $QG WKH UHYHUVH GLUHFWLRQ DOVRKROGVWUXH ,Q UHODWLRQ WR WKH VLPSOHQHVVFRPSOLFDWHGQHVV SULQFLSOH LI WKHUH LV VLPSOHQHVV HJ WKH UHODWLYHO\ VLPSOH DQDO\VLV RI WKH WKHDWUH RI WKH RSSUHVVHG E\ LWV DGYRFDWHV WKHUH LV FRPSOLFDWHGQHVV HJ WKH UHODWLYHO\ PRUHFRPSOLFDWHGDQDO\VLVRIWKHWKHDWUHRIWKHRSSUHVVHGE\FKDOOHQJLQJ WKHFODLPVDQGDVVXPSWLRQVDVVKRZQLQWKHSUREOHPVSRLQWHGRXWE\WKH FULWLFVDVFLWHG $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHRSHQQHVVKLGGHQQHVVSULQFLSOHLIWKHUHLVRSHQQHVV HJWKHRSHQH[SORUDWLRQRIXVLQJWKHDWUHWRILJKWRSSUHVVLRQDVVKRZQLQ WKHWKHDWUHRIWKHRSSUHVVHG WKHUHLVKLGGHQQHVVHJWKHKLGGHQELDVLQ WKHWKHDWUHRIWKHRSSUHVVHGDVVKRZQLQLWVUDGLFDORUIDUOHIWLVWLGHRORJ\ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHGHQVHQHVVHPSWLQHVVSULQFLSOHLIWKHUHLVGHQVHQHVV HJWKHUHODWLYHO\GHQVHUFRQFHQWUDWLRQRIFRQFHUQVZLWK³WKHUHKHDUVDORI UHYROXWLRQ´ LQ WKH WKHDWUH RI WKH RSSUHVVHG WKHUH LV HPSWLQHVV HJ WKH UHODWLYHO\ OHVV GHQVH RU PRUH HPSW\ FRQFHQWUDWLRQ RI FRQFHUQV ZLWK WKH DHVWKHWLF LVVXH RI ZKDW UHDOO\ FRXQWV DV ³EHDXWLIXO´ LQ D JRRG WKHDWULFDO SHUIRUPDQFH LQ WKH WKHDWUH RI WKH RSSUHVVHG $QG WKH UHYHUVH GLUHFWLRQ DOVRKROGVWUXH ,QUHODWLRQWRWKHFKDQJHFRQVWDQF\SULQFLSOHLIWKHUHLVFKDQJHHJ WKHHYHUQHZZD\VWRGRWKHDWUHDVVKRZQLQWKHWKHDWUHRIWKHRSSUHVVHG WKHUHLVFRQVWDQF\HJWKHHYHUFRQVWDQWH[LVWHQFHRIGLIIHUHQWSUREOHPV LQ WKH HYHU QHZ ZD\V WR GR WKHDWUH DV VKRZQ LQ WKH SUREOHPV DERXW WKH WKHDWUH RI WKH RSSUHVVHG SRLQWHG RXW E\ WKH FULWLFV $QG WKH UHYHUVH GLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHRUGHUFKDRVSULQFLSOHLIWKHUHLVRUGHUHJWKHPRUH RU OHVV RUGHUO\ QDWXUH RI VRFLDO UHDOLW\ DV SRUWUD\HG E\ WKH UXOLQJ FODVV FODVV IRU LWV ³FXOWXUDO DQG LGHRORJLFDO GRPLQDWLRQ´ LQ DFFRUGDQFH WR WKH WKHDWUH RI WKH RSSUHVVHG WKHUH LV FKDRV HJ WKH PRUH RU OHVV FKDRWLF QDWXUHRIVRFLDOUHDOLW\DVSRUWUD\HGE\WKHUXOHGFODVVLQWKHWKHDWUHRIWKH RSSUHVVHG ZKHQ WKH SUDFWLWLRQHUV WU\ WR VXEYHUW RU ³GHWHFW WKH SRLVRQ LQILOWUDWLQJ´PDVVPHGLDVRDVWRGHFRQVWUXFWLWRUWRWHDULWDSDUW $QGWKH UHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH VORZQHVVTXLFNQHVV SULQFLSOH LI WKHUH LV VORZQHVV HJ WKH UHODWLYHO\ VORZHU VSHHG RI WKRVH ZKR QHYHU H[SHULHQFHV DQ\ WKHDWUHRIWKHRSSUHVVHG³WREHSURDFWLYH´LQUHVROYLQJDVLPLODUFRQIOLFWLQ RSSUHVVLRQ LI ³HQFRXQWHUHG LQ UHDOLW\´ WKHUH LV TXLFNQHVV HJ WKH
&KDSWHU7KH3UHVHQFHZLWK&RQVWUDLQWV
UHODWLYHO\ TXLFNHU VSHHG RI WKRVH LQ WKH WKHDWUH RI WKH RSSUHVVHG ³WR EH SURDFWLYH VLQFH WKH\ IHHO PXFK PRUH SUHSDUHG DQG FRQILGHQW LQ UHVROYLQJ WKH FRQIOLFW´ LQ RSSUHVVLRQ LI ³HQFRXQWHUHG LQ UHDOLW\´ $QG WKH UHYHUVH GLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHH[SDQVLRQFRQWUDFWLRQSULQFLSOHLIWKHUHLVH[SDQVLRQ HJWKHUHODWLYHH[SDQVLRQRIWKHLQIOXHQFHRIWKHWKHDWUHRIWKHRSSUHVVHG LQ WKH SRSXOLVW FXOWXUH RI /DWLQ $PHULFD QRZDGD\V WKHUH LV FRQWUDFWLRQ HJ WKH UHODWLYH IDLOXUH RI WKH LQIOXHQFH RI WKH WKHDWUH RI WKH RSSUHVVHG DPRQJWKH ³QHRFRQVHUYDWLYH´HVWDEOLVKPHQWLQ $PHULFDHVSHFLDOO\ XQGHU WKH %XVK DGPLQLVWUDWLRQ LQ KLV UHFNOHVV LPSHULDO ZDUV DEURDG $QG WKH UHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH WKHRU\SUD[LV SULQFLSOH LI WKHUH LV WKHRU\ HJ WKH WKHRUHWLFDOFRQVWUXFWLRQRIWKHWHFKQLTXHVLQWKHWKHDWUHRIWKHRSSUHVVHG WKHUH LV SUD[LV HJ WKH SUDFWLFDO DSSOLFDWLRQ RI WKH WHFKQLTXHV LQ WKH WKHDWUHRIWKHRSSUHVVHGWRWKHUHDOZRUOGOLNHWKHLUDGRSWLRQE\WKHVRFLDO QHWZRUN FDOOHG WKH ³,QWHUQDWLRQDO 7KHDWUH RI WKH 2SSUHVVHG 2UJDQLVDWLRQ´ :.RRR $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHFRQYHQWLRQQRYHOW\SULQFLSOHLIWKHUHLVFRQYHQWLRQ HJ WKH FRQYHQWLRQDO ZLVGRP RI GRLQJ DHVWKHWLFV LQ WKHDWUH WKHUH LV QRYHOW\ HJ WKH DOWHUQDWLYH QRYHO FKDOOHQJH WR WKH FRQYHQWLRQDO ZLVGRP RI GRLQJ DHVWKHWLFV LQ WKHDWUH E\ WKH QHZ LGHD RI WKH WKHDWUH RI WKH RSSUHVVHG IRU VRFLDO DFWLRQ RU WKH ³UHKHDUVDO RI UHYROXWLRQ´ LQVWHDG ZLWKRXWIRFXVLQJRQDHVWKHWLFV $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH HYROXWLRQWUDQVIRUPDWLRQ SULQFLSOH LI WKHUH LV HYROXWLRQ HJ WKH QDWXUDO HYROXWLRQ RI KXPDQV WR ILJKW ZLWK HDFK RWKHU LQ WKH VWDWH RI QDWXUH WKHUH LV WUDQVIRUPDWLRQ HJ WKH WHFKQLFDO WUDQVIRUPDWLRQRIKXPDQDELOLW\WRILJKWZLWKHDFKRWKHUE\WKHLQYHQWLRQ RI WKH WKHDWUH RI WKH RSSUHVHG IRU WKH ³UHKHDUVDO RI UHYROXWLRQ´ $QG WKH UHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHV\PPHWU\DV\PPHWU\SULQFLSOHLIWKHUHLVV\PPHWU\ HJ WKH H[LVWHQFH RI GLIIHUHQW ZD\V WR GR SHUIRUPLQJ DUWV WKHUH LV DV\PPHWU\HJWKHSRSXODULW\RIWKHWKHDWUHRIWKHRSSUHVVHGDPRQJWKH UXOHGFODVVLQWKHSRSXOLVWFXOWXUHRI /DWLQ $PHULFDLQWKHVHFRQGKDOIRI WKH WK FHQWXU\²EXW WKH SRSXODULW\ RI WUDGLWLRQDO RSHUD DPRQJ ³WKH DULVWRFUDF\LQPRVWRI(XURSH´LQ³WKHWKFHQWXU\´ :. $QGWKH UHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHVRIWQHVVKDUGQHVVSULQFLSOHLIWKHUHLVVRIWQHVVHJ WKH DSSUHFLDWLRQ RI WKH WKHDWUH RI WKH RSSUHVVHG DV VKRZQ LQ LWV LQFRUSRUDWLRQ E\ WKH ³,QWHUQDWLRQDO 7KHDWUH RI WKH 2SSUHVVHG 2UJDQLVDWLRQ´ WKHUH LV KDUGQHVV HJ WKH FULWLTXH RI WKH WKHDWUH RI WKH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
RSSUHVVHG DV VKRZQ LQ WKH SUREOHPV SRLQWHG RXW E\ WKH FULWLFV DV FLWHG $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH VHULRXVQHVVSOD\IXOQHVV SULQFLSOH LI WKHUH LV VHULRXVQHVV HJ WKH VHULRXV EXVLQHVV RI WKRVH LQ WKH WKHDWUH RI WKH RSSUHVVHG WR ILJKW DJDLQVW WKH RSSUHVVLRQ RI WKH UXOLQJ FODVV WKHUH LV SOD\IXOQHVVHJWKHSOD\IXOSDUWRIWKRVHLQWKHWKHDWUHRIWKHRSSUHVVHG ZKHQWKH\SOD\DURXQGZLWKGLIIHUHQWWHFKQLTXHVWRVXEYHUWDQG³GHWHFWWKH SRLVRQLQILOWUDWLQJ´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²EXW WKH FRQWULEXWLRQ WR WKH PROGLQJDQGFRQWURORIEHOLHIVYDOXHVDQGEHKDYLRUVE\ZD\RIWUDGLWLRQDO RSHUD IRU D UHODWLYHO\ PRUH UHDFWLRQDU\ ZRUOGYLHZ $QG WKH UHYHUVH GLUHFWLRQDOVRKROGVWUXH $QG LQ UHODWLRQ WR WKH VWDELOLW\UHDFWLRQ SULQFLSOH LI WKHUH LV VWDELOLW\ HJWKHUHODWLYHO\PRUHVWDEOHFRQGLWLRQRISHUIRUPLQJDUWVPRVWO\IRUWKH XSSHU FODVVHV LQ WKH ROGHU GD\V ZKHQ IRU LQVWDQFH ³WKURXJKRXW WKH WK FHQWXU\ RSHUD ZRXOG UDSLGO\ EHFRPH WKH HQWHUWDLQPHQW RI FKRLFH IRU WKH DULVWRFUDF\LQ PRVWRI(XURSH´ WKHUHLVUHDFWLRQHJWKH GRPLDQQFHRI WKH XSSHU FODVVHV LQ SHUIRUPLQJ DUWV LQ WKH ROGHU GD\V OHG WR IXUWKHU FKDQJHVODWHURQHVSHFLDOO\LQ³WKHWKFHQWXU\´ZKLFK³ZDVDSHULRGRI JURZWKIRUWKHSHUIRUPLQJDUWVIRUDOOVRFLDOFODVVHV´LQVWHDG :. $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH
7KH3UHVHQFH7HFKQRORJ\DQG&RPSXWHU0XVLF $QRWKHU JRRG FDVH VWXG\ KHUH WR XQGHUVWDQG WKH SUHVHQFH IURP WKH SHUVSHFWLYH RI VRFLHW\ KDV WR GR ZLWK WKH SUHVHQFH WHFKQRORJ\ DQG FRPSXWHUPXVLF:.QQQ 7KHWHUP³FRPSXWHUPXVLF´UHIHUVWR³DILHOGRIVWXG\UHODWLQJWRWKH DSSOLFDWLRQV RI FRPSXWLQJ WHFKQRORJ\ LQ PXVLF FRPSRVLWLRQ SDUWLFXODUO\
&KDSWHU7KH3UHVHQFHZLWK&RQVWUDLQWV
WKDWVWHPPLQJIURPWKH:HVWHUQDUWPXVLFWUDGLWLRQ,WLQFOXGHVWKHWKHRU\ DQGDSSOLFDWLRQRIQHZDQGH[LVWLQJWHFKQRORJLHVLQPXVLFVXFKDVVRXQG V\QWKHVLV GLJLWDO VLJQDO SURFHVVLQJ VRXQG GHVLJQ VRQLF GLIIXVLRQ DFRXVWLFVDQGSV\FKRDFRXVWLFV´:.SSS 7KHILHOGRIFRPSXWHUPXVLFLVUHODWLYHO\\RXQJVLQFHLW³FDQWUDFHLWV URRWVEDFNWRWKHRULJLQRIHOHFWURQLFPXVLFDQGWKHYHU\ILUVWH[SHULPHQWV DQGLQQRYDWLRQVZLWKHOHFWURQLFLQVWUXPHQWVDWWKHWXUQRIWKHWKFHQWXU\ 0RUHUHFHQWO\ZLWKWKHDGYHQWRISHUVRQDOFRPSXWLQJDQGWKHJURZWKRI KRPH UHFRUGLQJ WKH WHUP FRPSXWHU PXVLF LV QRZ VRPHWLPHV XVHG WR GHVFULEH DQ\ PXVLF WKDW KDV EHHQ FUHDWHG XVLQJ FRPSXWLQJ WHFKQRORJ\´ :.SSS 7HFKQRORJ\DQG&RPSXWHU0XVLF +LVWRULFDOO\³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´:.SSS3'RRUQEXVFK $QRWKHU ILUVW LV ³WKH ROGHVW NQRZQ UHFRUGLQJV RI FRPSXWHU JHQHUDWHG PXVLF´ ZKLFK ³ZHUH SOD\HG E\ WKH )HUUDQWL 0DUN FRPSXWHU D FRPPHUFLDO YHUVLRQ RI WKH %DE\ 0DFKLQH IURP WKH 8QLYHUVLW\ RI 0DQFKHVWHU LQ WKH DXWXPQ RI 7KH PXVLF SURJUDP ZDV ZULWWHQ E\ &KULVWRSKHU6WUDFKH\'XULQJDVHVVLRQUHFRUGHGE\WKH%%&WKHPDFKLQH PDQDJHG WR ZRUN LWV ZD\ WKURXJK %DD %DD %ODFN 6KHHS *RG 6DYH WKH .LQJ DQGSDUWRI ,QWKH0RRG ´:.SSS-)LOGHV 7ZR RWKHU GHYHORSPHQWV LQ WKH V ³ZHUH WKH RULJLQV RI GLJLWDO VRXQG V\QWKHVLV E\ FRPSXWHU DQG RI DOJRULWKPLF FRPSRVLWLRQ SURJUDPV EH\RQG URWH SOD\EDFN 0D[ 0DWKHZV DW %HOO /DERUDWRULHV GHYHORSHG WKH LQIOXHQWLDO 086,& , SURJUDP DQG LWV GHVFHQGHQWV IXUWKHU SRSXODULVLQJ FRPSXWHU PXVLF WKURXJK D DUWLFOH LQ 6FLHQFH $PRQJVW RWKHU SLRQHHUV WKH PXVLFDO FKHPLVWV /HMDUHQ +LOOHU DQG /HRQDUG ,VDDFVRQ ZRUNHGRQDVHULHVRIDOJRULWKPLFFRPSRVLWLRQH[SHULPHQWVIURP PDQLIHVWHGLQWKHSUHPLHUHRIWKH,OOLDF6XLWHIRUVWULQJTXDUWHW´:. SSS/+LOOHU +RZHYHULQWKRVHGD\V³FRPSXWHUPXVLFSURJUDPVW\SLFDOO\GLGQRW UXQLQUHDOWLPH3URJUDPVZRXOGUXQIRUKRXUVRUGD\VRQPXOWLPLOOLRQ GROODU FRPSXWHUV WR JHQHUDWH D IHZ PLQXWHV RI PXVLF -RKQ &KRZQLQJ V
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
ZRUN RQ )0 V\QWKHVLV IURP WKH V WR WKH V DQG WKH DGYHQW RI LQH[SHQVLYHGLJLWDOFKLSVDQGPLFURFRPSXWHUVRSHQHGWKHGRRUWRUHDOWLPH JHQHUDWLRQ RI FRPSXWHU PXVLF %\ WKH HDUO\ V WKH SHUIRUPDQFH RI PLFURSURFHVVRUEDVHG FRPSXWHUV UHDFKHG WKH SRLQW WKDW UHDOWLPH JHQHUDWLRQ RI FRPSXWHU PXVLF XVLQJ PRUH JHQHUDO SURJUDPV DQG DOJRULWKPVEHFDPHSRVVLEOH´:.SSS ,QDQ\HYHQWFRPSXWHUPXVLFFDQEHIXUWKHUDQDO\]HGLQWHUPVRIWZR PDMRU DUHDV QDPHO\ D FRPSXWHUJHQHUDWHG PXVLF DQG E PDFKLQH LPSURYLVDWLRQ²LQZKDWIROORZVUHVSHFWLYHO\ 7HFKQRORJ\DQG&RPSXWHU*HQHUDWHG0XVLF 7KH ILUVW DUHD RI FRPSXWHU PXVLF WR EH LQWURGXFHG KHUH FRQFHUQV ³FRPSXWHUJHQHUDWHG PXVLF´ ZKLFK FDQ EH GLYLGHG LQWR WKUHH FDWHJRULHV IRUDQDO\VLVDVVXPPDUL]HGLQ7DEOH D &RPSXWHU*HQHUDWHG6FRUHVIRU+XPDQ3OD\HUV ,Q WKLV ILUVW FDWHJRU\ ³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´:.SSS %XWWKHZRUOG¶VUHDOO\ILUVWFRPSXWHUJHQHUDWHGPXVLF³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´:.SSS ,QDGGLWLRQ³FRPSXWHUVKDYH DOVREHHQXVHGLQDQDWWHPSWWRLPLWDWH WKH PXVLF RI JUHDW FRPSRVHUV RI WKH SDVW VXFK DV 0R]DUW $ SUHVHQW H[SRQHQW RI WKLV WHFKQLTXH LV 'DYLG &RSH +H ZURWH FRPSXWHU SURJUDPV WKDWDQDO\VHZRUNVRIRWKHUFRPSRVHUVWRSURGXFHQHZZRUNVLQDVLPLODU
&KDSWHU7KH3UHVHQFHZLWK&RQVWUDLQWV
VW\OH +H KDV XVHG WKLV SURJUDP WR JUHDW HIIHFW ZLWK FRPSRVHUV VXFK DV %DFK DQG 0R]DUW KLV SURJUDP ([SHULPHQWV LQ 0XVLFDO ,QWHOOLJHQFH LV IDPRXV IRUFUHDWLQJ 0R]DUW VQG6\PSKRQ\ DQGDOVR ZLWKLQ KLVRZQ SLHFHV FRPELQLQJ KLV RZQ FUHDWLRQV ZLWK WKDW RI WKH FRPSXWHU´ :. SSS E 0XVLF&RPSRVHGDQG3HUIRUPHGE\&RPSXWHUV ,Q WKLV VHFRQG FDWHJRU\ ³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´:.SSS 6RPH RWKHU SURJUDPV E\ GLIIHUHQW FRPSXWHUV ³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´:.SSS 2WKHU SURJUDPV ³FDQ DOVR EH SHUIRUPHG LQ FRPSXWHU PXVLF SURJUDPPLQJ ODQJXDJHV VXFK DV 0D[063 6XSHU&ROOLGHU &VRXQG 3XUH 'DWD 3G .H\NLW DQG &KXF. 7KHVH SURJUDPV QRZ HDVLO\ UXQ RQ PRVW SHUVRQDOFRPSXWHUVDQGDUHRIWHQFDSDEOHRIPRUHFRPSOH[IXQFWLRQVWKDQ WKRVH ZKLFK ZRXOG KDYH QHFHVVLWDWHG WKH PRVW SRZHUIXO PDLQIUDPH FRPSXWHUVVHYHUDOGHFDGHVDJR´:.SSS $PD]LQJO\ ³WKHUH H[LVW SURJUDPV WKDW JHQHUDWH KXPDQVRXQGLQJ PHORGLHVE\XVLQJDYDVWGDWDEDVHRISKUDVHV2QHH[DPSOHLV%DQGLQD
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
%R[ZKLFKLVFDSDEOHRIFUHDWLQJMD]]EOXHVDQGURFNLQVWUXPHQWDOVRORV ZLWK DOPRVW QR XVHU LQWHUDFWLRQ $QRWKHU LV ,PSUR9LVRU ZKLFK XVHV D VWRFKDVWLFFRQWH[WIUHHJUDPPDUWRJHQHUDWHSKUDVHVDQGFRPSOHWHVRORV´ :.SSS $PRUHFRPSOLFDWHGSURJDPLVWKH³ F\EHUQHWLF DSSURDFKWRFRPSXWHU FRPSRVLWLRQ´ ZKLFK³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´:.SSS F &RPSXWHU$LGHG$OJRULWKPLF&RPSRVLWLRQ $QG LQ WKLV WKLUG FDWHJRU\ ³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´ :. SSS 7HFKQRORJ\DQG0DFKLQH,PSURYLVDWLRQ $QG WKH VHFRQG DUHD RI FRPSXWHU PXVLF WR EH LQWURGXFHG KHUH FRQFHUQV³PDFKLQHLPSURYLVDWLRQ´ 7KHWHUP³PDFKLQHLPSURYLVDWLRQ´UHIHUVWR³FRPSXWHUDOJRULWKPVWR FUHDWHLPSURYLVDWLRQRQH[LVWLQJPXVLFPDWHULDOV7KLVLVXVXDOO\GRQHE\ VRSKLVWLFDWHG UHFRPELQDWLRQ RI PXVLFDO SKUDVHV H[WUDFWHG IURP H[LVWLQJ
&KDSWHU7KH3UHVHQFHZLWK&RQVWUDLQWV
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´:.SSS 0DFKLQHLPSURYLVDWLRQFDQEHGLYLGHGLQWRWKUHHSDUWVIRUDQDO\VLVDV VKRZQEHORZDQGVXPPDUL]HGLQ7DEOH D 6WDWLVWLFDO6W\OH0RGHOLQJ ,Q WKLV ILUVW SDUW ³VW\OH PRGHOLQJ LPSOLHV EXLOGLQJ D FRPSXWDWLRQDO UHSUHVHQWDWLRQ RI WKH PXVLFDO VXUIDFH WKDW FDSWXUHV LPSRUWDQW VW\OLVWLF IHDWXUHV IURP GDWD 6WDWLVWLFDO DSSURDFKHV DUH XVHG WR FDSWXUH WKH UHGXQGDQFLHVLQWHUPVRISDWWHUQGLFWLRQDULHVRUUHSHWLWLRQVZKLFKDUHODWHU UHFRPELQHGWRJHQHUDWHQHZPXVLFDOGDWD6W\OHPL[LQJFDQEHUHDOL]HGE\ DQDO\VLV RI D GDWDEDVH FRQWDLQLQJ PXOWLSOH PXVLFDO H[DPSOHV LQ GLIIHUHQW VW\OHV´:.SSS ,QIDFW³0DFKLQH,PSURYLVDWLRQEXLOGVXSRQDORQJPXVLFDOWUDGLWLRQ RIVWDWLVWLFDOPRGHOLQJWKDWEHJDQZLWK+LOOHUDQG,VDDFVRQ V,OOLDF6XLWHIRU 6WULQJ4XDUWHW DQG;HQDNLV XVHVRI0DUNRYFKDLQVDQGVWRFKDVWLF SURFHVVHV 0RGHUQ PHWKRGV LQFOXGH WKH XVH RI ORVVOHVV GDWD FRPSUHVVLRQ IRU LQFUHPHQWDO SDUVLQJ SUHGLFWLRQ VXIIL[ WUHH DQG VWULQJ VHDUFKLQJ E\ IDFWRURUDFOHDOJRULWKPEDVLFDOO\DIDFWRURUDFOHLVD¿QLWHVWDWHDXWRPDWRQ FRQVWUXFWHG LQ OLQHDU WLPH DQG VSDFH LQ DQ LQFUHPHQWDO IDVKLRQ ´ :. SSS&$OODX]HQ E 8VHVRI0DFKLQH,PSURYLVDWLRQ ,Q WKLV VHFRQG SDUW ³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´:. SSS F ,PSOHPHQWDWLRQV $QG LQ WKLV WKLUG SDUW WKH LPSOHPHQWDWLRQ RI PDFKLQH LPSURYLVDWLRQ FDQ EH LOOXVWUDWHG ZLWK WKH H[DPSOH RI ³20D[´ ZKLFK LV ³D VRIWZDUH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
HQYLURQPHQWGHYHORSHGLQ,5&$020D[XVHV2SHQ0XVLFDQG0D[,WLV EDVHGRQUHVHDUFKHVRQVW\OLVWLF PRGHOLQJFDUULHGRXWE\*HUDUG$VVD\DJ DQG 6KORPR 'XEQRY DQG RQ UHVHDUFKHV RQ LPSURYLVDWLRQ ZLWK WKH FRPSXWHU E\ * $VVD\DJ 0 &KHPLOOLHU DQG * %ORFK DND WKH 20D[ %URWKHUV LQWKH,UFDP0XVLF5HSUHVHQWDWLRQVJURXS´:.SSS 3UREOHPVZLWK&RPSXWHU0XVLF +RZHYHU FRPSXWHU PXVLF KDV LWV RZQ SUREOHPV &RQVLGHU IRU LOOXVWUDWLRQVRPHPDLQFULWLFLVPVEHORZDVVXPPDUL]HGLQ7DEOH )LUVWO\RQHPDLQFULWLFLVPRIFRPSXWHUPXVLFLVWKDWWKHSHUIRUPDQFH E\ D PDFKLQH RIWHQ ODFNV ³WKH FKDULVPD DQG SL]]D]] RI PXVLFLDQV SHUIRUPLQJOLYH´:.SSS1&ROOLQV 6HFRQGO\DQRWKHUPDLQFULWLFLVPRIFRPSXWHUPXVLFLVWKDWWKHPXVLF FRPSRVHGDQGSHUIRUPHGE\FRPSXWHUVLVQRJXDUDQWHHRIVXFFHVV )RU LQVWDQFH SURJUDPV EDVHG RQ ³IUDFWDO JHRPHWU\´ FDQ HQG XS SURGXFLQJ³PXVLF´ZKLFK³FDQEHPRUHOLNHQRLVH´LQVWHDGRUPRUHOLNH³D IDQWDVWLFDOO\GLVVRQDQWFDFRSKRQ\´:.SSS $QGWKLUGO\VWLOODQRWKHU PDLQFULWLFLVPRIFRPSXWHU PXVLFLV WKDWLW IRFXVHV WRR PXFK RQ WKH SURJUDPPLQJ SRZHU RI FRPSXWHUV EXW WRR OLWWOH RQ DHVWKHWLF LVVXHV OLNH ZKDW UHDOO\ FRQVWLWXWHV D ³EHDXWLIXO´ RU ³XJO\´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
&KDSWHU7KH3UHVHQFHZLWK&RQVWUDLQWV
SULQFLSOH WKH HYROXWLRQWUDQVIRUPDWLRQ SULQFLSOH WKH V\PPHWU\ DV\PPHWU\ SULQFLSOH WKH VRIWQHVVKDUGQHVV SULQFLSOH WKH VHULRXVQHVV SOD\IXOQHVV SULQFLSOH WKH UHJUHVVLRQSURJUHVVLRQ SULQFLSOH WKH VDPH GLIIHUHQFHSULQFLSOHDQGWKHVWDELOLW\UHDFWLRQSULQFLSOH )RU LQVWDQFH LQ UHODWLRQ WR WKH IRUPDOQHVVLQIRUPDOQHVV SULQFLSOH LI WKHUHLVIRUPDOQHVVHJWKHIRUPDOORJLFDOUHTXLUHPHQWRIFRPSOHWHQHVVLQ DV\VWHPRI LGHDVDVLQFRPSXWHU PXVLF WKHUHLVLQIRUPDOQHVVHJWKH QRQIRUPDO H[LVWHQFH RI LQFRPSOHWHQHVV LQ FRPSXWHU PXVLF DV VKRZQ LQ WKH FULWLFLVP WKDW LW FDQQRW SURYH LWV RZQ PXVLFDO SLHFHV DV ³EHDXWLIXO´ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH DEVROXWHQHVVUHODWLYHQHVV SULQFLSOH LI WKHUH LV DEVROXWHQHVV HJ WKH DEVROXWH YLHZ RI WKRVH LQ FRPSXWHU PXVLF WR XVH FRPSXWLQJWHFKQRORJ\IRU PXVLFFRPSRVLWLRQ WKHUHLVUHODWLYHQHVVHJ ZKDWLVJRRGIRUWKRVHLQFRPSXWHUPXVLFWRXVHFRPSXWLQJWHFKQRORJ\IRU PXVLFFRPSRVLWLRQLVQRWQHFHVVDULO\VRIRUWKRVHLQWUDGLWLRQDOPXVLFZKR SUHIHU KXPDQ FRPSRVLWLRQ ZLWK DHVWKHWLF FRQFHUQV LQ PLQG $QG WKH UHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHSDUWLDOLW\WRWDOLW\SULQFLSOHLIWKHUHLVSDUWLDOLW\HJ WKH SDUWLDO YLHZ RI WKRVH LQ FRPSXWHU PXVLF WKHUH LV WRWDOLW\ HJ WKH PRUHKROLVWLFYLHZRIWKHIXWXUHRIPXVLFVXFKWKDWWKHZKROHLVQRWWKH VXPRILWVSDUWVWKDWLVWKHIXWXUHRIPXVLFLVQRWUHGXFLEOHWRWKHVXPRI GLIIHUHQW FRQIOLFWLQJ YLHZV RI SURGXFLQJ PXVLF EH LW FRPSXWHUJHQHUDWHG RU KXPDQFUHDWHG VLQFH WKHUH DUH HPHUJHQW SURSHUWLHV QRW \HW WRWDOO\ NQRZQLQRXUWLPH $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH SUHGLFWDELOLW\XQSUHGLFWDELOLW\ SULQFLSOH LI WKHUH LV SUHGLFWDELOLW\HJWKHSUHGLFWDEOHWHQGHQF\RIWKRVHLQFRPSXWHUPXVLFWR PDNHJRRGXVHRIFRPSXWLQJWHFKQRORJ\IRUPXVLFFRPSRVLWLRQ WKHUHLV XQSUHGLFWDELOLW\HJWKH PRUHGLIILFXOWWDVNWRSUHGLFWH[DFWO\WKHH[WHQW WRZKLFKDQ\FRPSXWHUJHQHUDWHGPXVLFZLOOEHVXFFHVVIXORQDSDUWLFXODU IXWXUHRFFDVLRQVLQFHLWFDQHQGXSSURGXFLQJDOONLQGVRI³PXVLF´ZKLFK ³FDQ EH PRUH OLNH QRLVH´ VRPHWLPH PRUH OLNH ³D IDQWDVWLFDOO\ GLVVRQDQW FDFRSKRQ\´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
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
,Q UHODWLRQ WR WKH ILFWLRQUHDOLW\ SULQFLSOH LI WKHUH LV ILFWLRQ HJ WKH ILFWLRQDODVSHFWRIFRPSXWHUPXVLFZKHQ³PDFKLQHLPSURYLVDWLRQ´FUHDWHV GLIIHUHQW ³UHFRPELQDWLRQV RI PXVLFDO SKUDVHV H[WUDFWHG IURP H[LVWLQJ PXVLF´ WKHUHLVUHDOLW\HJWKHUHDOLVWLFDVSHFWRIFRPSXWHUPXVLFZKHQ ³PDFKLQH LPSURYLVDWLRQ´ LV EDVHG RQ ³PXVLFDO SKUDVHV H[WUDFWHG IURP H[LVWLQJPXVLF´ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH ILQLWHQHVVWUDQVILQLWHQHVV SULQFLSOH LI WKHUH LV ILQLWHQHVV HJ WKH ILQLWH QXPEHU RI GLIIHUHQW JURXSV RI FRPSXWHU JHQHUDWHG PXVLF QDPHO\ WKH WZR NQRZQ DV ³FRPSXWHUJHQHUDWHG VFRUHV IRUKXPDQSOD\HUV´DQG³PXVLFFRPSRVHGDQGSHUIRUPHGE\FRPSXWHUV´ WKHUH LV WUDQVILQLWHQHVV HJ WKH WUDQVILQLWH QXPEHU RI DOO WKH SRVVLEOH LQGLYLGXDO SLHFHV RI FRPSXWHU PXVLF HYHU SURGXFHG LQ KLVWRU\ UHJDUGOHVV RI ZKHWKHU WKH\ DUH ³FRPSXWHUJHQHUDWHG VFRUHV IRU KXPDQ SOD\HUV´ RU ³PXVLF FRPSRVHG DQG SHUIRUPHG E\ FRPSXWHUV´ $QG WKH UHYHUVH GLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH SUHFLVHQHVVYDJXHQHVV SULQFLSOH LI WKHUH LV SUHFLVHQHVV HJ WKH SUHFLVH FODVVLILFDWLRQ RI WKUHH FDWHJRULHV RI ³FRPSXWHUJHQHUDWHGPXVLF´IRUDQDO\VLVLQWKHDUWLFOHDIRUHFLWHG WKHUHLV YDJXHQHVVHJWKHYDJXHQHVVLQWKHFODVVLILFDWLRQRIWKHWKUHHFDWHJRULHV RI³FRPSXWHUJHQHUDWHGPXVLF´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³WKHFKDULVPDDQGSL]]D]]RIPXVLFLDQVSHUIRUPLQJ OLYH´ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHGHQVHQHVVHPSWLQHVVSULQFLSOHLIWKHUHLVGHQVHQHVV HJ WKH UHODWLYHO\ GHQVHU FRQFHQWUDWLRQ RI FRPSXWHUJHQHUDWHG PXVLF LQ FRPSXWHU PXVLF WKHUH LV HPSWLQHVV HJ WKH UHODWLYHO\ OHVV GHQVH RU PRUH HPSW\ FRQFHQWUDWLRQ RI FRPSXWHUJHQHUDWHG PXVLF LQ WUDGLWLRQDO PXVLF $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHFKDQJHFRQVWDQF\SULQFLSOHLIWKHUHLVFKDQJHHJ WKHHYHUQHZZD\VWRFRPSRVHPXVLFDVVKRZQLQFRPSXWHUPXVLF WKHUH
