Brooklyn Law Review Brooklyn Law Review
Volume 89 Issue 1 Article 8
12-7-2023
Kneecapping Scalping: Ending the Predatory Scourge Plaguing E-Kneecapping Scalping: Ending the Predatory Scourge Plaguing E-
Commerce Using Unfair Practice Frameworks Commerce Using Unfair Practice Frameworks
Zachary Michael Elvove
Follow this and additional works at: https://brooklynworks.brooklaw.edu/blr
Part of the Antitrust and Trade Regulation Commons, Commercial Law Commons, Consumer
Protection Law Commons, Law and Economics Commons, and the Legislation Commons
Recommended Citation Recommended Citation
Zachary M. Elvove,
Kneecapping Scalping: Ending the Predatory Scourge Plaguing E-Commerce Using
Unfair Practice Frameworks
, 89 Brook. L. Rev. 329 (2023).
Available at: https://brooklynworks.brooklaw.edu/blr/vol89/iss1/8
This Note is brought to you for free and open access by the Law Journals at BrooklynWorks. It has been accepted
for inclusion in Brooklyn Law Review by an authorized editor of BrooklynWorks.

.QHHFDSSLQJ 6FDOSLQJ
(1',1* 7+( 35('$725< 6&285*( 3/$*8,1*
(&200(5&( 86,1* 81)$,5 35$&7,&(
)5$0(:25.6
,1752'8&7,21
´, MXVW QHYHU WKRXJKW ,·G EH LQ WKLV SRVLWLRQ , QHYHU
WKRXJKW ,·G EH LQ D SODFH ZKHUH , GRQ·W NQRZ LI ,·P JRLQJ WR KDYH
WKH IRRG WR IHHG P\ EDE\µ
%ULGJHW (VKHOPDQ H[SUHVVHG WKH JXW
ZUHQFKLQJ GHVSHUDWLRQ H[SHULHQFHG E\ SDUHQWV DFURVV WKH 8QLWHG
6WDWHV DV D EDE\ IRUPXOD VKRUWDJH H[SORGHG LQWR D QDWLRQDO
FULVLV
$OWKRXJK EDE\ IRUPXOD LV W\SLFDOO\ RXW RI VWRFN  SHUFHQW
RI WKH WLPH WKDW DYHUDJH LQFUHDVHG IURP  SHUFHQW RQ 0D\ 
 WR  SHUFHQW RQ 0D\ 
7KH DVWURQRPLFDO GHFOLQH LQ
LQYHQWRULHV OHG WKH )HGHUDO 7UDGH &RPPLVVLRQ )7& WR ODXQFK
D FLYLO LQYHVWLJDWLRQ LQWR WKH VKRUWDJH
)7& &KDLU /LQD .KDQ
YRZHG ´WR IXOO\ HQIRUFH WKH ODZ DJDLQVW DQ\RQH ZKRµ H[SORLWHG
IDPLOLHV GHVSHUDWHO\ VHHNLQJ LQIDQW IRUPXOD HVSHFLDOO\ ´WKRVH
ZKR XVH RQOLQH ¶ERWV· WR DXWRPDWLFDOO\ SXUFKDVH DQG WKHQ UHVHOO
$QG\ %DQNHU 6W /RXLV 0RPV 6ZDS %DE\ )RUPXOD RQ )DFHERRN $PLG
1DWLRQDO 6KRUWDJH)
2;12: 0D\    30 KWWSVIR[QRZFRP
QHZVPLVVRXULVWORXLVPRPVVZDSEDE\IRUPXODRQIDFHERRNDPLGQDWLRQDOVKRUWDJH
>KWWSVSHUPDFF)1$)7@ YLGHR LQWHUYLHZ
,G (GJDU 6DQGRYDO $PDQGD 0RUULV 0DGHOHLQH 1JR $ %DE\ )RUPXOD
6KRUWDJH /HDYHV 'HVSHUDWH 3DUHQWV 6HDUFKLQJ IRU )RRG1<7
,0(6 0D\  
KWWSVZZZQ\WLPHVFRPXVEDE\IRUPXODVKRUWDJHKWPO
>KWWSVSHUPDFF3'9'<4+@
6WHSKDQLH 6WDPP %DE\ )RUPXOD 6KRUWDJH 6WXQV 6WDWHV ,QFOXGLQJ
7HQQHVVHH .DQVDV DQG 'HODZDUH:
$// 67 - 0D\    $0
KWWSVRQZVMFRP4+ID+* >KWWSVSHUPDFF:<%$+$@ 'DQLHOOD *HQRYHVH %DE\
)RUPXOD 6KRUWDJH 2XWRI6WRFN 5DWHV 6XUJH WR )
2; %86 0D\    30
KWWSVI[QZV4%SX, >KWWSVSHUPDFF6-&+654@
&DUO : +LWWLQJHU 'DQLHO .DXIPDQ -XOLD 3HUOPDQ 0DUF 6FKLOGNUDXW $O\VH
6WDFK 9LFWRULD :HDWKHUIRUG %DE\ )RUPXOD 6KRUWDJH 6XEMHFW RI )7& 6FUXWLQ\%
$.(5
+267(7/(5 -XQH   KWWSVZZZEDNHUODZFRPLQVLJKWVEDE\IRUPXOD
VKRUWDJHVXEMHFWRIIWFVFUXWLQ\ >KWWSVSHUPDFF83$/5:.@
 %522./<1 /$: 5(9,(: >9RO 
IRUPXOD DW H[RUELWDQW SULFHVµ
7KXV WKH SUDFWLFH RI VFDOSLQJ
³
UDWKHU WKDQ VXSSO\ PDQXIDFWXULQJ RU WUDGH LVVXHV³ZRUVHQHG
WKH FULVLV ZKLOH H[LVWLQJ ODZV UHJXODWLRQV DQG DQWLVFDOSLQJ
IUDPHZRUNV
IXQGDPHQWDOO\ IDLOHG WR GHWHU WKH *RUGRQ *HNNRV
RI WKH ZRUOG IURP SUH\LQJ RQ FRQVXPHUV DQG LQIOLFWLQJ
LUUHSDUDEOH LQMXU\
$OWKRXJK WKH EDE\ IRUPXOD VKRUWDJH VRPHZKDW
LPSURYHG
LW ´H[DFWHG D KHDY\ HPRWLRQDOµ WROO

DQG KDUGO\
UHSUHVHQWHG WKH RQO\ KXQWLQJ JURXQG IRU VFDOSHUV³WKH SUDFWLFH
SRVHV D SHUHQQLDO SUREOHP

7KH WDUJHWV RI VFDOSLQJ DUH
/LQD 0 .KDQ 6WDWHPHQW RI &KDLU /LQD 0 .KDQ 5HJDUGLQJ 6ROLFLWDWLRQ IRU
3XEOLF &RPPHQWV RQ WKH ,QIDQW )RUPXOD 6KRUWDJH)
('75$'( &200·1 0D\  
KWWSVZZZIWFJRYV\VWHPILOHVIWFBJRYSGI6WDWHPHQWRI&KDLU/LQD0
.KDQUH6ROLFLWDWLRQIRU3XEOLF&RPPHQWVRQ,QIDQW)RU
PXOD6KRUWDJHBBILQDOSGI >KWWSVSHUPDFF0<;(;@
7UDGLWLRQDOO\ VFDOSLQJ GHQRWHV D VSHFLILF IRUP RI DUELWUDJH ZKHUHE\
SHUVRQV SXUFKDVH WLFNHWV DQG WKHQ UHVHOO WKHP DW SULFHV VXEVWDQWLDOO\ LI QRW
H[RUELWDQWO\ JUHDWHU WKDQ IDFH YDOXH RQFH WKH\ DQG RWKHU EX\HUV H[KDXVWHG VXSSO\ D
WLFNHW VFDOSHU GHQRWHV D SHUVRQ HQJDJHG LQ VXFK DFWLYLWLHV 6FDOSLQJ%
/$&.·6 /$:
',&7,21$5< WK HG  $UORWWD Y %UDGOH\ &WU  )G   WK &LU 
+RZHYHU WKLV XQVFUXSXORXV SUDFWLFH H[WHQGV IDU EH\RQG WLFNHW PDUNHWV DQGDIIHFWVD
EURDG VZDWK RI FRPPRGLWLHV WKHUHIRUH KHUHLQDIWHU LQ WKLV QRWH ´VFDOSLQJµ DQG ´VFDOSHUVµ
UHIHUV WR WKH SUHGDWRU\ SUDFWLFH UHJDUGOHVV RI WKH LQGXVWU\
$OWKRXJK SULFH JRXJLQJ ODZV WDUJHW WKLV W\SH RI FULVLV WKH\ RIWHQ UHTXLUH DQ
HPHUJHQF\ GHFODUDWLRQ EHIRUH WKH\ WDNH HIIHFW 6HH HJ&
$/3(1$/ &2'( D E
FXUUHQW ZLWK &K RI ² VW ([HFXWLYH 6HVVLRQ DQG XUJHQF\ OHJLVODWLRQ WKURXJK
&K  RI  5HJXODU 6HVVLRQ 1< *
(1%86/$: U 0F.LQQH\ 
0RUHRYHU SULFH JRXJLQJ ODZV RIWHQ IDLO WR IL[ WKH LVVXH 6HH -XOLD /HYLWDQ 3ULFH *RXJLQJ
WKH $PD]RQ 0DUNHWSODFH DQG WKH 'RUPDQW &RPPHUFH &ODXVH&
2/80-/62&
3
52%6    6SHQFHU :DUNHQWLQ 3ULFH *RXJLQJ LQ WKH 7LPH RI &29,'
+RZ 86 $QWL3ULFH *RXJLQJ /DZV )DLO &RQVXPHUV0
'-,17·/ /  ² 
0DQ\ SHRSOH FRUUHFWO\ DUJXHG WKDW WKH LQIDQW IRUPXOD FULVLV ODUJHO\ VWHPPHG
IURP PDQXIDFWXULQJ IDLOXUH DQG WUDGH UHVWULFWLRQV :KLOH WKRVH IDFWRUV XQGRXEWHGO\ LQLWLDWHG
WKH EDE\ IRUPXOD VKRUWDJH PDMRU RYHUVLJKWV LQ ERWK SXEOLF DQG SULYDWH DQWLVFDOSLQJ RU
FRQVXPHU SURWHFWLRQ IUDPHZRUNV GHHSHQHG WKH FULVLV 6HH HJ 'HUHN 7KRPSVRQ :KDW·V
%HKLQG $PHULFD·V 6KRFNLQJ %DE\)RUPXOD 6KRUWDJH"$
7/$17,& 0D\  
KWWSVZZZWKHDWODQWLFFRPLGHDVDUFKLYHEDE\IRUPXODVKRUWDJHDEERWWUHFDOO
 >KWWSVSHUPDFF0'985@ *DEULHOOD %HDXPRQW6PLWK 5RFND%\H 7UDGH
5HVWULFWLRQV RQ %DE\ )RUPXOD&
$72 ,167 0D\    30 KWWSVZZZFDWR
RUJEORJURFNE\HWUDGHUHVWULFWLRQVEDE\IRUPXOD >KWWSVSHUPDFF6*@ /DXUHQ
'HEWHU %DE\ )RUPXOD 6KRUWDJH :RUVHQHG E\ 6KRSSLQJ %RWV %X\LQJ XS ,QYHQWRU\
)
25%(6 0D\    30 KWWSVZZZIRUEHVFRPVLWHVODXUHQGHEWHU
EDE\IRUPXODVKRUWDJHERWVVQDSXSLQYHQWRU\ >KWWSVSHUPDFF360
++--@ :LOO *UHHQ +RZ ¶*ULQFK %RWV· $UH &RUUXSWLQJ <RXU 6WRFN&
21680(5 0*07
$XJ   KWWSVZZZFLSVRUJVXSSO\PDQDJHPHQWDQDO\VLVDXJXVWKRZ
JULQFKERWVDUHFRUUXSWLQJ\RXUVWRFN >KWWSVSHUPDFF$3&$9@
-XOLH &UHVZHOO 0LFKDHO &RUNHU\ 6WRUH 6KHOYHV $UH 1R /RQJHU %DUH EXW
%DE\ )RUPXOD 5HPDLQV LQ 6KRUW 6XSSO\1<7
,0(6 6HSW  
KWWSVQ\WLPV8Z$4 >KWWSVSHUPDFF-9*5:.@

3DULMD .DYLODQ] )7& ,QYHVWLJDWHV $PHULFD·V %DE\ )RUPXOD 6KRUWDJH&11
XSGDWHG 0D\    30 KWWSVZZZFQQFRPEXVLQHVVEDE\
IRUPXODIWFLQYHVWLJDWLRQ >KWWSVSHUPDFF6(57&%5@

6WHSKHQ +DSSHO  0DULDQQH 0 -HQQLQJV 7KH (LJKW 3ULQFLSOHV RI WKH
0LFURHFRQRPLF DQG 5HJXODWRU\ )XWXUH RI 7LFNHW 6FDOSLQJ 7LFNHW %URNHUV DQG 6HFRQGDU\
7LFNHW 0DUNHWV-/&
20  ² 
@ .1((&$33,1* 6&$/3,1* 
LQFDOFXODEOH³QHLWKHU ERUGHUV QRU FDWHJRU\ OLPLWV LWV UHDFK

7KH
JURZWK LQ VWUHHWZHDU DQG VQHDNHU FXOWXUH GUHZ WKH DWWHQWLRQ RI
VFDOSHUV ZKR XVH DXWRPDWHG ERWV EHFDXVH WKH UHVDOH PDUNHW IRU
OLPLWHGUXQ VQHDNHUV ´FRXOG SRWHQWLDOO\ UHDFK  ELOOLRQ E\
µ

7KH IDVKLRQ LQGXVWU\ SURYLGHG DQ HTXDOO\ OXFUDWLYH
WDUJHW IRU RQOLQH DQG EULFNDQGPRUWDU VFDOSLQJ

,Q UHFHQW
\HDUV VFDOSHUV UHOHQWOHVVO\ WDUJHWHG QHZ YLGHR JDPH FRQVROHV
DQG *UDSKLFV 3URFHVVLQJ 8QLWV *38V³D KRWO\ GHPDQGHG
WHFKQRORJ\ XVHG E\ $, VHUYLFH SURYLGHUV 3& JDPHUV FORXG VHUYHU
IDUPV DQG FU\SWRFXUUHQF\ PLQHUV

-XVW DV ZLWK EDE\ IRUPXOD
VFDOSHUV H[DFHUEDWHG WKH RQJRLQJ JOREDO FKLS VKRUWDJH FDXVHG E\
WKH &29,' SDQGHPLF DQG GURYH XS SULFHV IRU ERWK EX\HUV DQG
VHOOHUV

7KH FKLS VKRUWDJH OHG WR KLJKHU SULFHV IRU QHZ DQG XVHG
FDUV ZKLFK LQ WXUQ FUHDWHG DQRWKHU WDUJHW IRU VFDOSHUV

,Q
UHVSRQVH WR WKLV EOLJKW )RUG SURKLELWHG EX\HUV RI WKH QHZ HOHFWULF
) /LJKWQLQJ IURP UHVHOOLQJ WKH YHKLFOH IRU RQH \HDU DQG
*HQHUDO 0RWRUV IROORZHG VXLW

)HDULQJ LUUHSDUDEOH GDPDJH WR
FRQVXPHU FRQILGHQFH 7R\RWD $XVWUDOLD EHJJHG OHJLVODWRUV WR IL[
WKH GLUH VFDOSLQJ SUREOHP EHFDXVH ´>7R\RWD LV@ DOO DERXW

6HH LQIUD QRWHV ² DQG DFFRPSDQ\LQJ WH[W

$OIUHG 1J 7KHVH %RW 6KRSSHUV DUH (YHU\ 6QHDNHUKHDG·V 1LJKWPDUH&1(7
2FW    $0 KWWSVFQHWFRGTIGW4 >KWWSVSHUPDFF+059*8$@ 5HJJLH
:DGH 7KH *OREDO 6QHDNHU 5HVDOH 0DUNHW &RXOG 5HDFK  %LOOLRQ E\ <
$+22),1
-XO\   KWWSV\KRRLWK+Z0+3 >KWWSVSHUPDFF$5(9+@ VHH JHQHUDOO\
6DUDK ( 0LFKLJDQ 6QHDNHU %RWV %RWQHWV 0DOLFLRXV 'LJLWDO 7RROV WKDW +DUP 5DWKHU
WKDQ +HOS (&RPPHUFH5
87*(56 %86 / -   GLVFXVVLQJ VFDOSLQJ VQHDNHUV

0DULVVD 3LD]ROOD 5HWDLO $UELWUDJH 7KH 7LFNHW 6FDOSLQJ RI )DVKLRQ)2; %86
-DQ    30 KWWSVI[QZV'W/)S6 >KWWSVSHUPDFF)-$$(@

%HQ *LOEHUW 2QH 5HVHOOHU *URXS 6QDJJHG 1HDUO\  3OD\6WDWLRQ
&RQVROHV DQG WKH 5HVDOH 0DUNHW 0LJKW %H WKH 2QO\ 3ODFH WR 6FRUH 2QH $IWHU ,W 6ROG 2XW
(YHU\ZKHUH 2QOLQH%
86,16,'(5 1RY    $0 KWWSVZZZ
EXVLQHVVLQVLGHUFRPSOD\VWDWLRQODXQFKGD\XVHXURSHIORRGHGE\UHVHOOHUERWV
 >KWWSVSHUPDFF%3(=-1*@ -RKQ ( 'XQQ :KR·V %X\LQJ $OO WKH *UDSKLFV &DUGV"
%DG 6FDOSLQJ %RWV 7KDW·V :KR)
25%(6 $SU    $0 KWWSVZZZ
IRUEHVFRPVLWHVMRKQGXQQZKRVEX\LQJDOOWKHJUDSKLFVFDUGVEDGVFDOSLQJ
ERWVWKDWVZKR"VK EG >KWWSVSHUPDFF.<5(.@

6FRWW %ODLU 7KH &KLS 6KRUWDJH 5XQV 'HHSHU 7KDQ <RX 7KLQN +HUH·V
(YHU\WKLQJ <RX 1HHG WR .QRZ7
(&+5$'$5 1RY   KWWSVZZZ
WHFKUDGDUFRPQHZVWKHFKLSVKRUWDJHUXQVGHHSHUWKDQ\RXWKLQNKHUHVHYHU\WKLQJ
\RXQHHGWRNQRZ>KWWSVSHUPDFF&)3-99@ -DFRE 5RDFK $ &RPSOHWH
&KURQRORJLFDO +LVWRU\ RI WKH &DWDVWURSKLF *38 6KRUWDJH'
,*,775(1'6 -XO\  
KWWSVZZZGLJLWDOWUHQGVFRPFRPSXWLQJFDWDVWURSKLFJSXVKRUWDJHDFKURQRORJLFDO
KLVWRU\ >KWWSVSHUPDFF-=06*..@

6HDQ 2·.DQH 7KH &KLS 6KRUWDJH LV 0DNLQJ &DUV 0RUH ([SHQVLYH9(5*(
0D\    $0 KWWSVZZZWKHYHUJHFRPVHPLFRQGXFWRU
VKRUWDJHQHZFDUWUXFNSULFHVVDOHV >KWWSVSHUPDFF=(5$@

6HDQ 6]\PNRZVNL )RUG 'HDOHUV &DQ %DQ ) /LJKWQLQJ &XVWRPHUV IURP
5HVHOOLQJ 7UXFNV WR 'LVFRXUDJH 6FDOSHUV &1(7 -DQ    $0
KWWSVFQHWFR%0)('. >KWWSVSHUPDFF<*;).5&@ 1DWKDQLHO 0RWW 5HSRUW *0
,V 8VLQJ :DUUDQWLHV WR 'LVFRXUDJH +XPPHU (9 6FDOSLQJ3&0
$* -XO\  
KWWSVZZZSFPDJFRPQHZVUHSRUWJPLVXVLQJZDUUDQWLHVWRGLVFRXUDJHKXPPHUHY
VFDOSLQJ >KWWSVSHUPDFF3(647@
 %522./<1 /$: 5(9,(: >9RO 
SURWHFWLQJ FRQVXPHUVµ DQG ´ZDQW>V@ FXVWRPHUV WR SD\ D IDLU DQG
UHDVRQDEOH SULFH EDVHG RQ WKH PDQXIDFWXUHU·V UHWDLO SULFHµ

&RPSDQLHV ZLWK LQHIIHFWLYH DQWLVFDOSLQJ VDIHJXDUGV VXIIHUHG
UHSXWDWLRQDO KDUP ZLWK VRPH SXEOLFO\ DSRORJL]LQJ WR
FRQVXPHUV

6FDOSHUV RSSRUWXQLVWLFDOO\ WDUJHWHG YDULRXV
PDUNHWV LQ SXUVXLW RI QHZ LQYHVWPHQW LQVWUXPHQWV DQG KDUPHG
EX\HUV DQG VHOOHUV E\ FLUFXPYHQWLQJ GLJLWDO SURWHFWLRQV

7KH SODJXH RI SUHGDWRU\ SULFLQJ SUDFWLFHV LV D SUREOHP E\
GHVLJQ ([LVWLQJ DQWLVFDOSLQJ ODZV SULPDULO\ WDUJHW UHVDOH LQ WKH
 ELOOLRQ WLFNHW PDUNHW HJ OLYH HYHQWV DQG VSRUWV

7KLV
DSSURDFK UHIOHFWV KRZ SROLF\PDNHUV QDUURZO\ OLPLW
LQWHUYHQWLRQV LQWR WKH PDUNHWSODFH HVSHFLDOO\ ZKHQ FRQFHUQHG
WKDW VXFK DFWLRQV FRXOG LQWHUIHUH ZLWK ´SXUH IUHHPDUNHW
EHKDYLRU DQG XQEULGOHG FDSLWDOLVPµ

7KH VXSHUFKDUJHG
SUROLIHUDWLRQ RI DXWRPDWHG VRIWZDUH RU ´ERWVµ

KRZHYHU OHG

-RVKXD 'RZOLQJ 7R\RWD ,V 7U\LQJ WR 6WRS 1HZ&DU ´6FDOSHUVµ IURP 3XVKLQJ
8S 3ULFHV'
5,9( 6HSW    $0 KWWSVZZZGULYHFRPDXQHZVWR\RWDQHZ
FDUVFDOSHUVSXVKLQJXSSULFHV >KWWSVSHUPDFF/0/)@

6HH 6WHSKHQ 7RWLOR ([FOXVLYH 6RQ\·V 3OD\6WDWLRQ %RVV 0RYHV 3DVW &RQVROH
:DUV$
;,26 -XQH   KWWSVZZZD[LRVFRPSVMLPU\DQLQWHUYLHZ
PRELOHF\EHUSXQNVRQ\ >KWWSVSHUPDFF/'/&@ UHVHOOHUV DQG ERWV IUXVWUDWHG
6RQ\·V HIIRUWV ´WR JHW 36V LQWR ¶WKH ULJKW KDQGV·µ 7D\ORU /\OHV 1YLGLD 3XEOLFO\
$SRORJL]HV IRU 57;  /DXQFK 3URPLVHV WR 6KLS 0RUH &DUGV (YHU\ :HHN9
(5*( 6HSW
   30 KWWSVZZZWKHYHUJHFRPQYLGLDDSRORJ\UW[
JSXSUHRUGHUVKRUWDJHLVVXHV >KWWSVSHUPDFF703:6:(@ GHVFULELQJ KRZ
KHDY\ WUDIILF RYHUZKHOPHG 1YLGLD·V ZHEVLWH DQG FRQVXPHUV VWUXJJOHG WR SXUFKDVH QHZO\
UHOHDVHG *38V

6HH 1LFN 6WDWW 7KH *DPLQJ ,QGXVWU\ .HHSV )DLOLQJ 0LVHUDEO\ DW 6HOOLQJ ,WV
0RVW ,PSRUWDQW 3URGXFWV9
(5*( 1RY    30 KWWSVZZZ
WKHYHUJHFRPVRQ\SVSUHRUGHUPLFURVRIW[ER[VHULHV[QYLGLDUW[
PHVV >KWWSVSHUPDFF4$/7<@

%\DUG 'XQFDQ ´+RZ ,V 7KLV /HJDO"µ 5(9($/ 0DU  
KWWSVUHYHDOQHZVRUJDUWLFOHKRZLVWKLVOHJDO >KWWSVSHUPDFF8<0$'(-@ VHH
6DPPL (OHIDQW %H\RQG WKH %RWV 7LFNHGRII RYHU 7LFNHW 3ULFHV RU WKH (WHUQDO
6FDPQDWLRQ"8&/$(
17/5(9  ² ²  (ULF 6FKURHGHU -RVK )LVKHU
-RKQ 2UEH -RKQ %XVK $ %ULHI 2YHUYLHZ RQ 7LFNHW 6FDOSLQJ /DZV 6HFRQGDU\ 7LFNHW
0DUNHWV DQG WKH 6WXE+XE (IIHFW(
17632576 / 1RY  DW  ² 
OLVWLQJ DQWLVFDOSLQJ VWDWXWHV E\ VWDWH

6HH 9LMD\ 5DJKDYDQ &RQVXPHU /DZ·V (TXLW\ *DS  87$+ / 5(9 
²  GLVFXVVLQJ WKH OLPLWV RI FRUUHFWLQJ PDUNHW LQHIILFLHQF\ DQG DUJXLQJ WKDW
FRQVXPHU PDUNHW LQWHUYHQWLRQV VKRXOG DGGUHVV LQHTXLW\ /XNH +HUULQH 7KH )RONORUH RI
8QIDLUQHVV1<8/5
(9    GLVFXVVLQJ KRZ PDUNHW IDLOXUH DQDO\VHV
QHXWHUHG DQG GLVWRUWHG ´XQIDLU RU RSSUHVVLYH PHWKRGV RI FRPSHWLWLRQµ XQGHU 6HFWLRQ RI
WKH )7& $FW -DVPLQ <DQJ $ :KROH 'LIIHUHQW %DOOJDPH 7LFNHW 6FDOSLQJ /HJLVODWLRQ DQG
%HKDYLRUDO (FRQRPLFV"9
$1'-(17/35$&   

$OWKRXJK WKH IRUP DQG IXQFWLRQ RI WKHVH WHFKQRORJLHV PD\ GUDVWLFDOO\ GLIIHU
HYHU\ LOOLFLW XVHU OHYHUDJHV WKHP WR FUHDWH DQ DGYDQWDJHRXV PDUNHW SRVLWLRQ +HUHLQDIWHU
´ERWVµ UHIHUV WR DQ\ WHFKQRORJ\ WKDW FRQIHUV DQ XQIDLU DGYDQWDJH E\ GLVUXSWLQJ HTXLWDEOH
PDUNHW DFFHVV 6HH 4
8(8(,7+2: 21/,1( 5(7$,/(56 &$1 %($7 %$' %276 '(/,9(5
)$,51(66 )25 )/$6+ 6$/(6 352'8&7 '5236 ² KWWSVTXHXHLWFRP
PHGLD]FME[ZEHDWLQJUHWDLOERWVSGI >KWWSVSHUPDFF):=7;@ GHVFULELQJ
YDULRXV ´¶HFRPPHUFH ERW>V@· RU ¶JULQFK ERW>V@·µ DQG KRZ WKRVH WHFKQRORJLHV ZRUN %HWWHU
2QOLQH 7LFNHW 6DOHV $FW RI  3XE / 1R ²   6WDW   FRGLILHG
DV DPHQGHG DW  86& F SURKLELWLQJ WHFKQRORJLHV WKDW ´FLUFXPYHQW D VHFXULW\
@ .1((&$33,1* 6&$/3,1* 
&RQJUHVV WR SDVV WKH %HWWHU 2QOLQH 7LFNHW 6DOHV $FW RI 
%276 ZKLFK HPSRZHUHG WKH )7& WR HQIRUFH QHZ SURYLVLRQV
SURKLELWLQJ WKH XVH RI ERWV

$OWKRXJK ODXGHG DV D KHIW\
GHWHUUHQFH

LW WRRN WKH )7& PRUH WKDQ ILYH \HDUV WR EULQJ DQ\
FDVH XQGHU %276 WKH ILUVW RI ZKLFK UHVXOWHG LQ D GLVDSSRLQWLQJO\
VPDOO ILQH

%276 IHOO VKRUW RI LWV JRDOV DQG QHJOHFWHG RWKHU
UHVDOH PDUNHWSODFHV &RQWHPSRUDQHRXV UHSRUWLQJ RQ WKH )7&·V
´KLVWRULFµ DFWLRQ SRLQWHG RXW WKDW WKH ODZ GLG QRW DSSO\ WR
WHFKQRORJLHV XVHG ´WR VFDOS YLGHR JDPH FRQVROHV RU JUDSKLFV
FDUGVµ

&RQVHTXHQWO\ &RQJUHVV GUDIWHG WZR GLIIHUHQW DFWV WR
WDUJHW WLFNHW VFDOSLQJ DQG ERWV VHSDUDWHO\ WKH %HWWHU 2YHUVLJKW
RI 6HFRQGDU\ 6DOHV DQG $FFRXQWDELOLW\ LQ &RQFHUW 7LFNHWLQJ $FW
RI  %266 VRXJKW WR LQFUHDVH WLFNHW SULFH WUDQVSDUHQF\ LQ
DOO WLFNHW PDUNHWV

ZKLOH WKH 6WRSSLQJ *ULQFK %RWV $FW RI 
*ULQFK DWWHPSWHG WR H[SDQG WKH %276 $FW·V UHDFK WR H
FRPPHUFH DQG WKH  ELOORQ RQOLQH UHVDOH PDUNHW

'HVSLWH WKH
FOHDU QHHG IRU H[SDQVLRQ QHLWKHU DFW PRYHG RXW RI FRPPLWWHH
HYHQ WKRXJK &RQJUHVV ILUVW FRQVLGHUHG %266 DQG *ULQFK LQ 
DQG  UHVSHFWLYHO\

7KH UHOHQWOHVV IRFXV RQ ERWV KRZHYHU HQWLUHO\ PLVVHV WKH
SRLQW 7KHVH WHFKQRORJLHV UHSUHVHQW D PHUH V\PSWRP RI D PXFK
PHDVXUH DFFHVV FRQWURO V\VWHP RU RWKHU WHFKQRORJLFDO FRQWURO RU PHDVXUHRQDQ,QWHUQHW
ZHEVLWH RU RQOLQH VHUYLFHµ XVHG E\ WLFNHW LVVXHUV

 86& F

6HH (ULF 5HQQHU %URZQ 2EDPD 6LJQV /DZ WR &RPEDW 7LFNHW %RWV(17
:
./< 'HF    30 KWWSVHZFRPDUWLFOHREDPDODZWLFNHW
ERWV >KWWSVSHUPDFF$(4=66@

7KH )7&·V RQO\ DFWLRQ XQGHU %276 UHVXOWHG LQ DQ LPSUHVVLYH  PLOOLRQ LQ
FLYLO SHQDOWLHV EXW WKH MXGJPHQW ZDV ODWHU UHGXFHG WR  PLOOLRQ³D QHDUO\  SHUFHQW
GHFOLQH³GXH WR DQ LQDELOLW\ WR SD\ -D\ 0D\ILHOG )7& %ULQJV )LUVW(YHU &DVHV 8QGHU
WKH %276 $FW)
(' 75$'( &200·1 -DQ   KWWSVZZZIWFJRYQHZV
HYHQWVQHZVSUHVVUHOHDVHVIWFEULQJVILUVWHYHUFDVHVXQGHUERWVDFW
>KWWSVSHUPDFF-<)4$@

6HH '\ODQ & 3RUFHOOR $ )L[HG *DPH 7KH )UXVWUDWLRQV RI 7LFNHW 6FDOSLQJ
DQG WKH 5HDOLWLHV RI ,WV 6ROXWLRQV%522./5(9  ²  5REHUW -
0F)DGGHQ 7KH %276 $FW $ 6PDOO 6WHS IRU )DQNLQG :KHQ D *LDQW /HDS ,V 1HHGHG
:
$6+%851 / -  ²  VHH DOVR 5REHUW &ULEE 0DUFR &KRZQ 2YHG :H
:HQW 8QGHUFRYHU DV 7LFNHW 6FDOSHUV³DQG 7LFNHWPDVWHU 2IIHUHG WR +HOS 8V 'R %XVLQHVV
7
252172 67$5 6HSW  KWWSVZZZWKHVWDUFRPQHZVLQYHVWLJDWLRQV
ZHZHQWXQGHUFRYHUDVWLFNHWVFDOSHUVDQGWLFNHWPDVWHURIIHUHGWRKHOSXV
GREXVLQHVVKWPO >KWWSVSHUPDFF1&9)/7@ GHWDLOLQJ 7LFNHWPDVWHU·V SUDFWLFHV
LQFHQWLYL]LQJ RQOLQH VFDOSLQJ 0LFKDHO .DQ 6FDOSHUV )LQHG IRU 8VLQJ %RWV WR 6FRRS XS
7LFNHWV RQ 7LFNHWPDVWHU3&0
$* -DQ   KWWSVZZZSFPDJFRPQHZV
VFDOSHUVILQHGIRUXVLQJERWVWRVFRRSXSWLFNHWVRQWLFNHWPDVWHU
>KWWSVSHUPDFF-54&96.@

+5  WK &RQJ 

6  WK &RQJ  $OLFLD 'RQLJHU 6KRSSHUV $UH %X\LQJ IURP
5HVDOH 5HWDLOHUV 0RUH WKDQ (YHU +HUH·V :K\ &1%& 'HF    30
KWWSVFQEF[4<Y= >KWWSVSHUPDFF$1+4'5@

6HH %HWWHU 2YHUVLJKW RI 6HFRQGDU\ 6DOHV DQG $FFRXQWDELOLW\ LQ &RQFHUW
7LFNHWLQJ $FW RI  +5  WK &RQJ  6WRSSLQJ *ULQFK %RWV $FW RI 
+5  WK &RQJ 
 %522./<1 /$: 5(9,(: >9RO 
ODUJHU GLVHDVH VFDOSLQJ ,PSRVLQJ FLYLO RU FULPLQDO SHQDOWLHV RQ WKH
WRROV RI WKH VFDOSLQJ WUDGH IDLOV WR GHWHU WKH SUDFWLFH LWVHOI EHFDXVH
WKH XQGHUO\LQJ HFRQRPLFV UHPDLQ XQVFDWKHG

6R ORQJ DV RQOLQH
UHVDOH UHPDLQV D SURILWDEOH YHQWXUH VFDOSHUV ZLOO GHYHORS QHZ
PDUNHW PDQLSXODWLRQ WDFWLFV DV ´¶>I@UDXG LV LQILQLWH· JLYHQ WKH
¶IHUWLOLW\ RI PDQ·V LQYHQWLRQ·µ

$OWKRXJK OHJLVODWLRQ OLNH %276
EURDGHQV FRQVXPHU SURWHFWLRQV DJDLQVW ´XQIDLU RU GHFHSWLYH DFWV RU
SUDFWLFHVµ 8'$3

LWV XQQHFHVVDULO\ QDUURZ VFRSH DQG H[LVWLQJ
HQIRUFHPHQW GHILFLHQFLHV IDLO WR SURYLGH HTXLWDEOH UHOLHI

$ EHWWHU
VROXWLRQ LV VLPSO\ WR FXW RXW WKH PLGGOHPHQ
$FFRUGLQJO\ WKLV QRWH DUJXHV WKDW VFDOSLQJ LWVHOI
FRQVWLWXWHV DQ ´XQIDLU RU GHFHSWLYH DFW RU SUDFWLFHµ XQGHU 6HFWLRQ
RI WKH )7& $FW DQG ´/LWWOH )7& $FWVµ