&KDSWHU7KH3UHVHQFHZLWK&RQVWUDLQWV
LVFRQVWDQF\HJWKHHYHUFRQVWDQWH[LVWHQFHRIGLIIHUHQWSUREOHPVLQWKH HYHUQHZZD\VWRFRPSRVHPXVLFDVVKRZQLQWKHSUREOHPVRIFRPSXWHU PXVLFSRLQWHGRXWE\WKHFULWLFV $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHRUGHUFKDRVSULQFLSOHLIWKHUHLVRUGHUHJWKHPRUH RU OHVV RUGHUO\ QDWXUH RI FRPSXWHU PXVLF JHQHUDWHG E\ IUDFWDO JHRPHWU\ ZKHQLWFDQSURGXFH³DO\ULFDODQGPHORGLFSLHFHRIPXVLF´ WKHUHLVFKDRV HJ WKH PRUH RU OHVV FKDRWLF QDWXUH RI FRPSXWHU PXVLF JHQHUDWHG E\ IUDFWDOJHRPHWU\ZKHQLWSURGXFHV³DIDQWDVWLFDOO\GLVVRQDQWFDFRSKRQ\´ :.SSS $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH VORZQHVVTXLFNQHVV SULQFLSOH LI WKHUH LV VORZQHVV HJ WKH UHODWLYHO\ VORZHU VSHHG RI HDUO\ ³FRPSXWHUPXVLF SURJUDPV´ LQ WKH ROGHU GD\V ZKLFK ³ZRXOG UXQ IRU KRXUV RU GD\V´ RQO\ LQ RUGHU ³WR JHQHUDWHDIHZPLQXWHVRIPXVLF´DQGWKXVGLGQRWUXQLQUHDOWLPH WKHUH LV TXLFNQHVV HJ WKH UHODWLYHO\ TXLFNHU VSHHG RI ³FRPSXWHUPXVLF SURJUDPV´ QRZDGD\V EHFDXVH ³E\ WKH HDUO\ V WKH SHUIRUPDQFH RI PLFURSURFHVVRUEDVHG FRPSXWHUV UHDFKHG WKH SRLQW WKDW UHDOWLPH JHQHUDWLRQ RI FRPSXWHU PXVLF XVLQJ PRUH JHQHUDO SURJUDPV DQG DOJRULWKPVEHFDPHSRVVLEOH´ $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHH[SDQVLRQFRQWUDFWLRQSULQFLSOHLIWKHUHLVH[SDQVLRQ HJ WKH UHODWLYH H[SDQVLRQ RI WKH LQIOXHQFH RI FRPSXWHU PXVLF QRZDGD\V WKHUHLVFRQWUDFWLRQHJWKHUHODWLYHGHFOLQHRIWKHLQIOXHQFH RIWUDGLWLRQDOPXVLFZLWKRXWDQ\XVHRIFRPSXWLQJWHFKQRORJ\QRZDGD\V $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH WKHRU\SUD[LV SULQFLSOH LI WKHUH LV WKHRU\ HJ WKH WKHRUHWLFDO FRQVWUXFWLRQ RI IUDFWDO JHRPHWU\ LQ PDWKHPDWLFV WKHUH LV SUD[LVHJWKHSUDFWLFDODSSOLFDWLRQRIIUDFWDOJHRPHWU\LQPDWKHPDWLFVWR WKHILHOGRIFRPSXWHUPXVLF $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHFRQYHQWLRQQRYHOW\SULQFLSOHLIWKHUHLVFRQYHQWLRQ HJ WKH FRQYHQWLRQDO ZLVGRP RI SURGXFLQJ PXVLF ZLWKRXW WKH XVH RI FRPSXWLQJ WHFKQRORJ\ LQ WKH ROGHU GD\V WKHUH LV QRYHOW\ HJ WKH DOWHUQDWLYH QRYHO FKDOOHQJH WR WKH FRQYHQWLRQDO ZLVGRP RI SURGXFLQJ PXVLF ZLWKRXWWKHXVHRIFRPSXWLQJWHFKQRORJ\LQWKHROGHUGD\VE\WKH QHZ LGHD RI FRPSXWHU PXVLF QRZDGD\V $QG WKH UHYHUVH GLUHFWLRQ DOVR KROGVWUXH ,Q UHODWLRQ WR WKH HYROXWLRQWUDQVIRUPDWLRQ SULQFLSOH LI WKHUH LV HYROXWLRQ HJ WKH QDWXUDO HYROXWLRQ RI KXPDQV WR PDNH VRXQGV LQ WKH VWDWH RI QDWXUH LQ D SULPLWLYH ZD\ WKHUH LV WUDQVIRUPDWLRQ HJ WKH WHFKQLFDOWUDQVIRUPDWLRQRIKXPDQDELOLW\WRPDNHVRXQGVE\WKHLQYHQWLRQ RIFRPSXWHUPXVLF $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,QUHODWLRQWRWKHV\PPHWU\DV\PPHWU\SULQFLSOHLIWKHUHLVV\PPHWU\ HJ WKH H[LVWHQFH RI GLIIHUHQW ZD\V WR SURGXFH PXVLF WKHUH LV
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
DV\PPHWU\HJWKHSRSXODULW\RIFRPSXWLQJWHFKQRORJ\DPRQJWKRVHLQ FRPSXWHUPXVLF²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³QHZYDULDWLRQV´RI³H[LVWLQJPXVLFPDWHULDOV´ WKHUHLVSOD\IXOQHVV HJWKHSOD\IXOSDUWRIWKRVHLQ PDFKLQH LPSURYLVDWLRQ ZKHQWKH\SOD\ DURXQG ZLWK GLIIHUHQW SRVVLEOH UHFRPELQDWLRQV ³RI PXVLFDO SKUDVHV H[WUDFWHG IURP H[LVWLQJ PXVLF´ LQ RUGHU WR FUHDWH QHZ PXVLF $QG WKH UHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH UHJUHVVLRQSURJUHVVLRQ SULQFLSOH LI WKHUH LV UHJUHVVLRQHJWKHUHJUHVVLRQPDGHE\FRPSXWHUPXVLFDVVKRZQLQWKH SUREOHPVSRLQWHGRXWE\WKHFULWLFV WKHUHLVSURJUHVVLRQHJWKHSURJUHVV PDGH E\ FRPSXWHU PXVLF DV VKRZQ LQ LWV FRQWULEXWLRQ WR WKH FUHDWLRQ RI QHZPXVLFDIRUHFLWHG $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH ,Q UHODWLRQ WR WKH VDPHGLIIHUHQFH SULQFLSOH LI WKHUH LV VLPLODULW\ LQ RXWFRPH HJ WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV UHJDUGOHVV RI ZKHWKHU WKLV EH GRQH E\ ZD\ RI FRPSXWHUJHQHUDWHG PXVLF RU E\ ZD\ RI KXPDQ FRPSRVLWLRQ RI PXVLF WKHUH LV GLIIHUHQFH LQ RXWFRPH HJ WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI FRPSXWHUJHQHUDWHG PXVLFIRUDUHODWLYHO\PRUHWHFKQRSKLOLFOLIHZRUOG²EXWWKHFRQWULEXWLRQWR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI KXPDQFRPSRVLWLRQRIPXVLFIRUDUHODWLYHO\PRUHQDWXUDOLVWLFOLIHZRUOG $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH $QG LQ UHODWLRQ WR WKH VWDELOLW\UHDFWLRQ SULQFLSOH LI WKHUH LV VWDELOLW\ HJWKHUHODWLYHO\PRUHVWDEOHFRQGLWLRQRIWUDGLWLRQDOPXVLFLQWKHROGHU GD\V ZKHQ LW ZDV WDNHQ IRU JUDQWHG WKDW PXVLF ZDV WR EH FRPSRVHG E\ KXPDQV WKHUHLVUHDFWLRQHJWKHLQVWLWXWLRQRIWUDGLWLRQDOPXVLFWKHQOHG WR IXUWKHU FKDQJHV ODWHU RQ ZKHQ FRPSRVHUV VWDUWHG XVLQJ FRPSXWLQJ WHFKQRORJ\ IRU PXVLF FRPSRVLWLRQ $QG WKH UHYHUVH GLUHFWLRQ DOVR KROGV WUXH
&KDSWHU7KH3UHVHQFHZLWK&RQVWUDLQWV
7KH3UHVHQFHDQG&XOWXUH 7KH SUHVHQFH ZKHQ H[DPLQHG IURP WKH SHUVSHFWLYH RI FXOWXUH FDQ FDVWDQLOOXPLQDWLQJOLJKWRQLWVSRVVLELOLW\DQGGHVLUDELOLW\DQGWKLVFDQEH VKRZQ E\ ZD\ RI WZR FDVH VWXGLHV QDPHO\ WKH SUHVHQFH SHUIRUPDQFH DQG WKH SKLORVRSK\ RI DUW DQG WKH SUHVHQFH YDOXH DQGWKHDUWV²WREHDQDO\]HGLQZKDWIROORZVLQWKDWRUGHU
7KH3UHVHQFH3HUIRUPDQFHDQGWKH3KLORVRSK\RI$UW $Q H[FHOOHQW FDVH VWXG\ KHUH WR XQGHUVWDQG WKH SUHVHQFH IURP WKH SHUVSHFWLYH RI FXOWXUH KDV WR GR ZLWK WKH SUHVHQFH SHUIRUPDQFH DQG WKH SKLORVRSK\RIDUWHVSHFLDOO\LQ:HVWHUQFXOWXUH 7KH WHUP ³SKLORVRSK\ RI DUW´ KHUH VKRXOG QRW EH FRQIXVHG ZLWK ³DHVWKHWLFV´ DOWKRXJK ³DHVWKHWLFV LV XVHG E\ VRPH DV D V\QRQ\P IRU WKH SKLORVRSK\ RI DUW VLQFH +HJHO´ EXW QRW HYHU\RQH DJUHHV ZLWK WKLV :. FF )RU LQVWDQFH ³RWKHUV LQVLVW RQ D GLVWLQFWLRQ EHWZHHQ WKHVH FORVHO\ UHODWHG ILHOGV ,Q SUDFWLFH DHVWKHWLF MXGJHPHQW >DV LQ DHVWKHWLFV@ UHIHUV WR WKHVHQVRU\FRQWHPSODWLRQRUDSSUHFLDWLRQRIDQREMHFWQRWQHFHVVDULO\DQ DUWREMHFW ZKLOHDUWLVWLFMXGJHPHQW>DVLQSKLORVRSK\RIDUW@UHIHUVWRWKH UHFRJQLWLRQDSSUHFLDWLRQRUFULWLFLVPRIDUWRUDQDUWZRUN´:.FF ,QWKLVVHQVHWKHSKLORVRSK\RIDUWLVDVXEVHWRIDHVWKHWLFVVLQFHWKH IRUPHUFRQFHUQVRQO\ZLWKDQ³DUWREMHFW´OLNHDEHDXWLIXOGDQFH ZKHUHDV WKHODWWHUFRQFHUQVQRWRQO\ZLWKDQ³DUWREMHFW´EXWDOVRZLWKD³QDWXUDO´ REMHFWOLNHDEHDXWLIXOPRXQWDLQ LQPXVLF@DUHQRWMXGJHGDVEHDXWLIXO EHFDXVHWKH\DUHGLVIOXHQW´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³IRUZKRP")RUWKHDUWLVW")RUWKHDXGLHQFH")RU VRFLHW\DWODUJHDQGRUIRULQGLYLGXDOVEH\RQGWKHDXGLHQFH"´VRWKDW³WKH WUXWK LV FRPSOH[´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
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
*RRGH[DPSOHVRIIDPLO\UHVHPEODQFHLQUHODWLRQWRWKHSULQFLSOHDUH LQIOH[LELOLW\IOH[LELOLW\ VWDQGDUGL]DWLRQVSHFLDOL]DWLRQ LPSHUIHFWQHVV SHUIHFWQHVV VXSHUILFLDOLW\GHSWK VKDOORZQHVVGHHSQHVV HFRQRPLFDOQHVV HODERUDWHGQHVV SODLQQHVVFLUFXPVSHFWLRQ RQHVLGHGQHVVPXOWLVLGHGQHVV DQGWKHOLNH
WK7KHVLV7KH2SHQQHVV+LGGHQQHVV3ULQFLSOH 7KH WHQWK WKHVLV UHIHUV WR WKH RSHQQHVVKLGGHQHQVV SULQFLSOH RQ WKH GHWHFWLRQRIWKLQJV LQWKHFDWHJRU\RI ³VWUXFWXUH´LQH[LVWHQWLDOGLDOHFWLFV ZKLFK ZDV DOUHDG\ ZRUNHG RXW LQ P\ SUHYLRXV ERRNV HVSHFLDOO\ LQ )3+8 LQWKDWUHDOLW\KDVLWVKLGGHQIDFHMXVWDVLWLVRSHQWRRXWVLGHYLHZ LQ VRPHRWKHU ZD\V7KHUHLVQRRSHQQHVV ZLWKRXW KLGGHQQHVV²DQGYLFH YHUVD )RU LQVWDQFH RQ WKH RQH KDQG WKHUH LV RSHQQHVV HJ WKH RSHQ H[SORUDWLRQRIIDFLDOH[SUHVVLRQVDQGQRQYHUEDOFRPPXQLFDWLRQDVVKRZQ E\ 0HKUDELDQ LQ 6HF WKH RSHQ H[SORUDWLRQ RI WKH UHODWLRQVKLS EHWZHHQ FRVPHWLF SURGXFWV DQG WKHDWUH PDNHXS LQ 6HF WKH RSHQ H[SORUDWLRQRIGDQFHODQJXDJHDQGZDJJOHGDQFHE\)ULVFKLQ6HF WKHRSHQH[SORUDWLRQRIWKHUHODWLRQVKLSEHWZHHQ³WKHELUGVRXQGVWKDWDUH PHORGLRXVWRWKHKXPDQHDU´DQG³ELUGVRQJV´E\]RRPXVLFRORJLVWLQ6HF WKHRSHQH[SORUDWLRQRIWKHUHODWLRQVKLSEHWZHHQVXSSRUWLQJ\RXQJ WDOHQWDQGJLYLQJWKHPDZDUGVOLNHWKH(GLQEXUJK&RPHG\$ZDUGVLQ6HF WKHRSHQH[SORUDWLRQRIWKHUHODWLRQVKLSEHWZHHQWKHEDQRI³WHVWLQJ FRVPHWLFVRQDQLPDOV´DQGWKHFDOOIRUDOWHUQDWLYHVDIHW\WHVWVRIFRVPHWLF SURGXFWV LQ 6HF WKH RSHQ H[SORUDWLRQ RI WKH UHODWLRQVKLS EHWZHHQ VRPHUXOHVLQFODVVLFDOEDOOHWDQGEHDXWLIXOGDQFLQJLQ6HFWKHRSHQ H[SORUDWLRQRIWKHUHODWLRQVKLSEHWZHHQ³WKHFRVWXPHVVHWVDQGSURSHUWLHV´ VKRZHG LQ FRVWXPH GUDPD DQG WKHLU VXLWDELOLW\ ³LQ D SDUWLFXODU KLVWRULFDO HUD´LQ6HFWKHRSHQH[SORUDWLRQRIXVLQJ³FXSVDQGEDOOVURXWLQH´ DQGWKHFUHDWLRQRI³EDE\FKLFNV´LQPLFURPDJLFDVSHUIRUPHGE\-RKQQ\ $FH3DOPHULQ6HFWKHRSHQH[SORUDWLRQRIWKHUHODWLRQVKLSEHWZHHQ ³OLVWHQLQJ WR 0R]DUW V SLDQR VRQDWD .´ DQG WKH UHGXFWLRQ RI ³WKH QXPEHU RI VHL]XUHV LQ SHRSOH ZLWK HSLOHSV\´ DOVR NQRZQ DV WKH ³0R]DUW HIIHFW´LQ6HFWKHRSHQH[SORUDWLRQRIWKHXVHRIFKDQFHRSHUDWLRQ LQ &DJH¶V PXVLF LQ 6HF WKH RSHQ H[SORUDWLRQ RI WKH XVH RI GLJLWDO WHFKQRORJ\ IRUVRXQGGHVLJQLQ6HFWKHRSHQH[SORUDWLRQRIXVLQJ WKHDWUH WR ILJKW RSSUHVVLRQ DV VKRZQ LQ WKH WKHDWUH RI WKH RSSUHVVHG LQ 6HF WKH RSHQ H[SORUDWLRQ RI WKH XVH RI FRPSXWLQJ WHFKQRORJ\ IRU PXVLFFRPSRVLWLRQLQ6HFWKHRSHQH[SORUDWLRQRIWKHUHODWLRQVKLS
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
EHWZHHQ³HPSDWK\´DQGWKHYDOXHRIDUWE\7ROVWR\LQ6HFDQGWKH RSHQH[SORUDWLRQRIXVLQJPRUDOLW\DQGUHOLJLRQIRUGUDPDDVLQPRUDOLW\ SOD\VE\WKH&DWKROLF&KXUFKLQWKHSUH5HIRUPDWLRQSHULRGLQ6HF 2Q WKH RWKHU KDQG WKHUH LV KLGGHQQHVV HJ WKH KLGGHQ ELDV LQ WKH VWXGLHVE\0HKUDELDQDVVKRZQLQWKHSUREOHPVWKDWWKHVWXGLHVDUH³EDVHG RQWKHMXGJPHQWRIWKHPHDQLQJRIVLQJOHWDSHUHFRUGHGZRUGVLHDYHU\ DUWLILFLDO FRQWH[W´ HWF LQ 6HF WKH KLGGHQ ELDV LQ WKH FODLPV DERXW FRVPHWLF SURGXFWV E\ ³FRVPHWLFV FRPSDQLHV´ ZKR ³KDYH EHHQ FULWLFLVHG IRU PDNLQJ SVHXGRVFLHQWLILF FODLPV DERXW WKHLU SURGXFWV ZKLFK DUH PLVOHDGLQJ RU XQVXSSRUWHG E\ VFLHQWLILF HYLGHQFH´ LQ 6HF WKH KLGGHQ ELDV LQ )ULVFK¶V VWXG\ VLQFH IRU WKH FULWLFV ZDJJOH GDQFH LV QRW UHDOO\ D ³ODQJXDJH´ RU ³GLDOHFW´ DV LWV UHVHDUFKHUV FODLPHG LQ 6HF WKH KLGGHQ ELDV LQ WKH H[SORUDWLRQ RI WKH UHODWLRQVKLS EHWZHHQ ³WKH ELUG VRXQGVWKDWDUH PHORGLRXVWR WKH KXPDQHDU´DQG ³ELUGVRQJV´VLQFH QRW HYHU\RQH DFFHSW WKH FULWHULRQ RI ³PHORGLRXV´ VRXQGV DV EHDXWLIXO RU SOHDVDQWEHFDXVH-RKQ&DJHIRULQVWDQFHDQGKLVIROORZHUVSUHIHUFKDRWLF PXVLFQRWPHORGLRXVRQHLQ6HFWKHKLGGHQELDVLQWKH(GLQEXUJK &RPHG\$ZDUGVEHFDXVHRILWVKLVWRU\RIGLVFULPLQDWLRQDJDLQVWQRPLQHHV ZKR DUH QRW ³PDOH ZKLWH (QJOLVK´ LQ 6HF WKH KLGGHQ ELDV LQ WKH FDOO IRU DOWHUQDWLYH VDIHW\ WHVWV RI FRVPHWLF SURGXFWV EHFDXVH ³WKLV SUHVXPHVWKDWFRVPHWLFVFRPSDQLHVDUHDOUHDG\XVLQJFRPSXWHUPRGHOLQJ DQG FHOO FXOWXUHV WR VLPXODWH KXPDQ WLVVXH WZR WHFKQLTXHV WKDW KDYH KDG DPELJXRXVXWLOLW\LQGLVFRYHULQJSUREOHPVHDUO\´LQ6HFWKHKLGGHQ ELDVLQWKHUXOHVVLQFHIRUWKHFULWLFVWKH\DUHQRWQHFHVVDULO\GHVLUDEOHDV SRLQWHG RXW E\ %DODQFKLQH LQ 6HF WKH KLGGHQ ELDV LQ WKHVH FRVWXPHV VHWV DQG SURSHUWLHV EHFDXVH WKH\ DUH VXLWDEOH RQO\ IRU D SDUWLFXODUKLVWRULFDOHUDLQ6HFWKHKLGGHQELDVLQWKHSHUIRUPDQFH RI ³EDE\ FKLFNV´ E\ -RKQQ\ $FH 3DOPHU EHFDXVH RI KLV XVH RI GLIIHUHQW WULFNV ZLWK REMHFWV DQG KLV KDQGV LQ 6HF WKH KLGGHQ ELDV LQ WKH H[SORUDWLRQ RI WKH ³0R]DUW HIIHFW´ VLQFH IRU WKH FULWLFV ³WKH YDOLGLW\ RI WKH 0R]DUW (IIHFW DQG WKH VWXGLHV XQGHUJRQH WR UHDFK WKLV WKHRU\ KDYH EHHQGRXEWHGGXHWRUHDVRQVVXFKDVWKHOLPLWDWLRQVLQWKHRULJLQDOVWXG\ DQG WKH GLIILFXOW\ LQ SURYLQJ WKH HIIHFW RI 0R]DUW V PXVLF LQ VXEVHTXHQW VWXGLHV´LQ6HFWKHKLGGHQELDVLQWKHXVHRIFKDQFHRSHUDWLRQVLQ &DJH¶VPXVLFEHFDXVHRIKLVDQDUFKLVWLGHRORJ\LQ6HFWKHKLGGHQ ELDV LQ WKH XVH RI GLJLWDO WHFKQRORJ\ IRU VRXQG GHVLJQ EHFDXVH GLJLWDO VRXQGLVPDGH³EHOLHYDEOH´EXWPD\QRWEH³UHDO´LQQDWXUHLQ6HF WKHKLGGHQELDVLQWKHWKHDWUHRIWKHRSSUHVVHGDVVKRZQLQLWVUDGLFDORU IDUOHIWLVWLGHRORJ\LQ6HFWKHKLGGHQELDVLQWKHXVHRIFRPSXWLQJ WHFKQRORJ\IRUPXVLFFRPSRVLWLRQEHFDXVHWKHSHUIRUPDQFHE\DPDFKLQH RIWHQ ODFNV ³WKH FKDULVPD DQG SL]]D]] RI PXVLFLDQV SHUIRUPLQJ OLYH´ LQ
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
6HFWKHKLGGHQELDVLQ7ROVWR\¶VH[SORUDWLRQVLQFHLWLJQRUHVRWKHU YLHZV ZKLFK VXJJHVW VRPHWKLQJ HOVH LQ WKDW ³DUW FDQ DFW DV D PHDQV WR VRPH VSHFLDO NLQG RI NQRZOHGJH $UW PD\ JLYH LQVLJKW LQWR WKH KXPDQ FRQGLWLRQ $UW UHODWHV WR VFLHQFH DQG UHOLJLRQ $UW VHUYHV DV D WRRO RI HGXFDWLRQRULQGRFWULQDWLRQRUHQFXOWXUDWLRQ$UWPDNHVXVPRUHPRUDO´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
7KHVLV7KH'HQVHQHVV(PSWLQHVV3ULQFLSOH
7KH HOHYHQWK WKHVLV FRQFHUQV WKH GHQVHQHVVHPSWLQHVV SULQFLSOH RQ WKH GLVWULEXWLRQ RI HQWLWLHV LQ VSDFH LQ WKH FDWHJRU\ RI ³VWUXFWXUH´ LQ H[LVWHQWLDO GLDOHFWLFV ZKLFK LV ILUVW SURSRVHG LQ )3+83 LQ WKDW ERWK GHQVLW\ DQG YRLG DUH QHHGHGLQ UHODWLRQ WR WKH PLQG QDWXUH FXOWXUH DQG VRFLHW\ DOEHLW LQ GLIIHUHQW ZD\V 7KHUH LV QR GHQVHQHVV ZLWKRXW HPSWLQHVV²DQGYLFHYHUVD /HVWDQ\PLVXQGHUVWDQGLQJRFFXUVWKHWHUP³YRLG´LVXVHGKHUHRQO\ DVDQDSSUR[LPDWLRQRIHPSWLQHVVGHSHQGLQJRQWKHGHJUHHRIWKHODFNRI GHQVLW\ VLQFH LQ SK\VLFV LW LV ZHOO NQRZQ WKDW ³HPSW\´ VSDFH LV QRW UHDOO\ HPSW\ DOO WKH ZD\ EHFDXVH LW FDQ EH IXOO RI HQHUJ\ HJ UDQGRP TXDQWXP IOXFWXDWLRQV DW WKH VXEDWRPLF OHYHO DQG IRU WKDW PDWWHU GDUN HQHUJ\LQ WKHXQLYHUVH DQG PDWWHUHJGLIIHUHQW YHUVLRQVRIVXEDWRPLF SDUWLFOHV DQG IRU WKDW PDWWHU GDUN PDWWHU LQ WKH XQLYHUVH ) :LOF]HN
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
)RULQVWDQFHRQWKHRQHKDQGWKHUHLVGHQVHQHVVHJWKH UHODWLYHO\ GHQVHUFRQFHQWUDWLRQRIIDFLDOH[SUHVVLRQVWRHYRNHHPRWLRQVOLNHUDVDVLQ ,QGLDQSHUIRUPLQJDUWVLQ6HFWKHUHODWLYHO\GHQVHUFRQFHQWUDWLRQRI ³VKDGHV´ZKLFKDUHGHHSHUWKDQWKHEDVH´LQ³VKDGRZ´WKHDWUHPDNHXSLQ 6HF WKH UHODWLYHO\ GHQVHU FRQFHQWUDWLRQ RI KRQH\ EHHV LQ ³WKH WKLFNHVW EXVWOH RI WKH KLYH´ ZKHUH D ³URXQG GDQFH´ LV WR RFFXU LQ 6HF WKH UHODWLYHO\ GHQVHU FRQFHQWUDWLRQ RI ³PHORGLRXV´ VRXQGV LQ ³ELUG VRQJV´ LQ 6HF WKH UHODWLYHO\ GHQVHU FRQFHQWUDWLRQ RI HYHQWV LQ FRPHG\ DQG WKHDWUH LQ WKH )ULQJH LQ 6HF WKH UHODWLYHO\ GHQVHU FRQFHQWUDWLRQ LQ WKH ROGHU GD\V RI ³QHJDWLYH VLGH HIIHFWV GHIRUPLWLHV EOLQGQHVV DQG HYHQ GHDWK´ GXH WR ³WKH DEVHQFH RI UHJXODWLRQ RI WKH PDQXIDFWXUH DQG XVH RI FRVPHWLFV´ LQ 6HF WKH UHODWLYHO\ GHQVHU FRQFHQWUDWLRQRIGRLQJ³WXUQHGLQOHJV´LQQHRFODVVLFDOEDOOHWLQ6HF WKH UHODWLYHO\ GHQVHU FRQFHQWUDWLRQ RI FRQFHUQV ZLWK LOOXVLRQ LQ LOOXVLRQ FRVWXPHLQ6HFWKHUHODWLYHO\GHQVHUFRQFHQWUDWLRQRIFRQFHUQVZLWK FRJQLWLYHSURFHVVLQJIOXHQF\IRUWKRVHLQWKHSURFHVVLQJIOXHQF\WKHRU\RI DHVWKHWLF SOHDVXUH LQ 6HF WKH UHODWLYHO\ GHQVHU FRQFHQWUDWLRQ RI ³PRWLYDWLRQDQGSRVLWLYHHPRWLRQV´LQDSDWLHQWLIKHUHFHLYHVERWKPXVLF WKHUDS\ DQG WUDGLWLRQDO WKHUDS\ EHFDXVH ³FXUUHQW UHVHDUFK DOVR VXJJHVWV WKDWZKHQPXVLFWKHUDS\LVXVHGLQFRQMXQFWLRQZLWKWUDGLWLRQDOWKHUDS\LW LPSURYHV VXFFHVV UDWHV VLJQLILFDQWO\´ LQ 6HF WKH UHODWLYHO\ GHQVHU FRQFHQWUDWLRQ RI FKDQFH RSHUDWLRQV LQ FKDQFH PXVLF LQ 6HF WKH UHODWLYHO\GHQVHUFRQFHQWUDWLRQRIWKHXVHVRI³UHFRUGHGVRXQG´LQWKHROGHU GD\VRIVRXQGGHVLJQIRUWKHDWUHVD\LQWKHODWHWKFHQWXU\LQ6HF WKH UHODWLYHO\ GHQVHU FRQFHQWUDWLRQ RI FRQFHUQV ZLWK ³WKH UHKHDUVDO RI UHYROXWLRQ´ LQ WKH WKHDWUH RI WKH RSSUHVVHG LQ 6HF WKH UHODWLYHO\ GHQVHUFRQFHQWUDWLRQRIFRPSXWHUJHQHUDWHG PXVLFLQFRPSXWHU PXVLFLQ 6HFWKHUHODWLYHO\GHQVHUFRQFHQWUDWLRQRIFRQFHUQVZLWK³EHDXW\´LQ WKH:HVWLQWKHHDUO\WKFHQWXU\RUDOLWWOHEHIRUHLQ6HFDQGWKH UHODWLYHO\ GHQVHU FRQFHQWUDWLRQ RI FRQFHUQV E\ WKRVH LQ SUH5HIRUPDWLRQ PRUDOLW\SOD\VZLWK³VDOYDWLRQWKURXJKDQLQGLYLGXDO VDFWLRQVNQRZQDVD
MXVWLILFDWLRQE\ZRUNV LQ&DWKROLFWKHRORJ\´LQ6HF 2QWKHRWKHUKDQGWKHUHLVHPSWLQHVVHJWKHUHODWLYHO\OHVVGHQVHRU PRUH HPSW\ FRQFHQWUDWLRQ RI IDFLDO H[SUHVVLRQV WR HYRNH HPRWLRQV LQ FKDQFH PXVLF E\ -RKQ &DJH LQ 6HF WKH UHODWLYHO\ OHVV GHQVH RU PRUHHPSW\FRQFHQWUDWLRQRI³VKDGHV´ ZKLFKDUH³GHHSHUWKDQ WKHEDVH´ LQ³KLJKOLJKW´WKHDWUHPDNHXSLQ6HFWKHUHODWLYHO\OHVVGHQVHRU PRUHHPSW\FRQFHQWUDWLRQRIKRQH\EHHVRXWVLGHWKHKLYHZKHUHWKHUHLV QR ZDJJOHGDQFHLQ6HFWKHUHODWLYHO\OHVVGHQVHRU PRUHHPSW\ FRQFHQWUDWLRQRI ³PHORGLRXV´VRXQGVLQFKDRWLF PXVLFE\ -RKQ&DJHDQG KLV IROORZHUV LQ 6HF WKH UHODWLYHO\ OHVV GHQVH RU PRUH HPSW\
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
FRQFHQWUDWLRQ RI HYHQWV OLNH ³PXVLFDO VKRZV DQG DUW H[KLELWLRQV´ LQ WKH )ULQJH LQ 6HF WKH UHODWLYHO\ OHVV GHQVH RU PRUH HPSW\ FRQFHQWUDWLRQQRZDGD\VRI³QHJDWLYHVLGHHIIHFWVGHIRUPLWLHVEOLQGQHVV DQG HYHQ GHDWK´ GXH WR GLIIHUHQW UHJXODWLRQV DQG FDPSDLJQV IRU VDIH FRVPHWLFVDOWKRXJKWKHUHHPHUJHQHZSUREOHPVDVVRFLDWHGZLWKFRVPHWLF LQGXVWU\ LQ 6HF WKH UHODWLYHO\ OHVV GHQVH RU PRUH HPSW\ FRQFHQWUDWLRQRIGRLQJ³WXUQHGLQOHJV´LQFODVVLFDOEDOOHWLQ6HFWKH UHODWLYHO\ OHVV GHQVH RU PRUH HPSW\ FRQFHQWUDWLRQ RI FRQFHUQV ZLWK LOOXVLRQLQFRVWXPHGUDPDLQ6HFWKHUHODWLYHO\OHVVGHQVHRUPRUH HPSW\ FRQFHQWUDWLRQ RI FRQFHUQV ZLWK WKH SKLORVRSKLFDO TXHVWLRQ FRQFHUQLQJ WKH ³DUWLVWLF PHULW´ RI EHDXWL\ IRU WKRVH LQ WKH SURFHVVLQJ IOXHQF\WKHRU\RIDHVWKHWLFSOHDVXUHLQ6HFWKHUHODWLYHO\OHVVGHQVH RUPRUHHPSW\FRQFHQWUDWLRQRI³PRWLYDWLRQDQGSRVLWLYHHPRWLRQV´LQD SDWLHQWLIKHGRHVQRWUHFHLYHERWKPXVLFWKHUDS\DQGWUDGLWLRQDOWKHUDS\ LQ 6HF WKH UHODWLYHO\ OHVV GHQVH RU PRUH HPSW\ FRQFHQWUDWLRQ RI FKDQFH RSHUDWLRQV LQ PXVLF ZLWK FRQVRQDQW PHORGLHV LQ 6HF WKH UHODWLYHO\OHVVGHQVHRUPRUHHPSW\FRQFHQWUDWLRQRIWKHXVHVRI³GLJLWDO WHFKQRORJ\´LQWKHROGHUGD\VRIVRXQGGHVLJQIRUWKHDWUHVD\LQWKHODWH WK FHQWXU\ LQ 6HF WKH UHODWLYHO\ OHVV GHQVH RU PRUH HPSW\ FRQFHQWUDWLRQRIFRQFHUQVZLWKWKHDHVWKHWLFLVVXHRIZKDWUHDOO\FRXQWVDV ³EHDXWLIXO´ LQ D JRRG WKHDWULFDO SHUIRUPDQFH LQ WKH WKHDWUH RI WKH RSSUHVVHG LQ 6HF WKH UHODWLYHO\ OHVV GHQVH RU PRUH HPSW\ FRQFHQWUDWLRQ RI FRPSXWHUJHQHUDWHG PXVLF LQ WUDGLWLRQDO PXVLF LQ 6HF WKHUHODWLYHO\OHVVGHQVHRUPRUHHPSW\FRQFHQWUDWLRQRIFRQFHUQV ZLWK³EHDXW\´DPRQJ³WKHFXELVWVGDGDLVWV6WUDYLQVN\DQGPDQ\ODWHUDUW PRYHPHQWV´ ZKLFK ³VWUXJJOHG DJDLQVW WKLV FRQFHSWLRQ WKDW EHDXW\ ZDV FHQWUDOWRWKHGHILQLWLRQRIDUW´LQWKHODWHUSDUWRIWKHWKFHQWXU\LQ6HF DQG WKH UHODWLYHO\ OHVV GHQVH RU PRUH HPSW\ FRQFHQWUDWLRQ RI FRQFHUQV E\ WKRVH LQ SRVW5HIRUPDWLRQ PRUDOLW\ SOD\V ZLWK ³VDOYDWLRQ WKURXJKDQLQGLYLGXDO VDFWLRQV´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