3DUW , HVWDEOLVKHV WKH
VFRSH RI WKH VFDOSLQJ SUREOHP ZLWK D KLVWRULFDO RYHUYLHZ
GLVFXVVLQJ LWV SK\VLFDO RULJLQV OHJDO LPSOLFDWLRQV DQG H[SDQVLRQ
LQWR HFRPPHUFH 3DUW ,, GHPRQVWUDWHV KRZ PRGHUQ SULYDWH
VHFWRU VROXWLRQV DQG SXEOLF UHJXODWRU\ IUDPHZRUNV IDOO VKRUW RI
GHWHUULQJ VFDOSHUV )LQDOO\ 3DUW ,,, SURSRVHV KRZ WR NQHHFDS
LH VHYHUHO\ KLQGHU VFDOSLQJ E\ SURKLELWLQJ LW XQGHU H[LVWLQJ
8'$3 HQIRUFHPHQW VFKHPDV DQG LPSOHPHQWLQJ PRGHVW UHIRUPV
WR H[LVWLQJ SUDFWLFHV WKURXJK ERWK  VDOHV OHGJHUV DQG SULFH
WUDQVSDUHQF\ PHDVXUHV DQG  SXUFKDVH DJUHHPHQW OLPLWDWLRQV
RQ UHVDOH
, 2
1 7+( 25,*,16 2) 6&$/3(567+( (92/87,21 2) $
35$&7,&(
7KH KLVWRULFDO UHFRUG VXJJHVWV WKDW WKH SUDFWLFH RI
VFDOSLQJ GDWHV EDFN WR WKH 5RPDQ (PSLUH ZKHUH VFDOSHUV
KRFNHG WKH PRVW GHVLUDEOH VHDWV DW WKH &RORVVHXP³VHDWLQJ QHDU

6HH (OHIDQW VXSUD QRWH  DW ²

+HQU\ ( 6PLWK $Q (FRQRPLF $QDO\VLV RI /DZ 9HUVXV (TXLW\ 2FW 
 XQSXEOLVKHG PDQXVFULSW TXRWLQJ -
26(3+ 6725<&200(17$5,(6 21 (48,7<
-85,6358'(1&( $6 $'0,1,67(5(' ,1 (1*/$1' $1' $0(5,&$  Q WK HG 
KWWSVODZ\DOHHGXVLWHVGHIDXOWILOHVDUHDZRUNVKRSOHRGRFXPHQW+6PLWKB/DZ9HUVXV
(TXLW\SGI >KWWSVSHUPDFF1.363@

 86& D

/LQGVD\ 0DL]ODQG :K\ )HGHUDO /DZ +DVQ·W 6WRSSHG 2QOLQH 7LFNHW 6FDOSHUV
IURP &KHDWLQJ :86$ -XQH    $0 KWWSVZZZZXVDFRP
DUWLFOHQHZVQDWLRQZRUOGZK\IHGHUDOODZKDVQWVWRSSHGRQOLQHWLFNHWVFDOSHUVIURP
FKHDWLQJ >KWWSVSHUPDFF9(=;(@

/LWWOH )7& $FWV UHIHUV JHQHUDOO\ WR WKH FRQVXPHU SURWHFWLRQ RU GHFHSWLYH
WUDGH SUDFWLFHV VWDWXWHV ´HQDFWHG LQ DOO ILIW\ VWDWHV DQG WKH 'LVWULFW RI &ROXPELDµ -DFN (
.DUQV 6WDWH 5HJXODWLRQ RI 'HFHSWLYH 7UDGH 3UDFWLFHV 8QGHU ´/LWWOH )7& $FWVµ 6KRXOG
)HGHUDO 6WDQGDUGV &RQWURO"'
,&./5(9    VHH DOVR 'HH 3ULGJHQ
:UHFNLQJ %DOO 'LVJXLVHG DV /DZ 5HIRUP $/(&·V 0RGHO $FW RQ 3ULYDWH (QIRUFHPHQW RI
&RQVXPHU 3URWHFWLRQ 6WDWXWHV1<85
(9/62&&+$1*(  ² 
GLVFXVVLQJ WKH JURZWK RI ´/LWWOH )7&µ DFWV
@ .1((&$33,1* 6&$/3,1* 
WKH (PSHURU

$OWKRXJK LWV H[DFW RULJLQV UHPDLQ D P\VWHU\
VFDOSLQJ UHDUHG LWV KHDG FRQWLQXRXVO\ IURP WKH DJH RI WKH %DUG
WR WKH SUHVHQW

HYHQ DV HIIRUWV WR FXUWDLO VFDOSLQJ VKLIWHG ZLWK
WKH HEE DQG IORZ RI VRFLHWDO YLHZV DQG OHJDO GRFWULQHV

<HW WKH
VFDOSHUV RI WKH SDVW ORRN QRWKLQJ OLNH WKH PRGHUQ VFDOSHU
:KHUHDV WKH VFDOSHUV RI \RUH ORXGO\ KDUDQJXHG SDWURQV RU
SDVVHUVE\ DW UDLOURDG VWDWLRQV DQG VWDGLXPV

WRGD\·V
RSSRUWXQLVWLF SDUDVLWHV KDUGO\ PDNH DQ\ QRLVH RXWVLGH RI RQOLQH
FRPPXQLWLHV RQ 5HGGLW DQG 'LVFRUG

6FDOSLQJ HPHUJHG LQ WKH 8QLWHG 6WDWHV GXULQJ WKH
V

7KH H[SORVLYH JURZWK LQ UDLO WUDYHO SURYLGHG IHUWLOH
JURXQG IRU SHRSOH ORRNLQJ WR TXLFNO\ IOLS WLFNHWV IRU D SURILW

7KH
SUDFWLFH VZLIWO\ VSUHDG WR WKH HQWHUWDLQPHQW LQGXVWU\ DQG LW
LPPHGLDWHO\ GUHZ SXEOLF DWWHQWLRQ

7KHDWHUV UHVSRQGHG ZLWK D
UDQJH RI UHPHGLHV³IURP EODFNOLVWLQJ WKH SXUFKDVHUV RI VFDOSHG
WLFNHWV E\ XVLQJ VSRWWHUV WR LGHQWLI\ FRQVXPHUV WR SODFLQJ
SXUFKDVH OLPLWV DQG RWKHU UHVWULFWLRQV RQ WLFNHW VDOHV

(DFK RI
WKHVH PHDVXUHV KRZHYHU IDLOHG WR VWRS WKH VSUHDG RI VFDOSLQJ³
LW WDUJHWHG WKH V\PSWRPV UDWKHU WKDQ WKH XQGHUO\LQJ
SURILWDELOLW\ SUREOHP %ODFNOLVWLQJ PHUHO\ FDXVHG FRQIXVLRQ DQG
FRQVWHUQDWLRQ E\ SXQLVKLQJ SDWURQV³VFDOSHUV LOOLFLWO\ VROG
XQXVDEOH WLFNHWV DQG SURILWHG E\ GXSLQJ FRQVXPHUV³ZKLOH
VFDOSHUV FLUFXPYHQWHG ´OLPLWV SHU SHUVRQµ WKURXJK WKH XVH RI
SUR[LHV ZKR VLPSO\ ERXJKW DGGLWLRQDO WLFNHWV

$OWKRXJK SROLFH
GHSDUWPHQWV FUDFNHG GRZQ RQ WKH VFDOSLQJ VFRXUJH DQG VRPH
OHJLVODWRUV SURSRVHG RUGLQDQFHV DJDLQVW VFDOSLQJ

LW WRRN D KDOI

: 3 &DUH\ 1HZV 6FDOSLQJ *RHV 8SVFDOH 7KH 6HFRQGDU\ 7LFNHW 0DUNHW·V
2QOLQH 5HYROXWLRQ$
5,=67$7( 81,9 -XO\   KWWSVQHZVZSFDUH\DVXHGX
VFDOSLQJJRHVXSVFDOHVHFRQGDU\WLFNHWPDUNHWVRQOLQHUHYROXWLRQ
>KWWSVSHUPDFF*03'7$@ VHH 3RUFHOOR VXSUD QRWH  DW 

3DVFDO &RXUW\ 6RPH (FRQRPLHV RI 7LFNHW 5HVDOH-(&213(563  
 VHH .
(55< 6(*5$9(7,&.(7 6&$/3,1*$1 $0(5,&$1 +,6725< ² 

6HH LQIUD 3DUW ,

6HH 6(*5$9( VXSUD QRWH  DW 

.DLWO\Q 7LIIDQ\ 7KH 1HZ 7LFNHW 6FDOSHUV $UH <RXQJ 8QDVKDPHG DQG 9HU\
2QOLQH$
7/$17,& 1RY   KWWSVZZZWKHDWODQWLFFRPWHFKQRORJ\
DUFKLYHGLVFRUGVFDOSHUVKDUU\VW\OHVWLFNHWUHVDOHYHULILHGIDQ >KWWSV
SHUPDFF3$$=/@

6HH 0F)DGGHQ VXSUD QRWH  DW ² 6(*5$9( VXSUD QRWH  DW 

6HH 0F)DGGHQ VXSUD QRWH  DW ² :DONHU Y :DEDVK 6W /RXLV
3DF 5\ &R  0R $SS   &W $SS 

1RW HYHQ &KDUOHV 'LFNHQV HVFDSHG WKH SODJXH RI VFDOSLQJ DV ´YRFLIHURXV
JHQWOHPDQµ UHVROG WLFNHWV WR KLV UHDGLQJV DW WHQ WLPHV WKH DVNLQJ SULFH &RPPHQWDWRUV
ODPHQWHG WKH LQWROHUDEOH ´SHUWLQDFLW\µ RI VFDOSHUV ´WKUXVWLQJ UHVHUYHG VHDWV LQ \RXU IDFHµ
$PXVHPHQWV1<7
,0(6 6HSW   KWWSVQ\WLPV7'E,]P >KWWSVSHUPDFF07
<=5@ 6
(*5$9( VXSUD QRWH  DW 

6HH (OHIDQW VXSUD QRWH  DW ²

,G DW 

6(*5$9( VXSUD QRWH  DW   VHH 7KH %RRWK%DUUHWW 6HDVRQ $Q (IIRUW WR
3URKLELW 6SHFXODWLRQ LQ 7LFNHWV LQ &KLFDJR 1< 7
,0(6 6HSW  
 %522./<1 /$: 5(9,(: >9RO 
FHQWXU\ IRU OHJLVODWXUHV WR HQDFW H[SOLFLW DQWLVFDOSLQJ ODZV

7KHVH VWDWXWHV DW WKH WXUQ RI WKH QLQHWHHQWK FHQWXU\ FHQWHUHG RQ
WZR FRQFHSWV SXEOLF QXLVDQFH DQG IDLUQHVV LQ SULFLQJ

0DQ\ RSSRQHQWV RI VFDOSLQJ DWWDFN WKH SUDFWLFH DV D
QXLVDQFH

3XEOLF QXLVDQFH UHTXLUHV XQUHDVRQDEOH LQWHUIHUHQFH
ZLWK D SXEOLF ULJKW WKDW FDXVHV LQMXU\ RU KDUP

6FDOSHUV WKDW
REVWUXFWHG VLGHZDONV XQQHFHVVDULO\ FURZGHG KLJKWUDIILF DUHDV
OLNH 7LPHV 6TXDUH DQG <DQNHH 6WDGLXP RU GLVWXUEHG WKH SXEOLF
WUDQTXLOLW\ E\ ORXGO\ \HOOLQJ ´WLFNHWV KHUHµ DUJXDEO\ YLRODWHG D
SXEOLF ULJKW

WKDW LV WKH ULJKW WR FRPIRUWDEO\ DFFHVV SXEOLF
VSDFHV

:KHWKHU WKH VFDOSHU DFWHG UHDVRQDEO\ DOVR IDFWRUV LQWR
WKLV DQDO\VLV DQG LW KLQJHV RQ WKH VHYHULW\ ORQJHYLW\ RU
VWDWXWRULO\ SURKLELWHG RU SURVFULEHG QDWXUH RI WKH FRQGXFW

*LYHQ WKH QXPEHU RI VWDWXWHV WKDW VSHFLILFDOO\ WDUJHWHG WKH
DIRUHPHQWLRQHG EHKDYLRUV DQG WKDW VFDOSHUV HQJDJHG LQ VXFK
UHJXODUL]HG FRQGXFW

VFDOSLQJ XQUHDVRQDEO\ LQWHUIHUHG ZLWK D
SXEOLF ULJKW

&RQVHTXHQWO\ VRPH HDUO\ DQWLVFDOSLQJ VWDWXWHV
RQO\ UHVWULFWHG ZKHUH VFDOSHUV UHVROG WLFNHWV³OLPLWLQJ FULPLQDO
RU FLYLO SHQDOWLHV WR ORFDWLRQEDVHG YLRODWLRQV

6XFK OHJLVODWLRQ
PHUHO\ UHJXODWHG VFDOSLQJ UDWKHU WKDQ SURKLELWHG WKH SUDFWLFH

KWWSVQ\WLPV;WL2 >KWWSVSHUPDFF08683+-@ GHVFULELQJ D SURSRVHG
RUGLQDQFH WKDW PDGH VFDOSLQJ ´RQ WKH VWUHHW RU DW DQ\ SODFH VDYH WKH UHJXODUO\ DSSRLQWHG
RIILFH RI D WLFNHW RU WLFNHWV WR DQ\ WKHDWUH RU SODFH RI DPXVHPHQW D PLVGHPHDQRUµ ZLWK D
´ WR µ ILQH

6HH 0F)DGGHQ VXSUD QRWH  DW ²

6HH +DSSHO -HQQLQJV VXSUD QRWH  DW ²

6HH LQIUD QRWHV ² DQG DFFRPSDQ\LQJ WH[W

6HH 5(67$7(0(17 6(&21' 2) 72576 % $0/,167 

6HH LG DW FPW J ´,W LV QRW KRZHYHU QHFHVVDU\ WKDW WKH HQWLUH FRPPXQLW\ EH
DIIHFWHG E\ D SXEOLF QXLVDQFH VR ORQJ DV WKH QXLVDQFH ZLOO LQWHUIHUH ZLWK WKRVH ZKR FRPH
LQ FRQWDFW ZLWK LW LQ WKH H[HUFLVH RI D SXEOLF ULJKW RU LW RWKHUZLVH DIIHFWV WKH LQWHUHVWV RI
WKH FRPPXQLW\ DW ODUJHµ &DOHE +DOEHUJ 7KH 6HFRQGDU\ 0DUNHW IRU 7LFNHWV $ /RRN DW
7LFNHW 6FDOSLQJ 7KURXJK DQ (FRQRPLF 3URSHUW\ /DZ DQG &RQVWLWXWLRQDO )UDPHZRUN
'
(3$8/ - 632576 / &217(03352%6   

,Q 1HZ <RUN PDJLVWUDWHV LQ 0HQ·V 1LJKW &RXUW H[FRULDWHG VFDOSHUV DV D
QXLVDQFH DQG WKH PDJLVWUDWHV UHJXODUO\ ILQHG RU VHQWHQFHG WKHP IRU EORFNLQJ SXEOLF
DFFHVV WR VWUHHWV DQG DPXVHPHQWV LH D SXEOLF QXLVDQFH 6HH HJ 7LFNHW 6SHFXODWRUV
)LQHG 1< 7
,0(6 )HE   KWWSVQ\WLPV*X%N/* >KWWSVSHUPDFF$0
4=.@ ´7KHUH VKRXOG EH D ELOO SDVVHG E\ WKH /HJLVODWXUH SURKLELWLQJ WKH VDOH RI WKHDWUH
WLFNHWV E\ VSHFXODWRUVµ 7LFNHW 6SHFXODWRUV $UH +LJKZD\PHQ1<7
,0(6 'HF  
KWWSVQ\WLPV:7&;+; >KWWSVSHUPDFF98;$5@ ´>6FDOSHUV@ DUH SUDFWLFDOO\
KLJKZD\PHQ DQG KROG XS HYHU\ERG\ WKDW JRHV WR D SODFH RI DPXVHPHQW $ PDQ
VLPSO\ KDV WR ILJKW KLV ZD\ WKURXJK WKHVH VSHFXODWRUV ZKHQ KH ZDQWV WR JR WR D WKHDWUHµ

6HH 5(67$7(0(17 6(&21' 2) 72576 %D²F $0/,167 
+DOEHUJ VXSUD QRWH  DW 

6HH 6WHYHQ & +LJKILHOG +RZ 0RGHUQ 7UHQGV DQG 0DUNHW (FRQRPLFV +DYH
5HQGHUHG $QWL7LFNHW 6FDOSLQJ /HJLVODWLRQ 2EVROHWH'
(3$8/ / 5(9  ²
² 

6HH +DOEHUJ VXSUD QRWH  DW 

,G DW 

7KH VKRUWFRPLQJV RI SXEOLF QXLVDQFH HQIRUFHPHQW DJDLQVW WKH LQWHUIHUHQFHV
FDXVHG E\ VFDOSLQJ MXVWLILHG JRYHUQPHQW UHJXODWLRQV DJDLQVW WKH SUDFWLFH ´,W LV WKH GXW\
@ .1((&$33,1* 6&$/3,1* 
7KH FRQFHSW RI IDLUQHVV DOVR XQGHUSLQQHG VRPH RI WKH
HDUOLHVW DWWHPSWV WR FXUWDLO VFDOSLQJ

)DLUQHVV DSSOLHV WR
VFDOSLQJ LQ WKUHH FRQWH[WV  WR FRQVXPHUV SXUFKDVLQJ WLFNHWV
 WR DUWLVWV DQG SURPRWHUV VHOOLQJ WLFNHWV DQG  WR
JRYHUQPHQWV UHJXODWLQJ WUDQVDFWLRQV

&RQVXPHUV ILQG
XQIDLUQHVV ZKHQHYHU DQ RXWFRPH YDVWO\ GLIIHUV IURP WKHLU SRLQW
RI UHIHUHQFH HJ VHHLQJ  WLFNHWV RQ WKH UHVDOH PDUNHW
DQG WKHQ KDYLQJ WR SD\ RQ DYHUDJH  WKHUHLQ IRU D 7D\ORU
6ZLIW·V 7KH (UDV 7RXU FRQFHUW WLFNHW WKDW VKRXOG FRVW EHWZHHQ
 DQG  ZLWKRXW KLGGHQ IHHV

7KXV VFDOSLQJ EDQV
WKHRUHWLFDOO\ NHSW WLFNHWV ZLWKLQ WKH UHDFK RI WKH RUGLQDU\
FRQVXPHU E\ SUHYHQWLQJ H[RUELWDQW UHVDOH SULFHV DQG HQKDQFLQJ
HTXLWDEOH PDUNHW DFFHVV

$UWLVWV YHQXHV DQG SULPDU\ VHOOHUV
KHOG VLPLODU FRQFHUQV³ZKLOH YHQXHV WDUJHWHG ORZ SULFHV WR
PD[LPL]H HYHQW DWWHQGDQFH DQG ERRVW SURILWV IURP FRQFHVVLRQV
DQG PHUFKDQGLVH

SULPDU\ VHOOHUV DQG DUWLVWV XQGHUSULFHG
WLFNHWV WR PDLQWDLQ FRQVXPHU FRQILGHQFH DQG H[SDQG DFFHVV
DFURVV VRFLRHFRQRPLFDOO\ GLYHUVH IDQV

([RUELWDQW UHVDOH WLFNHW
SULFHV IUXVWUDWH WKHVH REMHFWLYHV E\ DGYHUVHO\ DIIHFWLQJ WKH
YHQXH·V VDOHV UHYHQXH DQG GUDZLQJ WKH LUH RI SDVVLRQDWH
SXUFKDVHUV

,Q D EXVLQHVV VHQVH VFDOSLQJ XQIDLUO\ WKUHDWHQV
WKHUHIRUHRIJRYHUQPHQWDODJHQFLHVWRSUHYHQWIUDXGDQGH[WRUWLRQLQWKH UHVDOH RI
WKHDWHU WLFNHWV 7KH HYLOV RI WKHDWHU WLFNHW VSHFXODWLQJ DUH XQGLVSXWHG 7KH VWUHHW
VSHFXODWRU LQ SDUWLFXODU KDV EHFRPH D QXLVDQFH +LV SXUSRVH LV WR SUH\ RQ WKH SHRSOHµ
3HRSOH Y :HOOHU  1<6   $SS 'LY 

6HH 3DXO - &ULVFXROR 5HDVVHVVLQJ WKH 7LFNHW 6FDOSLQJ 'LVSXWH 7KH $SSOLFDWLRQ
(IIHFWV DQG &ULWLFLVPV RI &XUUHQW $QWL6FDOSLQJ /HJLVODWLRQ6
(721 +$// - 63257 / 
²  VHH DOVR (OHIDQW VXSUD QRWH  DW ² GHVFULELQJ QLQHWHHQWKFHQWXU\
UHFRJQLWLRQ WKDW VSHFXODWRUV XQIDLUO\ PDQLSXODWH SULFHV DQG GLVSODFH FRQVXPHUV

6HH +DOEHUJ VXSUD QRWH  DW ²

&KULVWLQH -ROOV &DVV 5 6XQVWHLQ 5LFKDUG 7KDOHU $ %HKDYLRUDO $SSURDFK
WR /DZ DQG (FRQRPLFV6
7$1/5(9    'DYH %URRNV 7D\ORU 6ZLIW·V
(UDV 7RXU RQ 7UDFN WR 6HOO 0 LQ 7LFNHWV +HUH·V :KHUH 7KDW 0RQH\ *RHV%
,//%2$5'
'HF   KWWSVZZZELOOERDUGFRPSURWD\ORUVZLIWHUDVWRXUWLFNHWVDOHVZKR
JHWVSDLG >KWWSVSHUPDFF'.15$0@ -DFN +REEV 7D\ORU 6ZLIW 7RXU 7LFNHWV 5HDFK
. D 'D\ $IWHU *RLQJ RQ 6DOH1<3
267 1RY    30
KWWSVQ\SRVWFRPWD\ORUVZLIWWRXUWLFNHWVUHDFKN >KWWSVSHUPDFF
/+%+(@

6HH -ROOV HW DO VXSUD QRWH  DW  ² GLVFXVVLQJ IDLUQHVV LQ
PDUNHW WUDQVDFWLRQV DQG WKH HIIHFWV RI EDQV RQ WLFNHW UHVDOH

6HH +DSSHO -HQQLQJV VXSUD QRWH  DW  QQ² GLVFXVVLQJ KRZ
SULFLQJ OHYHUV DIIHFW GHPDQG IRU WLFNHWV DQG FRQFHVVLRQV LQ WKH HQWHUWDLQPHQW LQGXVWU\

-RKQ ' 7LVKOHU 7LFNHW 6FDOSLQJ $Q (FRQRPLF $QDO\VLV DQG 3URSRVHG
6ROXWLRQ6
$17$ &/$5$ / 5(9   Q 

2QH SDUWLFXODUO\ KLJKSURILOH LQFLGHQW LQYROYHG WKH IUDXGXOHQW SXUFKDVHDQG
VXEVHTXHQW UHVDOH RI WLFNHWV IRU %DUEDUD 6WUHLVDQG %LOO\ -RHO %RQ -RYL DQG %UXFH
6SULQJVWHHQ FRQFHUWV DPRQJ RWKHU SRSXODU DUWLVWV DQG HYHQWV ZKRVH QDPHV GR QRW EHJLQ
ZLWK WKH OHWWHU ´%µ 'DYLG 9RUHDFRV :LVHJX\· 2ZQHUV $YRLG 86 3ULVRQ LQ 7LFNHW
6FDOSLQJ &DVH%
/220%(5* -XQH    30 KWWSVZZZEORRPEHUJFRP
QHZVDUWLFOHVZLVHJX\RZQHUVDYRLGXVSULVRQLQPXVLFVSRUWVWLFNHWV
VFDOSLQJFDVH >KWWSVSHUPDFF:37()@ ,Q  WKH VFDOSHUV VHFXUHG QHDUO\ KDOI RI
WKH FHQWHUVWDJH SXEOLF WLFNHWV WR D %UXFH 6SULQJVWHHQ FRQFHUW ,G
 %522./<1 /$: 5(9,(: >9RO 
WKH DUWLVW·V JRRGZLOO ZLWK SDWURQV

,Q DGGLWLRQ WR IUXVWUDWLQJ
FRQVXPHUV DQG DUWLVWV ZKDW VFDOSHUV GR LQ WKH VKDGRZV
FLUFXPYHQWV WD[HV RQ WUDQVDFWLRQV RU LQFRPH

:KHUHDV DOO RWKHU
DFWRUV LQ WKH WLFNHW PDUNHWSODFH PXVW SD\ WKH SLSHU VFDOSHUV
GHIUDXG WKH JRYHUQPHQW ZKLOH XQIDLUO\ EHQHILWLQJ IURP
WD[SD\HUIXQGHG VWDGLXPV DQG FXOWXUDO FHQWHUV³WKH YHU\
VXEMHFW RI WKHLU H[SORLWV

$V VXFK ODZV UHJXODWLQJ VFDOSLQJ
HVSHFLDOO\ WKRVH WKDW UHTXLUH D OLFHQVH WR UHVHOO WLFNHWV DWWHPSW
WR HVWDEOLVK D IDLU DQG QHFHVVDU\ V\VWHP IRU SURSHUO\ UHFRUGLQJ
WD[DEOH WUDQVDFWLRQV DQG UHYHQXHV

'HVSLWH VWURQJ OHJDO EDVHV IRU DQWLVFDOSLQJ PHDVXUHV
WKHVH ODZV LQLWLDOO\ IDFHG FRQVWLWXWLRQDO LQILUPLW\

7KHVH
VWDWXWHV DFKLHYHG FULWLFDO PDVV MXVW DV WKH 86 6XSUHPH &RXUW
HQVKULQHG ODLVVH]IDLUH MXULVSUXGHQFH LQ /RFKQHU Y 1HZ <RUN

,Q /RFKQHU WKH 6XSUHPH &RXUW HVWDEOLVKHG GXH SURFHVV
SURWHFWLRQV IRU ´IUHHGRP RI FRQWUDFWµ DQG VWUXFN GRZQ D VWDWH
VWDWXWH³EDVHG RQ SXEOLF LQWHUHVW LQ KHDOWK DQG VDIHW\³WKDW
OLPLWHG WKH KRXUV DQ HPSOR\HH ZRUNHG DW D EDNHU\

'XULQJ WKH
/RFKQHU HUD FRXUWV UHSHDWHGO\ KHOG WKDW DQWLVFDOSLQJ RU WLFNHW
SULFH UHJXODWLRQV XQUHDVRQDEO\ LQWHUIHUHG ZLWK D SULYDWH

6HH -RQDWKDQ & %HQLWDK $QWL6FDOSLQJ /DZV 6KRXOG 7KH\ %H )RUJRWWHQ"
7
(;5(9(17632576 /   

6RPH VFDOSHUV UHSRUW VDOHV DQG RWKHUV GR QRW³ZKHUH DQG KRZ D VFDOSHU VHOOV
D WLFNHW DIIHFWV LI DQG KRZ D WUDQVDFWLRQ JHWV WD[HG HJ D FDVK VDOH D VDOHRQ6WXE+XED
VDOH WKURXJK 7ZLWWHU '0V HWF 6HH -DPHV / 6ZRIIRUG $UELWUDJH 6SHFXODWLRQ DQG 3XEOLF
3ROLF\ 7RZDUG 7LFNHW 6FDOSLQJ3
8%),15(9  ²  VHH DOVR :LOOLDP
1DFN )RRWEDOO·V /LWWOH %LJKRUQ"6
32576 ,//8675$7(' -DQ   KWWSV
YDXOWVLFRPYDXOWIRRWEDOOVOLWWOHELJKRUQVXSHUERZOWLFNHWVDUHEHLQJ
VFDOSHGIRUDVPXFKDVDQGWKHUHDUHDOOHJDWLRQVRIVFDQGDO >KWWSVSHUPDFF9
767@ GHWDLOLQJ KRZ VFDOSLQJ 6XSHU %RZO WLFNHWV LQ -DQXDU\  JHQHUDWHG  PLOOLRQ
LQ UHYHQXH $GMXVWHG IRU LQIODWLRQ WKH  PLOOLRQ LQ UHYHQXH JHQHUDWHG IURP VFDOSLQJ
6XSHU %RZO WLFNHWV LQ  WRWDOV  LQ XQWD[HG SURFHHGV &3, ,QIODWLRQ
&DOFXODWRU%
85($8 /$%67$7 KWWSVZZZEOVJRYGDWDLQIODWLRQBFDOFXODWRUKWP ODVW
YLVLWHG 1RY  

7D[SD\HUV VXEVLGL]H VSRUWV YHQXHV DQG SURPRWH WKH ´DGYDQFHPHQW RI WKH DUWV
DQG WKHDWHUµ ZKLFK DQWLVFDOSLQJ ODZV SURWHFW &ULVFXROR VXSUD QRWH  DW  FLWLQJ
3HRSOH Y -RKQVRQ  1<6G  &ULP &W  6HH 'DQLHO .DSODQ 7D[SD\HUV
%HZDUH 6XEVLGLHV IRU 6SRUWV 9HQXHV %DFN LQ 9RJXH 'HVSLWH /RZ 5HWXUQV$
7+/(7,& $SU
  KWWSVWKHDWKOHWLFFRPWD[SD\HUVEHZDUHVXEVLGLHVIRU
VSRUWVYHQXHVEDFNLQYRJXHGHVSLWHORZUHWXUQV >KWWSVSHUPDFF:+'65@

6HH 'DQLHO - *ODQW] )RU%LG 6FDOSLQJ 2QOLQH" $QWL6FDOSLQJ /HJLVODWLRQ
LQ DQ ,QWHUQHW 6RFLHW\&
$5'2=2 $576 (17 / -   

6HH 3K\OOLV / =DQNHO :DQWHG 7LFNHWV³$ 5HDVVHVVPHQW RI &XUUHQW 7LFNHW
6FDOSLQJ /HJLVODWLRQ DQG WKH &RQWURYHUV\ 6XUURXQGLQJ ,WV (QIRUFHPHQW6
(721 +$//
- 63257 /  ² 

/RFKQHU Y 1HZ <RUN  86  

,G DW ²
@ .1((&$33,1* 6&$/3,1* 
HQWHUSULVH

QRW ´DIIHFWHG ZLWK D SXEOLF LQWHUHVWµ

,W WRRN DQRWKHU
KDOI FHQWXU\

IRU WKH 86 6XSUHPH &RXUW WR KROG WLFNHW UHVDOH D
´PDWWHU RI SXEOLF LQWHUHVWµ DQG DSSO\ WKH ´UDWLRQDO EDVLVµ WHVW WR
ILQG PRVW DQWLVFDOSLQJ OHJLVODWLRQ DQG SULFH UHJXODWLRQV ´D YDOLG
H[HUFLVH RI WKH VWDWH·V SROLFH SRZHUµ

$OWKRXJK OHJLVODWRUV KDYH
UHFRJQL]HG VFDOSHUV DV ´OHHFKHV DQG SDUDVLWHV ZKRVH RQO\ VNLOO LQ
OLIH LV WRµ IOHHFH FRQVXPHUV

QRW HYHU\ VWDWH OHJLVODWXUH HQDFWHG
WLFNHW VFDOSLQJ ODZV IROORZLQJ WKH VKLIW LQ SUHFHGHQW

7KH GLYHUJHQW DSSURDFKHV QDWLRQZLGH UHVXOWHG LQ D
UHJXODWRU\ PHQDJHULH RI GLVSDUDWH LQHIIHFWXDO VWDWH ODZV

7KLV
SDWFKZRUN SUHVHQWHG D SUREOHP DW WKH GDZQ RI WKH WZHQW\ILUVW
FHQWXU\ ZKHQ WKH LQWHUQHW PDGH PDUNHW PDQLSXODWLRQ HDVLHU IRU
VFDOSHUV ZKR ZHUH QR ORQJHU OLPLWHG WR SK\VLFDO SXUFKDVHV

7HFKQRORJLHV FKDQJHG KRZ VFDOSHUV RSHUDWHG EXW WKH LVVXHV LQ
WKH UHVDOH PDUNHW UHPDLQHG WKH VDPH EHFDXVH QRWKLQJ FKDQJHG
WKH HFRQRPLF SULQFLSOHV XQGHUJLUGLQJ VFDOSLQJ

'HVSLWH WKH

7LFNHW VFDOSHUV DOVR DFWHG DV LQWHUPHGLDULHV ZKR SXUFKDVH WLFNHWV IURP
FRQVXPHUV ZLWK ORZ YDOXDWLRQV IRU WKH SURGXFW DQG VHOO WKHP WR EX\HUV ZLWK KLJK
YDOXDWLRQV³WKLV JHQHUDWHV SURILWV IRU ERWK WKH VFDOSHU DQG WKH LQGLYLGXDO VHOOHU ZKLOH
UHDOORFDWLQJ UHVRXUFHV WR FRQVXPHUV ZLOOLQJ WR SD\ PRUH 6HH 6FRWW ' 6LPRQ ,I <RX &DQ·W
%HDW ¶(P -RLQ ¶(P ,PSOLFDWLRQV IRU 1HZ <RUN·V 6FDOSLQJ /DZ LQ /LJKW RI 5HFHQW
'HYHORSPHQWV LQ WKH 7LFNHW %XVLQHVV)
25'+$0 / 5(9  ² 

6HH HJ 7\VRQ %URV8QLWHG 7KHDWUH 7LFNHW 2IIV ,QF Y %DQWRQ  86
   %XW VHH 3HRSOH H[ UHO &RUW 7KHDWHU &R Y 7KRPSVRQ  1(   ,OO
 XSKROGLQJ WKH FRQVWLWXWLRQDOLW\ RI D FLW\ RUGLQDQFH WKDW SURKLELWHG SDUWQHUVKLSV
EHWZHHQ SULPDU\ VHOOHUV DQG VFDOSHUV

7KH &RXUW·V VKLIW WRZDUG WKH ´UDWLRQDO EDVLVµ WHVW EHJDQ LQ WKH HDUO\ V
6HH HJ 8QLWHG 6WDWHV Y &DUROHQH 3URGXFWV &R  86  ² Q  1HEELD
Y 1HZ <RUN  86  ² 

(J *ROG Y 'L &DUOR  ) 6XSS   6'1<  DII·G  86
  DIILUPLQJ D GLVWULFW FRXUW GHFLVLRQ WKDW XSKHOG D 1HZ <RUN ODZ SURKLELWLQJ
WKH UHVDOH RI DQ\ WLFNHW DW D SULFH JUHDWHU WKDQ  RYHU LWV IDFH YDOXH DFFRUG 6WDWH Y
0DMRU  6(G   *D  &ODUN 3 .LUNPDQ 1RWH :KR 1HHGV 7LFNHWV"
([DPLQLQJ 3UREOHPV LQ WKH *URZLQJ 2QOLQH 7LFNHW 5HVDOH ,QGXVWU\
)
('&200/-
  

&DUO ,QJUDP 6HQDWH 5HYHUVHV 6WDQG 3DVVHV %LOO WR &UDFN 'RZQ RQ 7LFNHW
6FDOSLQJ/$7
,0(6 -XQH    $0 KWWSVODWPV6W] >KWWSVSHUPD
FF.&(7=.@

$V RI  VL[WHHQ VWDWHV KDYH QRWHQDFWHGDQ\DQWLVFDOSLQJODZV
$ODVND ,GDKR ,RZD .DQVDV 0DLQH 0RQWDQD 1HEUDVND 1HZ +DPSVKLUH 1RUWK
'DNRWD 2NODKRPD 2UHJRQ 6RXWK 'DNRWD 7H[DV 8WDK :HVW 9LUJLQLD DQG
:\RPLQJ 6HH 6FKURHGHU HW DO VXSUD QRWH  DW ² VHH JHQHUDOO\ 6
48,5( 3$7721
%2**66(&21'$5< 7,&.(7 0$5.(73/$&(*8,'( 72 86 7,&.(7 5(6$/(
5(*8/$7,216  KWWSVZZZVTXLUHSDWWRQERJJVFRPaPHGLDILOHVLQVLJKWV
SXEOLFDWLRQVVHFRQGDU\WLFNHWPDUNHWSODFHJXLGHWRXVWLFNHWUHVDOH
UHJXODWLRQVXVWLFNHWUHVDOHODZJXLGHEURFKXUHSGI >KWWSVSHUPDFF*(=3(3&@
SURYLGLQJ D FRPSUHKHQVLYH RYHUYLHZ RI FXUUHQW VWDWH DQG ORFDO UHVDOH ODZV