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
*RRGH[DPSOHVRIIDPLO\UHVHPEODQFHLQUHODWLRQWRWKHSULQFLSOHDUH IXOOQHVVYRLGQHVVQHDUQHVVIDUQHVVFRQFHQWUDWLRQGLVSHUVLRQDQGWKHOLNH WK
7KHVLV7KH&KDQJH&RQVWDQF\3ULQFLSOH
7KH WZHOIWK WKHVLV FRQFHUQV WKH FKDQJHFRQVWDQF\ SULQFLSOH RQ WKH DOWHUDWLRQ RI WKLQJV LQ WKH FDWHJRU\ RI ³SURFHVV´ LQ H[LVWHQWLDO GLDOHFWLFV ZKLFK LV ILUVW QDPHG LQ %&3& DQG ZHUH ZRUNHG RXW LQ P\ ERRNV OLNH )+& )&' DQG )3+& LQ WKDW FKDQJH RFFXUV RYHU WLPH DOWKRXJK FRQVWDQF\LVDOVRDOORZHG 2OGSOD\HUVIDGHDZD\DQGQHZRQHVHPHUJHVZLWKHYHUQHZFDXVHV DQGHYHUQHZIRUPV²DQGDV\PPHWU\XQGHUJRHVFKDQJHVRYHUWLPHWRRVR GRHVV\PPHWU\7KHUHLVQRFKDQJHZLWKRXWFRQVWDQF\²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³VWDJH LOOXVLRQV´ DQG ³PLFURPDJLF´ LQ 6HF WKH HYHU QHZZD\VWRFXUHSDWLHQWVZLWKGLIIHUHQWLOOQHVVHVDVVKRZQLQWKHPXVLF WKHUDS\ LQ 6HF WKH HYHU QHZ ZD\V WR PDNH PXVLF DV VKRZQ LQ FKDQFH PXVLF LQ 6HF WKH HYHU QHZ ZD\V WR GR VWDJHFUDIW LQ SHUIRUPLQJ DUWV DV VKRZQ LQ VRXQG GHVLJQ DQG OLJKWLQJ GHVLJQ DIRUHGLVFXVVHGLQ6HFWKHHYHUQHZZD\VWRGRWKHDWUHDVVKRZQLQ WKHWKHDWUHRIWKHRSSUHVVHGLQ6HFWKHHYHUQHZZD\VWRFRPSRVH PXVLF DV VKRZQ LQ FRPSXWHU PXVLF LQ 6HF WKH HYHU QHZ ZD\V WR MXGJH DUW DV VKRZQ LQ WKH GLIIHUHQW DQVZHUV WR GLIIHUHQW DHVWKHWLF DQG DUWLVWLF TXHVWLRQV RYHU WLPH DV GLVFXVVHG HDUOLHU LQ 6HF DQG WKH HYHUQHZZD\VWRLQFRUSRUDWHYDOXHLQWRSHUIRUPDQFHDVVKRZQLQWKHSUH 5HIRUPDWLRQDQGSRVW5HIRUPDWLRQPRUDOLW\SOD\VLQ6HF
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
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³VWDJH LOOXVLRQV´ DQG ³PLFURPDJLF´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
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
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
WK7KHVLV7KH2UGHU&KDRV3ULQFLSOH 7KH WKLUWHHQWK WKHVLV LV FDOOHG WKH WKH RUGHUFKDRV SULQFLSOH RQ WKH SDWWHUQRIWKLQJV LQWKHFDWHJRU\RI³SURFHVV´LQH[LVWHQWLDOGLDOHFWLFVDV ILUVW ZRUNHG RXW LQ )& LQ WKDW ERWK RUGHU DQG FKDRV DUH YLWDO LQ WKH SURFHVVRIFKDQJHLQWKHZRUOG 7KH SUHIHUHQFH IRU RUGHU LV ELDVHG VLQFH LW GRHV QRW JLYH VXIILFLHQW DWWHQWLRQ WR WKH YLWDO UROH RI FKDRV LQ WKH WUDQVIRUPDWLRQ RI WKH ZRUOG ZLWKRXWVRPHKRZUHGXFLQJLWIRUWKHXQGHUVWDQGLQJRIRUGHU 7KHUHLVQR RUGHUZLWKRXWFKDRV²DQGYLFHYHUVD 7KHVFLHQWLILFVHDUFKIRURUGHULQWKHZRUOGLVRIWHQDKLGGHQELDVLQLWV RQWRORJLFDOREVHVVLRQZLWKRUGHUVLQFHFKDRVLVRIWHQWUHDWHGDVWKH³EDG´ JX\ZLWKRUGHUDVWKH³JRRG´JX\IRUWKHHQGJRDORIVFLHQFH 1HLWKHURUGHUQRUFKDRVLVWKHILQDOHQGRIWKHZRUOGDQGRQHLVQRWWR EHWUHDWHGDVWKHPHDQVIRUWKHRWKHULQWKHWUDQVIRUPDWLRQRIWKLQJV%RWK DUHIXQGDPHQWDOLQWKHLUUHFXUUHQWGLDOHFWLFDO LQWHUDFWLRQV ZLWKHDFKRWKHU RYHUWLPHZLWKRXWUHGXFLQJRQHIRUWKHRWKHU )RU LQVWDQFH RQ WKH RQH KDQG WKHUH LV RUGHU HJ WKH PRUH RU OHVV RUGHUO\SDWWHUQRIDIDFHWRIDFHFRPPXQLFDLWRQZKHQWKHWKUHHHOHPHQWV PRYHLQWKHVDPHGLUHFWLRQDQGVXSSRUWHDFKRWKHULQ6HFWKHPRUH RUOHVVRUGHUO\SDWWHUQRI³DQFHVWRUVWRPRGHUQKRQH\EHHV´ZKHQHYHUWKH\ VHQWLQIRUPDWLRQ³WRHQFRXUDJHRWKHUQHVWPDWHVWR IRUDJH´ E\SHUIRUPLQJ ³H[FLWDWRU\ PRYHPHQWV´LQ6HFWKHPRUHRUOHVVRUGHUO\ QDWXUHRI ZKDOHVRQJVZLWKWKHLU³UHJXODUDQGSUHGLFWDEOHVRXQGV´QRWDEO\E\³WKH +XPSEDFN :KDOH´ LQ 6HF WKH PRUH RU OHVV RUGHUO\ QDWXUH RI
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
WUDGLWLRQDO FRPHG\ ZKLFK LV WR EH SUHSDUHG DQG SUDFWLFHG EHIRUH WKH SHUIRUPDQFH ZLWKLWV³VWDQGDUGLVHGVWUXFWXUHRIDVHTXHQFHRIMRNHVZLWK SXQFKOLQHV´LQ6HFWKHPRUHRUOHVVRUGHUO\QDWXUHRIWKHFRVPHWLF LQGXVWU\ QRZDGD\V EHFDXVH RI WKH H[LVWHQFH RI GLIIHUHQW UHJXODWLRQV ³RI WKHPDQXIDFWXUHDQGXVHRIFRVPHWLFV´DVZHOODVGLIIHUHWQFDPSDLJQVIRU VDIH FRVPHWLFV LQ 6HF WKH PRUH RU OHVV RUGHUO\ QDWXUH RI FODVVLFDO EDOOHWZLWKLWVVWULFWUXOHVLQ6HFWKHPRUHRUOHVVRUGHUO\YLHZRI FRVWXPHVZKHQORRNHGIURPWKHSHUVSHFWLYHRIDSDUWLFXODUKLVWRULFDOHUD LQ6HFWKH PRUHRUOHVVRUGHUO\ QDWXUHRIVLPSOHSDWWHUQVLQ PXVLF ZKLFK DUH ³IOXHQW´ LQ DFFRUGDQFH WR WKH SURFHVVLQJ IOXHQF\ WKHRU\ RI DHVWKHWLFSOHDVXUHLQ6HFWKHPRUHRUOHVVRUGHUO\QDWXUHRIPXVLF IRUFKLOGUHQWROLVWHQWRLQ³PXVLFWKHUDS\´LQ6HFWKHPRUHRUOHVV RUGHUO\QDWXUHRIFRQVRQDQWPHORGLHVOLNHWKRVHLQPHGLHYDOPXVLFLQ6HF WKH PRUH RU OHVV RUGHUO\ QDWXUH RI WKH FRRUGLQDWLRQ SURFHVV LQ D ³VPDOOWKHDWUH´EHFDXVHWKH³WHFKQLFDOFUHZ´DUHVPDOOLQQXPEHU³WKHUH LV OHVV ZRUN WR GR´ DQG WKH VPDOO FUHZ ILQG LW HDVLHU WR UHVROYH WKHLU GLIIHUHQW YLHZV DERXW SURGXFWLRQ LQ 6HF WKH PRUH RU OHVV RUGHUO\ QDWXUH RI VRFLDO UHDOLW\ DV SRUWUD\HG E\ WKH UXOLQJ FODVV FODVV IRU LWV ³FXOWXUDODQGLGHRORJLFDOGRPLQDWLRQ´LQDFFRUGDQFHWRWKHWKHDWUHRIWKH RSSUHVVHGLQ6HFWKHPRUHRUOHVVRUGHUO\QDWXUHRIFRPSXWHUPXVLF JHQHUDWHGE\IUDFWDOJHRPHWU\ZKHQLWFDQSURGXFH³DO\ULFDODQGPHORGLF SLHFH RI PXVLF´ LQ 6HF WKH PRUH RU OHVV RUGHUO\ QDWXUH RI WKH :HVWHUQSKLORVRSK\RIDUWLQ WKHROGHUGD\V ZKHQ ³EHDXW\ ZDVFHQWUDOWR WKH GHILQLWLRQ RI DUW´ DQG ³DQ\WKLQJ WKDW ZDVQ W WU\LQJ WR EH EHDXWLIXO FRXOGQ WFRXQWDVDUW´LQ6HFDQGWKHPRUHRUOHVVRUGHUO\SDWWHUQRI WKHEHKDYLRUVRID ³YLUWXRXV´SHUVRQ ZKHQ KHDFWV LQDFFRUGDQFHWR³WKH VDFUDPHQWV RI WKH &DWKROLF &KXUFK´ ³WKH DEVWLQHQFH IURP WKH 6HYHQ 'HDGO\6LQV´DQGVRRQLQ6HF 2QWKHRWKHUKDQGWKHUHLVFKDRVHJWKHPRUHRUOHVVFKDRWLFSDWWHUQ RI D IDFHWRIDFH FRPPXQLFDLWRQ ZKHQ WKH WKUHH HOHPHQWV PRYH LQ FRQIOLFWLQJ GLUHFWLRQV DQG GR QRW VXSSRUW HDFK RWKHU LQ 6HF WKH PRUHRUOHVVFKDRWLFQDWXUHRI³DQFHVWRUVWRPRGHUQKRQH\EHHV´ZKHQWKH\ ³SHUIRUPHG H[FLWDWRU\ PRYHPHQWV´ OLNH ³VKDNLQJ ]LJ]DJJLQJ EX]]LQJ DQGFUDVKLQJLQWRQHVWPDWHV´LQ6HFWKHPRUHRUOHVVFKDRWLFQDWXUH RI FKDQFH PXVLF E\ -RKQ &DJH DQG KLV IROORZUV ZLWK WKH XVH RI FKDQFH RSHUDWLRQVLQ6HFWKHPRUHRUOHVVFKDRWLFQDWXUHRILPSURYLVDWLRQDO FRPHG\³WRSHUIRUPVSRQWDQHRXVO\´LQ6HFWKHPRUHRUOHVVFKDRWLF QDWXUH RI WKH FRVPHWLF PDUNHW LQ WKH ROGHU GD\V GXH WR ³WKH DEVHQFH RI UHJXODWLRQ RI WKH PDQXIDFWXUH DQG XVH RI FRVPHWLFV´ LQ 6HF WKH PRUH RU OHVV FKDRWLF QDWXUH RI PRGHUQ EDOOHW ZKHQ WKHUH DUH VR PDQ\ GLIIHUHQW EDOOHW VW\OHV FRPSDQLHV DQG FKRUHRJUDSKHUV WR FKRRVH IURP LQ
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
6HFWKHPRUHRUOHVVFKDRWLFQDWXUHRIFRVWXPHVZKHQORRNHGIURP WKHYDULRXVSHUVSHFWLYHVRIGLIIHUHQWKLVWRULFDOHUDVHDFKZLWKLWVSHFXOLDU GLVWLQFWLYHQHVV LQ 6HF WKH PRUH RU OHVV FKDRWLF QDWXUH RI ³YHU\ FRPSOH[ SDWWHUQV´ LQ PXVLF ZKLFK DUH ³GLVIOXHQW´ LQ DFFRUGDQFH WR WKH SURFHVVLQJIOXHQF\WKHRU\RIDHVWKHWLFSOHDVXUHLQ6HFWKHPRUHRU OHVV FKDRWLF QDWXUH RI PXVLF IRU SDWLHQWV WR OLVWHQ WR LQ ³DYDQWPXVLF WKHUDS\´ ZKHQ ³PXVLF WKHUDSLVW PXVLF UHVHDUFKHU DQG H[SHULPHQWDO FRPSRVHU(QULFR&XUUHUL>@FOLQLFDOO\H[SORUHGWKHRULHVDQGFRQFHSWV GHYHORSHGE\WKH$PHULFDQFRPSRVHU-RKQ&DJH´LQ6HFWKHPRUH RUOHVVFKDRWLFQDWXUHRI³PXVLFDOGLFHJDPHSRSXODULQWKHODWHWKDQG HDUO\ WK FHQWXU\´ LQ ZKLFK ³HDFK PHDVXUH >LQ D PXVLFDO SLHFH@ KDG VHYHUDO SRVVLEOH YHUVLRQV DQG D SURFHGXUH IRU VHOHFWLQJ WKH SUHFLVH VHTXHQFH EDVHG RQ WKH WKURZLQJ RI D QXPEHU RI GLFH´ LQ 6HF WKH PRUHRUOHVVFKDRWLFQDWXUHRIWKHFRRUGLQDWLRQSURFHVVLQD³ODUJHWKHDWUH´ EHFDXVHWKH³WHFKQLFDOFUHZ´DUHODUJHLQQXPEHUWKHUHLVVRPXFKPRUH ZRUNWRGRDQGWKHUHDUHPRUHGLYHUVHSHRSOHZKRFDQGLVDJUHHDERXWWKH SURGXFWLRQ RI D VKRZ LQ 6HF WKH PRUH RU OHVV FKDRWLF QDWXUH RI VRFLDOUHDOLW\DVSRUWUD\HGE\WKHUXOHGFODVVLQWKHWKHDWUHRIWKHRSSUHVVHG ZKHQ WKH SUDFWLWLRQHUV WU\ WR VXEYHUW RU ³GHWHFW WKH SRLVRQ LQILOWUDWLQJ´ PDVV PHGLD VR DV WR GHFRQVWUXFW LW RU WR WHDU LW DSDUW LQ 6HF WKH PRUH RU OHVV FKDRWLF QDWXUH RI FRPSXWHU PXVLF JHQHUDWHG E\ IUDFWDO JHRPHWU\ZKHQLWSURGXFHV³DIDQWDVWLFDOO\GLVVRQDQWFDFRSKRQ\´LQ6HF WKH PRUH RU OHVV FKDRWLF QDWXUH RI WKH :HVWHUQ SKLORVRSK\ RI DUW QRZDGD\V HVSHFLDOO\ LQ SRVWPRGHUQ DHVWKHWLFV ZKHUH DQ\WKLQJ JRHV LQ 6HF DQG WKH PRUH RU OHVV FKDRWLF SDWWHUQ RI WKH EHKDYLRUV RI D ³YLFLRXV´SHUVRQEHFDXVHKHLV³GLDEROLF´³ZLFNHG´³GHFHSWLYH´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
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
WK
7KHVLV7KH6ORZQHVV4XLFNQHVV3ULQFLSOH
7KH IRXUWHHQWK WKHVLV FRQFHUQV WKH VORZQHVVTXLFNQHVV SULQFLSOH RQ WKHVSHHGRIFKDQJH LQWKHFDWHJRU\RI³SURFHVV´LQH[LVWHQWLDOGLDOHFWLFV ZKLFKZDVILUVWZRUNHGRXWLQ),$ LQWKDWERWKVORZQHVVDQGTXLFNQHVV FRH[LVWZLWKWKHLURZQLQWHUQDOWHQVLRQWRWKHH[WHQWWKDWHDFKILJKWVIRU LWV RZQ UHOHYDQFH ZLWK WKH RWKHU LQ DFFRUGDQFH WR WKH SHUVSHFWLYHV RI QDWXUHWKHPLQGFXOWXUHDQGVRFLHW\ZLWKRXWRQHEHLQJWKHYLFWRUDQGWKH RWKHUEHLQJWKHYDQTXLVKHGLQWKHORQJKDXO7KHUHLVQRVORZQHVVZLWKRXW TXLFNQHVV²DQGYLFHYHUVD )RU LQVWDQFH RQ WKH RQH KDQG WKHUH LV VORZQHVV HJ WKH UHODWLYHO\ VORZHU VSHHG RI FHUWDLQ HPRWLRQV OLNH ³IHDU DQG VXUSULVH´ WR EH FRUUHFWO\ LGHQWLILHG LQ WKH VWXGLHV E\ (NPDQ LQ 6HF WKH UHODWLYHO\ VORZHU VSHHGRIGU\VNLQWRKDYHDVPRRWKPDNHXSLI³SHUIRUPHUVZLWKGU\VNLQ´ GR QRW ³XVH D PRLVWXUL]HU GDLO\ DQG DIWHU WKHLU IDFHV KDYH EHHQ FOHDQVHG IROORZLQJ D SHUIRUPDQFH´ LQ 6HF WKH UHODWLYHO\ VORZHU VSHHG RI KRQH\ EHHV WR IRUDJH LQ ³WURSLFDO KDELWDWV«LI ZDJJOH GDQFLQJ LV SUHYHQWHG´ LQ 6HF WKH UHODWLYHO\ VORZHU VSHHG RI ³WKH SDFH RI HYROXWLRQ RI D ZKDOH V VRQJ´ WR FKDQJH VLQFH LQ ³VRPH \HDUV«OLWWOH YDULDWLRQ PD\ EH UHFRUGHG´ LQ 6HF WKH UHODWLYHO\ VORZHU VSHHG RI HYHQWVOLNHVNHWFKVKRZVWRJURZVXEVWDQWLYHO\LQWKHKLVWRU\RIWKH)ULQJH LQ6HFWKHUHODWLYHO\VORZHUVSHHGRI³3DUDEHQV´WRHYHU³FDXVHVNLQ LUULWDWLRQ DQG FRQWDFW GHUPDWLWLV LQ LQGLYLGXDOV´ ZLWKRXW ³SDUDEHQ DOOHUJLHV´ LQ 6HF WKH UHODWLYHO\ VORZHU VSHHG RI DQ\ EDOOHW VWXGHQW ROGHUWKDQ\HDUVROGWRVXIIHUIURPSK\VLFDOLQMXULHVLIVKHWDNHVSRLQWH FODVV LQ 6HF WKH UHODWLYHO\ VORZHU VSHHG RI D FRVWXPH GHVLJQHU WR ILQLVKKLVMREZKHQKHKDVGLVDJUHHPHQWVZLWKWKHGLUHFWRUVHWGHVLJQHUV OLJKWLQJ GHVLJQHUV SHUIRUPHUV HWF LQ 6HF WKH UHODWLYHO\ VORZHU VSHHGRI³JUDQGLOOXVLRQV´WREHPRYHDURXQGIURPRQHORFDWLRQWRDQRWKHU EHFDXVH RI WKHLU VL]H DQG WKH GLIILFXOW\ RI VKLSSLQJ LQ 6HF WKH UHODWLYHO\ VORZHU VSHHG RI D PRWKHU¶V KHDUWEHDW KHDUG E\ D IHWXV LQ WKH ZRPE ZKHQ WKH ³KHDUWEHDW«DW RWKHU WLPHV VORZ>V@ GRZQ´ DFFRUGLQJ WR /HYLWLQ LQ 6HF WKH UHODWLYHO\ VORZHU VSHHG RI WKRVH ZKR ZDQW WR PDVWHU ³&DJH V HWXGHV´ EHFDXVH WKH\ ³DUH DOO H[WUHPHO\ GLIILFXOW WR SHUIRUP´LQ6HFWKHUHODWLYHO\VORZHUVSHHGRI³VRXQGGHVLJQHUVWR DFTXLUHVRXUFHPDWHULDO´EHIRUH³WKH:RUOG:LGH:HE´HL[VWHGDWDOODVLQ WKHROGHUGD\VRIWKHWKFHQWXU\LQ6HFWKHUHODWLYHO\VORZHUVSHHG RI WKRVH ZKR QHYHU H[SHULHQFHV DQ\ WKHDWUH RI WKH RSSUHVVHG ³WR EH SURDFWLYH´LQUHVROYLQJDVLPLODUFRQIOLFWLQRSSUHVVLRQLI³HQFRXQWHUHGLQ UHDOLW\´ LQ 6HF WKH UHODWLYHO\ VORZHU VSHHG RI HDUO\ ³FRPSXWHU PXVLF SURJUDPV´ LQ WKH ROGHU GD\V ZKLFK ³ZRXOG UXQ IRU KRXUV RU GD\V´
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
RQO\LQRUGHU³WRJHQHUDWHDIHZPLQXWHVRIPXVLF´DQGWKXVGLGQRWUXQLQ UHDOWLPHLQ6HFWKHUHODWLYHO\VORZHUVSHHGRIVRPHRQHWRMXGJHDQ DUW REMHFW LI KH KDV WR FRQVLGHU DOO SRVVLEOH DVSHFWV RI LW ZLWK TXHVWLRQV OLNH³WKHRYHUDOOUHVXOW"2XUH[SHULHQFHRULQWHUSUHWDWLRQRIWKHUHVXOW",V LWDSK\VLFDOREMHFW"6HYHUDOREMHFWV"$FODVVRIREMHFWV"$PHQWDOREMHFW" $ILFWLRQDOREMHFW"$QDEVWUDFWREMHFW"$QHYHQW"2UVLPSO\DQ$FW"´LQ 6HFDQGWKHUHODWLYHO\VORZHUUHDGLQHVVRIWKRVHLQSRVW5HIRUPDWLRQ PRUDOLW\ SOD\V WR IRFXV RQ ³DWWDLQLQJ VDOYDWLRQ WKURXJK DQ LQGLYLGXDO V DFWLRQV´EHFDXVHRIWKHLUIRFXVRQWKHFRUUXSWLRQRIWKH&DWKROLF&KXUFK LQ6HF 2QWKHRWKHUKDQGWKHUHLVTXLFNQHVVHJWKHUHODWLYHO\IDVWHUVSHHG RIFHUWDLQHPRWLRQVOLNH³MR\´DQG³DQJHU´WREHFRUUHFWO\LGHQWLILHGLQWKH VWXGLHVE\(NPDQLQ6HFWKHUHODWLYHO\TXLFNHUVSHHGRIGU\VNLQWR KDYH D VPRRWK PDNHXS LI ³SHUIRUPHUV ZLWK GU\ VNLQ XVH D PRLVWXUL]HU GDLO\DQGDIWHUWKHLUIDFHVKDYHEHHQFOHDQVHGIROORZLQJDSHUIRUPDQFH´LQ 6HF WKH UHODWLYHO\ TXLFNHU VSHHG RI KRQH\ EHHV WR IRUDJH LQ ³WURSLFDO KDELWDWV«LI ZDJJOH GDQFLQJ´ LV SHUIRUPHG LQ 6HF WKH UHODWLYHO\ TXLFNHU VSHHG RI ³WKH SDFH RI HYROXWLRQ RI D ZKDOH V VRQJ´ WR FKDQJHVLQFHLQRWKHU\HDUV³WKHVRQJPD\FKDQJHTXLWHUDSLGO\´LQ6HF WKHUHODWLYHO\TXLFNHUVSHHGRIHYHQWVLQWKHDWUHDQGFRPHG\WRJURZ VXEVWDQWLYHO\ LQ WKH KLVWRU\ RI WKH )ULQJH LQ 6HF WKH UHODWLYHO\ TXLFNHUVSHHGRI³3DUDEHQV´WR³FDXVHVNLQLUULWDWLRQDQGFRQWDFWGHUPDWLWLV LQ LQGLYLGXDOV ZLWK SDUDEHQ DOOHUJLHV D VPDOO SHUFHQWDJH RI WKH JHQHUDO SRSXODWLRQ´ LQ 6HF WKH UHODWLYHO\ TXLFNHU VSHHG RI DQ\ EDOOHW VWXGHQW \RXQJHU WKDQ \HDUV ROG WR VXIIHU IURP SK\VLFDO LQMXULHV LI VKH WDNHVSRLQWHFODVVEHFDXVHIRU³DQ\\RXQJHUWKDQHOHYHQHYHQZLWKVWURQJ SK\VLTXH DQG WHFKQLTXH WKH ERQHV LQ D VWXGHQW V IHHW ZLOO PROG DQG FRQIRUPWRWKHSRLQWH VKRHDQGWKH JLUO VIHHW ZLOOOLNHO\EHGLVILJXUHGLQ VWUXFWXUH´LQ6HFWKHUHODWLYHO\TXLFNHUVSHHGRIDFRVWXPHGHVLJQHU WR ILQLVK KLV MRE ZKHQ KH VKDUHV WKH VDPH YLHZV ZLWK WKH GLUHFWRU VHW GHVLJQHUVOLJKWLQJGHVLJQHUVSHUIRUPHUVHWFLQ6HFWKHUHODWLYHO\ TXLFNHUVSHHGRI ³PLFURPDJLF´WREHPRYHDURXQGIURPRQHORFDWLRQWR DQRWKHU EHFDXVH RI LWV VPDOO VL]H LQ 6HF WKH UHODWLYHO\ TXLFNHU VSHHG RI D PRWKHU¶V KHDUWEHDW KHDUG E\ D IHWXV LQ WKH ZRPE ZKHQ WKH ³KHDUWEHDW«DWWLPHVVSHHG>V@XS´DFFRUGLQJWR/HYLWLQLQ6HFWKH UHODWLYHO\TXLFNHUVSHHGRIWKRVHZKRZDQWWRPDVWHUFRQVRQDQWPHORGLHV IRUEDELHVEHFDXVHWKH\DUHHDVLHUWRSHUIRUPLQ6HFWKHUHODWLYHO\ TXLFNHU VSHHG RI ³VRXQG GHVLJQHUV WR DFTXLUH VRXUFH PDWHULDO TXLFNO\ HDVLO\´RQ³WKH:RUOG:LGH:HE´QRZDGD\VLQ6HFWKHUHODWLYHO\ TXLFNHU VSHHG RI WKRVH LQ WKH WKHDWUH RI WKH RSSUHVVHG ³WR EH SURDFWLYH VLQFH WKH\ IHHO PXFK PRUH SUHSDUHG DQG FRQILGHQW LQ UHVROYLQJ WKH
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
FRQIOLFW´ LQ RSSUHVVLRQ LI ³HQFRXQWHUHG LQ UHDOLW\´ LQ 6HF WKH UHODWLYHO\ TXLFNHU VSHHG RI ³FRPSXWHUPXVLF SURJUDPV´ QRZDGD\V EHFDXVH ³E\ WKH HDUO\ V WKH SHUIRUPDQFH RI PLFURSURFHVVRUEDVHG FRPSXWHUVUHDFKHGWKHSRLQWWKDWUHDOWLPH JHQHUDWLRQRIFRPSXWHU PXVLF XVLQJ PRUH JHQHUDO SURJUDPV DQG DOJRULWKPV EHFDPH SRVVLEOH´ LQ 6HF WKHUHODWLYHO\TXLFNHUVSHHGRIVRPHRQHWRMXGJHDQDUWREMHFWLIKH KDV WR FRQVLGHU RQO\ D VPDOO DVSHFW RI LW OLNH KLV H[SHULHQFH RI LW DV ³VLPSO\ DQ DFW´ DQG QRW PRUH LQ 6HF DQG WKH UHODWLYHO\ TXLFNHU UHDGLQHVVRIWKRVHLQSUH5HIRUPDWLRQPRUDOLW\SOD\VWRIRFXVRQ³DWWDLQLQJ VDOYDWLRQ WKURXJK DQ LQGLYLGXDO V DFWLRQV NQRZQ DV D MXVWLILFDWLRQ E\ ZRUNV LQ&DWKROLFWKHRORJ\´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
WK7KHVLV7KH([SDQVLRQ&RQWUDFWLRQ3ULQFLSOH 7KHILIWHHQWKWKHVLVLVFDOOHGWKHH[SDQVLRQFRQWUDFWLRQSULQFLSOHLQWKH FDWHJRU\RI³SURFHVV´LQH[LVWHQWLDOGLDOHFWLFVLQWKDWHQWLWLHVLQWKHZRUOG FDQERWKH[SDQGLQVRPHZD\VDQGFRQWUDFWLQRWKHURQHVDVSDUWRIWKHLU QDWXUH7KHUHLVQRH[SDQVLRQZLWKRXWFRQWUDFWLRQ²DQGYLFHYHUVD 7KLVSULQFLSOHDOWKRXJK QRWVRH[SOLFLWO\FDOOHG ZDVDOUHDG\ XVHGLQ P\ SUHYLRXV ZRUNV RQ GLIIHUHQW WRSLFV HJ WKH WKHRU\ RI IORDWLQJ FRQVFLRXVQHVVLQ)&'DQG)3+&WKHXQLRQRIWKHXQLRQVLQ%:7DQGWKH F\FOLFDOSURJUHVVLRQRIV\VWHPIUDJPHQWDWLRQDQGLQWHJUDWLRQLQ)&' )RULQVWDQFHRQWKHRQHKDQGWKHUHLVH[SDQVLRQHJWKHUHODWLYHO\ PRUH GHYHORSHG DELOLW\ RI DQ DFWRU LQ WKH 5DVD PHWKRG WR FRQYH\ ³ HPSDWKHWLF HPRWLRQV´ ZLWK KLV IDFLDO H[SUHVVLRQV LQ 6HF WKH UHODWLYHO\ PRUH GHYHORSHG DELOLW\ RI DFWRUV LQ WKHDWUH RI RXU WLPH WR XVH FRVPHWLF PDNHXSLQ6HFWKHUHODWLYHO\ PRUHGHYHORSHGDELOLW\RI KRQH\ EHHV WR GDQFH LQ D ZDJJOH ZD\ LQ 6HF WKH UHODWLYHO\ PRUH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
GHYHORSHG DELOLW\ RI WKRVH VWXG\LQJ ELUG VRQJV WR GHDO ZLWK ³PHORGLRXV´ VRXQGVLQ6HFWKHUHODWLYHH[SDQVLRQRIWKHLQIOXHQFHRIWKH)ULQJH LQ UHFHQW GHFDGHV LQ 6HF WKH UHODWLYHO\ PRUH GHYHORSHG DELOLW\ RI WKRVH LQ WKH ROGHU GD\V WR WHVW FRVPHWLFV RQ DQLPDOV LQ 6HF WKH UHODWLYH H[SDQVLRQ RI FRQWHPSRUDU\ EDOOHW QRZDGD\V LQ 6HF WKH UHODWLYHO\ PRUH GHYHORSHG DELOLW\ RI LOOXVLRQ FRVWXPH GHVLJQHUV WR GHDO ZLWKGLIIHUHQWLOOXVLRQWULFNVWRIRROWKHH\HVRIWKHDXGLHQFHLQ6HF WKH UHODWLYH H[SDQVLRQ RI WKH LQIOXHQFH RI VXFK SHUVSHFWLYHV OLNH ³SV\FKRDQDO\VLV´ ³IHPLQLVP´ ³SKHQRPHQRORJ\´ DQG ³WKH ZULWLQJV RI :LWWJHQVWHLQ /\RWDUG DQG 'HUULGD´ VLQFH WKH V LQ WKHLU FRPSHWLWLRQ ZLWK³DUWSV\FKRORJ\´LQ6HFWKHUHODWLYHO\PRUHGHYHORSHGDELOLW\ RIDFKLOG³WRKDQGOHDQLQVWUXPHQW´ZHOOEXWQRWRWKHUVVRLWLVLPSRUWDQW IRU WKH PXVLF WKHUDSLVW ³WR JLYH WKH FKLOG WKH ULJKW LQVWUXPHQW´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³D OLYLQJ EUHDWKLQJHPERGLPHQWRIDFKDUDFWHU´QRWMXVWWRFRQYH\³HPRWLRQ´DVLV WKH FDVH LQ WKH :HVWHUQ 6WDQLVODYVNL PHWKRG LQ 6HF WKH UHODWLYHO\ OHVV GHYHORSHG DELOLW\ RI DFWRUV LQ WKHDWUH RI RXU WLPH WR GR ZLWKRXW FRVPHWLF PDNHXS DV ZDV WKH FDVH LQ DQFLHQW *UHHN DQG 5RPDQ WKHDWUH ZKHQ ³PDNHXS ZDV XQQHFHVVDU\´ DQG ³DFWRUV ZRUH YDULRXV PDVNV´ LQVWHDGLQ6HFWKHUHODWLYHO\OHVVGHYHORSHGDELOLW\RIKRQH\EHHVLQ HQJDJHLQ³H[FLWDWRU\PRYHPHQWV´OLNH³VKDNLQJ]LJ]DJJLQJEX]]LQJDQG FUDVKLQJLQWRQHVWPDWHV´ZKLFK³>D@QFHVWRUVWRPRGHUQKRQH\EHHV´RIWHQ GLG LQ 6HF WKH UHODWLYHO\ OHVV GHYHORSHG DELOLW\ RI WKRVH VWXG\LQJ ELUGVRQJVWRGHDOZLWK³FKDRWLF´VRXQGVDVLQFKDQFHPXVLFE\-RKQ&DJH LQ 6HF WKH UHODWLYH GHFOLQH RI WKH LQIOXHQFH RI WKH (GLQEXUJ ,QWHUQDWLRQDO )HVWLYDO LQ UHFHQW GHFDGHV LQ 6HF WKH UHODWLYHO\ OHVV GHYHORSHGDELOLW\RIWKRVHLQWKHROGHUGD\VWRXVHDOWQHUDWLYHVDIHW\WHVWV RI FRVPHWLF SURGXFWV OLNH ³FRPSXWHU PRGHOLQJ DQG FHOO FXOWXUHV WR VLPXODWH KXPDQ WLVVXH´ LQ 6HF WKH UHODWLYH GHFOLQH RI FODVVLFDO EDOOHW QRZDGD\V LQ 6HF WKH UHODWLYHO\ OHVV GHYHORSHG DELOLW\ RI LOOXVLRQ FRVWXPH GHVLJQHUV WR GHDO ZLWK GHVLJQ SUREOHPV UHODWHG WR