6HH 6FKURHGHU HW DO VXSUD QRWH  DW ² OLVWLQJ E\ VWDWH WKH H[LVWHQFH
DQG IRFXV RI DQWLVFDOSLQJ VWDWXWHV

3DXO &URVE\ -RUGL 0F.HQ]LH 7KH (FRQRPLFV RI 7LFNHW 6FDOSLQJ
&
219(56$7,21 6HSW    30 KWWSVWKHFRQYHUVDWLRQFRPWKHHFRQRPLFVRI
WLFNHWVFDOSLQJ >KWWSVSHUPDFF0&4@ GHWDLOLQJ KRZ RQOLQH SODWIRUPV
LQFUHDVH DOORFDWLYH HIILFLHQF\ E\ JUHDWO\ UHGXFLQJ WUDQVDFWLRQ FRVWV

6HH +DSSHO -HQQLQJV VXSUD QRWH  DW ²
 %522./<1 /$: 5(9,(: >9RO 
ZLGH YDULHW\ RI SULYDWH HQIRUFHPHQW SUDFWLFHV DQG OHJLVODWLYH
FRXQWHUPHDVXUHV VFDOSLQJ IORXULVKHG DV DQ LQFUHGLEO\ OXFUDWLYH
HQGHDYRU DQG WUDQVIRUPHG IURP D SUDFWLFH LQWR DQ HQWHUSULVH LQ
DQG RI LWVHOI

7KH UHVXOW RQOLQH VFDOSLQJ H[SDQGHG
H[SRQHQWLDOO\ PRRWHG SXEOLF QXLVDQFH EDVHG DQWLVFDOSLQJ
VWDWXWHV DQG HOHYDWHG WKH FHQWUDOLW\ RI IDLUQHVV
,, :
5,67 6/$33,1*$17,6&$/3,1* $3352$&+(6 $5(
$%<60$/
7KH VFDOH RI RQOLQH VFDOSLQJ FDQQRW EH XQGHUVWDWHG :KHQ
:DOPDUW PDGH DGGLWLRQDO 6RQ\ 3OD\6WDWLRQ VWRFN DYDLODEOH IRU
RQOLQH SXUFKDVH RQ 1RYHPEHU   LW IDFHG DQ DVWRQLVKLQJ
´ PLOOLRQ ERW DWWHPSWV ZLWKLQ WKH ILUVW  PLQXWHV DORQH ZKLFK
LV D IUDFWLRQ RI ZKDW >:DOPDUW·V@ V\VWHPV GHDO ZLWK
FRQWLQXDOO\µ

,Q  ERW DFWLYLW\ UHSUHVHQWHG  SHUFHQW RI
DOO LQWHUQHW WUDIILF

D  SHUFHQW LQFUHDVH IURP 

7KH
VKHHU LQFUHDVH LQ ERW WUDIILF FUHDWHG DQ LPPHQVH FKDOOHQJH IRU
UHWDLOHUV SUHYLRXVO\ XQDFFXVWRPHG WR WKH SUDFWLFH RI VFDOSLQJ

DQG SROLF\PDNHUV ZRUULHG DV PXFK DERXW FRQVXPHU EDFNODVK DV
WKH\ GLG RXWFU\ IURP EXVLQHVVHV

7KH SUROLIHUDWLRQ RI ERWV UHYHDOHG GHHS IODZV ZLWKLQ
H[LVWLQJ SULYDWH VHFWRU VHFXULW\ PHDVXUHV DQG DQWLVFDOSLQJ ODZV
)RU H[DPSOH WKH YDULHW\ RI PDUNHWV WDUJHWHG E\ VFDOSHUV
UHIOHFWHG D IXQGDPHQWDO VKLIW LQ WKH SUDFWLFH LWVHOI³VFDOSLQJ

6HH (OHIDQW VXSUD QRWH  DW ²

-HUU\ *HLVOHU 'RLQJ 2XU 3DUW WR (QVXUH &XVWRPHUV 1RW ¶*ULQFK %RWV· &DQ
%X\ 7KLV 6HDVRQ·V +RWWHVW ,WHPV:
$/0$57 'HF   KWWSV
FRUSRUDWHZDOPDUWFRPQHZVURRPGRLQJRXUSDUWWRHQVXUHFXVWRPHUVQRW
JULQFKERWVFDQEX\WKLVVHDVRQVKRWWHVWLWHPV >KWWSVSHUPDFF-=(;6@ :DOPDUW
LV QRW DORQH 6HH ,
03(59$,03(59$ %$' %27 5(3257 _(9$6,9( %276 '5,9(
21/,1( )5$8'   >KHUHLQDIWHU  %DG %RW 5HSRUW@ KWWSV
ZZZLPSHUYDFRPUHVRXUFHVUHSRUWV,PSHUYD%DG%RW5HSRUWSGI >KWWSVSHUPD
FF(5=5$)@ VWDWLQJ WKDW ,PSHUYD PLWLJDWHG ´D JLJDQWLF VFDOSLQJ DWWDFN RQ D JOREDO
UHWDLOHU·VGURSRIDOLPLWHGHGLWLRQFROOHFWRUV·LWHPFRQVLVW>LQJ@RI QR OHVV WKDQ PLOOLRQ
ERW UHTXHVWV WR WKH SURGXFW SDJH LQ D PHUH  PLQXWHV )RU FRQWH[W WKDW·V  PRUH
WKDQ WKH >UHWDLOHU·V@ DYHUDJH ZHE WUDIILFµ

,03(59$%$' %27 5(3257  KWWSVZZZLPSHUYDFRP
UHVRXUFHVUHSRUWV,PSHUYD%DG%RW5HSRUWSGI >KWWSVSHUPDFF%07=)@

,G DW 

$OWKRXJK :DOPDUW ZRUNHG WRZDUG GHIHDWLQJ VFDOSHUV LW QHYHUWKHOHVV
SURILWHG RII WKHLU HIIRUWV E\ DOORZLQJ WKLUG SDUWLHV WR RIIHU WKHLU LOOJRWWHQJRRGVRQLWV
RIILFLDO RQOLQH VWRUHIURQW 6HH -DUHG &DUYDOKR 6FDOSHG 36V $UH %HLQJ 5HVROG RQ
:DOPDUW·V 6LWH IRU 5LGLFXORXV 3ULFHV*
$0(5$17 0D\   KWWSVJDPHUDQWFRP
VFDOSHGSVVUHVROGZDOPDUWVVLWHULGLFXORXVSULFHV >KWWSVSHUPDFF4*&1-(@

6HH 5RE )DKH\ +DUGZDUH /DXQFKHV DQG 3UH2UGHUV 'HVSHUDWHO\ 1HHG D
6KDNH8S*
$0(6,1'8675< 2FW   KWWSVZZZJDPHVLQGXVWU\EL]KDUGZDUH
ODXQFKHVDQGSUHRUGHUVGHVSHUDWHO\QHHGDVKDNHXSRSLQLRQ >KWWSVSHUPDFF=7
+@ VHH +DSSHO -HQQLQJV VXSUD QRWH  DW ²
@ .1((&$33,1* 6&$/3,1* 
DOORZHG SHRSOH WR WUHDW FRPPRGLWLHV OLNH LQYHVWPHQW YHKLFOHV

7KLV H[SODLQV ZK\ VR PDQ\ RGGLWLHV EHFDPH WDUJHWV IRU VFDOSLQJ
7HVOD EUDQG PLFURSKRQHV

WKH 0HWD IRUPDOO\ 2FXOXV 4XHVW


1)7V

3RNpPRQ DQG 0DJLF WKH *DWKHULQJ FDUGV

DQG HYHQ
ZULVWEDQGV WR WKH 'HSS Y +HDUG WULDO

5HWDLOHUV DQG UHJXODWRUV
VWUXJJOHG ZLWK EDODQFLQJ SURWHFWLRQDU\ PHDVXUHV ZLWK HFRQRPLF
DFWLYLW\ 7KH ILUVW VXEVHFWLRQ GHVFULEHV WKH LQDGHTXDF\ RI SULYDWH
VHFWRU UHVSRQVHV WR RQOLQH VFDOSLQJ ZKLOH WKH VHFRQG VXEVHFWLRQ
DQDO\]HV WKH VKRUWFRPLQJV RI FXUUHQW DQG SURSRVHG OHJLVODWLYH
PHDVXUHV LQ UHVSRQVH WR RQOLQH ERWV
$ 7KDQN <RX IRU 6FDOSLQJ 3ULPDU\ 0DUNHWV )DLO
&RQVXPHUV DQG %HQHILW IURP 6FDOSHUV
6FDOSLQJ PHWDVWDVL]HG WR WKH LQWHUQHW ZLWK WKH H[SORVLYH
JURZWK LQ ERWV DQG RQOLQH PDUNHWSODFHV VWUXJJOHG WR WUHDW ERWK
WKH V\PSWRP DQG WKH GLVHDVH

6WDQGDUG VWUDWHJLHV WR
VWUHQJWKHQ VLWH VHFXULW\ WKURXJK V\VWHPV OLNH ´&$37&+$µ

EXFNOHG XQGHU WKH LQFUHDVH LQ WKH QXPEHU DQG VRSKLVWLFDWLRQ RI

6HH 6WHSKHQ . +DSSHO 0DULDQQH 0 -HQQLQJV &UHDWLQJ D )XWXUHV 0DUNHW
IRU 0DMRU (YHQW 7LFNHWV 3UREOHPV DQG 3URVSHFWV&
$72 -   SURSRVLQJ D
QDWLRQDO WLFNHW PDUNHWSODFH RQ SDU ZLWK WKH &KLFDJR 0HUFDQWLOH ([FKDQJH UHSOHWH ZLWK
GHULYDWLYHV DQG RSWLRQV FRQWUDFWV 7KH LGHD WKDW WKH UHVDOH LQGXVWU\ DSSURDFKHG D VL]H
WKDW GHPDQGV ODUJHVFDOH QDWLRQDO DWWHQWLRQ RQO\ EROVWHUV DQ DUJXPHQW IRU VWURQJHU
UHJXODWRU\ HIIRUWV WR HVWDEOLVK IDLU GHDOLQJV LQ DQ XQUHJXODWHG PDUNHWSODFH 6HH LQIUD
3DUW ,,,

8PDU 6KDNLU 7HVOD LV 1RZ 6HOOLQJ .DUDRNH 0LFURSKRQHV LQ &KLQD9(5*(
-DQ    30 KWWSVZZZWKHYHUJHFRPWHVODNDUDRNH
PLFURSKRQHVWHVODPLFGLVWUDFWLRQPHUFKDQGLVHURXQGXS >KWWSVSHUPDFF.-*-.&@

0LWFKHOO &ODUN 0HWD ,V 5DLVLQJ 4XHVW +HDGVHW 3ULFHV E\  1H[W 0RQWK
9
(5*( -XO\    30 KWWSVZZZWKHYHUJHFRPPHWD
TXHVWRFFXOXVSULFHLQFUHDVH >KWWSVSHUPDFF4$0))0(@

7RQ\ .ORU 'DNLQ /HYLW +RZ %RWV ([SORLW 1)7 6DOHV3(5,0(7(5;-DQ
  KWWSVZZZSHULPHWHU[FRPUHVRXUFHVEORJKRZVFDOSLQJERWV
PDQLSXODWHQIWVDOHV >KWWSVSHUPDFF5)';5@ +RZ 1)7 %RWV ([SORLW
0DUNHWSODFHV
.$6$'$ KWWSVZZZNDVDGDLRQIWERWV >KWWSVSHUPDFF/7/$*.=@

1LFROH &DUSHQWHU 7KH *UHDW 3RNpPRQ &DUG 6KRUWDJH +DV D 6ROXWLRQ %LOOLRQ
1HZ &DUGV3
2/<*21 -XO\    30 KWWSVZZZSRO\JRQFRP
SRNHPRQSRNHPRQFDUGVKRUWDJHSURGXFWLRQQXPEHUV >KWWSVSHUPDFF9)6
;44@ :LOO %HGLQJILHOG 7KH 5DFH ,V 2Q WR 6WRS 6FDOSLQJ %RWV )URP %X\LQJ $OO WKH 36V
:
,5(' )HE    $0 KWWSVZZZZLUHGFRPVWRU\VFDOSLQJERWVEX\LQJDOOWKH
SVV >KWWSVSHUPDFF9<$+.@

%URRNH .DWR 6FDOSHUV $UH 6HOOLQJ 'HSS Y +HDUG &RXUW $FFHVV RQ ¶%ODFN
0DUNHW· 1< 3
267 0D\    $0 KWWSVQ\SRVWFRPVFDOSHUV
DUHVHOOLQJGHSSYKHDUGFRXUWDFFHVVRQEODFNPDUNHW >KWWSVSHUPDFF'4&;3@

%HGLQJILHOG VXSUD QRWH 

&$37&+$ DQG UH&$37&+$ DWWHPSW WR GLVWLQJXLVK KXPDQV IURP
FRPSXWHUV E\ UHTXLULQJ D ZHEVLWH YLVLWRU WR LGHQWLI\ VSHFLILF LQIRUPDWLRQIURPGLVWRUWHG
WH[W RU LPDJHV 6HH &$37&+$,
03(59$ KWWSVZZZLPSHUYDFRPOHDUQDSSOLFDWLRQ
VHFXULW\ZKDWLVFDSWFKD >KWWSVSHUPDFF7)3(&4@ ODVW YLVLWHG 2FW   VHH
DOVR 4
8(8(,7 VXSUD QRWH  GHVFULELQJ W\SHV RI RQOLQH ERWV KRZ HDFK RQH WDUJHWV
VSHFLILF VHFXULW\ PHDVXUHV DQG WKH LPSDFW RI LQFUHDVHG ERW WUDIILF RQ UHWDLOHUV
 %522./<1 /$: 5(9,(: >9RO 
ERWV HDFK \HDU

(IIRUWV E\ UHWDLOHUV DQG RWKHU VHOOHUV WR VWDYH RII
VFDOSLQJ FDXVHG FRQIXVLRQ DQG HYHQ RXWULJKW DQJHU IURP
FRQVXPHUV

HVSHFLDOO\ ZKHQ WKH V\VWHPV IDLOHG WR IUXVWUDWH
HYHQ WKH PRVW LOOHTXLSSHG VFDOSHU IURP ILQGLQJ VXFFHVV

6RPH
FRPSDQLHV³VXFK DV 7R\RWD 1LNH DQG 6RQ\³RVWHQVLEO\ FDUH
DERXW WKH LPSDFW RI VFDOSHUV RQ WKH FXVWRPHU H[SHULHQFH DQG
KDYH LPSRVHG SHQDOWLHV IRU YLRODWLRQV RI UHOHYDQW SROLFLHV

%XW
LGHQWLFDO FODLPV IURP PDUNHWSODFHV VXFK DV 7LFNHWPDVWHU DQG
UHWDLOHUV ZLWK RQOLQH WKLUGSDUW\ VHOOHUV OLNH :DOPDUW LUN
FUHGXOLW\ EHFDXVH WKRVH SDUWLHV SURILW IURP ERWK WKH VDOH DQG
UHVDOH RI JRRGV

$OWKRXJK PDQ\ VHOOHUV FRQFRFWHG ´ODE\ULQWKLQH
PHFKDQLVPVµ WR VWLIOH VFDOSHUV

WKHVH IUDPHZRUNV³SDLG
VXEVFULSWLRQV SURGXFW EXQGOHV G\QDPLF SULFLQJ DQG ORWWHU\
V\VWHPV DPRQJ RWKHUV³PRQHWDULO\ EHQHILWWHG WKH PHUFKDQWV
DQG VWUXJJOHG WR VDIHJXDUG WKH VKRSSHUV

6HYHUDO VHOOHUV LPSOHPHQWHG SDLG VXEVFULSWLRQ VHUYLFHV LQ
DQ HIIRUW WR FUDFN GRZQ RQ VFDOSLQJ

$OWKRXJK %HVW %X\ FUHDWHG
D VXEVFULSWLRQ VHUYLFH WKDW SURYLGHG QXPHURXV EHQHILWV LW DOVR
ORFNHG WKH SXUFKDVH RI FHUWDLQ SURGXFWV EHKLQG WKDW 
SD\ZDOO³UHTXLULQJ FRQVXPHUV WR MRLQ LWV DQQXDO PHPEHUVKLS
SURJUDP MXVW IRU WKH FKDQFH WR SXUFKDVH D SURGXFW

3XW DQRWKHU

6HH 48(8(,7 VXSUD QRWH 

6WDWW VXSUD QRWH 

-DQKRL 0F*UHJRU 3OD\6WDWLRQ 6FDOSHUV $UHQ·W +DSS\ ZLWK 7KHLU 3XEOLF
,PDJH)
25%(6 )HE    $0 KWWSVZZZIRUEHVFRP
VLWHVMD\PFJUHJRUSOD\VWDWLRQVFDOSHUVDUHQWKDSS\ZLWKWKHLUSXEOLF
LPDJH >KWWSVSHUPDFF/69:7@ GLVFXVVLQJ WKH OHJDOLW\ DQG PHWKRGRORJ\ RI
VFDOSLQJ SUDFWLFHV

6HH HJ 6WHIDQ 6\NHV 1LNH 0RYHV WR &XUE 6QHDNHU%X\LQJ %RWV DQG 5HVDOH
0DUNHW ZLWK 3HQDOWLHV &1%& 2FW    30 KWWSVFQEF[$P89GD
>KWWSVSHUPDFF:<-.1@ VXSUD QRWHV ² DQG DFFRPSDQ\LQJ WH[W

:KHWKHU SXUFKDVHG E\ D VFDOSHU RU DQ RUGLQDU\ FRQVXPHU WKH SURFHHGV
IURP WKH VDOH RI JRRGV SDG D UHWDLOHU·V ERWWRP OLQH 6HH 0
25,7= /8; 3(7(5 %8*62/(
9$/8( ²7+( 61($.(5 5(6$/( 0$5.(7   KWWSVFRUHDFXNGRZQORDG
SGISGI >KWWSVSHUPDFF..=<@ 2OLYLD +DUULV 36 6FDOSHUV &DQ
1RZ 6HOO 7KURXJK :DOPDUW·V :HEVLWH6
&5((1 5$17 0D\  
KWWSVVFUHHQUDQWFRPSVVFDOSHUVUHVHOOZDOPDUWZHEVLWH >KWWSVSHUPDFF;)
*&'@ &ULEE 2YHG VXSUD QRWH 

$OH[ &UDQ] 7KH 1HHGOHVV 'UDPD RI %X\LQJ D 369(5*( 0D\  
 $0 KWWSVZZZWKHYHUJHFRPSVUHVWRFNEHVWEX\
ZDOPDUWVRQ\SOD\VWDWLRQ >KWWSVSHUPDFF%'19(;@

0DUVKDOO +RQRURI 36 %XQGOHV DUH %DG IRU 6FDOSHUV³DQG IRU *DPHUV
7
20·6 *8,'( -DQ   KWWSVZZZWRPVJXLGHFRPQHZVSVEXQGOHVVFDOSHUV
JDPHUV >KWWSVSHUPDFF&).-8/'@

&DPHURQ )DXONQHU :K\ WKH 36 3D\ZDOO ,VQ·W :RUWKZKLOH DW $PD]RQ
:DOPDUW RU %HVW %X\9
(5*( 1RY    $0 KWWSVZZZWKHYHUJH
FRPSVUHVWRFN[ER[EHVWEX\ZDOPDUWDPD]RQVXEVFULSWLRQ
>KWWSVSHUPDFF641*&<@

6WHYH 'HQW %HVW %X\ /LPLWV 6DOHV RI 19,',$ 57;6HULHV *38V WR 7RWDOWHFK
6XEVFULEHUV(
1*$'*(7 )HE    $0 KWWSVZZZHQJDGJHWFRPEHVWEX\
JSXVDOHVWRWDOWHFKPHPEHUVKLSSD\ZDOOKWPO >KWWSVSHUPDFF%)='0)@
@ .1((&$33,1* 6&$/3,1* 
ZD\ ´%HVW %X\ ZDQWV D SRXQG RI IOHVK EHIRUH LW KDQGV RYHU D QHZ
1YLGLD JUDSKLFV FDUGµ

0RVW *38V FRVW DSSUR[LPDWHO\ ²
 SHU XQLW DQG %HVW %X\·V SROLF\ HIIHFWLYHO\ LQFUHDVHG SULFHV
 WR  SHUFHQW ZKLOH VWLOO IDLOLQJ WR VWRS VFDOSHUV

7KLV ´PLQRU
RSHUDWLRQ FRVWµ KHOSHG VFDOSHUV VHFXUH PRUH LQYHQWRU\ EHFDXVH LW
HIIHFWLYHO\ SULFHG RXW RWKHU FRQVXPHUV

2QH VFDOSHU VWDWHG WKDW
%HVW %X\·V SROLF\ ´GLG PRUH WR KHOS WKDQ DQ\WKLQJ HOVHµ

$PD]RQ WRRN D VLPLODU DSSURDFK EXW LPSOHPHQWHG DQ DGGLWLRQDO
VHFXULW\ PHDVXUH WKDW OLPLWHG D SRUWLRQ RI IUHTXHQWO\ VFDOSHG
UHVWRFNV WR FHUWDLQ LQYLWHG $PD]RQ 3ULPH VXEVFULEHUV ZKLFK
PRUH HIIHFWLYHO\ GHWHUUHG VFDOSHUV IURP JDPLQJ WKH V\VWHP

+RZHYHU $PD]RQ 3ULPH ZKLFK FRVWV  SHU \HDU DQG
FRPPDQGV DQ HVWLPDWHG  PLOOLRQ 86 PHPEHUV

FUHDWHG
VLPLODU EDUULHUV WR HQWU\ IRU FRQVXPHUV

/LNH VXEVFULSWLRQV EXQGOHV LQFUHDVH WKH SURILWV IRU
UHWDLOHUV ZKLOH SULFLQJ RXW PDQ\ FRQVXPHUV

3URGXFW EXQGOLQJ
LV D VWUDWHJ\ ZKHUH D EUDQG RU PHUFKDQW VHOOV WZR RU PRUH RIWHQ
FRPSOHPHQWDU\ SURGXFWV WRJHWKHU

*DPH6WRS QRWRULRXVO\

%UDQGRQ +LOO %HVW %X\ /RFNV 1YLGLD 57; *38V %HKLQG 2EVFHQH 
3D\ZDOO7
20·6 +$5':$5( )HE   KWWSVZZZWRPVKDUGZDUHFRPQHZVEHVW
EX\WRWDOWHFKJHIRUFHUW[ >KWWSVSHUPDFF9&4*&($@

5RDFK VXSUD QRWH 

0DUN 7\VRQ %HVW %X\·V  *38 3D\ZDOO +HOSHG 6FDOSHUV 1RW *DPHUV
7
20·6 +$5':$5( )HE   KWWSVZZZWRPVKDUGZDUHFRPQHZVEHVWEX\JSX
SD\ZDOOVFDOSHUV >KWWSVSHUPDFF%<:%*;@

0LFKDHO .DQ  7RWDOWHFK 3D\ZDOO +HOSV 6FDOSHU 6QDJ  *38V IURP
%HVW %X\3&0
$* )HE   KWWSVZZZSFPDJFRPQHZVWRWDOWHFKSD\ZDOO
KHOSVVFDOSHUVQDJSOXVJSXVIURPEHVWEX\ >KWWSVSHUPDFF<%7)5@

/LVD /DF\ $PD]RQ·V ,QYLWH2QO\ 2UGHUV 6HHN WR :HHG 2XW ¶%DG $FWRUV·
$
':((. -XQH   KWWSVZZZDGZHHNFRPFRPPHUFHDPD]RQLQYLWHRQO\RUGHUV
>KWWSVSHUPDFF515)@

.HOO\ 7\NR $PD]RQ 3ULPH ,QFUHDVH 6WDUWV )ULGD\ +HUH·V +RZ WR /RFN LQ D
0HPEHUVKLS DW &XUUHQW 3ULFH86$7
2'$< )HE    $0 KWWSVZZZ
XVDWRGD\FRPVWRU\PRQH\VKRSSLQJDPD]RQSULPHPHPEHUVKLSLQFUHDVHJLIW
VXEVFULSWLRQ >KWWSVSHUPDFF1;+=-@ %ULDQ 'HDQ $PD]RQ 3ULPH 8VHU
DQG 5HYHQXH 6WDWLVWLFV %
$&./,1.2 $XJ   KWWSVEDFNOLQNRFRPDPD]RQ
SULPHXVHUV >KWWSVSHUPDFF/.*7/*7@

$LVKD 0DOLN $PD]RQ ,V /DXQFKLQJ DQ ,QYLWH%DVHG 2UGHULQJ 2SWLRQ
6WDUWLQJ ZLWK WKH 36 DQG ;ER[ 6HULHV ;7
(&+&581&+ -XQH    $0
KWWSVWHFKFUXQFKFRPDPD]RQLQYLWHRQO\RUGHULQJRSWLRQSV[ER[VHULHV
[ >KWWSVSHUPDFF)<6878@

%ODLU VXSUD QRWH  5HWDLOHUV DQG PDQXIDFWXUHUV WDNH DGYDQWDJH RI JRRGV
OLPLWHG E\ VXSSO\ WKURXJK EXQGOHV OHYHUDJLQJ WKHLU PDUNHW SRZHU WR SXVK FRQVXPHUV
WRZDUG VSHQGLQJ H[WUD PRQH\ RQ JRRGV WKH\ PLJKW ZDQW ,G %XW UHWDLOHUV DOVR WDUJHW
VFDOSHUV ZLWK WKLV SUDFWLFH³FRQVXPHUV FRXOG SXUFKDVH WKRVH DGGLWLRQDO EXQGOHG JRRGV
VHSDUDWHO\ ZLWKRXW D SULFH PDUNXS EHFDXVH GHPDQG GRHV QRW RXWSDFH VXSSO\IRUWKRVH
DQFLOODU\ SURGXFWV $OWKRXJK EXQGOHV ´DFW DV D GHWHUUHQW IRU VFDOSHUV DQG ERWVµ VR ORQJ
DV WKH UHVDOH SULFH RI D FRQVROH LWVHOI H[FHHGV WKH FRVW RI WKH EXQGOH WKH VFDOSHU EHQHILWV
IURP WKH SXUFKDVH 6HH +RQRURI VXSUD QRWH 

6HH /R .LGG +RZ 3URGXFW %XQGOLQJ 'ULYHV 5HYHQXH +RZ WR 'R ,W 5LJKW&2*6<
-DQ   KWWSVFRJV\FRPEORJSURGXFWEXQGOLQJ >KWWSVSHUPDFF6$4../4@
0LFKHOOH 'HHU\ 7KH *XLGH WR 3URGXFW %XQGOLQJ ([DPSOHV 6WUDWHJ\ 3ULFLQJ6
+Ż*81 'HF
  KWWSVJHWVKRJXQFRPOHDUQSURGXFWEXQGOLQJ >KWWSVSHUPDFF0$$.4)@
 %522./<1 /$: 5(9,(: >9RO 
EXQGOHV QHZ YLGHR JDPH FRQVROHV ZLWK RWKHU JRRGV VXFK DV
FRSLHV RI WKH ODWHVW YLGHR JDPH UHOHDVHV SHULSKHUDOV HJ
KHDGVHWV DFFHVVRULHV DQG JLIW FDUGV

7KHVH SHULSKHUDO RU
DFFHVVRU\ EXQGOHV LQFUHDVHG WKH FRVW RI D FRQVROH SXUFKDVH
DQ\ZKHUH IURP  WR  SHUFHQW

$W WKH RXWVHW RI FRQVROH
ODXQFKHV WKH GHPDQG IRU WKRVH DGGLWLRQDO DFFHVVRULHV DOVR
RXWSDFHG VXSSO\ PDNLQJ WKH GHDOV OXFUDWLYH IRU VFDOSHUV HYHQ LI
LW LQFUHDVHG FRVWV

$OWKRXJK VXFK ´PL[HG EXQGOLQJµ DFWV DV DQ
HIIHFWLYH SULFH GLVFULPLQDWLRQ WRRO ZLWK VRFLDO ZHOIDUHHQKDQFLQJ
IHDWXUHV

*DPH6WRS·V SUDFWLFH RI EXQGOLQJ JLIW FDUGV ZLWK
FRQVROHV KDV FRPSHOOHG FRQVXPHUV WR SRQ\ XS DGGLWLRQDO FDVK LQ
DQ HIIRUW WR REOLJDWH WKHP WR VSHQG HYHQ PRUH PRQH\ LQ WKH
IXWXUH XVLQJ D SUHSDLG OLQH RI FUHGLW LH D JLIW FDUG

,Q WKH OLYHHYHQWV LQGXVWULHV HJ HQWHUWDLQPHQW DQG
VSRUWV UHFHQW KLJKSURILOH WLFNHW VDOHV LQYROYHG ´G\QDPLF
SULFLQJµ

D SUDFWLFH GHVLJQHG IRU DUWLVWV WR FDSWXUH WKH ´UHDOµ
PDUNHW SULFH WKDW VFDOSHUV DFKLHYH E\ G\QDPLFDOO\ KLNLQJ XS
UHJXODU WLFNHW SULFHV LQ UHVSRQVH WR GHPDQG 8QVXUSULVLQJO\ WKLV
SUDFWLFH UHVXOWHG LQ HQRUPRXV FRQWURYHUVLHV

OHJLVODWLYH
KHDULQJV

DQG UHFRUGEUHDNLQJ UHWXUQV IRU WKH WLFNHWLQJ
SODWIRUPV

7KLV WDFWLF FOHDUO\ IHOO VKRUW³VFDOSHUV FRXOG VWLOO

+RQRURI VXSUD QRWH 

6HH LG

6HH -DQKRL 0F*UHJRU 36 ;ER[ 6HULHV ; 5HVWRFN 3UREOHPV 5HWDLOHUV $UH $OVR
%DIIOHG)
25%(6 -XO\    30 KWWSVZZZIRUEHVFRPVLWHVMD\PFJUHJRU
SV³[ER[VHULHV[UHVWRFNSUREOHPVUHWDLOHUVDUHDOVREDIIOHG >KWWSVSHUPDFF
%.=.%&0@ VHH DOVR (ULF $EHQW 36 5HVWRFNHG %XW LQ %XQGOHV WR 6WRS WKH 6FDOSHUV
6
/$6+*($5 $SU    $0 KWWSVZZZVODVKJHDUFRPSVUHVWRFNHGEXWLQ
EXQGOHVWRVWRSWKHVFDOSHUV >KWWSVSHUPDFF0*&:*'1@

6HH <RQJ &KDR 7LPRWK\ 'HUGHQJHU 0L[HG %XQGOLQJ LQ 7ZR6LGHG 0DUNHWV
LQ WKH 3UHVHQFH RI ,QVWDOOHG %DVH (IIHFWV0
*076&,VHH JHQHUDOO\ 7LPRWK\
'HUGHQJHU 9LQHHW .XPDU 7KH '\QDPLF (IIHFWV RI %XQGOLQJ DV D 3URGXFW 6WUDWHJ\
0
.7*6&,   H[DPLQLQJ WKH LPSDFW RI FRQVROH EXQGOHV RQ FRQVXPHU SXUFKDVHV
DQG GHQRWLQJ WKDW ´SXUH EXQGOLQJ UHIHUV >WR WKH@ SUDFWLFH RI VHOOLQJ WZR RU PRUH GLVFUHWH
SURGXFWV RQO\ DV SDUW RI D EXQGOH >DQG@ PL[HG EXQGOLQJ UHIHUV WR WKH SUDFWLFH RI VHOOLQJ D
EXQGOH RI WKH SURGXFWV DV ZHOO DV WKH LQGLYLGXDO SURGXFWV WKHPVHOYHVµ

+RQRURI VXSUD QRWH 

6HH 5DPVL $ :RRGFRFN 7KH (IILFLHQW 4XHXH DQG WKH &DVH $JDLQVW '\QDPLF
3ULFLQJ  ,
2:$ / 5(9    GHILQLQJ G\QDPLF SULFLQJ DV ´WKH XVH RI
LQIRUPDWLRQ DJH WRROV VXFK DV ELJ GDWD DQG DOJRULWKPV WR DGMXVW SULFHV EDVHG RQ QHZ
LQIRUPDWLRQ RYHU SHULRGV GXULQJ ZKLFK RXWSXW LV IL[HGµ

$QG\ *UHHQH (WKDQ 0LOOPDQ 6SULQJVWHHQ )DQV 5DJHG RYHU 7LFNHW 3ULFHV
([SHUWV 6D\ 7KHUH·V 1R (DV\ )L[5
2//,1* 6721( $XJ   KWWSVZZZ
UROOLQJVWRQHFRPPXVLFPXVLFIHDWXUHVEUXFHVSULQJVWHHQWLFNHWFRQWURYHUV\
>KWWSVSHUPDFF4%%4=@

%UHQW -RKQVRQ 0DWW $UFR $IWHU 6SULQJVWHHQ 8SURDU 7RS 1- /DZPDNHU
2UGHUV +HDULQJ RQ ¶2EVFHQH· 7LFNHW 3ULFHV1-
&20 -XO\    30
KWWSVZZZQMFRPSROLWLFVDIWHUVSULQJVWHHQXSURDUWRSQMODZPDNHURUGHUV
KHDULQJRQREVFHQHWLFNHWSULFHVKWPO >KWWSVSHUPDFF8:59/@

- &ODUD &KDQ /LYH 1DWLRQ 5HSRUWV % LQ 5HYHQXH DV )DQ $WWHQGDQFH +LWV
4XDUWHUO\ +LJK+
2//<:22' 5(3 $XJ    30 KWWSVZZZKROO\ZRRGUHSRUWHU
@ .1((&$33,1* 6&$/3,1* 
SXUFKDVH WLFNHWV DW WKH ORZHU SULFHV

³DQG LW OHG WR DQ
LPSRUWDQW TXHVWLRQ KRZ LV ´G\QDPLF SULFLQJµ DQ\ GLIIHUHQW IURP
VFDOSLQJ" /HJLVODWRUV GHVLJQHG DQWLVFDOSLQJ ODZV WR HQVXUH
FRQVXPHUV EHQHILWHG IURP IDLU PDUNHW SULFLQJ DQG WKH G\QDPLF
SULFLQJ PRGHO DUWLILFLDOO\ LQFUHDVHG WKRVH FRVWV WR PDWFK WKH
DOJRULWKPLFDOO\ GHILQHG VFDOSHU SULFHV

,Q WKHVH VLWXDWLRQV
FRQVXPHUV SDLG PRUH UHJDUGOHVV RI ZKHWKHU WKH\ SXUFKDVHG D
WLFNHW IURP WKH SULPDU\ VHOOHU RU VFDOSHU

(YHQ DWWHPSWV WR UDQGRPL]H WKH DOORFDWLRQ RI VXSSO\
IDLOHG WR GHWHU VFDOSHUV $OWKRXJK ORWWHU\ DQG UDIIOH V\VWHPV
SRSXODU ZLWK FRPSDQLHV VXFK DV 1LNH DQG $GLGDV

FUHDWHG
REVWDFOHV E\ UHTXLULQJ H[WHQVLYH SHUVRQDO LQIRUPDWLRQ WR VLJQ
XS IRU OLPLWHG UHOHDVH SURGXFWV KDFNHUV QHYHUWKHOHVV
VXFFHVVIXOO\ PDQDJHG WR FLUFXPYHQW DQG HIIHFWLYHO\
PDQLSXODWH VXFK SURJUDPV