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
FRVWXPHGUDPDLQ6HFWKHUHODWLYHGHFOLQHRIWKHLQIOXHQFHRI³DUW SV\FKRORJ\´ VLQFH WKH V LQ LWV FRPSHWLWLRQ ZLWK ³SV\FKRDQDO\VLV´ ³IHPLQLVP´³SKHQRPHQRORJ\´DQG³WKHZULWLQJVRI:LWWJHQVWHLQ/\RWDUG DQG'HUULGD´LQ6HFWKHUHODWLYHO\OHVVGHYHORSHGDELOLW\RIDFKLOG WRKDQGOH³RWKHU´LQVWUXPHQWVDOWKRXJKKHFDQKDQGOHDFHUWDLQLQVWUXPHQW ZHOOVRLWLVLPSRUWDQWIRUWKHPXVLFWKHUDSLVW³WRJLYHWKHFKLOGWKHULJKW LQVWUXPHQW´ LQ 6HF WKH UHODWLYH GHFOLQH RI WKH LQIOXHQFH RI WUDGLWLRQDO FRQVRQDQW PHORGLHV QRZDGD\V LQ 6HF WKH UHODWLYH GHFOLQH RI WKH XVH RI ³RQO\ WKH GLDORJXH DQG RFFDVLRQDO VRXQG HIIHFWV´ QRZDGD\VHYHQWKRXJKLWZDVSHUYDVLYHLQWKHROGHUGD\VRIVRXQGGHVLJQ ³EHIRUH VWHUHR VRXQGWUDFNV´ LQ 6HF WKH UHODWLYH IDLOXUH RI WKH LQIOXHQFH RI WKH WKHDWUH RI WKH RSSUHVVHG DPRQJ WKH ³QHRFRQVHUYDWLYH´ HVWDEOLVKPHQWLQ$PHULFDHVSHFLDOO\XQGHUWKH%XVKDGPLQLVWUDWLRQLQKLV UHFNOHVV LPSHULDO ZDUV DEURDG LQ 6HF WKH UHODWLYH GHFOLQH RI WKH LQIOXHQFH RI WUDGLWLRQDO PXVLF ZLWKRXW DQ\ XVH RI FRPSXWLQJ WHFKQRORJ\ QRZDGD\V LQ 6HF WKH UHODWLYH GHFOLQH RI WKH LQIOXHQFH RI DQFLHQW DHVWKHWLFVLQWKH:HVWQRZDGD\VLQ6HFDQGWKHUHODWLYHGHFOLQHRI WKH LQIOXHQFH RI &DWKROLFLVP LQ WKH SRVW5HIRUPDWLRQ PRUDOLW\ SOD\V LQ 6HF $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH $JDLQLWVKRXOGEHVWUHVVHG KRZHYHUWKDWWKHUHDUHGLIIHUHQWVKDGHV RI JUD\ RU GLIIHUHQW GHJUHHV RI WUXWK LQ WKH WZR RSSRVLWHV DQG WKH FODVVLILFDWLRQ LV QRW QHFHVVDULO\ PXWXDOO\ H[FOXVLYH HLWKHU ,Q IDFW HYHQ ZKHQVRPHFRPELQDWLRQVRIWKHWZRRFFXUWKH\RQO\HQG XSVKDULQJWKH VDPHGLDOHFWLFUHODWLRQVKLSEXWLQDGLIIHUHQWGHJUHH $OVR WKHUH DUH VRPH RWKHU UHODWLRQVKLSV DV D NLQG RI IDPLO\ UHVHPEODQFH ZKLFK KDYH VRPHWKLQJ LQ FRPPRQ ZLWK WKH SULQFLSOH EXW WKH\ DUH QRW H[DFWO\ WKH VDPH EXW RQO\ PRUH RU OHVV FRPSDUDEOH ZKLFK YDULHVIURPFDVHWRFDVH *RRGH[DPSOHVRIIDPLO\UHVHPEODQFHLQUHODWLRQWRWKHSULQFLSOHDUH FRQTXHVWDXWDUN\ ULVHIDOO RU XSGRZQ VSUHDGVKULQN H[WHQGLQJQHVV VKRUWHQLQJQHVVDQGVRIRUWK
WK7KHVLV7KH7KHRU\3UD[LV3ULQFLSOH
7KH VL[WHHQWK WKHVLV LV WKH WKHRU\SUD[LV SULQFLSOH RQ WKH GXDOLW\ RI NQRZOHGJH LQ WKH FDWHJRU\ RI ³DJHQF\´ LQ H[LVWHQWLDO GLDOHFWLFV ZKLFK ZDVILUVWZRUNHGRXWLQ)3+( LQWKDWLIWKHUHLVWKHRUHWLFDOFRQVWUXFWLRQ WKHUH LV OLNHZLVH LWV SUDFWLFDO DSSOLFDWLRQ ERWK WHFKQLFDO DQG QRUPDWLYH 7KHUHLVQRWKHRU\ZLWKRXWSUD[LV²DQGYLFHYHUVD
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
)RU LQVWDQFH RQ WKH RQH KDQG WKHUH LV WKHRU\ HJ WKH WKHRUHWLFDO FRQVWUXFWLRQ RI ³UDVD´ LQ ,QGLDQ DHVWKHWLFV LQ 6HF WKH WKHRUHWLFDO FRQVWUXFWLRQ RI VXEVWDQFHV IRU FRVPHWLFV LQ FKHPLVWU\ LQ 6HF WKH WKHRUHWLFDO FRQVWUXFWLRQ RI ZDJJOH GDQFH E\ )ULVWFK LQ EHHNHHSLQJ DQG HWKRORJ\ LQ 6HF WKH WKHRUHWLFDO FRQVWUXFWLRQ RI ³ELUG VRQJV´ E\ ]RRPXVLFRORJLVWVLQ6HFWKHWKHRUHWLFDOFRQVWUXFWLRQRI³DOWHUQDWLYH FRPHG\´ LQ SHUIRUPLQJ DUWV LQ 6HF WKH WKHRUHWLFDO FRQVWUXFWLRQ RI FKHPLFDOV OLNH ³]LQF R[LGH´ DQG ³WLWDQLXP GLR[LGH´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³UDVD´LQ,QGLDQDHVWKHWLFVWRWKHILHOGRI,QGLDQSHUIRUPLQJDUWVOLNHWKH ,QGLDQ FODVVLFDO GDQFH DQG WKHDWUH VXFK DV WKH RQHV RI %KDUDWDQDW\DP NDWKDN.XFKLSXGL2GLVVL0DQLSXUL.XGL\DWWDP.DWKDNDOLDQGRWKHUVLQ 6HFWKHSUDFWLFDODSSOLFDWLRQRIVXEVWDQFHVIRUFRVPHWLFVWRWKHILHOG RIWKHDWUHIRUPDNHXSLQ6HFWKHSUDFWLFDODSSOLFDWLRQRIWKHVWXG\ RIZDJJOHGDQFHWRWKHILHOGRIFRPSXWLQJVFLHQFHOLNHWKH³RSWLPL]DWLRQ DOJRULWKPV´ E\ ³XVLQJ EHH ZDJJOH GDQFH EHKDYLRU IRU HIILFLHQW IDXOW WROHUDQWURXWLQJ´LQ6HFWKHSUDFWLFDODSSOLFDWLRQRI³ELUGVRQJV´LQ ]RRPXVLFRORJ\WRWKHILHOGRIHWKQRPXVLFRORJ\DVVKRZQLQWKH³WKUHH JHQHUDOZD\VPXVLFLDQVRUFRPSRVHUVFDQEHDIIHFWHGE\ELUGVRQJ´LQ6HF WKHSUDFWLFDODSSOLFDWLRQRI³DOWHUQDWLYHFRPHG\´LQSHUIRUPLQJDUWV WR WKH ILHOG RI IHVWLYDOV OLNH WKH )ULQJH LQ 6HF WKH SUDFWLFDO DSSOLFDWLRQ RI ³]LQF R[LGH´ DQG ³WLWDQLXP GLR[LGH´ WR WKH ILHOG RI FRVPHWLFVWREHXVHGDV³PDNHXSIRXQGDWLRQV´LQ6HFWKHSUDFWLFDO DSSOLFDWLRQ RI PRGHUQ GDQFH WR WKH ILHOG RI FRQWHPSRUDU\ EDOOHW LQ 6HF WKH SUDFWLFDO DSSOLFDWLRQ RI WKHVH GLIIHUHQW FRVWXPH WHFKQLTXHV DQG SURSHUWLHV WR WKH ILHOG RI FRVWXPH GUDPD LQ 6HF WKH SUDFWLFDO DSSOLFDWLRQRIWKHSURFHVVLQJIOXHQF\WKHRU\RIDHVWKHWLFSOHDVXUHWRRWKHUV ILHOGV OLNH ³WKH SV\FKRORJ\ RI SHUFHSWLRQ FRJQLWLYH SV\FKRORJ\ VRFLDO
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
SV\FKRORJ\ HPSLULFDO DHVWKHWLFV ZHE GHVLJQ PDUNHWLQJ ILQDQFH DQG DUFKHRORJ\´ LQ 6HF WKH SUDFWLFDO DSSOLFDWLRQ RI WKH WKHRUHWLFDO FRQVWUXFWLRQRIWKHUHODWLRQVKLSEHWZHHQHPRWLRQVDQGPXVLFWRWKHILHOGRI FOLQLFDOWKHUDS\DVLQPXVLFWKHUDS\LQ6HFWKHSUDFWLFDODSSOLFDWLRQ RI FKDQFH RSHUDWLRQV LQ FKDQFH PXVLF WR RWKHU ILHOGV OLNH SRSXODU PXVLF DQG ILOP PXVLF LQ 6HF WKH SUDFWLFDO DSSOLFDWLRQ RI DFRXVWLF HQKDQFHPHQW LQ SK\VLFV WR WKH ILHOG RI SHUIRUPLQJ DUWV OLNH ³FKDPEHU RUFKHVWUD V\PSKRQ\ RUFKHVWUD RU RSHUD´ LQ 6HF WKH SUDFWLFDO DSSOLFDWLRQ RI WKH WHFKQLTXHV LQ WKH WKHDWUH RI WKH RSSUHVVHG WR WKH UHDO ZRUOGOLNHWKHLUDGRSWLRQE\WKHVRFLDOQHWZRUNFDOOHGWKH³,QWHUQDWLRQDO 7KHDWUH RI WKH 2SSUHVVHG 2UJDQLVDWLRQ´ LQ 6HF WKH SUDFWLFDO DSSOLFDWLRQ RI IUDFWDO JHRPHWU\ LQ PDWKHPDWLFV WR WKH ILHOG RI FRPSXWHU PXVLF LQ 6HF WKH SUDFWLFDO DSSOLFDWLRQ RI WKH WKHRUHWLFDO FRQVWUXFWLRQ RI HPSDWK\ LQ SV\FKRORJ\ WR WKH ILHOG RI WKH SKLORVRSK\ RI DUWDVVKRZQLQ7ROVWR\¶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
WK7KHVLV7KH&RQYHQWLRQ1RYHOW\3ULQFLSOH
7KH VHYHQWHHQWK WKHVLV LV WKH FRQYHQWLRQQRYHOW\ SULQFLSOH RQ WKH QDWXUH RI FUHDWLYH WKLQNLQJ LQ WKH FDWHJRU\ RI ³DJHQF\´ LQ H[LVWHQWLDO GLDOHFWLFV ZKLFK ZDV ILUVW ZRUNHG RXW LQ )3+&7 LQ WKDW LI WKHUH LV FRQYHQWLRQDOZLVGRPWKHUHLVOLNHZLVHQRYHOFKDOOHQJHWRWKHH[WHQWWKDW ERWK FRQYHUJHQW DQG GLYHUJHQW WKLQNLQJ DUH SDUW RI OLIH 7KHUH LV QR FRQYHQWLRQZLWKRXWQRYHOW\²DQGYLFHYHUVD
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
$V VUXPPDUL]HG IURP )3+&7 DOPRVW YHUEDWLP KHUH WKHUH DUH D ³FUHDWLYH WHFKQLTXHV´ DQG E ³FUHDWLYH WUDLWV´ ZKLFK ZKHQ VDWLVILHG²LQ UHODWLRQWRWKHODUJHUFRQWH[WRIWKHPLQGQDWXUHVRFLHW\DQGFXOWXUH²FDQ EHXVHGWRHQKDQFHFUHDWLYHZRUNV ,Q DGGLWLRQ FUHDWLYH WKLQNLQJ KDV LWV RZQ SRVVLELOLWLHV DQG OLPLWV LQ UHODWLRQ WR LQYHQWLRQ MXVW DV LW KDV LWV RZQ SURPLVHV DQG SLWIDOOV LQ UHODWLRQWRLQQRYDWLRQ ²DVDOUHDG\DQDO\]HGLQ)3+&7 ,QWKHHQGFUHDWLYHWKLQNLQJKDVLWVRZQGHVLUDELOLW\DQGGDUNVLGHVDV DOVRDOUHDG\DQDO\]HGLQ)3+&7 :LWKWKHVHFODULILFDWLRQVLQPLQG²WKHUHDUHJRRGHPSLULFDOH[DPSOHV IRUWKHFRQYHQWLRQQRYHOW\SULQFSOH )RU LQVWDQFH RQ WKH RQH KDQG WKHUH LV FRQYHQWLRQ HJ WKH FRQYHQWLRQDO ZLVGRP RI ,QGLDQ SHUIRUPLQJ DUWV DV VKRZQ LQ 5XNPLQL 'HYL VSXULWDQLVWLFLQWHUSUHWDWLRQVDQGDSSOLFDWLRQVRI6ULQJDUDUDVDLQ6HF WKHFRQYHQWLRQDOZLVGRPRIDQFLHQW*UHHNDQG5RPDQWKHDWUHZKHQ ³PDNHXS ZDV XQQHFHVVDU\´ DQG ³DFWRUV ZRUH YDULRXV PDVNV´ LQ 6HF WKH FRQYHQWLRQDO ZLVGRP DERXW ZDJJOH GDQFH E\ )ULVFK LQ 6HF WKH FRQYHQWLRQDO ZLVGRP WKDW ³WKURXJK WR WKH WK FHQWXU\ D PDMRULW\RIVFKRODUVLQWKH:HVWHUQZRUOGFRQWLQXHGWREHOLHYHWKDWPXVLF ZDV D GLVWLQFWO\ KXPDQ SKHQRPHQRQ´ LQ 6HF WKH FRQYHQWLRQDO ZLVGRPRIWKH(GLQEXUJK,QWHUQDWLRQDO)HVWLYDOLQUHJDUGWRLWVPDLQVWUHDP YLHZV DERXW SHUIRUPLQJ DUWV LQ 6HF WKH FRQYHQWLRQDO ZLVGRP RI WHVWLQJ FRVPHWLFV RQ DQLPDOV LQ WKH ROGHU GD\V LQ 6HF WKH FRQYHQWLRQDO ZLVGRP LQ WKH ROGHU GD\V DERXW ³WKH ILUVW SRLQWH VKRHV´ ZKLFK³ZHUHDFWXDOO\UHJXODUEDOOHWVOLSSHUVWKDWZHUHKHDYLO\GDUQHGDWWKH WLS´ DQG ³LW ZRXOG DOORZ WKH JLUO WR EULHIO\ VWDQG RQ KHU WRHV WR DSSHDU ZHLJKWOHVV´LQ6HFWKHFRQYHQWLRQDOZLVGRPDERXWFRVWXPHGHVLJQV IRU FKLOGUHQ IHVWLYDOV KROLGD\V HWF LQ 6HF WKH FRQYHQWLRQDO ZLVGRPDERXWWKH³DUWLVWLFPHULW´RIEHDXW\LQDHVWKHWLFVLQ6HFWKH FRQYHQWLRQDO ZLVGRP DERXW ³DEVROXWH PXVLF´ IRU LWV RZQ VDNH LQ 6HF WKH FRQYHQWLRQDO ZLVGRP DERXW WKH GHVLUDELOLW\ RI FRQVRQDQW PHORGLHV LQ 6HF WKH FRQYHQWLRQDO ZLVGRP RI WKH XVH RI ³RQO\ WKH GLDORJXHDQGRFFDVLRQDOVRXQGHIIHFWV´LQWKHROGHUGD\VRIVRXQGGHVLJQ ³EHIRUH VWHUHR VRXQGWUDFNV´ LQ 6HF WKH FRQYHQWLRQDO ZLVGRP RI GRLQJ DHVWKHWLFV LQ WKHDWUH LQ 6HF WKH FRQYHQWLRQDO ZLVGRP RI SURGXFLQJ PXVLF ZLWKRXW WKH XVH RI FRPSXWLQJ WHFKQRORJ\ LQ WKH ROGHU GD\V LQ 6HF WKH FRQYHQWLRQDO ZLVGRP DERXW WKH :HVWHUQ SKLORVRSK\ RI DUW LQ WKH ROGHU GD\V ZKHQ ³EHDXW\ ZDV FHQWUDO WR WKH GHILQLWLRQ RI DUW´ LQ 6HF DQG WKH FRQYHQWLRQDO ZLVGRP DERXW ³DWWDLQLQJ VDOYDWLRQ WKURXJK DQ LQGLYLGXDO V DFWLRQV´ LQ DFFRUGDQFH WR WKH &DWKROLF&KXUFKLQ6HF
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
2Q WKH RWKHU KDQG WKHUH LV QRYHOW\ HJ WKH DOWHUQDWLYH QRYHO FKDOOHQJH WR WKH FRQYHQWLRQDO ZLVGRP RI ,QGLDQ SHUIRUPLQJ DUWV E\ WKH QHZLGHDRI%DODVDUDVZDWKL VVFKRRORIVXEWOHDQGXQGHUVWDWHGDEKLQD\DRI WKH GHYDGDVLV´ ZKLFK ³FRQGHPQHG 5XNPLQL 'HYL V SXULWDQLVWLF LQWHUSUHWDWLRQV DQG DSSOLFDWLRQV RI 6ULQJDUD UDVD´ LQ 6HF WKH DOWHUQDWLYH QRYHO FKDOOHQJH WR WKH FRQYHQWLRQDO ZLVGRP RI DQFLHQW *UHHN DQG 5RPDQ WKHDWUH E\ WKH QHZ LGHD RI WKH XVH RI FRVPHWLFV IRU WKHDWUH PDNHXS QRZDGD\V LQ 6HF WKH DOWHUQDWLYH QRYHO FKDOOHQJH WR WKH FRQYHQWLRQDOZLVGRPDERXWZDJJOHGDQFHE\WKHQHZLGHDWKDW³SRWHQWLDO IRUDJHUVQHHGQRWFRUUHFWO\WUDQVODWHWKHGDQFHODQJXDJHIURPWKH ZDJJOH GDQFHWRVXFFHVVIXOO\IRUDJH´LQ6HFWKHDOWHUQDWLYHQRYHOFKDOOHQJH WR WKH FRQYHQWLRQDO ZLVGRP WKDW ³PXVLF ZDV D GLVWLQFWO\ KXPDQ SKHQRPHQRQ´ E\ WKH QHZ LGHD QRZDGD\V WKDW ³H[SHULPHQWV VLQFH WKHQ KDYH YLQGLFDWHG ,EQ DO+D\WKDP V YLHZ WKDW PXVLF GRHV LQGHHG KDYH DQ HIIHFW RQ DQLPDOV´ LQ 6HF WKH DOWHUQDWLYH QRYHO FKDOOHQJH WR WKH FRQYHQWLRQDOZLVGRPRIWKH(GLQEXUJK,QWHUQDWLRQDO)HVWLYDOLQUHJDUGWR LWVPDLQVWUHDPYLHZVDERXWSHUIRUPLQJDUWVE\WKHQHZLGHDRIWKH)ULQJH ZKLFK LV DQ ³DOWHUQDWLYH´ WR WKH PDLQVWUHDP (GLQEXUJK ,QWHUQDWLRQDO )HVWLYDOLQ6HFWKHDOWHUQDWLYHQRYHOFKDOOHQJHWRWKHFRQYHQWLRQDO ZLVGRPRIWHVWLQJFRVPHWLFVRQDQLPDOVLQWKHROGHUGD\VE\WKHQHZLGHD QRZDGD\V RI XVLQJ ³FRPSXWHU PRGHOLQJ DQG FHOO FXOWXUHV WR VLPXODWH KXPDQ WLVVXH´ DV DOWHUQDWLYH VDIHW\ WHVWV RI FRVPHWLFV LQ 6HF WKH DOWHUQDWLYH QRYHO FKDOOHQJH WR WKH FRQYHQWLRQDO ZLVGRP DERXW WKH ILUVW SRLQWHVKRHVE\WKHQHZLGHDRIXVLQJ³WKHKDUGER[WKDWLVXVHGWRGD\´LQ 6HF WKH DOWHUQDWLYH QRYHO FKDOOHQJH WR WKH FRQYHQWLRQDO ZLVGRP DERXW FRVWXPH GHVLJQV IRU FKLOGUHQ IHVWLYDOV KROLGD\V HWF E\ WKH QHZ LGHDRIXVLQJWKHPIRULOOXVLRQFRVWXPHFRVWXPHGUDPDHWFLQ6HF WKH DOWHUQDWLYH QRYHO FKDOOHQJH WR WKH FRQYHQWLRQDO ZLVGRP DERXW WKH ³DUWLVWLFPHULW´RIEHDXW\LQDHVWKHWLFVE\WKHQHZLGHDRI³WKHSURFHVVLQJ IOXHQF\ WKHRU\ RI DHVWKHWLF SOHDVXUH´ VXFK WKDW ³EHDXW\ LV VHHQ DV DQ H[SHULHQFH WKDW KDV QRWKLQJ WR GR ZLWK DUWLVWLF PHULW´ LQ 6HF WKH DOWHUQDWLYH QRYHO FKDOOHQJH WR WKH FRQYHQWLRQDO ZLVGRP DERXW ³DEVROXWH PXVLF´ IRU LWV RZQ VDNH E\ WKH QHZ LGHD RI ³SURJUDP PXVLF´ IRU WKH H[SUHVVLRQRIHPRWLRQVZLWKLPSOLFDWLRQVIRUPXVLFWKHUDS\LQ6HF WKH DOWHUQDWLYH QRYHO FKDOOHQJH WR WKH FRQYHQWLRQDO ZLVGRP DERXW WKH GHVLUDELOLW\ RI FRQVRQDQW PHORGLHV E\ WKH QHZ LGHD RI FKDQFH PXVLF E\ -RKQ&DJHDQGRWKHUVLQ6HFWKHDOWHUQDWLYHQRYHOFKDOOHQJHWRWKH FRQYHQWLRQDO ZLVGRP DERXW WKH XVH RI ³RQO\ WKH GLDORJXH DQG RFFDVLRQDO VRXQGHIIHFWV´LQWKHROGHUGD\VE\WKHQHZLGHDWKDW³WKHJUHDWHUG\QDPLF UDQJH RI WKH QHZ V\VWHPV FRXSOHG ZLWK WKH DELOLW\ WR SURGXFH VRXQGV DW WKHVLGHVRUEHKLQGWKHDXGLHQFHUHTXLUHGPRUHFUHDWLYLW\´LQVRXQGGHVLJQ
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
QRZDGD\V LQ 6HF WKH DOWHUQDWLYH QRYHO FKDOOHQJH WR WKH FRQYHQWLRQDOZLVGRPRIGRLQJDHVWKHWLFVLQWKHDWUHE\WKHQHZLGHDRIWKH WKHDWUHRIWKHRSSUHVVHGIRUVRFLDODFWLRQRUWKH ³UHKHDUVDO RIUHYROXWLRQ´ LQVWHDGZLWKRXWIRFXVLQJRQDHVWKHWLFVLQ6HFWKHDOWHUQDWLYHQRYHO FKDOOHQJHWRWKHFRQYHQWLRQDOZLVGRPRISURGXFLQJPXVLFZLWKRXWWKHXVH RIFRPSXWLQJWHFKQRORJ\LQ WKHROGHUGD\VE\WKH QHZLGHDRIFRPSXWHU PXVLF QRZDGD\V LQ 6HF WKH DOWHUQDWLYH QRYHO FKDOOHQJH WR WKH FRQYHQWLRQDO ZLVGRP DERXW WKH :HVWHUQ SKLORVRSK\ RI DUW LQ WKH ROGHU GD\V E\ WKH QHZ LGHD RI SRVWPRGHUQ DHVWKHWLFV ZKHUH DQ\WKLQJ JRHV LQ 6HFDQGWKHDOWHUQDWLYHQRYHOFKDOOHQJHWRWKHFRQYHQWLRQDOZLVGRP DERXW³DWWDLQLQJVDOYDWLRQWKURXJKDQLQGLYLGXDO VDFWLRQV´LQDFFRUGDQFHWR WKH&DWKROLF&KXUFKE\WKHQHZLGHDRI3URWHVWDQWLVPZKRVHIRFXVLVQRW RQ ³WKH LQGLYLGXDO¶V PRUDO EHKDYLRU´ EXW RQ ³WKH LQGLYLGXDOV WKHRORJLFDO SUDFWLFHV´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
WK7KHVLV7KH(YROXWLRQ7UDQVIRUPDWLRQ 3ULQFLSOH 7KHHLJKWHHQWKWKHVLVUHIHUVWRWKHHYROXWLRQWUDQVIRUPDWLRQSULQFLSOH RQ WKH PXOWLSOH NLQGV RI DJHQF\ LQ WKH FDWHJRU\ RI ³DJHQF\´ LQ H[LVWHQWLDOGLDOHFWLFVZKLFKZDVILUVWZRUNHGRXWLQ)$(DQGWKHQLQRWKHU ERRNVRIPLQH 7KLV SULQFLSOH²DQG WKH V\PPHWU\DV\PPHWU\ SULQFLSOH IRU LQVWDQFH²DUHERWKDERXWDJHQF\0RUHSUHFLVHO\WKHZRUG³DJHQF\´LQD IRUPDO GHILQLWLRQ UHIHUV WR ³D SHUVRQ RU WKLQJ WKURXJK ZKLFK SRZHU LV
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
H[HUWHGRUDQHQGLVDFKLHYHG´0:' ,WWKHUHIRUHGRHVQRWKDYHWR QHFHVVDULO\LQYROYHDQLQWHOOLJHQWOLIHIRUP %HFDXVHRIWKLVGXDOPHDQLQJLQDJHQF\WKHHYROXWLRQWUDQVIRUPDWLRQ SULQFLSOHLVPRUHFRQFHUQHGZLWKWKHNLQGRIDJHQF\WKDWLVERWKDERXWWKH HYROXWLRQLQWKHVWDWHRIQDWXUHHJDQREMHFWRIQDWXUDOEHDXW\ DQGWKH WUDQVIRUPDWLRQ LQ WKH ZRUOG RI LQWHOOLJHQW OLIHIRUPV HJ D ZRUN RI DUW 7KHUHLVQRHYROXWLRQZLWKRXWWUDQVIRUPDWLRQ²DQGYLFHYHUVD ,Q FODVVLFDO 'DUZLQLDQ HYROXWLRQDU\ WKHRU\ DV PRUH GHWDLOHGO\ DQDO\]HG LQ %11 HYROXWLRQ LV ³EOLQG´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³VRXQGVWKDWDUHPHORGLRXVWRWKHKXPDQHDU´LQWKHVWDWHRIQDWXUHLQ6HF WKH QDWXUDO HYROXWLRQ RI KXPDQV WR ODXJK LQ WKH VWDWH RI QDWXUH LQ 6HF WKH QDWXUDO HYROXWLRQ RI KXPDQV WR H[SHULHQFH GLIIHUHQW FKHPLFDOVXEVWDQFHVLQGLIIHUHQWZD\VLQWKHVWDWHRIQDWXUHLQ6HF WKH QDWXUDO HYROXWLRQ RI KXPDQV WR UXQ DQG GDQFH DURXQG LQ WKH VWDWH RI QDWXUH DOEHLW LQ D SULPLWLYH ZD\ LQ 6HF WKH QDWXUDO HYROXWLRQ RI KXPDQV WR EH QDNHG RU WR ZHDU PLQLPDOO\ LQ WKH VWDWH RI QDWXUH LQ 6HF WKHQDWXUDOHYROXWLRQRI KXPDQVWR KHDUVRXQGVLQ ERWKIOXHQWDQG GLVIOXHQWSDWWHUQVLQWKHVWDWHRIQDWXUHLQ6HFWKHQDWXUDOHYROXWLRQ RIKXPDQVWRJHWVLFNDQGUHFRYHULQWKHVWDWHRIQDWXUHLQ6HFWKH QDWXUDOHYROXWLRQRIKXPDQVWRKHDUGLIIHUHQWVRXQGVLQWKHVWDWHRIQDWXUH LQDSULPLWLYHZD\LQ6HFWKHQDWXUDOHYROXWLRQRIKXPDQVWRPDNH VRXQGVLQWKHVWDWHRIQDWXUHLQDSULPLWLYHZD\LQ6HFWKHQDWXUDO HYROXWLRQRIKXPDQVWRILJKWZLWKHDFKRWKHULQWKHVWDWHRIQDWXUHLQ6HF WKH QDWXUDO HYROXWLRQ RI KXPDQV WR PDNH VRXQGV LQ WKH VWDWH RI QDWXUHLQDSULPLWLYHZD\LQ6HFWKHQDWXUDOHYROXWLRQRIKXPDQVWR H[SHULHQFHEHDXWLIXOREMHFWVLQWKHVWDWHRIQDWXUHOLNHDEHDXWLIXOVN\LQ
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
6HFDQGWKHQDWXUDOHYROXWLRQRIKXPDQVWRSOD\ZLWKHDFKRWKHULQ WKHVWDWHRIQDWXUHLQ6HF 2Q WKH RWKHU KDQG WKHUH LV WUDQVIRUPDWLRQ HJ WKH WHFKQLFDO WUDQVIRUPDWLRQ RI KXPDQ DELOLW\ WR GDQFH E\ WKH LQYHQWLRQ RI V\VWHPDWLF PHWKRGV OLNH WKH ,QGLDQ 5DVD PHWKRG DQG WKH :HVWHUQ 6WDQLVODYVNL PHWKRG LQ 6HF WKH WHFKQLFDO WUDQVIRUPDWLRQ RI KXPDQ DELOLW\ WR ORRN EHDXWLIXO RU VRPHWKLQJ HOVH E\ WKH LQYHQWLRQ RI WKHDWUH PDNHXS LQ 6HF WKH WHFKQLFDO WUDQVIRUPDWLRQ RI WKH ZDJJOH GDQFH E\ WKH LQYHQWLRQRIWKH ³RSWLPL]DWLRQDOJRULWKPV´ ZKLFKXVH ³EHH ZDJJOHGDQFH EHKDYLRUIRUHIILFLHQWIDXOWWROHUDQWURXWLQJ´LQFRPSXWLQJVFLHQFHLQ6HF WKH WHFKQLFDO WUDQVIRUPDWLRQ RI VRXQGV E\ WKH LQYHQWLRQ RI KXPDQ PXVLFOLNHLQFRUSRUDWLQJ³UHFRUGLQJVRIELUGVLQWRWKHLUZRUNV´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³EHOLHYDEOH´ LQ 6HF WKH WHFKQLFDO WUDQVIRUPDWLRQ RI KXPDQ DELOLW\ WRILJKWZLWKHDFKRWKHUE\WKHLQYHQWLRQRIWKHWKHDWUHRIWKHRSSUHVHGIRU WKH³UHKHDUVDORIUHYROXWLRQ´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
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
ZKHQVRPHFRPELQDWLRQVRIWKHWZRRFFXUWKH\RQO\HQG XSVKDULQJWKH VDPHGLDOHFWLFUHODWLRQVKLSEXWLQDGLIIHUHQWGHJUHH $OVR WKHUH DUH VRPH RWKHU UHODWLRQVKLSV DV D NLQG RI IDPLO\ UHVHPEODQFH ZKLFK KDYH VRPHWKLQJ LQ FRPPRQ ZLWK WKH SULQFLSOH EXW WKH\ DUH QRW H[DFWO\ WKH VDPH EXW RQO\ PRUH RU OHVV FRPSDUDEOH ZKLFK YDULHVIURPFDVHWRFDVH *RRGH[DPSOHVRIIDPLO\UHVHPEODQFHLQUHODWLRQWRWKHSULQFLSOHDUH LQRUJDQLFQHVVYROLWLRQ QDWXUDOQHVVWHFKQRORJLFDOQHVV QDWXUDOQHVV QRQQDWXUDOQHVV QRQZLOOLQJQHVVZLOOLQJQHVV LQRUJDQLFQHVVPRWLYDWLRQ HYROXWLRQFUHDWLRQQDWXUDOQHVVDUWLILFLDOQHVVDQGVRRQ
WK7KHVLV7KH6\PPHWU\$V\PPHWU\3ULQFLSOH 7KHQLQHWHHQWKWKHVLVLVODEHOHGDVWKHV\PPHWU\DV\PPHWU\SULQFLSOH RQ WKH UHODWLRQVKLSV DPRQJ H[LVWHQWV LQ WKH FDWHJRU\ RI ³DJHQF\´ LQ H[LVWHQWLDOGLDOHFWLFVZKLFK ZDVDOVRDOUHDG\ ZRUNHGRXW LQ P\SUHYLRXV ERRNV LQWKDWWKHUHLVQRDV\PPHWU\ZLWKRXWV\PPHWU\²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³WKH DSSHDUDQFH RI WKH FKDUDFWHUV WKDW DFWRUV SRUWUD\´ LQ 6HF WKH SRSXODULW\ RI ZHDUQJ PDVNV ZLWKRXW PDNHXS LQ DQFLHQW *UHHNDQG5RPDQWKHDWUH²EXWWKHSRSXODULW\RIXVLQJPDNHXSLQ:HVWHUQ WKHDWUHQRZDGD\VLQ6HFWKHH[LVWHQFHRIGLIIHUHQWZD\VWRGDQFH LQ6HFWKHH[LVWHQFHRIGLIIHUHQWZD\VWRPDNHPXVLFLQ6HF WKHH[LVWHQFHRIGLIIHUHQWZD\VWRRUJDQL]HFRPHG\IHVWLYDOVLQ6HF WKHH[LVWHQFHRIGLIIHUHQWZD\VWRWHVWFRVPHWLFSURGXFWVLQ6HFWKH H[LVWHQFHRIGLIIHUHQWZD\VWRGDQFHLQEDOOHWLQ6HFWKHH[LVWHQFH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