/RWWHU\ V\VWHPV ULVN
XQQHFHVVDULO\ LQFUHDVLQJ FRVWV RQ FRQVXPHUV DV ZHOO
HVSHFLDOO\ ZKHQ JDSV H[LVW LQ WKH QRWLILFDWLRQ V\VWHP

RU LI
UHWDLOHUV LPSOHPHQW D ORWWHU\ V\VWHP WR SHUPLW FRQVXPHUV WR
SXUFKDVH RQO\ D EXQGOHG SURGXFW

6RPH EXVLQHVVHV DWWHPSWHG WR GLJLWDOO\ UHFUHDWH SK\VLFDO
REVWDFOHV IRU VFDOSHUV WKURXJK OLQHV 'LJLWDO TXHXHV RSHUDWH
VLPLODU WR D GHOL·V WLFNHW V\VWHP ZKLFK UHVWULFWV DFFHVV WR WKRVH
FRPEXVLQHVVEXVLQHVVQHZVOLYHQDWLRQTHDUQLQJV >KWWSVSHUPDFF
=<0:9@

6HH &KULV :LOOPDQ %UXFH 6SULQJVWHHQ )DQV )XULRXV DW 7LFNHW 3ULFHV *RLQJ
DV +LJK DV . 'XH WR 7LFNHWPDVWHU·V ¶'\QDPLF 3ULFLQJ· 9
$5,(7< -XO\   
30 KWWSVYDULHW\FRPPXVLFQHZVEUXFHVSULQJWHHQWLFNHWPDVWHUWLFNHWSULFHV
ULVHWKRXVDQGVG\QDPLFSULFLQJ >KWWSVSHUPDFF8+47.(0@ *UHHQH
0LOOPDQ VXSUD QRWH 

6HH 3RUFHOOR VXSUD QRWH  DW ²

6WHYH .QRSSHU 7D\ORU 6ZLIW·V 7LFNHW 6WUDWHJ\ %ULOOLDQW %XVLQHVV RU 6ORZLQJ
'HPDQG"5
2//,1* 6721( $SU   KWWSVZZZUROOLQJVWRQHFRPSURQHZVWD\ORUVZLIWV
WLFNHWVWUDWHJ\EULOOLDQWEXVLQHVVRUVORZLQJGHPDQG >KWWSVSHUPDFF33&<4<@

6HH 0LFKDHO %DUULV 1LNH 0RELOH 5DIIOH 7DNHV D 5XQ DW ,OOLFLW 6QHDNHU 7UDGH
5
(7$,/ ',9( KWWSVZZZUHWDLOGLYHFRPH[PRELOHFRPPHUFHGDLO\QLNHPRELOHUDIIOH
WDNHVDUXQDWLOOLFLWVQHDNHUWUDGH >KWWSVSHUPDFF5695:0@

1HZHJJ DQ RQOLQH FRPSXWHU KDUGZDUH UHWDLOHU LPSOHPHQWHG D ORWWHU\
V\VWHP WR SUHYHQW ERWV IURP EX\LQJ XS *38V³RQO\ IRU DQ HOHYHQ\HDUROG WR ILQG D
ORRSKROH WKDW EHDW WKH V\VWHP XVLQJ RQH RI WKH ZHEVLWH·V SRSXODU IHDWXUHV -RUJH -LPHQH]
<HDU2OG 'LVFRYHUV /RRSKROH LQ 1HZHJJ·V /RWWHU\ 6\VWHP %X\V 57; 3&*
$0(5
-XO\   KWWSVZZZSFJDPHUFRP\HDUROGGLVFRYHUVORRSKROHLQQHZHJJV
ORWWHU\V\VWHPEX\VUW[ >KWWSVSHUPDFF:;)3-$@

&RQVLGHU KRZ HDVLO\ DQ RSSRUWXQLW\ FDQ IDOO WKURXJK WKH FUDFNV JLYHQ WKH
VKHHU QXPEHU RI VSDP HPDLOV QRWLILFDWLRQV DQG RWKHU WH[W PHVVDJHV WKH DYHUDJH
FRQVXPHU UHFHLYHV RQ DQ\ JLYHQ GD\ (J $OOLVRQ -RKQVRQ :H /LYH LQ 1RWLILFDWLRQ +HOO
9
(5*( $XJ    30 KWWSVZZZWKHYHUJHFRPSXVK
QRWLILFDWLRQVLRVDQGURLGGDLO\GLJHVWWLPHVHQVLWLYH >KWWSVSHUPDFF5:*=)</@

0LFKDHO .DQ 1HZHJJ 5HVSRQGV WR *38 &38 6KRUWDJHV ZLWK &RQWURYHUVLDO
/RWWHU\ 6\VWHP3&0
$* -DQ   KWWSVZZZSFPDJFRPQHZVQHZHJJUHVSRQGV
WRJSXFSXVKRUWDJHVZLWKFRQWURYHUVLDOORWWHU\V\VWHP >KWWSVSHUPDFF0:93=4@
 %522./<1 /$: 5(9,(: >9RO 
LQ OLQH

7LFNHWPDVWHU·V 9HULILHG )DQ V\VWHP VXSSRVHGO\ DGGV
DQ H[WUD OD\HU RI VHFXULW\ E\ ERWK SULRULWL]LQJ XVHUV ZLWK
SXUFKDVH KLVWRULHV DQG UHTXLULQJ XVHUV WR SURYLGH LGHQWLILFDWLRQ
DQG SD\PHQW LQIRUPDWLRQ SULRU WR TXHXHLQJ

:KLOH RUGLQDU\
FRQVXPHUV HQGOHVVO\ UHIUHVKHG ZHEVLWHV RUJDQL]HG VFDOSLQJ
JURXSV

HDVLO\ FLUFXPYHQWHG YLUWXDO TXHXHV IRU FRQVROHV XVLQJ
ERWV

0RUHRYHU VHOOHUV· VHFXULW\ PHDVXUHV PXVW NHHS SDFH ZLWK
VFDOSHUV· FRQVWDQWO\ HYROYLQJ VRIWZDUH

ZKLFK LQFUHDVHV WKH
DGPLQLVWUDWLYH EXUGHQ DQG SURYLGHV FRPSDQLHV OLNH
7LFNHWPDVWHU ZLWK WKH MXVWLILFDWLRQ QHHGHG WR FKDUJH KLJKHU
SURFHVVLQJ IHHV WR WKH FRQVXPHU

8OWLPDWHO\ D P\ULDG RI RWKHU
WDFWLFV RIIHUHG DV PXFK KRSH RI H[LJHQWO\ HUDGLFDWLQJ WKH
HSLGHPLF RI ERWV DV WKH\ GLG H[SRVLQJ VLJQLILFDQW YXOQHUDELOLWLHV
WR WKRVH VDPH WHFKQRORJLHV


6HH 1HYUD $]HUNDQ 6ROG 2XW :K\ WKH 0XVLF ,QGXVWU\ 1HHGV WR 8UJH
/DZPDNHUV WR 5HJXODWH +RZ &RQFHUW 7LFNHWV $UH 'LVWULEXWHG:
+,77,(5 / 5(9 
 

3RUFHOOR VXSUD QRWH  DW  VHH DOVR -DVRQ .RHEOHU -RVHSK &R[ 7KH
&XUH 7ULHG WR 6WRS 6FDOSHUV %URNHUV $UH 6HOOLQJ (QWLUH 7LFNHWPDVWHU $FFRXQWV ,QVWHDG
9,&( 0DU    30 KWWSVZZZYLFHFRPHQDUWLFOHZ[MT]WKHFXUHWULHG
WRVWRSVFDOSHUVEURNHUVDUHVHOOLQJHQWLUHWLFNHWPDVWHUDFFRXQWVLQVWHDG
>KWWSVSHUPDFF73%<(;/@ GLVFXVVLQJ 7LFNHWPDVWHU·V 9HULILHG )DQ SURJUDP DQG
KRZ VFDOSHUV HDVLO\ FLUFXPYHQWHG LW

0DWW :HOW\ (YHU\WKLQJ <RX 1HHG WR .QRZ $ERXW 6QHDNHU %RWV&203/(;
-XO\   KWWSVZZZFRPSOH[FRPVQHDNHUVDPDWWZHOW\KRZWRXVHVQHDNHU
ERWV >KWWSVSHUPDFF'*:47@ WHDFKLQJ UHDGHUV KRZ WR VFDOS XVLQJ ERWV DQG
EHFRPH SDUW RI RUJDQL]HG ´FRRNµ JURXSV

&KULVWRSKHU 'ULQJ :KDW &DQ :H 'R WR 6WRS 7KH 36 DQG ;ER[ 6FDOSHUV"
*
$0(6,1'8675< 0D\   KWWSVZZZJDPHVLQGXVWU\EL]ZKDWFDQZHGRWR
VWRSWKHSVVFDOSHUV >KWWSVSHUPDFF%/*9.8@ 'HEUD 3DUPD $W 7LFNHWPDVWHU
6FDOSHUV 6FRUH DQG )DQV &RPH /DVW-/&
20  ² 

'DQD -DVNLHU .HHS WKH 7LFNHWV ZLWK WKH )DQV $ 3URSRVDO IRU D )HGHUDO /DZ
WR 3URWHFW &RQVXPHUV $JDLQVW 3ULFH *RXJLQJ DQG &RXQWHUIHLW 7LFNHWV LQ WKH 6HFRQGDU\
7LFNHWLQJ 0DUNHW:6
7$7( / 5(9   

(J ,DQ 7KRPDV :K\ 7D\ORU 6ZLIW %UXFH 6SULQJVWHHQ 7LFNHWV :LOO %H 0RUH
([SHQVLYH DQG 7RXJKHU WR *HW &1%& -DQ    30 KWWSVFQEF[K/3+%L
>KWWSVSHUPDFF67&:&6@ .DLWO\Q 7LIIDQ\ +RZ 7LFNHWPDVWHU·V 9HULILHG )DQ
3URJUDP 7R\V ZLWK WKH 3DVVLRQV RI )DQGRP9(5*( )HE    $0
KWWSVZZZWKHYHUJHFRPWLFNHWPDVWHUYHULILHGIDQWXPEOUUHGGLW
WD\ORUVZLIWKDUU\VW\OHV >KWWSVSHUPDFF;.%&8'7@

3DSHUOHVV0RELOH 2QO\ 7LFNHWV PLWLJDWH VFDOSLQJ DW WKH H[SHQVH RI WKH
ZKROHVDOH HOLPLQDWLRQ RI UHVDOH E\ OLPLWLQJ WKH WUDQVIHUDELOLW\ RI WLFNHWV 'DQL 'HDKO
3ULPDYHUD 6RXQG )HVWLYDO 6ZLWFKHV WR 0RELOH2QO\ 7LFNHWV WR &RPEDW %RWV DQG 6FDOSLQJ
9
(5*( 2FW    30 KWWSVZZZWKHYHUJHFRP
SULPDYHUDVRXQGIHVWLYDOPRELOHGLFHWLFNHWLQJVZLWFKFRPEDWVFDOSLQJ >KWWSVSHUPD
FF*:.3:@ %LRPHWULF VFDQV IRU WLFNHWV VROYH RQH FRQVXPHU SURWHFWLRQ LVVXH EXW
FUHDWH VHULRXV GDWD SULYDF\ FRQFHUQV %ODLU +XJKHV 7KH 1HZ 7LFNHWLQJ 7HFKQRORJ\ 7KDW
0D\ 0DNH 6FDOSLQJ D 7KLQJ RI WKH 3DVW&
219(56$7,21 1RY    30
KWWSVWKHFRQYHUVDWLRQFRPWKHQHZWLFNHWLQJWHFKQRORJ\WKDWPD\PDNHVFDOSLQJD
WKLQJRIWKHSDVW >KWWSVSHUPDFF7&5'30@ /LPLWLQJ D SURGXFW·V
IXQFWLRQDOLW\ HJ D *38·V FDSDFLW\ WR SHUIRUP SURRI RI ZRUN FDOFXODWLRQV IRU
FU\SWRPLQLQJ WKHRUHWLFDOO\ GLPLQLVKHV GHPDQG DQG LQFUHDVHV VXSSO\ EXW D VFDOSHU·V
JXLOH VHHPV OLPLWOHVV³LW WXUQV RXW WKDW OLPLWLQJ IXQFWLRQDOLW\ EDUHO\ DIIHFWHG WKH YDOXH
RI *38V IRU FU\SWR IDUPV 0LFKDHO .DQ &U\SWRFXUUHQF\ 0LQHUV 1YLGLD·V /LWH +DVK 5DWH
@ .1((&$33,1* 6&$/3,1* 
)RU HYHU\ ZDOO WKDW RQOLQH VHOOHUV EXLOG VFDOSHUV EULQJ D
WDOOHU ODGGHU 7KHVH VXSSRVHG FRXQWHUPHDVXUHV ´>U@HWDLOHU·V
UDQVRP GHPDQGVµ

PHUHO\ SULFHG RXW RUGLQDU\ FRQVXPHUV ZKR
FDQQRW DIIRUG WKH VXEVWDQWLDOO\ LQFUHDVHG FRVWV DQG IDLOHG WR
GHWHU VFDOSHUV IURP UDNLQJ LQ VLJQLILFDQW SURILWV

,I SULFHV RQ
WKH UHVDOH PDUNHW RXWVWULS WKH PRGHUDWH FRVW LQFUHDVHV IURP
WKHVH SUDFWLFHV WKH\ HIIHFWLYHO\ ER[ RXW WKH RUGLQDU\ $PHULFDQ
FRQVXPHU ZKLOH LPSURYLQJ WKH VHOOHU·V PDUJLQV
% $ 6\VWHP RI 8QFKHFNHG ,PEDODQFHV 0RGHUQ
$QWLVFDOSLQJ 5HJXODWLRQ
7KH SULYDWH VHFWRU·V VWUXJJOH WR FXUWDLO VFDOSLQJ HOHYDWHG
WKH QHHG IRU D IRUFHIXO UHJXODWRU\ UHVSRQVH $V RQH RI KLV ILQDO
DFWV LQ RIILFH 3UHVLGHQW 2EDPD VLJQHG WKH %276 $FW LQWR ODZ
WR HQVXUH FRQVXPHU DFFHVV WR WLFNHWV DW ´IDLU DQG UHDVRQDEOH
SULFHVµ DQG WR FRPEDW VFDOSLQJ LQ WKH WLFNHWLQJ LQGXVWU\

%276 OLNH WKH SURSRVHG *ULQFK

DQG %266

$FWV UHFRJQL]HG
WKDW PRGHUQ WHFKQRORJ\ DOWHUHG KRZ VFDOSHUV RSHUDWH³D
QHFHVVDU\ ILUVW VWHS LQ WKH GLUHFWLRQ RI H[SDQGLQJ FRQVXPHU
SURWHFWLRQ 7KHVH SLHFHV RI OHJLVODWLRQ ERWK SDVVHG DQG
SURSRVHG KRZHYHU H[KLELW IXQGDPHQWDO VKRUWFRPLQJV LQ
HQIRUFHPHQW DQG SROLF\ WKDW SUHYHQW WKHP IURP DFKLHYLQJ ZKDW
&RQJUHVV LQWHQGHG
%276 SURKLELWV WKH XVH RI ERWV WR FLUFXPYHQW GLJLWDO
VHFXULW\ PHDVXUHV RQ WLFNHWLQJ VLWHV DQG LW JLYHV WKH )7&
HQIRUFHPHQW DXWKRULW\ RYHU DQ\ YLRODWLRQV

,Q  VSRUWV
/LPLWHU 'LG /LWWOH WR 6WRS 8V3&0$* -DQ   KWWSVZZZSFPDJFRP
QHZVFU\SWRFXUUHQF\PLQHUVQYLGLDVOLWHKDVKUDWHOLPLWHUGLGOLWWOHWRVWRS
>KWWSVSHUPDFF=):=)@

-DVRQ (QJODQG &RQVROH %XQGOHV DQG 5HVWRFN 6XEVFULSWLRQ 3D\ZDOOV $UH 6KDG\³
+HUH·V :K\/
$3723 0$* 'HF   KWWSVZZZODSWRSPDJFRPIHDWXUHV
FRQVROHEXQGOHVDQGUHVWRFNVXEVFULSWLRQSD\ZDOOVDUHVKDG\ >KWWSVSHUPDFF%*7'=:8@

(J +RQRURI VXSUD QRWH  7KH FRXQWHUPHDVXUHV QHHGHG WR FRPEDW
VFDOSHUV LQFUHDVHG SULPDU\ VHOOHUV· RYHUKHDG FRVWV LH WLPH ODERU DQG UHVRXUFHV DQG
FRPSDQLHV SXVKHG WKH DGGLWLRQDO H[SHQVH RQWR FRQVXPHUV LH IHHV EXQGOHV
VXEVFULSWLRQV HWF

'DQ 5\V 3UHVLGHQW 2EDPD 6LJQV $QWL6FDOSLQJ %LOO LQWR /DZ%,//%2$5'
'HF   KWWSVZZZELOOERDUGFRPPXVLFPXVLFQHZVSUHVLGHQWREDPDVLJQV
ERWVDFWODZ >KWWSVSHUPDFF9-7-4*%@ =DFKDU\ 6 6WXUPDQ :KHUH·V WKH
&RQVXPHU +DUP" 7KH %276 $FW $ )UXLWOHVV %RRJH\PDQ +XQW9
$1'-(177(&+
/   

6WRSSLQJ*ULQFK%RWV$FWRI6WK&RQJ

%HWWHU 2YHUVLJKW RI 6HFRQGDU\ 6DOHV DQG $FFRXQWDELOLW\ LQ &RQFHUW 7LFNHWLQJ
$FW RI  +5  WK &RQJ 

%HWWHU 2QOLQH 7LFNHW 6DOHV $FW RI  3XE / 1R ²  6WDW 
FRGLILHG DW  86& F VHH DOVR /HVOH\ )DLU )7&·V )LUVW %276 $FW &DVHV -XVW WKH
7LFNHW WR +HOS 3URWHFW &RQVXPHUV IURP 7LFNHW %RWV)
('75$'( &200·1 -DQ  
KWWSVZZZIWFJRYQHZVHYHQWVEORJVEXVLQHVVEORJIWFVILUVWERWVDFWFDVHV
 %522./<1 /$: 5(9,(: >9RO 
WLFNHWLQJ ZHEVLWHV UHFHLYHG WKH ODUJHVW VKDUH RI ERWV ZKLFK
DFFRXQWHG IRU RYHU  SHUFHQW RI WRWDO WUDIILF RQ VXFK VLWHV