RIGLIIHUHQWFRVWXPHVRYHUWKHDJHVLQ6HFWKHH[LVWHQFHRIGLIIHUHQW VRXQGVLQERWKIOXHQWDQGGLVIOXHQWSDWWHUQVLQ6HFWKHH[LVWHQFHRI GLIIHUHQWZD\VWRWUHDWPXVLFEHLW³DEVROXWHPXVLF´RU³SURJUDPPXVLF´ LQ6HFWKHH[LVWHQFHRIGLIIHUHQWZD\VWRPDNHPXVLFLQ6HF WKHH[LVWHQFHRIGLIIHUHQW ZD\V WR PDNH VRXQGV IRUVRXQG GHVLJQLQ6HF WKHH[LVWHQFHRIGLIIHUHQWZD\VWRGRSHUIRUPLQJDUWVLQ6HF WKH H[LVWHQFH RI GLIIHUHQW ZD\V WR SURGXFH PXVLF LQ 6HF WKH H[LVWHQFH RI GLIIHUHQW ZD\V WR YLHZ ZKDW DUW LV LQ 6HF DQG WKH H[LVWHQFHRIGLIIHUHQWZD\VWRGRGUDPDLQ6HF 2QWKHRWKHUKDQGWKHUHLVDV\PPHWU\HJWKHSRSXODULW\RIWKH5DVD PHWKRG LQ ,QGLDQ SHUIRUPLQJ DUWV²EXW WKH SRSXODULW\ RI WKH 6WDQLVODYVNL PHWKRGLQ:HVWHUQSHUIRUPLQJDUWVLQ6HFWKHSRSXODULW\RIZDJJOH GDQFH DPRQJ KRQH\ EHHV²EXW WKH SRSXODULW\ RI ³VKDNLQJ ]LJ]DJJLQJ EX]]LQJ DQG FUDVKLQJ LQWR QHVWPDWHV´ DPRQJ ³>D@QFHVWRUV WR PRGHUQ KRQH\EHHV´ LQ 6HF ZKDOHV QDWXUDOO\ PDNH PXVLF LQ VHD²EXW KXPDQVQDWXUDOO\PDNHPXVLFRQODQGLQ6HFWKHSRSXODULW\RIWKH (GLQEXUJK ,QWHUQDWLRQDO )HVWLYDO DPRQJ PDLQVWUHDP IDQV²EXW WKH SRSXODULW\ RI WKH )ULQJH DPRQJ DOWHUQDWLYH IDQV LQ 6HF WKH SRSXODULW\ RI WHVWLQJ FRVPHWLFV RQ DQLPDOV LQ WKH ROGHU GD\V²EXW WKH SRSXODULW\RIWHVWLQJFRVPHWLFVZLWKWKHXVHRIFRPSXWHUPRGHOLQJDQGFHOO FXOWXUHVQRZDGD\VLQ 6HFWKHSRSXODULW\RI³SRVWVWUXFWXUDOEDOOHW VHHQLQWKHZRUNRI:LOOLDP)RUV\WKHLQ*HUPDQ\´²EXWWKHSRSXODULW\RI ³5XVVLDQ EDOOHW´ LQ WKH IRUPHU 6RYLHW UHSXEOLFV LQ 6HF WKH SRSXODULW\RIZHDULQJD³NLOW´LQ6FRWODQG²EXWWKHSRSXODULW\RIZHDULQJD ³NLPRQR´LQ-DSDQLQ6HFWKHSUHIHUHQFHIRUIOXHQWVRXQGSDWWHUQV E\ LQIDQWV EHFDXVH WKH\ OLNH ³FRQVRQDQW PHORGLHV´ LQ DFFRUGDQFH WR WKH SURFHVVLQJ IOXHQF\ WKHRU\ RI DHVWKHWLF SOHDVXUH²EXW WKH SUHIHUHQFH IRU GLVIOXHQWVRXQGSDWWHUQVE\-RKQ&DJHDQGKLVIROORZHUVEHFDXVHWKH\OLNH FKDRWLF PXVLF LQ 6HF WKH SRSXODULW\ RI ³DEVROXWH PXVLF´ DPRQJ WKRVHLQ.DQWLDQDHVWKHWLFV²EXWWKHSRSXODULW\RI³SURJUDPPXVLF´DPRQJ WKRVHLQPXVLFWKHUDS\LQ6HFWKHSRSXODULW\RIFRQVRQDQWPHORGLHV DPRQJWUDGLWLRQDO³*UHHNSKLORVRSKHUVDQGPHGLHYDOWKHRULVWVLQPXVLF´² EXWWKHSRSXODULW\RIFKDQFHPXVLFDPRQJDQDUFKLVWFRPSRVHUVOLNH&DJH DQGRWKHUVOLNHKLPLQ6HFWKHSRSXODULW\RIUHFRUGHGVRXQGLQWKH ROGHUGD\VRIVRXQGGHVLJQVD\LQWKHWKFHQWXU\²EXWWKHSRSXODULW\RI GLJLWDO VRXQG LQ VRXQG GHVLJQ QRZDGD\V LQ 6HF WKH SRSXODULW\ RI WKHWKHDWUHRIWKHRSSUHVVHGDPRQJWKHUXOHGFODVVLQWKHSRSXOLVWFXOWXUHRI /DWLQ$PHULFDLQWKHVHFRQGKDOIRIWKHWKFHQWXU\²EXWWKHSRSXODULW\RI WUDGLWLRQDORSHUDDPRQJ ³WKH DULVWRFUDF\LQ PRVWRI(XURSH´LQ ³WKHWK FHQWXU\´ LQ 6HF WKH SRSXODULW\ RI FRPSXWLQJ WHFKQRORJ\ DPRQJ WKRVH LQ FRPSXWHU PXVLF²EXW WKH SRSXODULW\ RI KXPDQ FRPSRVLWLRQ
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
DPRQJ WKRVH LQ WUDGLWLRQDO PXVLF LQ 6HF WKH SRSXODULW\ RI WKH :HVWHUQSKLORVRSK\RIDUWLQ WKHROGHUGD\V ZKHQ ³EHDXW\ ZDVFHQWUDOWR WKHGHILQLWLRQRIDUW´²EXWWKHSRSXODULW\RIWKHYLHZE\7KHRGRU$GRUQR QRZDGD\VZKHQKHVDLG³,WLVVHOIHYLGHQWWKDWQRWKLQJFRQFHUQLQJDUWLV VHOIHYLGHQW´LQ6HFDQGWKHSRSXODULW\RIXVLQJUHOLJLRQIRUGUDPD OLNH PRUDOLW\ SOD\V LQ PHGLHYDO (XURSH²EXW WKH SRSXODULW\ RI XVLQJ ³YDULHGVW\OHVDQGHPSKDVHV´IRUGUDPDLQSUHPRGHUQ&KLQDDQGWKLVLV WUXH DOWKRXJK ³UHOLJLRXV DQG SKLORVRSKLFDO LQIOXHQFH RQ DUW ZDV FRPPRQ«DQGGLYHUVH´EXWWKH\ZHUH³QHYHUXQLYHUVDOLWLVHDV\WRILQG DUW WKDW ODUJHO\ LJQRUHV SKLORVRSK\ DQG UHOLJLRQ LQ DOPRVW HYHU\ &KLQHVH WLPHSHULRG´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
WK7KHVLV7KH6RIWQHVV+DUGQHVV3ULQFLSOH 7KH WZHQWLHWK WKHVLV UHIHUV WR WKH VRIWQHVVKDUGQHVV SULQFLSOH RQ WKH IRUFH RI FKDQJH LQ WKH FDWHJRU\ RI ³DJHQF\´ LQ H[LVWHQWLDO GLDOHFWLFV ZKLFKZDVILUVWZRUNHGRXWLQ$/' LQWKDWDQ\FKDQJHE\DQDJHQWEHLW RUJDQLFOLNHKXPDQV RUQRQRUJDQLFOLNHQDWXUDOREMHFWV FDQRFFXULQD IRUFHIXODJJUHVVLYH RUJHQWOHSDFLILF ZD\ZKLFKFDQFRPHLQDOOVKDSHV DQG VL]HV RI FRXUVH 7KHUH LV QR VRIWQHVV ZLWKRXW KDUGQHVV²DQG YLFH YHUVD )RULQVWDQFHRQWKHRQHKDQGWKHUHLVVRIWQHVVHJWKHDSSUHFLDWLRQ RI0HKUDELDQ¶VILQGLQJVRQQRQYHUEDOFRPPXQLFDWLRQDVVKRZQLQWKHLU DGRSWLRQ E\ KLV DGYRFDWHV ³WKURXJKRXW KXPDQ FRPPXQLFDWLRQ VHPLQDUV ZRUOGZLGH´LQ6HFWKHDSSUHFLDWLRQRIWKHDWUHPDNHXSDVVKRZQLQ WKHWKUHHPDMRUDGYDQFHVDIRUHGLVFXVVHGLQ6HFWKHDSSUHFLDWLRQRI )ULVFK¶V VWXG\ DV VKRZQ LQ LWV DSSOLFDWLRQ E\ UHVHDUFKHUV LQ FRPSXWLQJ
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
VFLHQFH IRU WKH ³RSWLPL]DWLRQ DOJRULWKPV´ ZKLFK XVH ³EHH ZDJJOH GDQFH EHKDYLRUIRUHIILFLHQWIDXOWWROHUDQWURXWLQJLQ6HFWKHDSSUHFLDWLRQ RIDQLPDOPXVLFDVVKRZQLQWKHWKUHHZD\V³FRPSRVHUVKDYHLQWHJUDWHG ELUGVRQJ ZLWK PXVLF´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³,QWHUQDWLRQDO 7KHDWUH RI WKH 2SSUHVVHG 2UJDQLVDWLRQ´ LQ 6HF WKH DSSUHFLDWLRQ RI FRPSXWHU PXVLF DV VKRZQ LQ LWV DGRSWLRQ E\ WKRVH LQ FRPSXWHUJHQHUDWHG PXVLF DQG PDFKLQH LPSURYLVDWLRQ LQ 6HF WKH DSSUHFLDWLRQ RI WKH YLHZ WKDW ³EHDXW\ ZDV FHQWUDO WR WKH GHILQLWLRQRIDUW´LQWKHHDUO\WKFHQWXU\:HVWHUQZRUOGLQ6HFDQG WKH DSSUHFLDWLRQ RI XVLQJ &DWKROLFLVP IRU GUDPD DV VKRZQ LQ SUH 5HIRUPDWLRQPRUDOLW\SOD\VLQ6HF 2QWKHRWKHUKDQGWKHUHLVKDUGQHVVHJWKHFULWLTXHRI0HKUDELDQ¶V ILQGLQJVRQQRQYHUEDOFRPPXQLFDWLRQDVVKRZQLQWKHFULWLFLVPVE\WKH FULWLFVDVFLWHGLQ6HFWKHFULWLTXHRIWKHDWUHPDNHXSDVVKRZQLQ WKHSUREOHPVSRLQWHGRXWE\WKHFULWLFVDVFLWHGLQ6HFWKHFULWLTXH RI )ULVFK¶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³WKH ZD\V LQ ZKLFK PXVLF FDQ LOOXPLQDWH IXQGDPHQWDO LVVXHV LQ
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
FRJQLWLRQ KDYH EHHQ XQGHUH[DPLQHG RU HYHQ GLVPLVVHG DV HSLSKHQRPHQDO´LQ6HFWKHFULWLTXHRIPXVLFWKHUDS\DVVKRZQLQ WKHSUREOHPVSRLQWHGRXWE\WKHFULWLFVDVFLWHGLQ6HFWKHFULWLTXH RI FKDQFH PXVLF DV VKRZQ LQ WKH SUREOHPV SRLQWHG RXW E\ WKH FULWLFV DV FLWHGLQ6HFWKHFULWLTXHRIVRXQGGHVLJQDVVKRZQLQWKHSUREOHPV SRLQWHGRXWE\WKHFULWLFVDVFLWHGLQ6HFWKHFULWLTXHRIWKHWKHDWUH RI WKH RSSUHVVHG DV VKRZQ LQ WKH SUREOHPV SRLQWHG RXW E\ WKH FULWLFV DV FLWHG LQ 6HF WKH FULWLTXH RI FRPSXWHU PXVLF DV VKRZQ LQ WKH SUREOHPVSRLQWHGRXWE\WKH FULWLFVDVFLWHGLQ6HFWKHFULWLTXHRI WKHYLHZWKDW³EHDXW\ZDVFHQWUDOWRWKHGHILQLWLRQRIDUW´E\³WKHFXELVWV GDGDLVWV 6WUDYLQVN\ DQG PDQ\ ODWHU DUW PRYHPHQWV´ ZKR ³VWUXJJOHG DJDLQVW WKLV FRQFHSWLRQ´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
VW7KHVLV7KH6HULRXVQHVV3OD\IXOQHVV3ULQFLSOH 7KHWZHQW\ILUVWWKHVLVUHIHUV WRWKHVHULRXVQHVVSOD\IXOQHVVSULQFLSOH RQ WKH H[WHQW RI VHULRXVQHVV LQ WKH FDWHJRU\ RI ³DJHQF\´ LQ H[LVWHQWLDO GLDOHFWLFV ZKLFK LV ILUVW ZRUNHG RXW LQ )3++ LQ WKDW LI WKHUH LV VHULRXVQHVVWKHUHLVDOVRSOD\IXOQHVVHVSHFLDOO\ IRUDQ\DJHQW ZLWK VRPH NLQG RI LQWHOOLJHQFH OLIH EH LW DERXW KXPDQV DQLPDOV RU ODWHU SRVW KXPDQV7KHUHLVQRVHULRXVQHVVZLWKRXWSOD\IXOQHVV²DQGYLFHYHUVD /HVWDQ\PLVXQGHUVWDQGLQJRFFXUVWKHZRUG³SOD\IXOQHVV´KHUHVKRXOG QRW EH FRQIXVHG ZLWK RWKHU WHUPV OLNH ³ODXJKWHU´ ³VPLOH´ ³MRNH´ ³WLFNOHQHVV´DQG³ODXJKOLNHYRFDOL]DWLRQ´LQVRPHDQLPDOV IRULQVWDQFH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
%HLQJ SOD\IXO FDQ FRPH LQ DOO VKDSHV DQG VL]HV DQG WKHUHIRUH LV QRW QHFHVVDULO\WLHGXSZLWKDQ\RIWKHVHWHUPVDOKRXJKLWFDQUHVXOWIURPDQ\ RIWKHPRUDFRPELQDWLRQRIWKHPRUVRPHWKLQJHOVHDOWRJHWKHU 7KLVSULQFLSOHWRJHWKHUZLWKVRPHRWKHUSULQFLSOHVHVSHFLDOO\WKRXJK QRW H[FOXVLYHO\ OLNH WKH IRUPDOQHVVLQIRUPDOQHVV SULQFLSOH KDYH LPSRUWDQW LPSOLFDWLRQV IRU ZKDW FRQVWLWXWHV UDWLRQDOLW\ EH LW DERXW ³UDWLRQDOLW\ RI DSSOLFDWLRQ´ DW WKH SUDFWLFDO OHYHO RU ³UDWLRQDOLW\ RI NQRZOHGJH´ DW WKH PHWDWKHRUHWLFDO OHYHO DV VXPPDUL]HG LQ 6HF RI )3++ )RU LQVWDQFH RQ WKH RQH KDQG WKHUH LV VHULRXVQHVV HJ WKH VHULRXV EXVLQHVVRIWKRVHLQWKH5DVDPHWKRGWRFRQYH\HPRWLRQVZLWKWKHXVHRI IDFLDO H[SUHVVLRQV LQ 6HF WKH VHULRXV EXVLQHVV RI WKRVH LQ WKHDWUH PDNHXSWRFUHDWH³WKHDSSHDUDQFHRIWKHFKDUDFWHUVWKDWDFWRUVSRUWUD\´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³QHZYDULDWLRQV´RI³H[LVWLQJPXVLFPDWHULDOV´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³LQIHFWV WKH VXUURXQGLQJ EHHV WKRVH VLWWLQJ QH[W WR WKH GDQFHU VWDUW WULSSLQJ DIWHU
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
KHUDOZD\VWU\LQJWRNHHSWKHLURXWVWUHWFKHGIHHOHUVRQFORVHFRQWDFWZLWK WKH WLS RI KHU DEGRPHQ´ LQ 6HF WKH SOD\IXO DVSHFW RI KXPDQV WR VWXG\ ELUG VRQJV ZKHQ WKH\ SOD\ DURXQG ZLWK GLIIHUHQW ³UHFRUGLQJV RI ELUGV LQWR WKHLU ZRUNV´ LQ 6HF WKH SOD\IXO SDUW RI WKRVH LQ LPSURYLVDWLRQDOFRPHG\WRSOD\DURXQGZLWKGLIIHUHQWZD\VWRPDNHMRNHV ZKLFKDUHRIWHQXQSUHSDUHGDQGVSRQWDQHRXVLQ6HFWKHSOD\IXOSDUW RI WKRVH LQ FRVPHWLFV FRPSDQLHV ZKHQ WKH\ SOD\ DURXQG ZLWK GLIIHUHQW ZD\VWRWHVWFRVPHWLFVWKURXJKWKHDJHVLQ6HFWKHSOD\IXOSDUWRI WKRVH LQ QHRFODVVLFDO EDOOHW ZKHQ VRPHRQH OLNH 7HWOH\ SOD\HG ZLWK GLIIHUHQW WHFKQLTXHV LQ KLV H[SHULPHQWDLWRQ RI FRPELQLQJ ³EDOOHW DQG PRGHUQWHFKQLTXHV´LQWKHVLQ6HFWKHSOD\IXOSDUWRIWKRVHLQ FRVWXPHGHVLJQWRSOD\DURXQGZLWKGLIIHUHQWGHVLJQRSWLRQVHYHQZLWKD SDUWLFXODUVKRZLQPLQGLQ6HFWKHSOD\IXOSDUWRIWKRVHLQPDJLF ZKHQ WKH\ SOD\ DURXQG ZLWK GLIIHUHQW WHFKQLTXHV OLNH WKRVH ³VOHLJKWRI KDQGSHUIRUPDQFHVLQFOXGLQJGLFHERWWOHFDSVVXJDUFXEHVVSRQJHEDOOV SHEEOHV SHQV DQG FXSV DQG EDOOV´ DV WR VHH ZKLFK RQHV ZRUN RU GR QRW ZRUNZHOOXQGHUZKLFKFRQGLWLRQVLQWKHLUDWHPSWWRIRROWKHH\HVRIWKH DXGLHQFH LQ 6HF WKH SOD\IXO SDUW RI WKRVH LQ PXVLF WKHUDS\ ZKHQ WKH\ SOD\ DURXQG ZLWK GLIIHUHQW LQVWUXHPHQWV GLIIHUHQW SLHFHV RI PXVLF HWF VR DV WR NQRZ ZKLFK SDUWLFXODU RQH LV PRUH VXLWDEOH WR D SDUWLFXODU FKLOGLQ6HFWKHSOD\IXOSDUWRIWKRVHLQFKDQFH PXVLF ZKHQWKH\ SOD\DURXQGZLWKWKH,&KLQJIRUGLIIHUHQWSRVVLELOLWLHVDQGRSWLRQVLQ6HF WKH SOD\IXO SDUW RI WKRVH LQ VRXQG GHVLJQ ZKHQ WKH\ SOD\ DURXQG ZLWK GLIIHUHQW QHZ H[SHULPHQWDO VRXQGV ZLWK WKH KHOS RI GLJLWDO WHFKQRORJ\ LQ 6HF WKH SOD\IXO SDUW RI WKRVH LQ WKH WKHDWUH RI WKH RSSUHVVHGZKHQWKH\SOD\DURXQGZLWKGLIIHUHQWWHFKQLTXHVWRVXEYHUWDQG ³GHWHFWWKHSRLVRQLQILOWUDWLQJ´PDVVPHGLDLQ6HFWKHSOD\IXOSDUW RIWKRVHLQ PDFKLQHLPSURYLVDWLRQ ZKHQWKH\SOD\DURXQG ZLWKGLIIHUHQW SRVVLEOH UHFRPELQDWLRQV ³RI PXVLFDO SKUDVHV H[WUDFWHG IURP H[LVWLQJ PXVLF´LQRUGHUWRFUHDWHQHZPXVLFLQ6HFWKHSOD\IXOSDUWRIWKRVH LQ WKH SKLORVRSK\ RI DUW ZKHQ WKH\ SOD\ DURXQG ZLWK GLIIHUHQW ZD\V WR H[DPLQH DQ DUW REMHFW ZLWK TXHVWLRQV OLNH ³WKH RYHUDOO UHVXOW" 2XU H[SHULHQFHRULQWHUSUHWDWLRQRIWKHUHVXOW",VLWDSK\VLFDOREMHFW"6HYHUDO REMHFWV" $ FODVV RI REMHFWV" $ PHQWDO REMHFW" $ ILFWLRQDO REMHFW" $Q DEVWUDFW REMHFW" $Q HYHQW" 2U VLPSO\ DQ $FW"´ LQ 6HF DQG WKH SOD\IXOSDUWRIWKRVHLQ PRUDOLW\SOD\VWRSUHDFK&DWKROLFWHDFKLQJ ZKHQ WKH\SOD\DURXQG ZLWKGLIIHUHQWWHFKQLTXHVWRSUHDFKYLUWXHDQGFRQGHPQ YLFH OLNH WKH ³SHUVRQLILFDWLRQ´ RI -XVWLFH WKH GUDPDWLF UHSODFHPHQW RI ³-XVWLFH´ZLWK³(TXLW\´WKHLQWURGXFWLRQRI³WKH9LFH´DV³ZLFNHG´WRWKH DXGLHQFHDWWKHEHJLQQLQJRIDSOD\DQGVRRQLQ6HF $QGWKHUHYHUVHGLUHFWLRQDOVRKROGVWUXH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
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
QG7KHVLV7KH5HJUHVVLRQ3URJUHVVLRQ3ULQFLSOH 7KHWZHQW\VHFRQGWKHVLVLVFDOOHGWKHUHJUHVVLRQSURJUHVVLRQSULQFSOH RQ WKH GLUHFWLRQ RI KLVWRU\ LQ WKH FDWHJRU\ RI ³RXWFRPH´ LQ H[LVWHQWLDO GLDOHFWLFVZKLFK ZDVDOVRDOUHDG\ ZRUNHGRXW LQ P\SUHYLRXVERRNV LQ WKDW QHLWKHU WKH F\FOLFDO QRU WKH OLQHDU YLHZV DUH DGHTXDWH IRU H[SODLQLQJ PDQ\ SKHQRPHQD DW DOO OHYHOV 7KHUH LV QR UHJUHVVLRQ ZLWKRXW SURJUHVVLRQ²DQGYLFHYHUVD +LVWRU\ SURJUHVVHV WR PRUH DGYDQFHG IRUPV EXW ZLWK D UHJUHVVLYH WRXFK ([DPSOHV LQFOXGH QR IUHHGRP ZLWKRXW XQIUHHGRP QR HTXDOLW\ ZLWKRXW LQHTXDOLW\ DQG QR FLYLOL]DWLRQ ZLWKRXW EDUEDULW\ 7KLV LV QRW DQ LQHYLWDEOHODZEXWPHUHO\DKLJKO\OLNHO\HPSLULFDOWUHQG )RULQVWDQFHRQWKHRQHKDQGWKHUHLVUHJUHVVLRQHJWKHUHJUHVVLRQ PDGH E\ WKH VWXGLHV RQ QRQYHUEDO FRPPXQLFDWLRQ DV VKRZQ LQ WKH SUREOHPVLQ0HKUDELDQ¶VILQGLQJVSRLQWHGRXWE\WKHFULWLFVLQ6HF WKHUHJUHVVLRQPDGHE\WKHDWUHPDNHXSDVVKRZQLQWKHSUREOHPVSRLQWHG RXWE\WKHFULWLFVLQ6HFWKHUHJUHVVLRQPDGHE\WKHVWXG\RIZDJJOH GDQFH DV VKRZQ LQ WKH SUREOHPV RI )ULVFK¶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
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
FRJQLWLRQ DQG WKH DXGLHQFH LQ SHUIRUPLQJ DUWV DV VKRZQ LQ WKH SUREOHPV SRLQWHGRXWE\WKHFULWLFVDIRUHFLWHGLQ6HFWKHUHJUHVVLRQPDGHE\ PXVLF WKHUDS\ DV VKRZQ LQ WKH SUREOHPV SRLQWHG RXW E\ WKH FULWLFV DIRUHFLWHGLQ6HFWKHUHJUHVVLRQPDGHE\FKDQFHPXVLFDVVKRZQ LQ WKH SUREOHPV SRLQWHG RXW E\ WKH FULWLFV LQ 6HF WKH UHJUHVVLRQ PDGH E\ VWDJHFUDIW DV VKRZQ LQ WKH SUREOHPV SRLQWHG RXW E\ WKH FULWLFV DIRUHFLWHG LQ 6HF WKH UHJUHVVLRQ PDGH E\ WKH WKHDWUH RI WKH RSSUHVVHG DV VKRZQ LQ WKH SUREOHPV SRLQWHG RXW E\ WKH FULWLFV LQ 6HF WKHUHJUHVVLRQPDGHE\FRPSXWHUPXVLFDVVKRZQLQWKHSUREOHPV SRLQWHG RXW E\ WKH FULWLFV LQ 6HF WKH UHJUHVVLRQ PDGH E\ WKH SKLORVRSK\RIDUWDVVKRZQLQWKHSUREOHPVSRLQWHGRXWE\WKHFULWLFVLQ 6HF DQG WKH UHJUHVVLRQ PDGH E\ XVLQJ PRUDOLW\ DQG UHOLJLRQ IRU GUDPDDV VKRZQLQWKHSUREOHPVSRLQWHGRXWE\WKHFULWLFVDIRUHFLWHGLQ 6HF 2QWKHRWKHUKDQGWKHUHLVSURJUHVVHJWKHSURJUHVVPDGHE\WKH VWXGLHV RQ QRQYHUEDO FRPPXQLFDWLRQ DV VKRZQ LQ WKHLU FRQWULEXWLRQ WR RXU XQGHUVWDQGLQJ RI QRQYHUEDO FRPPXQLFDWLRQ DIRUHGLVFXVVHG LQ 6HF WKHSURJUHVVPDGHE\WKHDWUHPDNHXSDVVKRZQLQWKHWKUHHPDMRU DGYDQFHV DIRUHFLWHG LQ 6HF WKH SURJUHVV PDGH E\ WKH VWXG\ RI ZDJJOHGDQFHDVVKRZQLQLWVFRQWULEXWLRQWRDEHWWHUXQGHUVWDQGLQJRIEHH GDQFH DIRUHFLWHG LQ 6HF WKH SURJUHVV PDGH E\ ]RRPXVLFRORJ\ DV VKRZQ LQ LWV FRQWULEXWLRQ WR RXU XQGHUVWDQGLQJ RI ZKDOH VRQJV DQG ELUG VRQJVDIRUHFLWHGLQ6HFWKHSURJUHVVPDGHE\WKH)ULQJHDVVKRZQ LQLWVFRQWULEXWLRQWRDOWHUQDWLYHFRPHG\IHVWLYDOVDIRUHFLWHGLQ6HF WKHSURJUHVVPDGHE\WKHFRVPHWLFLQGXVWU\DVVKRZQLQLWVFRQWULEXWLRQWR WKH XVH RI FRVPHWLFV DURXQG WKH ZRUOG DIRUHFLWHG LQ 6HF WKH SURJUHVVPDGHE\WKHOHDUQLQJRIEDOOHWDVVKRZQLQLWVFRQWULEXWLRQWRD EHDXWLIXOZD\WRGDQFHDIRUHGLVFXVVHGLQ6HFWKHSURJUHVVPDGHE\ FRVWXPHGHVLJQDVVKRZQLQLWVFRQWULEXWLRQWRSHUIRUPLQJDUWVDIRUHFLWHG LQ6HFWKHSURJUHVVPDGHE\WKHVWXG\RIFRJQLWLRQDQGWKHDXGLHQFH LQSHUIRUPLQJDUWVDVVKRZQLQLWVDSSOLFDWLRQWRRWKHUILHOGVDIRUHFLWHGLQ 6HF WKH SURJUHVV PDGH E\ PXVLF WKHUDS\ DV VKRZQ LQ LWV FRQWULEXWLRQWRWKHWUHDWPHQWRISDWLHQWVZLWKGLIIHUHQWLOOQHVVHVDIRUHFLWHG LQ 6HF WKH SURJUHVV PDGH E\ FKDQFH PXVLF DV VKRZQ LQ LWV FRQWULEXWLRQWRWKHFUHDWLRQRIQHZPXVLFSLHFHVDIRUHFLWHGLQ6HF WKHSURJUHVVPDGHE\VWDJHFUDIWDVVKRZQLQLWVFRQWULEXWLRQWRSHUIRUPLQJ DUWV DIRUHFLWHG LQ 6HF WKH SURJUHVV PDGH E\ WKH WKHDWUH RI WKH RSSUHVVHGDVVKRZQLQLWVFRQWULEXWLRQWRWKHILJKWDJDLQVWWKHRSSUHVVLRQ RIWKHUXOLQJFODVVDIRUHFLWHGLQ6HFWKHSURJUHVVPDGHE\FRPSXWHU PXVLF DV VKRZQ LQ LWV FRQWULEXWLRQ WR WKH FUHDWLRQ RI QHZ PXVLF DIRUHFLWHG LQ 6HF WKH SURJUHVV PDGH E\ WKH SKLORVRSK\ RI DUW DV
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
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
UG7KHVLV7KH6DPH'LIIHUHQFH3ULQFLSOH 7KHWZHQW\WKLUGWKHVLVUHIHUVWRWKHVDPHGLIIHUHQFHSULQFLSOH RQWKH PHWDPRUSKRVLV RI FKDQJH LQ WKH FDWHJRU\ RI ³RXWFRPH´ LQ H[LVWHQWLDO GLDOHFWLFVZKLFKZDVZRUNHGRXWLQ$/'DQGRWKHUERRNVRIPLQH LQWKDW DQHQWLW\DVLWHYROYHVRYHUWLPHFDQEHERWKGLIIHUHQWIURPDQGVLPLODUWR LWV RSSRVLQJ DOWHUQDWLYHV DQG GRHV QRW KDYH WR EH VROHO\ PRUH GLIIHUHQW IURPWKHPRYHUWLPH7KHUHLVQRVLPLODULW\ZLWKRXWGLIIHUHQFH²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
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
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³FRQVRQDQW PHORGLHV´RUE\ZD\RI³PDJLFLOOXVLRQV´LQ6HFWKHFRQWULEXWLRQWR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV UHJDUGOHVV RI ZKHWKHU WKLV EH GRQH E\ ZD\ RI DEVROXWH PXVLF RU E\ ZD\ RI SURJUDP PXVLFLQ6HFWKHFRQWULEXWLRQWRWKHPROGLQJDQGFRQWURORIEHOLHIV YDOXHV DQG EHKDYLRUV UHJDUGOHVV RI ZKHWKHU WKLV EH GRQH E\ ZD\ RI FKDQFH PXVLF RU E\ ZD\ RI FRQVRQDQW PHORGLHV LQ 6HF WKH FRQWULEXWLRQWRWKHPROGLQJDQGFRQWURORIEHOLHIVYDOXHVDQGEHKDYLRUV UHJDUGOHVVRIZKHWKHUWKLVEHGRQHE\ZD\RIKXPDQYRLFHVLQSUHKLVWRULF WLPHV RU E\ ZD\ RI GLJLWDO WHFKQRORJ\ QRZDGD\V LQ 6HF WKH FRQWULEXWLRQWRWKHPROGLQJDQGFRQWURORIEHOLHIVYDOXHVDQGEHKDYLRUV UHJDUGOHVVRIZKHWKHUWKLVEHGRQHE\ZD\RIWKHWKHDWUHRIWKHRSSUHVVHG RU E\ ZD\ RI WUDGLWLRQDO RSHUD LQ 6HF WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV UHJDUGOHVV RI ZKHWKHUWKLVEHGRQHE\ZD\RIFRPSXWHUJHQHUDWHGPXVLFRUE\ZD\RI KXPDQFRPSRVLWLRQRIPXVLFLQ6HFWKHFRQWULEXWLRQWRWKHPROGLQJ DQGFRQWURORIEHOLHIVYDOXHVDQGEHKDYLRUVUHJDUGOHVVRIZKHWKHUWKLVEH GRQHE\ZD\RI7ROVWR\DQLVPZLWKLWV³YDOXHRIDUW´DVRQHRI³HPSDWK\´ RUE\ZD\RI'DGDLVPOLNH7ULVWDQ7]DUDZKR³VDZWKHIXQFWLRQRIDUWLQ DV WKH GHVWUXFWLRQ RI D PDG VRFLDO RUGHU´ LQ 6HF DQG WKH FRQWULEXWLRQWRWKHPROGLQJDQGFRQWURORIEHOLHIVYDOXHVDQGEHKDYLRUV
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
UHJDUGOHVVRIZKHWKHUWKLVEHGRQHE\ZD\RISOD\LQJ³-XVWLFH´LQPRUDOLW\ SOD\VRUE\ZD\RISOD\LQJ³(TXLW\´LQPRUDOLW\SOD\VLQ6HF 2Q WKH RWKHU KDQG WKHUH LV GLIIHUHQFH LQ RXWFRPH HJ WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\RIWKH5DVD PHWKRGLQWKH,QGLDQSHUIRUPLQJDUWV IRUDUHODWLYHO\ PRUHVDFUHGZRUOGYLHZEHFDXVH³HDFKUDVDDFFRUGLQJWR1ƗW\DVƗVWUDKDV D SUHVLGLQJ GHLW\´²EXW WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI WKH 6WDQLVODYVNL PHWKRG LQ :HVWHUQSHUIRUPLQJDUWVIRUDUHODWLYHO\PRUHVHFXODUZRUOGYLHZZLWKRXW DQ\FRQQHFWLRQWRDSUHVLGLQJGHLW\LQ6HFWKHFRQWULEXWLRQWRWKH PROGLQJDQGFRQWURORIEHOLHIVYDOXHVDQGEHKDYLRUVE\ ZD\RI ZHDULQJ PDVNV LQ DQFLHQW *UHHN DQG 5RPDQ WKHDWUH IRU D UHODWLYHO\ PRUH VLPSOH OLIHZRUOG²EXW WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHVDQGEHKDYLRUVE\ZD\RIXVLQJFRVPHWLFVLQFRQWHPSRUDU\:HVWHUQ WKHDWUH IRU D UHODWLYHO\ PRUH WHFKQRSKLOLF OLIHZRUOG LQ 6HF WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ZD\RIZDJJOHGDQFHE\DZRUNHUEHHIRUIRUDJLQJIRUDUHODWLYHO\PRUH VHULRXVZRUNDKROLFWLPH²EXWWKHFRQWULEXWLRQWRWKHPROGLQJDQGFRQWURO RIEHOLHIVYDOXHVDQGEHKDYLRUVE\ZD\RIZDJJOHGDQFHE\VXUURXQGLQJ EHHV IRU SDUWLFLSDWLRQ IRU D UHODWLYHO\ PRUH UHOD[HG MR\IXO WLPH LQ 6HF WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUVE\ ZD\RIDQLPDOPXVLFIRUDOLIHZRUOGUHODWLYHO\³PXFK PRUH GHSHQGHQW RQ VRXQG IRU FRPPXQLFDWLRQ DQG VHQVDWLRQ´²EXW WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI KXPDQ PXVLF IRU D OLIHZRUOG UHODWLYHO\ PRUH GHSHQGHQW RQ GLIIHUHQWVHQVHVOLNHVLJKWVPHOOWRXFKLQJDQGVRRQQRWMXVWVRXQGIRU FRPPXQLFDWLRQ DQG VHQVDWLRQ LQ 6HF WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI PDLQVWUHDP FRPHG\ IRU D UHODWLYHO\ PRUH FRQVHUYDWLYH PLQGVHW ZLK LWV ³VWDQGDUGLVHGVWUXFWXUHRIDVHTXHQFHRIMRNHVZLWKSXQFKOLQHV´²EXWWKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\RIDOWHUQDWLYHFRPHG\IRUDUHODWLYHO\ PRUHUDGLFDOPLQGVHW ZLWK LWV³IUHHGRPWRSXWRQDQ\VKRZ´LQFOXGLQJWKRVHZLWK³LQGLYLGXDOWDVWHV LQVH[XDOH[SOLFLWQHVVRUUHOLJLRQ´ZKLFK³KDYHEHHQFRQWUDYHQHG´LQ6HF WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI WHVWLQJ FRVPHWLFV RQ DQLPDOV IRU D UHODWLYHO\ PRUH FRUSRUDWHOLIHZRUOGGULYHQE\SURILW²EXWWKHFRQWULEXWLRQWRWKH PROGLQJ DQGFRQWURORIEHOLHIVYDOXHVDQGEHKDYLRUVE\ ZD\RIWHVWLQJFRVPHWLFV ZLWK FRPSXWHU PRGHOLQJ IRU D UHODWLYHO\ PRUH DQLPDOIULHQGO\ OLIHZRUOG GULYHQ E\ LGHRORJ\ LQ 6HF WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI FODVFLDO EDOOHW IRU D
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
UHODWLYHO\ PRUH FRQVHUYDWLYH PLQGVHW ZLWK LWV VWULFW UXOHV²EXW WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ZD\RIFRQWHPSRUDU\EDOOHWIRUDUHODWLYHO\PRUHOLEHUDOPLQGVHWZLWK LWV H[SHULPHQWDWLRQ ZLWK GLIIHUHQW WHFKQLTXHV LQ 6HF WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI FRVWXPH GUDPD IRU D UHODWLYHO\ PRUH KLVWRULFDOO\ UHODWLYH PLQGVHW²EXW WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI LOOXVLRQ FRVWXPH IRU D UHODWLYHO\ PRUH SHUFHSWXDOO\ GHFHSWLYH PLQGVHW LQ 6HF WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI ³FRQVRQDQW PHORGLHV´ IRU D UHODWLYHO\ PRUH FRJQLWLYHO\ IOXHQW PLQGVHW² EXW WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI ³PDJLF LOOXVLRQV´ IRU D UHODWLYHO\ PRUH SHUSHWXDOO\ LOOXVLYHPLQGVHWLQ6HFWKHFRQWULEXWLRQWRWKHPROGLQJDQGFRQWURO RIEHOLHIVYDOXHVDQGEHKDYLRUVE\ZD\RIDEVROXWHPXVLFIRUDUHODWLYHO\ PRUH ³FDWHJRULFDOLPSHUDWLYH´ ZRUOGYLHZ LQ .DQW¶V ODQJXDJH²EXW WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ZD\RISURJUDPPXVLFIRUDUHODWLYHO\PRUH³K\SRWKHWLFDOLPSHUDWLYH´ ZRUOGYLHZ LQ .DQW¶V ODQJXDJH LQ 6HF WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI FKDQFH PXVLFIRUDUHODWLYHO\PRUHDQDUFKLVWOLIHZRUOG²EXWWKHFRQWULEXWLRQWR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI FRQVRQDQW PHORGLHV IRU D UHODWLYHO\ PRUH FRQVHUYDWLYH OLIHZRUOG LQ 6HF WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI KXPDQ YRLFHV LQ SUHKLVWRULF WLPHV IRU D UHODWLYHO\ PRUHQDWXUHUHYHULQJOLIHZRUOG²EXWWKHFRQWULEXWLRQWRWKHPROGLQJDQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI GLJLWDO WHFKQRORJ\ QRZDGD\V IRU D UHODWLYHO\ PRUH QDWXUHPDVWHULQJ OLIHZRUOG LQ 6HF WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI WKH WKHDWUH RI WKH RSSUHVVHG IRU D UHODWLYHO\ PRUH UHYROXWLRQDU\ZRUOGYLHZ²EXWWKHFRQWULEXWLRQWRWKHPROGLQJDQGFRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI WUDGLWLRQDO RSHUD IRU D UHODWLYHO\ PRUH UHDFWLRQDU\ ZRUOGYLHZ LQ 6HF WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI FRPSXWHUJHQHUDWHG PXVLF IRU D UHODWLYHO\ PRUH WHFKQRSKLOLF OLIHZRUOG² EXW WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI KXPDQ FRPSRVLWLRQ RI PXVLF IRU D UHODWLYHO\ PRUH QDWXUDOLVWLF OLIHZRUOG LQ 6HF WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI 7ROVWR\DQLVP IRU D UHODWLYHO\PRUHFRQVHUYDWLYHRUGHUO\OLIHZRUOG²EXWWKHFRQWULEXWLRQWRWKH PROGLQJDQGFRQWURORIEHOLHIVYDOXHVDQGEHKDYLRUVE\ZD\RI'DGDLVP
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
OLNH7ULVWDQ7]DUDIRUDUHODWLYHO\PRUHUDGLFDODQDUFKLVWOLIHZRUOGLQ6HF DQG WKH FRQWULEXWLRQ WR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI SOD\LQJ ³-XVWLFH´ LQ PRUDOLW\ SOD\V IRU D UHODWLYHO\PRUHWKHRORJLFDODEVWUDFWZRUOGYLHZ²EXWWKHFRQWULEXWLRQWR WKH PROGLQJ DQG FRQWURO RI EHOLHIV YDOXHV DQG EHKDYLRUV E\ ZD\ RI SOD\LQJ ³(TXLW\´ LQ PRUDOLW\ SOD\V IRU D UHODWLYHO\ PRUH FLYLO FRQFUHWH ZRUOGYLHZ VLQFH WKH FKDQJH IURP ³-XVWLFH´ WR ³(TXLW\´ LV ³WKH HYROXWLRQ«IURP D WKHRORJLFDO DEVWUDFWLRQ WR D FLYLO VHUYDQW ´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
WK7KHVLV7KH6WDELOLW\5HDFWLRQ3ULQFLSOH 7KH WZHQW\IRXUWK WKHVLV LV FDOOHG WKH VWDELOLW\UHDFWLRQ SULQFSOH RQ WKHIHHGEDFNPHFKDQLVPIRUIXUWKHUFKDQJHV LQWKHFDWHJRU\RI³RXWFRPH´ LQ H[LVWHQWLDO GLDOHFWLFV ZKLFK ZDV ILUVW ZRUNHG RXW LQ )3+&+(0 LQ WKDW RQFH DQ RXWFRPH EHFRPHV VWDELOL]HG RYHU WLPH ZKLFK YDULHV IURP FDVH WR FDVH LW ZLOO XQGHUJR IXUWKHU FKDQJHV LQ LWV PXOWLIDFHWHG LQWHUDFWLRQV ZLWK WKH RXWVLGH ZRUOG HJ ZLWK RWKHU HQWLWLHV HQHUJ\ VSDFHDQGVRRQ 7KHUH LV QR VWDELOLW\ ZLWKRXW UHDFWLRQ IRU IXUWKHU FKDQJHV²DQG YLFH YHUVD )RULQVWDQFHRQWKHRQHKDQGWKHUHLVVWDELOLW\LQRXWFRPHHJWKH UHODWLYHO\PRUHVWDEOHFRQGLWLRQRIWKH5DVDPHWKRGZKHQ³%KDUDWD0XQL HQXQFLDWHGWKHHLJKW5DVDVLQWKH1ƗW\DVƗVWUDDQDQFLHQWZRUNRIGUDPDWLF WKHRU\´DQGLWLVUHDG\IRUXVHE\RWKHUVLQ6HFWKHUHODWLYHO\PRUH VWDEOHFRQGLWLRQRIWKHDWUHPDNHXSZKHQLWLVLQVWLWXWLRQDOL]HGLQUHODWLRQ WRDFHUWDLQVHWRIWHFKQLTXHVOLNHWKH³RQHRYHUDOOIDFHFRORU´LQWKHROGHU GD\VLQ6HFWKHUHODWLYHO\PRUHVWDEOHFRQGLWLRQRIDVSHFLILFIRUP RI GDQFH RQFH LW LV HYROYHG IRU VRPH EHHV OLNH ³VKDNLQJ ]LJ]DJJLQJ EX]]LQJ DQG FUDVKLQJ LQWR QHVWPDWHV´ E\ ³>D@QFHVWRUV WR PRGHUQ
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
KRQH\EHHV´ LQ 6HF WKH UHODWLYHO\ PRUH VWDEOH FRQGLWLRQ RI ZKDOH VRQJVZKHQ³DOOWKHZKDOHVLQDQDUHDVLQJYLUWXDOO\WKHVDPHVRQJDWDQ\ SRLQW LQ WLPH´ LQ 6HF WKH UHODWLYHO\ PRUH VWDEOH FRQGLWLRQ RI WKH (GLQEXUJK ,QWHUQDWLRQDO )HVWLYDO LQ WKH ROGHU GD\V ZKHQ LW ZDV WKH PDLQVWUHDP LQVWLWXWLRQ IRU FRPHG\ IHVWLYDOV LQ 6HF WKH UHODWLYHO\ PRUHVWDEOHFRQGLWLRQRIWKHSUDFWLFHRIWHVWLQJFRVPHWLFVRQDQLPDOVLQWKH ROGHU GD\V ZKHQ WKH DGYRFDWHV EHOLHYHG DW WKH WLPH WKDW ³VDIHW\ PHDVXUHV«RIWHQ UHTXLUHV DQLPDO WHVWLQJ´ VR WKDW WKH SURGXFWV FRXOG VHOO ZHOOLQWKHORQJWHUPLQ6HFWKHUHODWLYHO\PRUHVWDEOHFRQGLWLRQRI FODVVLFDO EDOOHW LQ WKH ROGHU GD\V ZKHQ LW ZDV LQVWLWXWLRQDOL]HG LQWR GLIIHUHQWFXOWXUDOYDULDQWVZLWKLWVVWULFWUXOHVLQ6HFWKHUHODWLYHO\ PRUHVWDEOHFRQGLWLRQRI³WKHFRVWXPHVVHWVDQGSURSHUWLHVLQDSDUWLFXODU KLVWRULFDO HUD´ DV UHYHDOHG LQ FRVWXPH GUDPD ZKHQ WKH\ EHFRPH LQVWLWXWLRQDOL]HG IRU WKDW SDUWLFXODU FXOWXUH DW WKH WLPH LQ 6HF WKH UHODWLYHO\PRUHVWDEOHFRQGLWLRQRIDUWSV\FKRORJ\LQWKHROGHUGD\VZKHQ LWJDLQHGLQIOXHQFHDV³DQLQWHUGLVFLSOLQDU\ILHOGWKDWVWXGLHVWKHSHUFHSWLRQ FRJQLWLRQDQGFKDUDFWHULVWLFV RIDUWDQGLWVSURGXFWLRQ´LQ 6HFWKH UHODWLYHO\ PRUH VWDEOH FRQGLWLRQ RI DHVWKHWLFV LQ WKH ROGHU GD\V ZKHQ SKLORVRSKHUVJRWVWXFNE\DUJXLQJDERXWWKHH[SUHVVLYHQHVVRIHPRWLRQVLQ PXVLF LQ 6HF WKH UHODWLYHO\ PRUH VWDEOH FRQGLWLRQ RI WUDGLWLRQDO PXVLF ZLWK FRQVRQDQW PHORGLHV LQ WKH ROGHU GD\V ZKHQ LW ZDV GHIHQGHG DQGLQVWLWXWLRQDOL]HGHVSHFLDOO\DPRQJ³*UHHNSKLORVRSKHUVDQGPHGLHYDO WKHRULVWV LQ PXVLF´ LQ 6HF WKH UHODWLYHO\ PRUH VWDEOH FRQGLWLRQ RI VRXQGGHVLJQLQWKHROGHUGD\VZKHQLWZDVLQVWLWXWLRQDOL]HGWRWKHHIIHFW WKDW³EHIRUHVWHUHRVRXQGWUDFNV«RQO\WKHGLDORJXHDQGRFFDVLRQDOVRXQG HIIHFWV ZHUHSUDFWLFDO´LQ6HFWKHUHODWLYHO\ PRUHVWDEOHFRQGLWLRQ RISHUIRUPLQJDUWVPRVWO\IRUWKHXSSHUFODVVHVLQWKHROGHUGD\VZKHQIRU LQVWDQFH ³WKURXJKRXW WKH WK FHQWXU\ RSHUD ZRXOG UDSLGO\ EHFRPH WKH HQWHUWDLQPHQW RI FKRLFH IRU WKH DULVWRFUDF\ LQ PRVW RI (XURSH´ LQ 6HF WKHUHODWLYHO\PRUHVWDEOHFRQGLWLRQRIWUDGLWLRQDOPXVLFLQWKHROGHU GD\V ZKHQ LW ZDV WDNHQ IRU JUDQWHG WKDW PXVLF ZDV WR EH FRPSRVHG E\ KXPDQVLQ6HFWKHUHODWLYHO\PRUHVWDEOHFRQGLWLRQRIWKH:HVWHUQ SKLORVRSK\ RI DUW LQ WKH HDUO\ WK FHQWXU\ ZKHQ LW ZDV LQVWLWXWLRQDOL]HG WKDW ³EHDXW\ ZDV FHQWUDO WR WKH GHILQLWLRQ RI DUW´ LQ 6HF DQG WKH UHODWLYHO\ PRUH VWDEOH FRQGLWLRQ RI WKH SUH5HIRUPDWLRQ PRUDOLW\ SOD\ ZKHQLWZDVLQVWLWXWLRQDOL]HGWRGHIHQGWKH&DWKROLFIDLWKLQ6HF 2QWKHRWKHUKDQGWKHUHLVUHDFWLRQLQRXWFRPHHJWKH5DVDPHWKRG KDV VLQFH WKHQ XQGHUJRQH IXUWKHU FKDQJHV RYHU WKH DJHV DV GLIIHUHQW VFKRROV LQ ,QGLD JLYH LW D GLIIHUHQW LQWHUSUHWDWLRQ OLNH WKH GLIIHUHQW RSSRVLQJ RQHV RI %KDUDWDQDW\DP NDWKDN .XFKLSXGL 2GLVVL 0DQLSXUL .XGL\DWWDP .DWKDNDOL DQG RWKHUV LQ 6HF WKH LQVWLWXWLRQDOL]HG
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
WKHDWUH PDNHXS KDV VLQFH WKHQ XQGHUJRQH IXUWKHU FKDQJHV LQWR ³D PXOWLGLPHQVLRQDO FUDIW´ RI WRGD\ ZLWK WKH WKUHH PDMRU DGYDQFHV DIRUHGLVFXVVHG LQ 6HF WKH VSHFLILF IRUP RI GDQFH FDQ WKHQ HYROYH RYHUWLPHWRIXUWKHUFKDQJHVOLNHWKHZDJJOHGDQFHRIFRQWHPSRUDU\KRQH\ EHHV LQ 6HF ZKDOH VRQJV LQ DQ DUHD FDQ OHDG WR IXUWKHU FKDQJHV ODWHU EHFDXVH RI WKH HYROXWLRQ RI ZKDOH V VRQJV RYHU WLPH HYHQ WKRXJK ³VRPH \HDUV WKH VRQJ PD\ FKDQJH TXLWH UDSLGO\ ZKHUHDV LQ RWKHU \HDUV OLWWOHYDULDWLRQPD\EHUHFRUGHG´LQ6HFWKHPDLQVWUHDPLQVWLWXWLRQ RIWKH(GLQEXUJK,QWHUQDWLRQDO)HVWLYDOWKHQOHGWRIXUWKHUFKDQJHVLQWKH ILHOG RI FRPHG\ IHVWLYDOV ODWHU RQ DV LW FDXVHG VRPH QRQPDLQVWUHDP DUWLVWVWRVHWXSWKH)ULQJHDVDQDOWHUQDWLYHWRWKHPDLQVWUHDP(GLQEXUJK ,QWHUQDWLRQDO )HVWLYDO LQ 6HF WKH SUDFWLFH RI WHVWLQJ FRVPHWLFV RQ DQLPDOV LQ WKH ROGHU GD\V OHG WR IXUWKHU FKDQJHV ODWHU RQ VLQFH LW FDXVHG ³VWURQJSXEOLFEDFNODVKDJDLQVWFRVPHWLFWHVWLQJRQDQLPDOV´DQGGLIIHUHQW FDPSDLJQV HPHUJHG WR FDOO IRU DOWHUQDWLYH WHVWV ZLWK FRPSXWHU PRGHOLQJ DQGFHOOFXOWXUHVLQ6HFWKHLQVWLWXWLRQRIFODVVLFDOEDOOHWWKHQOHGWR IXUWKHUFKDQJHVODWHURQZKHQLWVVWULFWUXOHVSURYRNHGRWKHUVWRFRPHXS ZLWK WKH QHRFODVVFLDO EDOOHW DQG FRQWHPSRUDU\ EDOOHW LQ 6HF ³WKH FRVWXPHV VHWV DQG SURSHUWLHV LQ D SDUWLFXODU KLVWRULFDO HUD´ FDQ OHDG WR IXUWKHUFKDQJHVODWHURQZKHQWKHVHFRVWXPHVVHWVDQGSURSHUWLHVZLOOEH WUDQVIRUPHG LQ D GLIIHUHQW ZD\ WR VXLW WKH FXOWXUDO WDVWHV RI DQRWKHU SDUWLFXODUKLVRWULFDOHUDLQ6HFWKHLQIOXHQFHRIDUWSV\FKRORJ\WKHQ OHGWRIXUWKHUFKDQJHVODWHURQZKHQLWIDFHGFRPSHWLQJSHUVSHFWLYHVOLNH ³SV\FKRDQDO\VLV´ ³IHPLQLVP´ ³SKHQRPHQRORJ\´ DQG ³WKH ZULWLQJV RI :LWWJHQVWHLQ /\RWDUG DQG 'HUULGD´ VXFK WKDW ³E\ WKH V WKH FHQWUDOLW\RIDUWSV\FKRORJ\LQDFDGHP\EHJDQWRZDQH´LQ6HFWKH DHVWKHWLF FKDOOHQJH WKHQ OHG WR IXUWKHU FKDQJHV ODWHU RQ ZKHQ PRUH DQG PRUH UHVHDUFKHUV LQ RXU WLPHV JR EH\RQG WKH ROG GHEDWH DQG PDNH JRRG XVH RI WKH SRVVLEOH UHODWLRQVKLS EHWZHHQ PXVLF DQG HPRWLRQV IRU PXVLF WKHUDS\ WR WUHDW SDWLHQWV ZLWK GLIIHUHQW LOOQHVVHV LQ 6HF WKH WUDGLWLRQDO PXVLF ZLWK FRQVRQDQW PHORGLHV HYHQWXDOO\ OHG WR IXUWKHU FKDQJHV ODWHU RQ ZKHQ WKRVH ZKR ZHUH QRW KDSS\ ZLWK LW UHEHOOHG DQG FUHDWHGWKHDOWHUQDWLYHFKDQFHPXVLFDVLVWKHFDVHRI&DJH¶VZRUNLQ6HF WKH VWDELOLW\ RI VRXQG GHVLJQ LQ WKH ROGHU GD\V WKHQ OHG WR IXUWKHU FKDQJHV ODWHU RQ ZKHQ ³WKH JUHDWHU G\QDPLF UDQJH RI WKH QHZ V\VWHPV FRXSOHG ZLWK WKH DELOLW\ WR SURGXFH VRXQGV DW WKH VLGHV RU EHKLQG WKH DXGLHQFHUHTXLUHGPRUHFUHDWLYLW\´LQVWHDGVRWKHROGLQVWLWXWLRQRIVRXQG GHVLJQZDVDEDQGRQHGLQ6HFWKHGRPLDQQFHRIWKHXSSHUFODVVHVLQ SHUIRUPLQJDUWVLQWKHROGHUGD\VOHGWRIXUWKHUFKDQJHVODWHURQHVSHFLDOO\ LQ ³WKH WK FHQWXU\´ ZKLFK ³ZDV D SHULRG RI JURZWK IRU WKH SHUIRUPLQJ DUWV IRU DOO VRFLDO FODVVHV´ LQVWHDG LQ 6HF WKH LQVWLWXWLRQ RI
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
WUDGLWLRQDO PXVLF WKHQ OHG WR IXUWKHU FKDQJHV ODWHU RQ ZKHQ FRPSRVHUV VWDUWHGXVLQJFRPSXWLQJWHFKQRORJ\IRUPXVLFFRPSRVLWLRQLQ6HF WKH LQVWLWXWLRQDOL]HG :HVWHUQ SKLORVRSK\ RI DUW LQ WKH HDUO\ WK FHQWXU\ WKHQ OHG WR IXUWKHU FKDQJHV ODWHU RQ ZKHQ ³WKH FXELVWV GDGDLVWV 6WUDYLQVN\ DQG PDQ\ ODWHU DUW PRYHPHQWV«VWUXJJOHG DJDLQVW WKLV FRQFHSWLRQ´ DQG SURSRVHG ³VRPH QRWLRQ OLNH H[SUHVVLRQ «LQ &URFH¶V WKHRULHV«RU FRXQWHUHQYLURQPHQW «LQ0F/XKDQ¶VWKHRU\´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
WK7KHVLV7KH3RVW+XPDQ 7UDQVGLVFLSOLQDULQHVV $QGWKHWZHQW\ILIWKWKHVLVLVDERXWWKHUROHRI³SRVWKXPDQV´ZKLFK , RULJLQDOO\ SURSRVHG LQ P\ SUHYLRXV ERRNV VWDUWLQJ ZLWK WKH ILUVW ERRN WLWOHG7KH)XWXUHRI+XPDQ&LYLOL]DWLRQLQDQGDOORWKHUVDIWHUZDUGV $V DOUHDG\ SRLQWHG RXW LQ 6HF , QHHG WR HPSKDVL]H DV WKLV LV VRPHWKLQJWKDW,XVHGWRUHSHDWDOPRVWYHUEDWLP IURPP\SUHYLRXVERRNV WZRFODULILFDWLRQVKHUHDERXWWKHWHUP³SRVWKXPDQ´DVDQHRORJLVPLQP\ ZRUNV )LUVWO\ WKH ZRUG ³SRVWKXPDQ´ KHUH VKRXOG QRW EH FRQIXVHG ZLWK DQRWKHUWHUPZKLFKORRNVVLPLODUEXWKDVDWRWDOO\GLIIHUHQWPHDQLQJLQWKH OLWHUDWXUH RI SRVWPRGHUQLVP QDPHO\ ³SRVWKXPDQLVP´²ZKLFK FRQVWLWXWHVDFULWLTXHRI³KXPDQLVP´DVWUDGLRQDOO\XQGHUVWRRGHVSHFLDOO\
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
WKRXJK QRW H[FOXVLYHO\ LQ UHODWLRQ WR WKH LGHD RI SURJUHVV LQ VFLHQFH DQG UHDVRQLQWKH(QOLJKWHQPHQWSURMHFW :. 0\ ZRUNV UHMHFW WKH SURMHFW RI ³SRVWPRGHUQLVP´ DQG SURSRVH WKH IXWXUHZRUOGRIZKDW,RULJQDOO\FDOOHG³DIWHUSRVWPRGHUQLW\´LQ)+&DQG )&'IRULQVWDQFH $QG VHFRQGO\ WKH ZRUG ³SRVWKXPDQ´ KHUH VKRXOG DOVR QRW EH FRQIXVHG ZLWK D VLPLODU WHUP ZKLFK LV XVHG WR FKDPSLRQ WKH LGHRORJ\ RI WHFKQRORJ\ IRU WKH IXWXUH FRH[LVWHQFH EHWZHHQ KXPDQV DQG F\ERUJV LQ ³WUDQVKXPDQLVP´:.D ,QVWHDG P\ WHUP ³SRVWKXPDQ´ LQ UHODWLRQ WR ³SRVWKXPDQLVP´ DOVR UHMHFWV³WUDQVKXPDQLVP´HVSHFLDOO\WKRXJKQRWH[FOXVLYHO\LQUHODWLRQWR WKH SURPLVHV RI WHFKQRORJ\ DQG UHIHUV WR VRPHWKLQJ HOVH DOWRJHWKHU WKDW LVWKHIXWXUHH[WLQFWLRQRIKXPDQVDQGLWVSRVWKXPDQVXFFHVVRUVLQGHHS VSDFHDQGEH\RQGXQWRPXOWLYHUVHV 0\ FULWLTXH RI ³WUDQVKXPDQLVP´ ZDV PRUH H[WHQVLYHO\ HODEURDWHG LQ 6HFRI%(3(²MXVWDVP\FULWLTXHRIGLIIHUHQWIXWXULVWLFVFHQDULRVRI ILFWLRQDODUWLILFLDOLQWHOOLJHQFHLQVFLHQFHILFWLRQZDVJLYHQLQ6HFRI )3+&20 :LWK WKHVH WZR FODULILFDWLRQV LQ PLQG DV VXPPDUL]HG LQ 7DEOH ²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
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
VRPH XSGDWHV ,DOUHDG\ ZRUNHGRXWLQ P\ QXPHURXVERRNV ZKDW WKHVH QHZ FKDOOHQJHV ZLOO EH DQG SURYLGH GLIIHUHQW RULJLQDO YLVLRQV WR PHHW WKHP²HVSHFLDOO\LQUHJDUGWRWKHIXWXUHHYROXWLRQVRIWKHPLQGHJ³WKH VXSHUVHVVLRQ FRPSXWLQJ´ ³PHWDPRUSKLF KXPRU´ ³WKH FRQWUDULDQ SHUVRQDOLW\´³WKHK\SHUPDUWLDOERG\´³WKHK\SHUVH[XDOERG\´³IORDWLQJ FRQVFLRXVQHVV´ ³K\SHUVSDWLDO FRQVFLRXVQHVV´ ³WKLQNLQJ PDFKLQHV´ ³XQIROGLQJ XQFRQVFLRXVQHVV´ ³WKLQNLQJ URERWV´ ³JHQHWLFDOO\ DOWHUHG VXSHULRU EHLQJV´ ³F\ERUJV´ DQG RWKHUV RI QDWXUH HJ ³FUHDWLRQDO FKHPLVWU\´ ³PXOWLODWHUDO VRXQG´ ³UHVHWWOHPHQW JHRORJ\´ ³SRVW FRVPRORJ\´ ³WKH DOWHUDWLRQ RI VSDFHWLPH´ ³WKH FUHDWLRQ RI QHZ PDWWHU HQHUJ\´ ³VHOHFWLYH JHRPHWU\´ DQG WKH OLNH RI VRFLHW\ HJ ³LQWHUYHQWLYHUHVKDSLQJ JHRJUDSK\´ ³GHWDFKHG JDPEOLQJ´ ³KHWHURGR[ HGXFDWLRQ´ ³PXOWLIDFHWHG ZDU DQG SHDFH´ ³YLUWXDO RUJDQL]DWLRQV´ GLIIHUHQW YHUVLRQV RI ³SRVWFDSLWDOLVP´ DQG ³SRVWGHPRFUDF\´ WKH PRYHPHQWRI³F\FOLFDOSURJUHVVLRQ´DWERWKVWUXFWXUDODQGV\VWHPLFOHYHOV ³DPELYDOHQWWHFKQRORJ\´DQGVRIRUWK DQGRIFXOWXUHHJ³FRPSDUDWLYH LPSDUWLDOOLWHUDWXUH´³SRVWKXPDQPLQGJDPHV´³FRPSDUDWLYHVXEVWLWXWLYH UHOLJLRQ´ ³SRVWHWKLFV´ ³SRVWFLYLOL]DWLRQ´ ³WUDQVIRUPDWLYH DHVWKHWLF H[SHULHQFH´³FRQWUDVWLYHPDWKHPDWLFDOORJLF´DQGWKHZKDWQRW LQKLVWRU\ HJWKHDJHRI³DIWHUSRVWPRGHUQLW\´ LQWKHFRQWH[WRIP\DSSURDFKHVLQ UHODWLRQ WR PHWKRGRORJ\ HJ ³VRSKLVWLFDWHG PHWKRGRORJLDO KROLVP´ ³FULWLFDOGLDOHFWLF IRUPDO VFLHQFH´ ³FRPSOH[ GDWD DQDO\VLV´ HWF DQG RQWRORJ\HJ³H[LVWHQWLDOGLDOHFWLFV´³FRQWUDVWLYHUDWLRQDOLW\´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
7RZDUGVWKH3RVW+XPDQ7UDQVGLVFLSOLQDULQHVV 7KLV ³SRVWKXPDQ´ WUDQVGLVFLSOLQDULQHVV LQ SHUIRUPLQJ DUWV WR WUDQVFHQG ERWK WKH ERG\ DQG LWV SUHVHQFH FDQ EH XQGHUVWRRG LQ WHUPV RI VHYHQ JUHDW IXWXUH WUDQVIRUPDWLRQV RI SHUIRUPLQJ DUWV LQ UHODWLRQ WR WKH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
PLQG QDWXUH VRFLHW\ DQG FXOWXUH²DV H[SODLQHG EHORZ DQG VXPPDUL]HG LQ7DEOH
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³QHZERGLHV´JLYHVIXWXUHDGYDQFHGKXPDQVDQGODWHU WKHLU VXFFHVVRUV QDPHO\ WKH SRVWKXPDQV WKH DELOLW\ WR FRPH XS ZLWK GLIIHUHQW QHZ IDFLDO H[SUHVVLRQV JHVWXUHVSRVWXUHV DQG FRVWXPHVFRVPHWLFVLQDZD\WKDWFXUUHQWKXPDQVFDQQRW 7KHUHDUHDOUHDG\VRPHLQGLFDWLRQVWKDWWKHIXWXUHRISHUIRUPLQJDUWV LVPRYLQJWRZDUGWKLVGLUHFWLRQ &RQVLGHUIRULOOXVWUDWLRQWKHGLIIHUHQW³ERGLHV´DVDOUHDG\VHHQLQWKH KLVWRU\RISHUIRUPLQJDUWVVXFKDVIDFLDOH[SUHVVLRQV6HF WKHDWUH PDNHXS 6HF FRVPHWLF SURGXFWV 6HF ERG\ PRYHPHQWV LQ EDOOHW6HF DQGLOOXVLRQFRVWXPH6HF IRULQVWDQFH ,QP\SUHYLRXVERRNV,DOUHDG\JDYHVRPHGHWDLOHGDQDO\VHVRIQRQ YHUEDO FRPPXQLFDWLRQ LQ GLIIHUHQW FRQWH[WV OLNH WKH LVVXHV RI ³NLQHVLFV´ DQG ³SUR[HPLFV´LQ%H\RQG&DSLWDOLVPWR3RVW&DSLWDOLVP DQGRI GLIIHUHQW IRUPV RI ³LQWXLWLRQ´ LQ 7KH )XWXUH RI 3RVW+XPDQ 8QFRQVFLRXVQHVV ,QDGGLWLRQWKHVHGLIIHUHQWYLVLRQVRIWKHERG\PXVWEHXQGHUVWRRGLQ UHODWLRQWRWKHIXWXUHGHYHORSPHQWVRIWKHPLQGLQWKHORQJKDXOZKLFK, KDGDOUHDG\HODERUDWHGLQP\SUHYLRXVERRNVDQGJRRGH[DPSOHVLQFOXGH ³IORDWLQJ FRQVFLRXVQHVV´ DV LQ )&' DQG )3+& ³K\SHUVSDWLDO FRQVFLRXVQHVV´DVLQ)3+&DQG)3+* ³XQIROGLQJXQFRQVFLRXVQHVV´DV LQ )3+8 ³WKH K\SHUPDUWLDO ERG\´ DV LQ )3+0$ ³WKH K\SHUVH[XDO ERG\´DVLQ)3+6 DQGRWKHUV
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
7KLVLVDOOWKHPRUHVRLQOLJKWRIWKHFKDOOHQJHRIFRPSOH[LW\ZKLFK KDVOLPLWHGWKHFXUUHQWKXPDQPLQGDVDOUHDG\DGGUHVVHGLQ7KH)XWXUHRI &RPSOH[LW\ DQG7KH)XWXUHRI3RVW+XPDQ)RUPDO6FLHQFH 0RUHLPSRUWDQWO\LQWKHHQGWKHIXWXUH³SRVWKXPDQ´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³QHZ DXGLHQFHV´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
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7KH7KLUG*UHDW)XWXUH7UDQVIRUPDWLRQRI3HUIRUPLQJ$UWV 7KH WKLUG JUHDW IXWXUH WUDQVIRUPDWLRQ RI SHUIRUPLQJ DUWV LQ WKH SRVW KXPDQ HUD FRQFHUQV ZKDW , RULJLQDOO\ FDOO QHZ LPLWDWLRQVLQFRUSRUDWLRQV LQUHODWLRQWRQDWXUH 7KLVVHDUFKIRU³QHZLPLWDWLRQVLQFRUSRUDWLRQV´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³QHZ IROORZHUV´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
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
7KH)LIWK*UHDW)XWXUH7UDQVIRUPDWLRQRI3HUIRUPLQJ$UWV 7KH ILIWK JUHDW IXWXUH WUDQVIRUPDWLRQ RI SHUIRUPLQJ DUWV LQ WKH SRVW KXPDQHUDFRQFHUQVZKDW,RULJLQDOO\FDOOQHZWHFKQRORJLHVLQUHODWLRQWR VRFLHW\ 7KLVVHDUFKIRU³QHZWHFKQRORJLHV´JLYHVIXWXUHDGYDQFHGKXPDQVDQG ODWHU WKHLU VXFFHVVRUV QDPHO\ WKH SRVWKXPDQV WKH DELOLW\ WR FRPH XS ZLWK GLIIHUHQW WHFKQLTXHV LQVWUXPHQWV SURGXFWV DQG HTXLSPHQWV IRU SHUIRUPDQFHLQDZD\WKDWFXUUHQWKXPDQVFDQQRW 7KHUHDUHDOUHDG\VRPHLQGLFDWLRQVWKDWWKHIXWXUHRISHUIRUPLQJDUWV LVPRYLQJWRZDUGWKLVGLUHFWLRQ &RQVLGHUIRULOOXVWUDWLRQWKHXVHRIGLIIHUHQWWHFKQRORJLHVDVDOUHDG\ VHHQ LQ WKH KLVWRU\ RI SHUIRUPLQJ DUWV VXFK DV PDNHXS SURGXFWV 6HF FRVPHWLFSURGXFWV6HF EDOOHWWHFKQLTXHV6HF PDJLF WULFNV 6HF PXVLFDO LQVWUXPHQWV 6HF FKDQFH RSHUDWLRQV 6HF WKHWHFKQLFDODVSHFWVRIVWDJHFUDIW6HF WKHWHFKQLTXHV RIWKHWKHDWUHRIWKHRSSUHVVHG6HF DQGFRPSXWHUJHQHUDWHGPXVLF 6HF IRULQVWDQFH ,Q DGGLWLRQ LQ 7KH )XWXUH RI $HVWKHWLF ([SHULHQFH , DOUHDG\ZHQWWRJUHDWOHQJWKVWRDUJXHWKDW³WHFKQRORJ\ZLOOKDYHDQHYHQ PRUH DPD]LQJ UROH WR SOD\ LQ WUDQVIRUPLQJ WKH ZD\ WKDW DHVWKHWLF H[SHULHQFH LV WR EH KDG )RU LOOXVWUDWLRQ WKHUH FDQ EH WZR PDMRU JUHDW WUDQVIRUPDWLRQV DPRQJ PDQ\ RWKHUV XQNQRZQ WR XV QRZ RI FRXUVH WR FRPHLQWKHIXWXUHZRUOGWKDWKXPDQVKDYHQHYHUNQRZQ´ ,Q UHJDUG WR WKH ILUVW RQH , ZURWH WKDW ³LQ IXWXUH DHVWKHWLF REMHFWV GLIIHUHQWXOWUDVRSKLVWLFDWHGWHFKQRORJLFDOGHYLFHVDQGVHQVRUVFDQEHFRPH VR HIIHFWLYH WKDW PDQ\ SDLQWLQJV ILOPV SKRWRV VFXOSWXUHV PXVLF DUFKLWHFWXUHSRHPVDQGDOOHOVHZLOOEHLQVWDOOHGZLWKWKHPWRHQKDQFHWKH DPD]LQJ PXOWLGLPHQVLRQDO YLUWXDO DHVWKHWLF H[SHULHQFH WR WKH SRLQW WKDW WKHREMHFWVPD\EHHDVLO\WDNHQDVUHDO´3%DRIX $QG LQ UHJDUG WR WKH VHFRQG RQH , WKHQ DGGHG WKDW ³ZKHQ IORDWLQJ FRQVFLRXVQHVV DQG K\SHUVSDWLDO FRQVFLRXVQHVV HPHUJH RQH GD\ WKH DHVWKHWLF ZRUOG ZLOO XQGHUJR FRVPLF FKDQJHV WKDW WKH KXPDQ ZRUOG KDV QHYHU VHHQ EHIRUH DV DHVWKHWLF H[SHULHQFH ZLOO WKHQ EH LQ GLIIHUHQW ORFDWLRQVRIGHHSVSDFHDQGGLIIHUHQWGLPHQVLRQVRIVSDFHWLPHOLWHUDOO\LQ GLIIHUHQWXQLYHUVHV ´3%DRIX /DWHU LQ 7KH )XWXUH RI 3RVW+XPDQ /LWHUDWXUH , DOVR HQYLVLRQHG QHZ WHFKQRORJLHV ZKLFK ZLOO DOORZ IXWXUH DGYDQFHG KXPDQV DQGODWHUWKHLUVXFFHVVRUVQDPHO\WKHSRVWKXPDQVWKHDELOLW\WRH[SORLW QHZWHFKQRORJLFDOSRVVLELOLWLHVIRUOLWHUDWXUHLQDZD\WKDWFXUUHQWKXPDQV FDQQRW
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
$OO WKHVH DUH MXVW VRPH LOOXVWUDWLYH UHODWLYHO\ SULPLWLYH H[DPSOHV LQ RXU WLPH RI FRXUVH EXW WKH LPSRUWDQW SRLQW WR UHPHPEHU KHUH LV WKDW WKH VHDUFK IRU QHZ WHFKQRORJLHV ZLOO IXUWKHU WUDQVIRUP SHUIRUPLQJ DUWV DW WKH PRUH DGYDQFHG OHYHO LQ WKH SRVWKXPDQ IXWXUH WKDW WKH KXPDQ ZRUOG KDV QHYHUNQRZQ 7KH6L[WK*UHDW)XWXUH7UDQVIRUPDWLRQRI3HUIRUPLQJ$UWV 7KH VL[WK JUHDW IXWXUH WUDQVIRUPDWLRQ RI SHUIRUPLQJ DUWV LQ WKH SRVW KXPDQHUDFRQFHUQVZKDW,RULJLQDOO\FDOOQHZVW\OHVLQUHODWLRQWRFXOWXUH 7KLVVHDUFKIRU³QHZVW\OHV´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³QHZHYDOXDWLRQV´JLYHVIXWXUHDGYDQFHGKXPDQVDQG ODWHU WKHLU VXFFHVVRUV QDPHO\ WKH SRVWKXPDQV WKH DELOLW\ WR GHDO ZLWK GLIIHUHQW DUWLVWLF FULWLFLVPV DQG LQWHUSUHWDWLRQV LQ D ZD\ WKDW FXUUHQW KXPDQVFDQQRW 7KHUHDUHDOUHDG\VRPHLQGLFDWLRQVWKDWWKHIXWXUHRISHUIRUPLQJDUWV LVPRYLQJWRZDUGWKLVGLUHFWLRQ &RQVLGHU IRU LOOXVWUDWLRQ WKH GLIIHUHQW DUWLVWLF FULWLFLVPV DQG LQWHUSUHWDWLRQV DV DOUHDG\ VHHQ LQ WKH KLVWRU\ RI SHUIRUPLQJ DUWV VXFK DV
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
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
(QRUPRXV,PSOLFDWLRQV 7KHVH VHYHQ JUHDW IXWXUH WUDQVIRUPDWLRQV RI SHUIRUPLQJ DUWV KDYH HQRUPRXV LPSOLFDWLRQV IRU VRPH GHHS TXHVWLRQV ZKLFK KDYH FRQVXPHG VRPHRIWKHEULJKWHVWPLQGVLQWKHKLVWRU\RISHUIRUPLQJDUWV )RULQVWDQFHZKDWLV³DUW´",VEHDXW\FHQWUDOWRWKHGHILQLWLRQRIDUW",V PXVLFWREHKDUPRQLRXVDQGSOHDVDQWWRKHDU":KDWVKRXOGZHMXGJHZKHQ ZH MXGJH DUW" :KDW VKRXOG DUW EH OLNH" :KDW LV WKH YDOXH RI DUW" ,V EHDXWLIXO GLVJXVWLQJ RU ERULQJ DUW IRUPV VLPLODU" $UH MXGJPHQWV RI EHDXLW\VHQVRU\HPRWLRQDOLQWHOOHFWXDOVRPHWKLQJHOVHRUDFRPELQDWLRQ RIWKHPDWRQFH"$QG«" 4XHVWLRQVDQGGLVDJUHHPHQWVOLNHWKLVZLOOUHFHLYHQHZDQVZHUVLQWKH IXWXUH KLVWRU\ RI DGYDQFHG KXPDQ DQG ODWHU SRVWKXPDQ SHUIRUPLQJ DUWV HVSHFLDOO\ LQ WKH FXUUHQW FRQWH[W RI JRLQJ EH\RQG ERWK WKH ERG\ DQG LWV SUHVHQFH²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
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
/HVW DQ\ PLVXQGHUVWDQGLQJ RFFXUV RQH PXVW UHPHPEHU WKDW WKHVH VHYHQ JUHDW IXWXUH WUDQVIRUPDWLRQV RI SHUIRUPLQJ DUWV ZLOO EULQJ QHLWKHU XWRSLD QRU G\VWRSLD²DV WKLV LV VRPHWKLQJ WKDW , KDYH ZDUQHG WLPH DQG DJDLQLQDOORIP\SUHYLRXVERRNV $IWHUDOODV,VRRIWHQVWUHVVHGLQP\SUHYLRXVERRNVLWLVQRWXSWRXV FXUUHQW KXPDQV WR GHFLGH ZKHWKHU RU QRW RU WR ZKDW H[WHQW WKH SRVW KXPDQIXWXUHRISHUIRUPLQJDUWVZLOOEHIRUEHWWHUDQGIRUZRUVHEHFDXVHLW ZLOO EH MXGJHG E\ WKH YDOXHV DQG EHOLHIV RI IXWXUH SRVWKXPDQV RQ HDUWK DQGLQGHHSVSDFHXQWRPXOWLYHUVHV²LQDZD\WKDWWKHHQWLUHKLVWRU\RIWKH KXPDQZRUOGKDVQHYHUNQRZQ 7KXVZLOOVWDUHDWXVWKHIXWXUHRISHUIRUPLQJDUWVDQGLWVSRVWKXPDQ IDWH
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
7DEOH6RSKLVWLFDWHG0HWKRGRORJLFDO+ROLVP 3DUW, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB ³0\ PHWKRGRORJLFDO KROLVP LPSOLHV WKH SDUWLDOLW\WRWDOLW\ SULQFLSOH LQ WKHRQWRORJ\RIH[LVWHQWLDOGLDOHFWLFVVHHWKHWDEOHRQWKHSDUWLDOLW\WRWDOLW\ SULQFLSOHIRUVXPPDU\ ZKLFKLVDJDLQVWWKHYDULHWLHVRID UHGXFWLRQLVP DQG E UHYHUVHUHGXFWLRQLVP LQ UHODWLRQ WR L FRQFHSW LL WKHRU\ LLL PHWKRGRORJ\DQGLY RQWRORJ\´)& ³>0@\ PHWKRGRORJLFDO KROLVP KHUH LV QRW RSSRVHG WR PHWKRGRORJLFDO LQGLYLGXDOLVP EXW LQFOXGHV LW DQG IRU WKDW PDWWHU RWKHU PHWKRGRORJLHV WRR «´ )3+& )RU WKLV UHDVRQ DQG RWKHUV WRR DV VXPPDUL]HG KHUHDIWHU P\ YHUVLRQ RI PHWKRGRORJLFDO KROLVP LV VRSKLVWLFDWHG²QRW YXOJDUDVVRPHWLPHVXVHGE\LQDSWVFKRODUVXVLQJWKHVDPHWHUP)& ³>0@\PHWKRGRORJLFDOKROLVPGRHVQRWGHPRFUDWLFDOO\SUHVXPHWKDWDOO OHYHOVDUHHTXDOO\YDOLGDVDOOOHYHOVDUHQRWFUHDWHGHTXDO,QRWKHUZRUGV LQUHODWLRQ WRLVVXH;OHYHO $ PD\EH PRUHUHOHYDQWWKDQOHYHO%EXWLQ UHODWLRQWR0@\PHWKRGRORJLFDOKROLVPGRHVQRWPDNHDQ\DSULRULSRVWXODWLRQWKDW WKHUHPXVWEHDGHILQLWHDQGIRUWKDWPDWWHULQGHILQLWH QXPEHURIOHYHOV´ LQDQ\DQDO\VLV)3+& 1RUGRHVLWGRJPDWLFDOO\UHTXLUHWKDWWKHUHPXVW EHDFHUWDLQFRPELQDWLRQRIOHYHOVRIDQDO\VLVLQDJLYHQLQTXLU\)& ³>0@HWKRGRORJLFDO KROLVP LQ P\ XVDJH GRHV QRW DVVXPH WKDW DOO OHYHOV«FDQ QHFHVVDULO\EHLQWHJUDWHGVLQFH PHWKRGRORJLFDOKROLVPLVQRW DLPHGWRVHDUFKIRUWKHKRO\JUDLORI DQLQWHJUDOWKHRU\« DVLVWKHFDVH IRU :LOEHU ,Q RWKHU ZRUGV LW DOORZV WKDW VRPHWLPHV VRPH OHYHOV PD\ H[SHULHQFH LUUHGXFLEOH JDSV EHWZHHQ WKHP WR EH XQGHUVWRRG DW EHVW DV HPSLULFDOFRUUHODWLRQVQRWDVFDXVDOUHODWLRQV«´)3+& ³>'@LIIHUHQW OHYHOV PD\ RYHUODS DQG HYHQ LQWHUDFW ZLWK HDFK RWKHU LQ D JLYHQFRQWH[WEXWVRPHWLPHVPD\QRW DQGWKHIDFWWKDW,HYHQSURSRVHG GLIIHUHQW ZD\V RI UHFODVVLI\LQJ WKH OHYHOV ZKHQHYHU QHHGHG LQ )'& UHLQIRUFHV WKLV SRLQW«7KH GXDO GDQJHU KHUH LV HLWKHU IRUFHIXOO\ PDNLQJ GLIIHUHQW OHYHOV LQWHUDFW ZKHQ WKH\ DUH MXVW GLIIHUHQW RU PHWDSKRULFDOO\ VSHDNLQJ DSSOHV DQG RUDQJHV RU LQDSSURSULDWHO\ LJQRULQJ WKHLU LQWHUDFWLRQVZKHQVRPHVLWXDWLRQVLQVWHDGUHTXLUHWKHP´)3+& ³>7@R XQGHUVWDQG GLIIHUHQW OHYHOV IURP WKHLU RZQ XQLTXH SHUVSHFWLYHV DV UHTXLUHG E\ P\ PHWKRGRORJLFDO KROLVP LV QRW WKH VDPH DV WU\LQJ WR UHGXFH WKHP WR D SUHIHUUHG OHYHO LQ WKH SURFHVV RI OHDUQLQJ IURP RWKHU OHYHOV7KLVVHFRQGNLQGRIPXOWLGLVFLSOLQDU\ZRUNLVQRWJHQXLQHDQGGRHV QR MXVWLFH WR WKH XQLTXH FRPSOH[LWLHV DQG PHULWV LQKHUHQW DW HDFK OHYHO´ )3+& BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
7DEOH6RSKLVWLFDWHG0HWKRGRORJLFDO+ROLVP 3DUW,,, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB ³>0\@ PHWKRGRORJLFDO KROLVP ZDONV D ILQH OLQH EHWZHHQ WKH DUWLILFLDO FODVVLILFDWLRQVHSDUDWLRQ RIOHYHOVDQGWKHVLPXOWDQHRXVLQFRUSRUDWLRQRI WKHP LI RQO\ IRU WKH VDNH RI KXPDQ VFKRODUO\ HQGHDYRU ,W VKRXOG EH UHPLQGHG WKDW QDWXUH GRHV QRW LPSRVH XSRQ LWVHOI WKH DFDGHPLF FODVVLILFDWLRQ RI WKH OHYHOV RI DQDO\VLV DV KXPDQV KDYH 7KH HQWHUSULVH RI FODVVLILFDWLRQLVWKHUHIRUHDQWKURSRFHQWULF´)3+& ³>0@\ PHWKRGRORJLFDO KROLVP DGYRFDWHV QHLWKHU HSLVWHPLF VXEMHFWLYLVP QRU HSLVWHPLF QRQVXEMHFWLYLVP HJ UHDOLVP LGHDOLVP DQG KLVWRULFLVP QHLWKHUHSLVWHPLFUHODWLYLVPHJVXEMHFWLYLVPKLVWRULFLVP QRUHSLVWHPLF DEVROXWLVP HJ UHDOLVP SRVLWLYLVP QHLWKHU HSLVWHPLF UHGXFWLRQLVP QRU HSLVWHPLF HPHUJHQFLVP DQG QHLWKHU HSLVWHPLF REMHFWLYLVP HJ UHDOLVP LGHDOLVP QRU HSLVWHPLF KLVWRULFLVP«1HLWKHU GRHV PHWKRGRORJLFDO KROLVPLQP\XVDJHDFFHSWWKHIDOVHPHWDFRQFHSWXDOGLFKRWRP\EHWZHHQ QRPLQDOLVP DQG UHDOLVP«7KHVH IDOVH GLFKRWRPLHV«DUH WR EH WUDQVFHQGHG,QRWKHUZRUGVPHWKRGRORJLFDOKROLVPGRHVQRWIXOO\DFFHSW HSLVWHPLFUHDOLVPSRVLWLYLVP DIRUPRIHSLVWHPLFLGHDOLVP KLVWRULFLVP VXEMHFWLYLVPDQGUHGXFWLRQLVPLQHSLVWHPRORJ\DQGSKLORVRSK\RIVFLHQFH EXW OHDUQV IURP WKH VWUHQJWKV DQG ZHDNQHVVHV RI DOO RI WKH RSSRVLQJ DSSURDFKHVZLWKRXWVLGLQJZLWKDQ\RIWKHP«´)3+& ³6RSKLVWLFDWHG PHWKRGRORJLFDO KROLVP LV VXEMHFW WR WKH FRQVWUDLQWV DV LPSRVHGE\WKHV\QWD[RIH[LVWHQWLDOGLDOHFWLFVHJWKHSDUWLDOLW\WRWDOLW\ SULQFLSOH DQG WKH SUHGLFWDELOLW\XQSUHGLFWDELOLW\ SULQFLSOH (YHQ LQ SUHGLFWDELOLW\ RXWFRPHV DUH VXEMHFW WR XQFHUWDLQW\ WKH GHJUHH RI ZKLFK YDULHVIURPFDVHWRFDVH´)& BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH6RSKLVWLFDWHG0HWKRGRORJLFDO+ROLVP 3DUW,9 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB ³6RSKLVWLFDWHGPHWKRGRORJLFDOKROLVP²ZKHQDSSOLHGHVSHFLDOO\WKRXJK QRW H[FOXVLYHO\ DV LOOXVWUDWHG LQ P\ QXPHURXV ZRUNV²FDQ HQULFK WKH XQGHUVWDQGLQJRIUHDOLW\LQVRPHGLVWLQFWLYHZD\V+HUHDUHWKUHHH[DPSOHV DVUHYHDOHGLQHDFKRIP\ERRNV ´)3+&7)3+/ ²³)LUVWO\ LW SURYLGHV D FRPSUHKHQVLYH DQDO\VLV RI D VXEMHFW PDWWHU IURP ZKLFK PXFK FDQ EH OHDUQHG DERXW UHDOLW\´ ³ERWK LQ UHODWLRQ WR WKHSHUVSHFWLYHVRIWKH PLQG QDWXUH VRFLHW\DQGFXOWXUHDQG DOVRLQ UHODWLRQWRDQHZFODVVLILFDWLRQRIWKHVXEMHFWPDWWHU´ ²³6HFRQGO\ LW VXJJHVWV VRPH YLVLRQV RI WKH IXWXUH LQ UHODWLRQ WR WKH VXEMHFWPDWWHULQTXHVWLRQ´ ²³$QG WKLUGO\ LW SURSRVHV VRPH LQVLJKWV RQ PHWDWKHRU\ HJ PHWKRGRORJ\DQGRQWRORJ\ LQJHQHUDO²ZLWKWKHFOHDUXQGHUVWDQGLQJ KRZHYHURIWKHGLOHPPDRIVSHFLILFYVJHQHUDORQWRORJ\DVVKRZQLQ WKH WDEOH RQ WKH V\QWD[ RI H[LVWHQWLDO GLDOHFWLFV LQ WKH FRQWH[W RI WKH GLOHPPD RI RQWRORJ\ )RU WKLV YHU\ UHDVRQ DOO RI WKHVH ZD\V DUH LPSRUWDQWZLWKRXWUHGXFLQJRQHLQWRWKHDQDO\VLVRIDQRWKHU´ ³,QWKHHQG P\ PHWDWKHRU\ERWKVRSKLVWLFDWHG PHWKRGRORJLFDOKROLVP DQG H[LVWHQWLDO GLDOHFWLFV VHUYHV DV D IRXQGDWLRQ WR XQLI\ DOO GRPDLQV RI NQRZOHGJH LQWR DQ XQLILHG WKHRU\ RI HYHU\WKLQJ E\ ZD\ RI VRPH RQWRORJLFDO SULQFLSOHV DQG WKH FRPSUHKHQVLYH SHUVSHFWLYHV RI WKH PLQG QDWXUH VRFLHW\ DQG FXOWXUH 7KLV LV VR ZLWKRXW FRPPLWLQJ WKH VLQV RI UHGXFWLRQLVP DQG UHYHUVHUHGXFWLRQLVP DV RIWHQ VHHQ LQ PDQ\ KROLVWLF DSSURDFKHVZLWKWKHIDGRIV\VHPVDSSURDFK²EHLWDERXWV\VWHPVWKHRU\ FKDRV WKHRU\ FRPSOH[LW\ WKHRU\ RU HOVH²DV D PRVW UHFHQW QRWRULRXV H[DPSOH ZKLFK,GHEXQNHGLQ7KH)XWXUHRI&RPSOH[LW\DQGDOVRLQ7KH )XWXUH RI 3RVW+XPDQ )RUPDO 6FLHQFH 0\ GLVWLQFWLYH DSSURDFK PDNHV JRRGXVHRIGLIIHUHQWVFKRROVRIWKRXJKWZLWKRXWIDYRULQJDQ\RIWKHPQRU WU\LQJWRLQWHJUDWHWKHPDVWKH\DUHQRWQHFHVVDULO\FRPSDWLEOHZLWKHDFK RWKHU VRDVWRDGMXVWIRUVXEMHFWLYLW\GLYHUVLW\FRQIOLFWDQGFRPSOH[LW\ IRU H[DPSOH ,Q WKLV VHQVH WKH ZRUG ³XQLILHG´ GRHV QRW KDYH WR PHDQ LQWHJUDWLYHDSSURDFKLQDQDUURZVHQVHQRUV\VWHPVDSSURDFKLQDEURDG RQHERWKRIZKLFK,UHMHFWZKLOHOHDUQLQJIURPWKHP´)3+)6)3+6 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 6RXUFHV $ VXPPDU\ RI 6HF LQ )3+&²DQG DOVR IURP %11 )3+67 $/')&)3+&7DQGWKHUHVWRIDOORWKHUERRNVRIPLQH6HHWKHERRNV IRUPRUHGHWDLO
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
7DEOH2Q5HGXFWLRQLVPDQG5HYHUVH5HGXFWLRQLVP 3DUW, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 7KH3DUWLDOLW\7RWDOLW\3ULQFLSOH ²7KHSDUWLDOLW\WRWDOLW\SULQFLSOHLQWKHRQWRORJ\RIH[LVWHQWLDOGLDOHFWLFV WDUJHWVDJDLQVWWKHYDULHWLHVRIUHGXFWLRQLVPDQGUHYHUVHUHGXFWLRQLVP DVDOUHDG\ZRUNHGRXWLQP\SUHYLRXVERRNV
$JDLQVWWKH9DULHWLHVRI5HGXFWLRQLVP ²&RQFHSWXDO5HGXFWLRQLVP 6RPH LOOXVWUDWLYH LQVWDQFHV LQYROYH P\ULDG GXDOLWLHV OLNH PLQG YV ERG\ VHOI YV ZRUOG GHPRFUDF\ YV QRQGHPRFUDF\ DQG WKH OLNH DVDOUHDG\DGGUHVVHGLQ)+&)3+&DQG%'3'IRULQVWDQFH ²7KHRUHWLFDO5HGXFWLRQLVP $ IDVFLQDWLQJ FDVH VWXG\ FRQFHUQV ZKDW , RULJLQDOO\ FDOOHG ³WKH IRXQGDWLRQ IDOODF\´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
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH2Q5HGXFWLRQLVPDQG5HYHUVH5HGXFWLRQLVP 3DUW,, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB $JDLQVWWKH9DULHWLHVRI5HGXFWLRQLVPFRQW G ²7KHRUHWLFDO5HGXFWLRQLVPFRQW¶G ,Q)3+*,LGHQWLI\DQRWKHUYHUVLRQRIUHGXFWLRQLVPLQ UHODWLRQWR LQILQLW\ V\PPHWU\ DQG GLPHQVLRQDOLW\ HJ WKH (XFOLGHDQ DUJXPHQWYVWKHQRQ(XFOLGHDQDUJXPHQWV ,Q)3+83,DQDO\]HGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR GHQVLW\ DQG YRLG HJ WKH HQJLQHHULQJ DUJXPHQW DQG WKH HFRORJ\ DUJXPHQW ,Q)3+/,H[DPLQHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR VWUXFWXUH DQG FRQWH[W HJ WKH VWUXFWXUDOLVW DUJXPHQW DQG WKH FRQWH[WXDOLVWDUJXPHQW ,Q3)+2,H[SORUHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR FRPPXQFDWLRQGHFLVLRQPDNLQJDQGOHDGHUVKLSHJWKHUDWLRQDO V\VWHPDUJXPHQWYVWKHQDWXUDOV\VWHPDUJXPHQW ,Q3)+0$,UHYHDOHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR WKH PDUWLDO ERG\ DQG VSLULW HJ WKH VSLULWXDO DUJXPHQW YV WKH PDWHULDOLVWDUJXPHQWYVWKHGHIHQVLYHDUJXPHQW ,Q3)+6,DQDO\]HGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR WKH VH[XDO ERG\ DQG VSLULW HJ WKH QDWXUDOLVW DUJXPHQW YV WKH FRQVWUXFWLYLVWDUJXPHQW ,Q3)+/$:,H[DPLQHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQ WRODZHJWKHQHFHVVLW\DUJXPHQWYVWKHFRQWHQJHQF\DUJXPHQW ,Q)3+:3,VKRZHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR ZDU DQG SHDFH HJ WKH DJJUHVVLYLVW DUJXPHQW YV WKH SDFLILVW DUJXPHQW ,Q%(3(,DQDO\]HGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR PRUDOLW\DQGLPPRUDOLW\HJWKHREMHFWLYLVWDUJXPHQWYVWKHQRQ REMHFWLYLVWDUJXPHQWYVWKHVNHSWLFDODUJXPHQW ,Q%&26,H[DPLQHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQWR WKHFRQWHVWHGEHJLQQLQJVDQGVSHFXODWLYHHQGVRIWKHXQLYHUVHHJ WKH VFLHQWLILFDUJXPHQW YVWKHUHOLJLRXVDUJXPHQWYVWKH HVRWHULF DUJXPHQWYVWKHPHWDSK\VLFDODUJXPHQW ,Q )3+3 , VKRZ DQRWKHU YHUVLRQ RI UHGXFWLRQLVP LQ UHODWLRQ WR QRUPDOLW\DQGDEQRUPDOLW\HJWKHQDWXUDODUJXPHQWYVWKHVRFLDO DUJXPHQWYVWKHFXOWXUDODUJXPHQWYVWKHPHQWDODUJXPHQW BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
7DEOH2Q5HGXFWLRQLVPDQG5HYHUVH5HGXFWLRQLVP 3DUW,,, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB $JDLQVWWKH9DULHWLHVRI5HGXFWLRQLVPFRQW G ²7KHRUHWLFDO5HGXFWLRQLVPFRQW¶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
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH2Q5HGXFWLRQLVPDQG5HYHUVH5HGXFWLRQLVP 3DUW,9 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB $JDLQVWWKH9DULHWLHVRI5HGXFWLRQLVPFRQW G ²7KHRUHWLFDO5HGXFWLRQLVPFRQW¶G ,Q)3+'$,SURSRVHGDQRWKHUYHUVLRQRIUHGXFWLRQLVPLQUHODWLRQ WRTXDQWLWDWLYHDQGTXDOLWDWLYHUHVHDUFKHJWKHQDWXUDODUJXPHQW YV WKH VRFLDO DUJXPHQW YV WKH FXOWXUDO DUJXPHQW YV WKH PHQWDO DUJXPHQW ,Q )3+*(2* , SURSRVHG DQRWKHU YHUVLRQ RI UHGXFWLRQLVP LQ UHODWLRQ WR HQYLURQPHQWV DQG WKHLU LQWHUDFWLRQV HJ WKH QDWXUDO DUJXPHQWYVWKHVRFLDODUJXPHQWYVWKHFXOWXUDODUJXPHQWYVWKH PHQWDODUJXPHQW $QG LQ )3+3$ , SURSRVH DQRWKHU YHUVLRQ RI UHGXFWLRQLVP LQ UHODWLRQWRWKHERG\DQGLWVSUHVHQFHHJWKHQDWXUDODUJXPHQWYV WKH VRFLDO DUJXPHQW YV WKH FXOWXUDO DUJXPHQW YV WKH PHQWDO DUJXPHQW ²0HWKRGRORJLFDO5HGXFWLRQLVP $ JRRG LQVWDQFH FRQFHUQV WKH GHEDWH EHWZHHQ GLIIHUHQW YHUVLRQV RI TXDOLWDWLYH DQG TXDQWLWDWLYH PHWKRGV DV DOUHDG\ DQDO\]HG LQ )& DQGDOVR)+& ,Q)3+0/,H[DPLQHGVLPLODUUHGXFWLRQLVPWKLV WLPH LQ WKH OLWHUDWXUH RQ PDWKHPDWLFDO ORJLF HJ WKH REVHVVLRQ ZLWKFRQVLVWHQF\VRXQGQHVVDQGFRPSOHWHQHVV $QGLQ)3+)6, DOVR H[SORUHG WKH SUREOHPV RI UHGXFWLRQLVP LQ WKH FRQWH[W RI IRUPDOVFLHQFHHJWKHDQDO\WLFDODUJXPHQW ²2QWRORJLFDO5HGXFWLRQLVP $Q H[FHOOHQW H[DPSOH LV WKH GHEDWH EHWZHHQ HPHUJHQWLVP DQG UHGXFWLRQLVP LQ FRPSOH[LW\ WKHRU\ DQG DOVR LQ SV\FKRORJ\ DV HODERUDWHGLQ)3+&LQWKHFRQWH[WRI%HLQJDQG%HFRPLQJ $JDLQVWWKH9DULHWLHVRI5HYHUVH5HGXFWLRQLVP ²&RQFHSWXDO5HYHUVH5HGXFWLRQLVP $Q\FRQFHSWRI³DUW´HJILQHDUWFDYHDUWRXWVLGHUDUWMXQNDUW LV GHHPHG DFFHSWDEOH LQ SRVWPRGHUQLVP DV DOUHDG\ DGGUHVVHG LQ &KRI)+& BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
7DEOH2Q5HGXFWLRQLVPDQG5HYHUVH5HGXFWLRQLVP 3DUW9 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB $JDLQVWWKH9DULHWLHVRI5HYHUVH5HGXFWLRQLVPFRQW G ²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³WKH FRPSURPLVH IDOODF\´ DV DQRWKHU JRRG LOOXVWUDWLRQ RI WKHRUHWLFDO UHYHUVHUHGXFWLRQLVP LQ PLVOHDGLQJO\ WUHDWLQJ ERWK JHQHWLF DQG HQYLURQPHQWDO DSSURDFKHV DVHTXDOO\YDOLG ²0HWKRGRORJLFDO5HYHUVH5HGXFWLRQLVP 7KHUH LV WKH ³DQ\WKLQJJRHV´ PHQWDOLW\ LQ SRVWPRGHUQLVP HJ GRLQJ DUW ZLWKRXW SUD[LV GRLQJ DUW ZLWK SUD[LV DQG GRLQJ DUW E\ VXEODWLRQ DV DQDO\]HG LQ &K RI )+& $QG LQ )3+)6 , DOVR H[SRVHG WKH SUREOHPV RI UHYHUVHUHGXFWLRQLVP LQ WKH FRQWH[W RI IRUPDOVFLHQFHLQUHODWLRQWRV\VWHPVWKHRU\ ²2QWRORJLFDO5HYHUVH5HGXFWLRQLVP 7KHUHDUHOLNHZLVHQRSULYLOHJHGRQWRORJ\DQGWKHGRRULVRSHQIRU DQ\WKLQJLQSRVWPRGHUQLVPHJWKHHTXDOVWDWXVRIWKHRQWRORJ\ RI %HLQJ YV WKDW RI %HFRPLQJ DV DOUHDG\ DGGUHVVHG LQ &K RI )+&²DQG DOVR LQ )3+& ,Q )$( , DOVR LQWURGXFHG DQRWKHU YHUVLRQ RI UHYHUVHUHGXFWLRQLVP WKDW LV ³WKH SOXUDOLVW IDOODF\´ LQ WKH FRQWH[W RI XQGHUVWDQGLQJ DHVWKHWLF H[SHULHQFH IRU LQVWDQFH² DOWKRXJK WKLV IDOODF\ KDV EHHQ FRPPLWWHG QRW H[FOXVLYHO\ LQ UHODWLRQ WR WKH RQWRORJLFDO OHYHO EXW DOVR DW WKH FRQFHSWXDO WKHRUHWLFDODQGPHWKRGRORJLFDORQHV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 6RXUFHV)URPP\SUHYLRXVERRNV
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH7KH&RQFHSWRQRI([LVWHQWLDO'LDOHFWLFV 3DUW, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 6HWVDQG(OHPHQWV ²6HWV ([WKH6DPH ([WKH2WKHUV ²(OHPHQWV ([ZKLWHVLQWKFHQWXU\$PHULFDLQWKHVHWRI³WKH6DPH´ ([,UDTGXULQJWKH86LQYDVLRQLQLQWKHVHWRI³WKH 2WKHUV´ 5HODWLRQV2SHUDWLRQV)XQFWLRQV ²5HODWLRQVHJ³EHORQJV´³HTXDOVWR´³LVJUHDWHUWKDQ´ ([V\PPHWULFLQWHUDFWLRQVZLWKLQWKH6DPHRUWKH2WKHUV ([DV\PPHWULFLQWHUDFWLRQVEHWZHHQWKH6DPHDQGWKH2WKHUV ²2SHUDWLRQVHJ³DQG´³RU´³QRW´³LI«WKHQ´ ([LIWKH6DPHRSSUHVVHVWKH2WKHUVLWZLOODOVRRSSUHVVLWVHOI ([WKH6DPHLVQRWWKH2WKHUV ²)XQFWLRQVHJJRDOV ([WKH6DPHLVKHJHPRQLFLQUHODWLRQWRWKH2WKHUV 7UXWK9DOXHV ²³´LI7UXHLQ6\PEROLF/RJLF ([WKHSURSRVLWLRQWKDWLPSHULDO-DSDQZDVKHJHPRQLFWR&KLQD GXULQJ::,, ²³´LI)DOVHLQ6\PEROLF/RJLF ([WKHSURSRVLWLRQWKDW*UHQDGDLQYDGHG)UDQFHLQ ²³´ ³´LI%RWK7UXHDQG)DOVHLQ'LDOHFWLF/RJLF ([WKHSURSRVLWLRQWKDWWKHUDEELWGXFNSLFWXUHUHIHUVWRDGXFN ²³a´ ³a´LI1HLWKHU7UXH1RU)DOVHRU1$LQ'LDOHFWLF/RJLF ([WKHSURSRVLWLRQWKDW*RGUHDOO\H[LVWV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
7DEOH7KH&RQFHSWLRQRI([LVWHQWLDO'LDOHFWLFV 3DUW,, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB $[LRPVDQG3RVWXODWHV ²$[LRPV ([WKHUHIOH[LYHD[LRP²³DQ\TXDQWLW\LVHTXDOWRLWVHOI´ ²3RVWXODWHV ([ WKH 666 SRVWXODWH²³LI WKH WKUHH VLGHV RI D WULDQJOH DUH FRQJUXHQWWRWKHLUFRUUHVSRQGLQJSDUWVWKHQWKHWULDQJOHVDUH FRQJUXHQW´ 7KHRUHPVDQG3ULQFLSOHV ²7KHRUHPVDQG3ULQFLSOHV LQ([LVWHQWLDO'LDOHFWLFV ,Q5HODWLRQWR0HWKRG ±7KHIRUPDOQHVVLQIRUPDOQHVVSULQFLSOH ±7KHDEVROXWHQHVVUHODWLYHQHVVSULQFLSOH ±7KHSDUWLDOLW\WRWDOLW\SULQFLSOH ±7KHSUHGLFWDELOLW\XQSUHGLFWDELOLW\SULQFLSOH ±7KHH[SOLFDELOLW\LQH[SOLFDELOLW\SULQFLSOH ±7KHILFWLRQUHDOLW\SULQFLSOH ,Q5HODWLRQWR6WUXFWXUH ±7KHILQLWHQHVVWUDQVILQLWHQHVVSULQFLSOH ±7KHSUHFLVHQHVVYDJXHQHVVSULQFLSOH ±7KHVLPSOHQHVVFRPSOLFDWHGQHVVSULQFLSOH ±7KHRSHQQHVVKLGGHQQHVVSULQFLSOH ±7KHGHQVHQHVVHPSWLQHVVSULQFLSOH ,Q5HODWLRQWR3URFHVV ±7KHFKDQJHFRQVWDQF\SULQFLSOH ±7KHRUGHUFKDRVSULQFLSOH ±7KHVORZQHVVTXLFNQHVVSULQFLSOH ±7KHH[SDQVLRQFRQWUDFWLRQSULQFLSOH BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH7KH&RQFHSWLRQRI([LVWHQWLDO'LDOHFWLFV 3DUW,,, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 7KHRUHPVDQG3ULQFLSOHVFRQW¶G ²7KHRUHPVDQG3ULQFLSOHV LQ([LVWHQWLDO'LDOHFWLFV ,Q5HODWLRQWR$JHQF\ ±7KHWKHRU\SUD[LVSULQFLSOH ±7KHFRQYHQWLRQQRYHOW\SULQFLSOH ±7KHHYROXWLRQWUDQVIRUPDWLRQSULQFLSOH ±7KHV\PPHWU\DV\PPHWU\SULQFLSOH ±7KHVRIWQHVVKDUGQHVVSULQFLSOH ±7KHVHULRXVQHVVSOD\IXOQHVVSULQFLSOH ,Q5HODWLRQWR2XWFRPH ±7KHUHJUHVVLRQSURJUHVVLRQSULQFLSOH ±7KHVDPHGLIIHUHQFHSULQFLSOH ±7KHVWDELOLW\UHDFWLRQSULQFLSOH BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1RWHV 7KH FDWHJRULHV DQG H[DPSOHV LQ HDFK DUH VROHO\ LOOXVWUDWLYH QRW H[KDXVWLYH 7KH FRPSDULVRQ LV DOVR UHODWLYH QRW DEVROXWH QRU DUH WKH\ PXWXDOO\H[FOXVLYH$VJHQHUDOLWLHVWKH\DOORZH[FHSWLRQV 6RXUFHV6WDUWLQJIURP&KRI%&3&DQGDOVRIURPRWKHUERRNVRIPLQH
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB ,Q5HODWLRQWR0HWKRG ²7KH)RUPDOQHVV,QIRUPDOQHVV3ULQFLSOH 2QWKH)RUPDO5HTXLUHPHQWVRI/RJLFDO6\VWHPV 7KHIRUPDOUHTXLUHPHQWVRIDORJLFDOV\VWHPHJFRQVLVWHQF\ VRXQGQHVV DQG FRPSOHWHQHVV KDYH ERWK XVHIXOQHVV DQG QRQ XVHIXOQHVV WR WKH H[WHQW WKDW LI WKHUH DUH IRUPDO V\VWHPV UHTXLULQJ WKHP WKHUH DUH DOWHUQDWLYH RQHV ZKLFK GR QRW 7KXV LW GRHV QRW H[FOXGHFODVVLFDOORJLFVEXWVLPSO\JRHVEH\RQGERWKFODVVLFDODQG QRQFODVVLFDO ORJLFV ZKLOH OHDUQLQJ VRPHWKLQJ IURP HDFK 7KHUH LV QRIRUPDOQHVVZLWKRXWLQIRUPDOQHVV²DQGYLFHYHUVD )RU LQVWDQFH H[LVWHQWLDO GLDOHFWLFV FDQ PDNH XVH RI ERWK FODVVLFDO ORJLFV XQGHU FHUWDLQ FRQGLWLRQV HJ HVSHFLDOO\ WKRXJK QRW H[FOXVLYHO\ ZKHQ WKH\ DUH FOHDUFXW HWF DQG QRQFODVVLFDO ORJLFV XQGHU DOWHUQDWLYH FRQGLWLRQV HVSHFLDOO\ WKRXJK QRW H[FOXVLYHO\ ZKHQ WKH\ DUH ³XQNQRZQ´ ³LUUHOHYDQW´ ³DPELJXRXV´ ³SRVVLEOH´ ZLWK ³GLIIHUHQW GHJUHHV RI WUXWK´ HPSLULFDOO\ LQFRQVLVWHQW LQ D GHVLUDEOHZD\HWF :.X )DPLO\ UHVHPEODQFH HJ ORJLFDOQHVVQRQORJLFDOQHVV UDWLRQDOLW\ QRQUDWLRQDOLW\HWF 6RXUFHV)URP)3+0/)3++)3+*$0DQGP\ODWHUERRNV
²7KH([SOLFDELOLW\,QH[SOLFDELOLW\3ULQFLSOH 2QWKH8QGHUO\LQJ0HFKDQLVPVRI7KLQJV %RWKH[SOLFDELOLW\DQGLQH[SOLFDELOLW\DUHSDUWRIWKHXQGHUVWDQGLQJRI WKLQJV 7KHUH LV QR H[SOLFDELOLW\ ZLWKRXW LQH[SOLFDELOLW\²DQG YLFH YHUVD 7KLVSULQFLSOHWHOOVXVWKHGXDOLW\RIWKHUHVHDUFKGLOHPPDLQWKDWLI UHDOLW\ FDQ EH H[SODLQHG LQ VRPH ZD\V LW DOVR KDV LWV RWKHU ZD\V ZKLFKDUHQRWTXLWHH[SODLQDEOHDWDJLYHQSRLQWLQWLPH )DPLO\ UHVHPEODQFH HJ XQGHUO\LQJQHVVUHJXODUQHVV FDXVDWLRQ UHJXODUQHVV FDXVDWLRQFRUUHODWLRQ H[SODQDWLRQGHVFULSWLRQ H[SODQDWLRQQDUUDWLRQH[SODQDWLRQLQWHUSUHWDWLRQHWF 6RXUFHV(VSHFLDOO\IURP)3+8²DQGDOVR)3+&6HHDOVRP\ODWHU ERRNV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW,, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB ,Q5HODWLRQWR0HWKRGFRQW¶G ²7KH3UHGLFWDELOLW\8QSUHGLFWDELOLW\3ULQFLSOH 2QWKH2FFXUUHQFHRI(YHQWV %RWKSUHGLFWDELOLW\DQGXQSUHGLFWDELOLW\KDYHDPDMRUUROHWRSOD\LQ WKH RFFXUUHQFH RI WKLQJV VR WKDW QHLWKHU GHWHUPLQLVP QRU LQGHWHUPLQLVP ZLQV WKH FHQWXULHVROG ILJKW 7KHUH LV QR SUHGLFWDELOLW\ZLWKRXWXQSUHGLFWDELOLW\²DQGYLFHYHUVD 7KHUHDUHHYHQWVZKLFKDUHSUHGLFWDEOHMXVWDVWKHUHDUHWKRVHZKLFK DUH QRW 2U ZKDW LV UHJDUGHG DV XQSUHGLFWDEOH DW RQH SRLQW LQ WLPH PD\ WXUQ RXW WR EH SUHGLFWDEOH ODWHU DQG FRQYHUVHO\ ZKDW LV GHHPHGDVSUHGLFWDEOHPD\WXUQRXWWRQRWEHVRSUHGLFWDEOH(YHQLQ SUHGLFWDELOLW\ RXWFRPHV DUH VXEMHFW WR XQFHUWDLQW\ WKH GHJUHH RI ZKLFKYDULHVIURPFDVHWRFDVH :RUNV RQ FRPSOH[LW\ WKHRU\ DV LQ )& TXDQWXP PHFKDQLFV DV LQ )3+67DQG)3+* IUHTXHQF\SUREDELOLW\VXEMHFWLYHRU%D\HVLDQ SUREDELOLW\ DQG ³VSHFLDO FDXVHV´ DV LQ )3+*$0 MXVW WR QDPH D IHZRIWKHPKDYHFRQWULEXWHGWRWKHXQGHUVWDQGLQJRIXQFHUWDLQLW\ )DPLO\ UHVHPEODQFH HJ VXUHQHVVDUELWUDULQHVV FHUWDLQW\ XQFHUWDLQW\ VXUHQHVVGRXEWIXOQHVV GHWHUPLQLVWLFQHVV LQGHWHUPLQLVWLFQHVV GHWHUPLQLVWLFQHVVUDQGRPQHVV OLNHOLQHVV ULVNLQHVVHWF 6RXUFHV(VSHFLDOO\IURP)& )3+*$06HHDOVRP\ODWHUERRNV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW,,, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB ,Q5HODWLRQWR0HWKRGFRQW¶G ²7KH3DUWLDOLW\7RWDOLW\3ULQFLSOH 2QWKH5HODWLRQVKLSVEHWZHHQ:KROHDQG3DUWV 7KHZKROHLVQRWWKHVXPRIWKHSDUWV7KHUHLVQRSDUWLDOLW\ZLWKRXW WRWDOLW\²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²7KH)LFWLRQ5HDOLW\3ULQFLSOH 2QWKHGLIIHUHQWIDFHVRI5HDOLW\ ,IWKHUHLVUHDOLW\WKHUHLVDOVRILFWLRQHVSHFLDOO\IRUDQ\DJHQWZLWK VRPH NLQG RI LQWHOOLJHQFH OLIH EH LW DERXW KXPDQV DQLPDOV RU ODWHU SRVWKXPDQV 7KHUH LV QR UHDOLW\ ZLWKRXW ILFWLRQ²DQG YLFH YHUVD 7KH GLVWLQFWLRQ EHWZHHQ UHDOLW\ DQG ILFWLRQ LV QRW DEVROXWH VLQFH WKHUH FDQ EH D PL[WXUH RI ERWK )LFWLRQ FDQ KDYH QRQILFWLRQDO HOHPHQWV MXVW DV QRQILFWLRQ FDQ KDYH ILFWLRQDO RQHV 6R WKH GLVWLQFWLRQLVLQGHJUHHQRWLQNLQG )DPLO\ UHVHPEODQFH HJ ILFWLRQQRQILFWLRQ ILFWLRQIDFW LPDJLQDWLRQIDFW LPDJLQDWLRQQRQILFWLRQ VXEMHFWLYLW\ REMHFWLYLW\HWF 6RXUFHV)LUVWIURP)3+/,7 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW,9 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB ,Q5HODWLRQWR0HWKRGFRQW¶G ²7KH$EVROXWHQHVV5HODWLYHQHVV3ULQFLSOH 2QWKH0XOWLSOLFLW\RI7KLQJV 7KHUH LV WKH PXOWLSOLFLW\ RI WKLQJV LQ UHDOLW\ EH WKH\ DERXW HQWLWLHV TXDOLWLHV RU SURSHUWLHV DQG UHODWLRQVKLSV VXFK WKDW ZKDW LV DFFHSWDEOH IURP RQH VWDQGSRLQW PD\ QRW EH VR IURP DQRWKHU )RU LQVWDQFHLIWKHUHLVVRPHWKLQJDEVROXWHWKHUHLVOLNHZLVHVRPHWKLQJ UHODWLYH 7KHUH LV QR DEVROXWHQHVV ZLWKRXW UHODWLYHQHVV²DQG YLFH YHUVD %RWKDEVROXWHQHVVDQGUHODWLYHQHVVKHUHDUHDOVRUHOHYDQWWRGLIIHUHQW PRGDOLWLHV RIWHQ FLWHG LQ WKH OLWHUDWXUH RQ RQWRORJ\ VXFK DV SRVVLELOLW\ HJ VRPHWKLQJ ³FDQ´ KDSSHQ DQG LWV RSSRVLWH HJ LPSRVVLELOLW\ SUREDELOLW\ HJ VRPHWKLQJ ³ZLOO´ KDSSHQ DQG LWV RSSRVLWH HJ LPSUREDELOLW\ DQG QHFHVVLW\ HJ VRPHWKLQJ ³VKRXOG´KDSSHQ DQGLWVRSSRVLWHHJFRQWLQJHQF\ )DPLO\ UHVHPEODQFH HJ XQLIRUPLW\GLYHUVLW\ LQWHUQDOQHVV H[WHUQDOQHVVLPPDQHQFHWUDQVFHQGHQFHLQGHSHQGHQFHGHSHQGHQFH LVRODWHGQHVVLQWHUFRQQHFWLYHQHVVHWF 6RXUFHV)URP)3+.6HHDOVRP\ODWHUERRNV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW9 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB ,Q5HODWLRQWR6WUXFWXUH ²7KH)LQLWHQHVV7UDQVILQLWHQHVV3ULQFLSOH 2QWKH1DWXUHRI1XPEHUV ,IWKHUHDUHILQLWHWKLQJVWKHUHDUHOLNHZLVHWUDQVILQLWHRQHV7KHUHLV QRILQLWHQHVVZLWKRXWWUDQVILQLWHQHVV²DQGYLFHYHUVD 7RDYRLGFRQIXVLRQ P\ XVDJHRIWKH ZRUG ³WUDQVILQLWH´KHUHGLIIHUV UDGLFDOO\ IURP WKH RQH XVHG E\ &DQWRU DQG RWKHU PDWKHPDWLFLDQV IRU³UHODWLYH´LQILQLW\²DQGLVPRUHOLPLWHGLQOLJKWRIWKHSUREOHPV FRQIURQWLQJDQ\DWWHPSWWRXQGHUVWDQGWKHLGHDRILQILQLW\ EHLWE\ LQWXLWLRQ LPDJLQDWLRQ DQG FRQFHSWLRQ DV GHWDLOHGO\ DQDO\]HG LQ 6HFRI)3+* ,QVWHDGE\³WUDQVILQLW\´,DOORZQXPEHUVZKLFKFDQEHPDQ\WLPHV ODUJHU²RU VPDOOHU IRU WKDW PDWWHU²WKDQ WKH ILQLWH WKLQJV WKDW ZH HQFRXQWHULQGDLO\OLIHEXWWKH\GRQRWKDYHWREHUHODWHGWRWKHLGHD RILQILQLW\DWDOOZKLFKPD\QRWH[LVW 2I FRXUVH WKHUH PD\ EH VRPH ERUGHUOLQH FDVHV LQ ZKLFK LW LV QRW FOHDUZKHWKHUWKHQXPEHULQTXHVWLRQLVWUDQVILQLWHLQP\XVDJH RU VLPSO\ D PDWKHPDWLFDO FRQYHQLHQFH $ JRRG H[DPSOH RI D ERUGHUOLQHFDVHLVWKH3ODQFN XQLWRIOHQJWK IRU ³WKHVPDOOHVWVSDFH SRVVLEO\ PHDVXUHG LQ QDWXUH´ ZKLFK LV ³OHVV WKDQ ELOOLRQWKV RI WULOOLRQWKV RI WULOOLRQWKV RI DQ LQFK´ RU VRPHWKLQJ OLNH î í PHWHUV 7KDW VDLG²P\ XVDJH RI ³WUDQVILQLW\´ FDQ DOVR UHVROYH RU EHWWHU GLVVROYH DQ DJHROG SUREOHP LQ SKLORVRSK\ NQRZQ DV ³=HQR V SDUDGR[HV´DVDOUHDG\H[SODLQHGLQ6HFRI)3+* )DPLO\ UHVHPEODQFH HJ ERXQGHGQHVVTXDVLXQERXQGHGQHVV VPDOOQHVVODUJHQHVV PLFURQHVVPDFURQHVV ERXQGHGQHVV XQERXQGHGQHVVHWF 6RXUFH)URP)3+*6HHDOVRP\ODWHUERRNV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW9, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB ,Q5HODWLRQWR6WUXFWXUHFRQW¶G ²7KH6LPSOHQHVV&RPSOLFDWHGQHVV3ULQFLSOH 2QWKH,QWHUFRQQHFWLRQDPRQJ7KLQJV %RWKVLPSOHQHVVDQGFRPSOLFDWHGQHVVDUHYLWDOZLWKRXWIDYRULQJRQH RYHUWKHRWKHULQWKDWHDFKLVXWLOL]HGGHSHQGLQJRQWKHEDVLVRIWKH SHUVSHFWLYHV RI QDWXUH WKH PLQG FXOWXUH DQG VRFLHW\ $QG HYHQ ZKHQ D FRPELQDWLRQ RI WKHP LV SUHIHUUHG WKH GLOHPPD LV RQO\ VKLIWHGWRDFRPELQDWLRQDOGHJUHHRIFRQFHUQ7KHUHLVQRVLPSOHQHVV ZLWKRXWFRPSOLFDWHGQHVV²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²7KH'HQVHQHVV(PSWLQHVV3ULQFLSOH 2QWKH'LVWULEXWLRQRI(QWLWLHVLQ6SDFH %RWK GHQVLW\ DQG YRLG DUH QHHGHG LQ UHODWLRQ WR WKH PLQG QDWXUH FXOWXUHDQGVRFLHW\DOEHLWLQGLIIHUHQWZD\V7KHUHLVQRGHQVHQHVV ZLWKRXWHPSWLQHVV²DQGYLFHYHUVD )RUFODULW\WKHWHUP³YRLG´LVXVHGKHUHRQO\DVDQDSSUR[LPDWLRQRI HPSWLQHVVGHSHQGLQJRQWKHGHJUHHRIWKHODFNRIGHQVLW\ VLQFHLQ SK\VLFVLWLVZHOONQRZQWKDW³HPSW\´VSDFHLVQRWUHDOO\HPSW\DOO WKH ZD\ EHFDXVH LW FDQ EH IXOO RI HQHUJ\ HJ UDQGRP TXDQWXP IOXFWXDWLRQVDWWKHVXEDWRPLFOHYHODQGIRUWKDWPDWWHUGDUNHQHUJ\ LQ WKH XQLYHUVH DQG PDWWHU HJ GLIIHUHQW YHUVLRQV RI VXEDWRPLF SDUWLFOHVDQGIRUWKDWPDWWHUGDUNPDWWHULQWKHXQLYHUVH )DPLO\ UHVHPEODQFH HJ IXOOQHVVYRLGQHVV QHDUQHVVIDUQHVV FRQFHQWUDWLRQGLVSHUVLRQGHQVHQHVVQRWKLQJQHVVHWF 6RXUFHV)LUVWZRUNHGRXWLQ)3+836HHDOVRP\ODWHUERRNV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW9,, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB ,Q5HODWLRQWR6WUXFWXUHFRQW¶G ²7KH3UHFLVHQHVV9DJXHQHVV3ULQFLSOH 2QWKH5HILQHPHQWRI7KLQJV %RWKSUHFLVHQHVVDQGYDJXHQHVVDUHLPSRUWDQWQRWWKDWRQHLVEHWWHU WKDQ WKH RWKHU EXW WKDW ERWK DUH XVHG LQ GLIIHUHQW GHJUHHV RI SUHIHUHQFH LQ DFFRUGDQFH WR WKH FRQWH[WXDO DSSOLFDWLRQ IURP WKH SHUVSHFWLYHV RI QDWXUH WKH PLQG FXOWXUH DQG VRFLHW\ (YHQ ZKHQ ERWKDUHXVHGLQDFRPELQDWLRQWKHGLOHPPDLVVKLIWHGLQVWHDGWRRQH RI FRPELQDWLRQDO FRQFHUQ 7KHUH LV QR SUHFLVHQHVV ZLWKRXW YDJXHQHVV²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
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW9,,, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB ,Q5HODWLRQWR6WUXFWXUHFRQW¶G ²7KH2SHQQHVV+LGGHQQHVV3ULQFLSOH 2QWKH'HWHFWLRQRI7KLQJV 5HDOLW\KDVLWVKLGGHQIDFHMXVWDVLWLVRSHQWRRXWVLGHYLHZLQVRPH RWKHU ZD\V 7KHUH LV QR RSHQQHVV ZLWKRXW KLGGHQQHVV²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²7KH&KDQJH&RQVWDQF\3ULQFLSOH 2QWKH$OWHUDWLRQRI7KLQJV &KDQJHRFFXUVRYHUWLPHDOWKRXJKFRQVWDQF\LVDOVRDOORZHG7KHUH LVQRFKDQJHZLWKRXWFRQVWDQF\²DQGYLFHYHUVD $V\PPHWU\XQGHUJRHVFKDQJHVRYHUWLPHVRGRHVV\PPHWU\ 2OGSOD\HUVIDGHDZD\DQGQHZRQHVHPHUJHVZLWKHYHUQHZFDXVHV DQGHYHUQHZIRUPV )DPLO\ UHVHPEODQFH HJ G\QDPLFQHVVVWDWLFQHVV LQVWDELOLW\ VWDELOLW\HWF 6RXUFHV)LUVWQDPHGLQ %&3&(VSHFLDOO\IURP)+&)&'DQG )3+&6HHDOVRRWKHUERRNVRIPLQHIURPWKDWSRLQWRQ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW,; BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB ,Q5HODWLRQWR3URFHVVFRQW¶G ²7KH([SDQVLRQ&RQWUDFWLRQ3ULQFLSOH 2QWKH*URZWKRI7KLQJV (QWLWLHVLQWKH ZRUOGFDQERWKH[SDQGLQVRPH ZD\VDQGFRQWUDFWLQ RWKHU RQHV DV SDUW RI WKHLU QDWXUH 7KHUH LV QR H[SDQVLRQ ZLWKRXW FRQWUDFWLRQ²DQGYLFHYHUVD )RULQVWDQFHLQWKHFRQWH[WRIDQRPDORXVH[SHULHQFHRQHRILWVPRVW IDVFLQDWLQJ H[SUHVVLRQV LV QRQH RWKHU WKDQ WKH DQDO\VLV RI GLIIHUHQW FDXVHVRIWKHVORZEXWVWHDG\H[SDQVLRQDQGIXUWKHUPRUHLISXWLQ DGLIIHUHQWZD\XQIROGLQJ RIXQFRQVFLRXVQHVV )DPLO\ UHVHPEODQFH HJ FRQTXHVWDXWDUN\ ULVHIDOO RU XSGRZQ VSUHDGVKULQNH[WHQGLQJQHVVVKRUWHQLQJQHVVHWF 6RXUFHV(VSHFLDOO\IURP)3+86HHDOVRP\ODWHUERRNV ²7KH6ORZQHVV4XLFNQHVV3ULQFLSOH 2QWKH6SHHGRI&KDQJH %RWK VORZQHVV DQG TXLFNQHVV FRH[LVW ZLWK WKHLU RZQ LQWHUQDO WHQVLRQWRWKHH[WHQWWKDWHDFKILJKWVIRULWVRZQUHOHYDQFHZLWKWKH RWKHULQDFFRUGDQFHWRWKHSHUVSHFWLYHVRIQDWXUHWKHPLQGFXOWXUH DQG VRFLHW\ ZLWKRXW RQH EHLQJ WKH YLFWRU DQG WKH RWKHU EHLQJ WKH YDQTXLVKHG LQ WKH ORQJ KDXO (YHQ ZKHQ ERWK DUH FKRVHQ LQ RWKHU FDVHV WKLV GLOHPPD LV RQO\ WUDQVIHUUHG LQWR VRPHWKLQJ HOVH ZLWK D FRPELQDWLRQDOFKDUDFWHU7KHUHLVQRVORZQHVVZLWKRXWTXLFNQHVV² DQGYLFHYHUVD ,QUHODWLRQWRWD[RQRP\TXLFNQHVV KDVLWVHIILFLHQW XVDELOLW\MXVWDV VORZQHVV KDV LWV DHVWKHWLF DSSHDO IRU LQVWDQFH $QG LQ UHODWLRQ WR QHWZRUN TXLFNQHVV KDV LWV DGYHQWXURXV UHDGLQHVV MXVW DV VORZQHVV KDVLWVULVNDGYHUVHFRQYHQLHQFHIRULQVWDQFH )DPLO\ UHVHPEODQFH HJ LQFRQYHQLHQFHFRQYHQLHQFH SDVVLYHQHVV DFWLYHQHVVQHVV JUDGXDOQHVVDEUXSWQHVV GHFHOHUDWLRQDFFHOHUDWLRQ HWF 6RXUFHV(VSHFLDOO\IURP),$6HHDOVRP\ODWHUERRNV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW; BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB ,Q5HODWLRQWR3URFHVVFRQW¶G ²7KH2UGHU&KDRV3ULQFLSOH 2QWKH3DWWHUQRI7KLQJV %RWKRUGHUDQGFKDRVDUHYLWDOLQWKHSURFHVVRIFKDQJHLQWKHZRUOG 7KHSUHIHUHQFHIRURUGHULVELDVHGVLQFHLWGRHVQRWJLYHVXIILFLHQW DWWHQWLRQWRWKHYLWDOUROHRIFKDRVLQWKHWUDQVIRUPDWLRQRIWKHZRUOG ZLWKRXWVRPHKRZUHGXFLQJLWIRUWKHXQGHUVWDQGLQJRIRUGHU 7KHUH LVQRRUGHUZLWKRXWFKDRV²DQGYLFHYHUVD 7KHVFLHQWLILFVHDUFKIRURUGHULQWKHZRUOGLVRIWHQDKLGGHQELDVLQ LWVRQWRORJLFDOREVHVVLRQZLWKRUGHUVLQFHFKDRVLVRIWHQWUHDWHGDV WKH ³EDG´ JX\ ZLWK RUGHU DV WKH ³JRRG´ JX\ IRU WKH HQG JRDO RI VFLHQFH 1HLWKHURUGHUQRUFKDRVLVWKHILQDOHQGRIWKHZRUOGDQGRQHLVQRWWR EHWUHDWHGDVWKHPHDQVIRUWKHRWKHULQWKHWUDQVIRUPDWLRQRIWKLQJV %RWKDUHIXQGDPHQWDOLQWKHLUUHFXUUHQWGLDOHFWLFDOLQWHUDFWLRQVZLWK HDFKRWKHURYHUWLPHZLWKRXWUHGXFLQJRQHIRUWKHRWKHU )DPLO\ UHVHPEODQFH HJ ODZIXOQHVVGLVRUGHU RUGHUGLVRUGHU OLQHDULW\QRQOLQHDULW\OLQHDULW\LUUHYHUVDOQHVVSDWWHUQFKDRVHWF 6RXUFHV(VSHFLDOO\IURP)&6HHDOVRP\ODWHUERRNV
,Q5HODWLRQWR$JHQF\ ²7KH6RIWQHVV+DUGQHVV3ULQFLSOH 2QWKH)RUFHRI&KDQJH 7KLV KDV WR GR ZLWK WKH IRUFH RI FKDQJH XQGHU WKH FDWHJRU\ DERXW DJHQF\LQH[LVWHQWLDOGLDOHFWLFVLQWKDWDQ\FKDQJHE\DQDJHQWEHLW RUJDQLF OLNH KXPDQV RU QRQRUJDQLF OLNH QDWXUDO REMHFWV FDQ RFFXU LQ D IRUFHIXO DJJUHVVLYH RU JHQWOH SDFLILF ZD\ ZKLFK FDQ FRPHLQDOOVKDSHVDQGVL]HVRIFRXUVH7KHUHLVQRVRIWQHVVZLWKRXW KDUGQHVV²DQGYLFHYHUVD )DPLO\ UHVHPEODQFH HJ SHDFHIXOQHVVYLROHQFH FRRSHUDWLRQ FRPSHWLWLRQ GRYLVKQHVVKDZNLVKQHVV UHZDUGSXQLVKPHQW SHDFH ZDUSDFLILFLW\DJJUHVVLRQDFFHSWDQFHGLVFULPLQDWLRQHWF 6RXUFHV(VSHFLDOO\IURP$/'6HHDOVRP\ODWHUERRNV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FRQWLQXHGRQQH[WSDJH
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW;, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
,Q5HODWLRQWR$JHQF\FRQW¶G ²7KH6\PPHWU\$V\PPHWU\3ULQFLSOH 2QWKH5HODWLRQVKLSVDPRQJ([LVWHQWV 7KHUHLVQRV\PPHWU\ZLWKRXWDV\PPHWU\²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
7KH)XWXUHRI3RVW+XPDQ3HUIRUPLQJ$UWV
7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW;,, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
,Q5HODWLRQWR$JHQF\FRQW¶G ²7KH(YROXWLRQ7UDQVIRUPDWLRQ3ULQFLSOH 2QWKH0XOWLSOH.LQGVRI$JHQF\ 7KLV SULQFLSOH DQG WKH V\PPHWU\DV\PPHWU\ SULQFLSOH DUH ERWK DERXW WKH DJHQF\ RI FKDQJH 7KH ZRUG ³DJHQF\´ LQ D IRUPDO GHILQLWLRQ UHIHUV WR ³D SHUVRQ RU WKLQJ WKURXJK ZKLFK SRZHU LV H[HUWHGRUDQHQGLVDFKLHYHG´0:'E ,WWKHUHIRUHGRHVQRW KDYHWRQHFHVVDULO\LQYROYHDQLQWHOOLJHQWOLIHIRUP %HFDXVHRIWKLVGXDOPHDQLQJLQDJHQF\WKHHYROXWLRQWUDQVIRUPDWLRQ SULQFLSOHLVPRUHFRQFHUQHGZLWKWKHPXOWLSOHNLQGVRIDJHQF\WKDW LVERWKDERXWWKHHYROXWLRQLQWKHVWDWHRIQDWXUHHJDQREMHFWRI QDWXUDO EHDXW\ DQG WKH WUDQVIRUPDWLRQ LQ WKH ZRUOG RI LQWHOOLJHQW OLIHIRUPV HJ D ZRUN RI DUW DQ DLUFRQGLWLRQHU HWF 7KHUH LV QR HYROXWLRQZLWKRXWWUDQVIRUPDWLRQ²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
&KDSWHU&RQFOXVLRQ²7KH)XWXUHRI3HUIRUPLQJ$UWV
7DEOH7KH6\QWD[RI([LVWHQWLDO'LDOHFWLFV, 7KH3ULQFLSOHV 3DUW;,,, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
,Q5HODWLRQWR$JHQF\FRQW¶G ²7KH&RQYHQWLRQ1RYHOW\3ULQFLSOH 2QWKH1DWXUHRI&UHDWLYH7KLQNLQJ ,IWKHUHLVFRQYHQWLRQDOZLVGRPWKHUHLVOLNHZLVHQRYHOFKDOOHQJHWR WKHH[WHQWWKDWERWKFRQYHUJHQWDQGGLYHUJHQWWKLQNLQJDUHSDUWRI OLIH7KHUHLVQRFRQYHQWLRQZLWKRXWQRYHOW\²DQGYLFHYHUVD ,QDGGLWLRQLQWKLVFRQWH[WRIWKHFRQYHQWLRQQRYHOW\SULQFLSOHWKHUH DUHLQWKHDEVHQFHRIEHWWHUZRUGVZKDW,ZDQWWRFDOOD FUHDWLYH WHFKQLTXHV DQG E FUHDWLYH WUDLWV ZKLFK ZKHQ VDWLVILHG²LQ UHODWLRQ WR WKH ODUJHU FRQWH[W RI WKH PLQG QDWXUH VRFLHW\ DQG FXOWXUH²FDQ EH XVHG WR HQKDQFH FUHDWLYH ZRUNV 7KH OLVW RI FUHDWLYH WHFKQLTXHV DQG WUDLWV DV VXPPDUL]HG LQ 7DEOH RI )3+&7 DUH QRW H[KDXVWLYH RI FRXUVH EXW WKH H[DPSOHV KHUH FRQVWLWXWH D JUHDW EHJLQQLQJ RI XQGHUVWDQGLQJ WKH VWUXFWXUH RI FUHDWLYHWKLQNLQJ