%276 GHILQHG WKH XVH RI WLFNHWLQJ ERWV DV DQ XQIDLU SUDFWLFH
SURKLELWHG XQGHU WKH )7& $FW

$V D UHVXOW D YLRODWLRQ RI %276
PD\ UHVXOW LQ FLYLO ILQHV FDSSHG DW  IRU HDFK LQGLYLGXDO
YLRODWLRQ

%276 DOVR DOORZV IRU VWDWHV WR EULQJ FLYLO DFWLRQV
DJDLQVW YLRODWRUV RI %276 LQGHSHQGHQW RI WKH )7&

%XW %276 IORSSHG EHIRUH LW HYHQ DUULYHG RQ 3UHVLGHQW
2EDPD·V GHVN EHFDXVH LW ODFNHG HIIHFWLYH H[SDQVLYH HQIRUFHPHQW
SURYLVLRQV

3ULRU WR LWV SDVVDJH &RQJUHVV ZHDNHQHG WKH
OHJLVODWLRQ ZKHQ LW UHPRYHG D SURSRVHG SULYDWH ULJKW RI DFWLRQ IRU
LQMXUHG SDUWLHV³VXFK DV IDQV DUWLVWV DQG SULPDU\ WLFNHW
VHOOHUV³DQG VWULSSHG RXW WKH IHGHUDO FULPLQDO SHQDOWLHV IRU DQ\
YLRODWLRQV

%276 GRHV OLWWOH PRUH WR GHWHU VFDOSHUV WKDQ DGGLQJ
WR WKHLU FRVW RI GRLQJ EXVLQHVV HVSHFLDOO\ VLQFH WKH ODZ OHIW
FULPLQDO VDQFWLRQV WR WKH VWDWHV ZKLFK VFDOSHUV FDQ HDVLO\ HYDGH
E\ RSHUDWLQJ LQ FHUWDLQ VWDWHV ZLWKRXW VDQFWLRQV

%XW WKDW FRVW
VWLOO DVVXPHV WKDW HQIRUFHPHQW DJHQFLHV LGHQWLI\ DQ\
YLRODWLRQV³LW LV H[FHHGLQJO\ FKDOOHQJLQJ WR FDWDORJ HYLGHQFH RI
VXFFHVVIXO ERW XVH DQG LW JURZV PRUH GLIILFXOW HYHU\ GD\

$V RI
 WKH )7& KDV WDNHQ RQO\ WKUHH HQIRUFHPHQW DFWLRQV IRU
YLRODWLRQV RI %276

ZKLOH 7LFNHWPDVWHU VHOOV DSSUR[LPDWHO\
ILIWHHQ WLFNHWV HYHU\ VHFRQG DQG QHDUO\  PLOOLRQ SHU \HDU

8OWLPDWHO\ %276 ODFNV WKH ELWH UHTXLUHG WR GHWHU VFDOSHUV
2WKHU SURSRVHG OHJLVODWLRQ ZRXOG IDUH QR EHWWHU WKDQ
%276 DW FXUWDLOLQJ VFDOSLQJ *ULQFK ZRXOG RSHUDWH LQ D QHDUO\
LGHQWLFDO PDQQHU WR %276 EXW ZLWK DQ H[SDQGHG PDQGDWH WKDW
FRYHUV WKH XVH RI WHFKQRORJ\ WR FLUFXPYHQW VHFXULW\ V\VWHPV RQ
MXVWWLFNHWKHOSSURWHFWFRQVXPHUV >KWWSVSHUPDFF6570@ GLVFXVVLQJ WKH )7&·V
ILUVW %276 HQIRUFHPHQW DFWLRQV

 %$' %27 5(3257 VXSUD QRWH  DW 

 86& FE

,G E% UHIHUHQFLQJ  86& 

,G FF

7KH IRUPHU )7& &KDLU DGPLWWHG WR LWV IDLOXUHV LQ DQ LQWHUYLHZ 'XQFDQ
VXSUD QRWH 

&RPSDUH %276 $FW +5  WK &RQJ  DOORZLQJ SULYDWH FLYLO
DFWLRQV DQG LQFOXGLQJ IHGHUDO FULPLQDO SHQDOWLHV ZLWK  86& F ODFNLQJ DQ\
PHQWLRQ RI IHGHUDO FULPLQDO SHQDOWLHV RU D SULYDWH ULJKW RI DFWLRQ

6HH  86& O P (OHIDQW VXSUD QRWH  DW 

6HH %RW 'HWHFWLRQ +RZ WR 'HWHFW %RWV RQ <RXU :HEVLWHV 0RELOH $SSV DQG
$3,V'
$7$ '20( $SU   KWWSVGDWDGRPHFRERWPDQDJHPHQWSURWHFWLRQERW
GHWHFWLRQKRZWRLGHQWLI\ERWWUDIILFWR\RXUZHEVLWH >KWWSVSHUPDFF780)9<@

)DLU VXSUD QRWH  &DLWOLQ +XVWRQ 6HQDWRUV $VN )7& WR 7DNH $FWLRQ RQ
%RWV )ROORZLQJ 7D\ORU 6ZLIW 7LFNHWLQJ ,VVXHV+
2//<:22' 5(3 1RY   
$0 KWWSVZZZKROO\ZRRGUHSRUWHUFRPEXVLQHVVEXVLQHVVQHZVWD\ORUVZLIWWLFNHWLQJ
VHQDWRUVIWF >KWWSVSHUPDFF1$*'.3@

7LFNHWPDVWHU 0DNHV WKH :RUOG D 6WDJH ZLWK 6DOHVIRUFH6$/(6)25&( KWWSV
ZZZVDOHVIRUFHFRPFXVWRPHUVXFFHVVVWRULHVWLFNHWPDVWHU >KWWSVSHUPDFF='4:0@
@ .1((&$33,1* 6&$/3,1* 
RQOLQH UHWDLOHUV WR SXUFKDVH RU UHVHOO DQ\ JRRG QRW MXVW WLFNHWV

,I LW HYHU FRPHV RXW RI FRPPLWWHH LW ZRXOG IDFH WKH H[DFW VDPH
LVVXHV WKDW LPSDFW %276³LW ODFNV VXIILFLHQWO\ VWURQJ
HQIRUFHPHQW PHFKDQLVPV

8QOLNH %276 KRZHYHU WKH
HQDFWPHQW RI *ULQFK FRXOG DOVR WKUHDWHQ WKH HIILFLHQF\ RI RQOLQH
PDUNHWV 0DQ\ EXVLQHVVHV DQG FRQVXPHUV XVH ERWV GHVLJQHG WR
SURYLGH DFWLRQDEOH LQVLJKWV³QDPHO\ WKH GLVFRYHU\ RI SURGXFWV
RU VHOOHUV SXUFKDVH DQG VDOH SULFH YDULDWLRQV RU WKH DYDLODELOLW\
RI VSHFLILF LQYHQWRULHV³LQ RUGHU WR HQKDQFH WKH HFRPPHUFH
H[SHULHQFH

)RU H[DPSOH VRPH IDPLOLHV ZKR VWUXJJOHG WR ILQG
EDE\ IRUPXOD XVHG WKHVH VRFDOOHG ´JRRGµ ERWV WR SURYLGH UHVWRFN
DOHUWV VR WKH\ FRXOG SXUFKDVH WKH IRUPXOD EHIRUH D VFDOSHU

&RPSDUHG WR WKH DYHUDJH FRQVXPHU SDUHQWV XVLQJ ERWV WKDW
WUDFN EDE\ IRUPXOD SULFHV EHQHILWWHG IURP WKH VDPH XQIDLU
FRPSHWLWLYH DGYDQWDJH WKDW D VFDOSHU UHFHLYHV IURP XVLQJ WKRVH
ERWV 8QGHU *ULQFK ERWK ´EDGµ ERWXVLQJ VFDOSHUV DQG IDPLOLHV
GHVSHUDWHO\ DWWHPSWLQJ WR FLUFXPYHQW WKHP XVLQJ ´JRRGµ ERWV
ZRXOG YLRODWH WKH ODZ 7KLV VLWXDWLRQ KLJKOLJKWV WKH LVVXH RI
WUHDWLQJ V\PSWRPV DQG QRW WKH XQGHUO\LQJ GLVHDVH RI VFDOSLQJ³
HYHQ WKRXJK ERWV FLUFXPYHQW VHFXULW\ V\VWHPV RI RQOLQH UHWDLOHUV
WR SXUFKDVH D JRRG WKHLU XVH RQO\ FUHDWHV D UHDO KDUP ZKHQ XVHG
ERWK WR EX\ DQG UHVHOO WKDW SURGXFW

7KH SURSRVHG %266 $FW FRQWUDVWV ZLWK %276 DQG
*ULQFK LQ WKDW LW VSHFLILFDOO\ WDUJHWV ´XQIDLU DQG GHFHSWLYH DFWV
DQG SUDFWLFHVµ LQ WKH SULPDU\ DQG VHFRQGDU\ WLFNHW PDUNHWV
WKURXJK PDQGDWRU\ GLVFORVXUHV GHVLJQHG WR HQKDQFH
WUDQVSDUHQF\

%266 UHTXLUHV SULPDU\ WLFNHW VHOOHUV

WR
SK\VLFDOO\ DQG GLJLWDOO\ GLVFORVH WKH WRWDO VXSSO\ RI WLFNHWV QR
ODWHU WKDQ VHYHQ GD\V SULRU WR WKH HYHQW GDWH DQG LW PDQGDWHV
GLVFORVXUH RI DQ\ DQFLOODU\ IHHV UHIXQG SROLFLHV DQG IDFH YDOXH

6WRSSLQJ *ULQFK %RWV $FW RI  6  WK &RQJ  SURSRVLQJ
FULPLQDO SHQDOWLHV IRU XVLQJ ERWV WR FLUFXPYHQW VHFXULW\ V\VWHPV LQ RUGHU WR SXUFKDVH DQG
UHVHOO JRRGV RU VHUYLFHV

6HH LG

6HH 7LP 3RZHUV (QDEOLQJ (FRPPHUFH ZLWK $FWLRQDEOH ,QVLJKWV=,//,$17
$SU   KWWSVUHVRXUFHV]LOOLDQWFRPEORJHQDEOLQJHFRPPHUFHZLWKDFWLRQDEOH
LQVLJKWV >KWWSVSHUPDFF-/(5'7@

6HH *UHHQ VXSUD QRWH 

6HH LQIUD 3DUW ,,, GLVFXVVLQJ IXUWKHU VFDOSLQJ IDLUQHVV DQG WKH QHHG IRU
UHDVRQDEOH H[FHSWLRQV WR UHVDOH OLPLWV

%HWWHU 2YHUVLJKW RI 6HFRQGDU\ 6DOHV DQG $FFRXQWDELOLW\ LQ &RQFHUW 7LFNHWLQJ
$FW RI  +5  WK &RQJ 

'HILQHG DV DQ\ ´RZQHU RU RSHUDWRU RI D YHQXH RU D VSRUWV WHDP D PDQDJHU RU
SURYLGHU RI DQ HYHQW RU D SURYLGHU RI WLFNHWLQJ VHUYLFHV RU DQ DJHQW RI VXFK >SDUWLHV@
WKDW HQJDJHV LQ WKH SULPDU\ VDOH RI WLFNHWV IRU DQ HYHQW RU UHWDLQV WKH DXWKRULW\ WR
RWKHUZLVH GLVWULEXWH WLFNHWVµ ([DPSOHV LQFOXGH ER[ RIILFHV RQ %URDGZD\0DGLVRQ
6TXDUH *DUGHQ )DQGDQJR DQG 7LFNHWPDVWHU DPRQJ RWKHUV ,G 
 %522./<1 /$: 5(9,(: >9RO 
RI WLFNHW SULFHV SULRU WR DQ\ FRPSOHWHG VDOH

7KH SURSRVHG
OHJLVODWLRQ DOVR UHJXODWHV ´VHFRQGDU\ WLFNHW VDOHV
PDUNHWSODFHVµ

UHTXLULQJ PRUH JUDQXODU GLVFORVXUHV IRU
VSHFXODWLYH OLVWLQJV DQG DOO WLFNHW UHVDOHV³VXFK DV ZKHWKHU D
UHVHOOHU FXUUHQWO\ SRVVHVVHV WKH WLFNHW ZKHQ WKH UHVHOOHU
REWDLQHG WKH WLFNHW DQG KRZ WLFNHWV ZLOO EH GLVWULEXWHG³LQ
DGGLWLRQ WR FRVW DQG UHIXQG GLVFORVXUHV VLPLODU WR SULPDU\ WLFNHW
VHOOHUV

%XW %266 KDV UHPDLQHG VWXFN LQ FRPPLWWHH VLQFH
 DQG LWV SDVVDJH ZRXOG GR OLWWOH WR DPHOLRUDWH VFDOSLQJ
EHFDXVH LW IDLOV WR XQGHUFXW VFDOSLQJ·V SURILWDELOLW\³WKH $FW
QHLWKHU HVWDEOLVKHV PD[LPXP UHVDOH SULFHV QRU FRGLILHV
VXIILFLHQWO\ VWURQJ GHWHUUHQWV WR WKH SUDFWLFH

6WDWHOHYHO DQWLVFDOSLQJ ODZV IDLU OLWWOH EHWWHU GHVSLWH
UHQHZHG HIIRUWV WR FXUE WKH HSLGHPLF 0RUH WKDQ WZRWKLUGV RI
VWDWHV KDYH HQDFWHG DQWLVFDOSLQJ ODZV

DOO RI ZKLFK DUH DEMHFW
IDLOXUHV $OWKRXJK DQWLVFDOSLQJ OHJLVODWLRQ UXQV WKH JDPXW IURP
RXWULJKW SURKLELWLRQ WR YHU\ PLQRU OLPLWDWLRQ QR VWDWH KDV
GHIHDWHG WKH HSLGHPLF QRU H[SDQGHG LWV VFRSH EH\RQG WKH ZRUOG
RI WLFNHWV

)RU H[DPSOH LQ  1HZ <RUN FRGLILHG HQKDQFHG
DQWLVFDOSLQJ SURYLVLRQV

,W DPHQGHG WKH VWDWH·V H[LVWLQJ %276
OLNH SURKLELWLRQ RQ WLFNHW ERWV E\ LQFUHDVLQJ FLYLO SHQDOWLHV IRU
YLRODWLRQV

7KH ODZ DOVR LPSRVHG D QHZ SURKLELWLRQ RQ WKH
UHVDOH RI WLFNHWV WR IUHH HYHQWV

DQG UHTXLUHG %266 $FWOLNH
GLVFORVXUHV DQG UHIXQG SROLFHV RQ SULPDU\ DQG VHFRQGDU\ WLFNHW

,G 

'HILQHG DV DQ\ ´EXVLQHVV LQFOXGLQJ D ZHEVLWH VRIWZDUH DSSOLFDWLRQ IRU D
PRELOH GHYLFH DQ\ RWKHU GLJLWDO SODWIRUP RU SRUWLRQ WKHUHRI RI D SK\VLFDO VHOOHU ZKRVH
SULPDU\ SXUSRVH LV WR IDFLOLWDWH WKH UHVDOH RI WLFNHWV WR SXUFKDVHUVµ ,G  ([DPSOHV
LQFOXGH 6WXE+XE ZKLFK FDOOV LWVHOI ´WKH OHDGLQJ PDUNHWSODFH IRU IDQV WR EX\ DQG VHOO
WLFNHWVµ 7LFNHWPDVWHU DQG H%D\ DPRQJ RWKHUV $ERXW 8V6
78%+8%
KWWSVZZZVWXEKXEFRPDERXW >KWWSVSHUPDFF1+.(;&@ ODVW YLVLWHG 1RY 
 VHH 6HOO RQ 7LFNHWPDVWHU7
,&.(70$67(5 KWWSVZZZWLFNHWPDVWHUFRPVHOO
>KWWSVSHUPDFF(+*-44;@ 2XU &RPSDQ\
(%$< KWWSVZZZHED\LQFFRP
FRPSDQ\ >KWWSVSHUPDFF+&$4%:@

+5  

%266 WUHDWV YLRODWLRQV XQGHU WKH $FW DV D 8'$3 YLRODWLRQ XQGHU 6HFWLRQ 
RI WKH )7& $FW DQG LW SURPRWHV SULFH WUDQVSDUHQF\ ZKLFK FRXOG LPSURYH DOORFDWLYH
HIILFLHQF\ DQG UHGXFH WUDQVDFWLRQ FRVWV 1HYHUWKHOHVV LW IDLOV WR DGGUHVV WKH SURILWHHULQJ
RI VFDOSHUV ,G  ²

)RU D FRPSUHKHQVLYH GLVFXVVLRQ RI VWDWH OHYHO DQWLVFDOSLQJ VWDWXHV VHH
*UDKDP )HQWRQ 7DPLQJ WKH 7LFNHW 0DUNHW +RZ $ &ORVHG 7LFNHWLQJ 6\VWHP &DQ %HDW
%DFN 6FDOSHUV DQG 5HFDSWXUH /RVW 5HYHQXH(
17632576 /  ² 

6HH LG

=DFK :LOOLDPV 6DP 5DVNLQ *RY +RFKXO $SSURYHV &UDFNGRZQ RQ 2QOLQH
7LFNHW %URNHUV RYHU ([WUD &KDUJHV1<3
267 -XQH    30
KWWSVQ\SRVWFRPNDWK\KRFKXOVLJQVELOOFUDFNLQJGRZQRQDGGHGWLFNHWIHHV
>KWWSVSHUPDFF+1'(*@

6HH 6%  ² 6 5HJ 6HVV 1< 

1< $576 &8/7$))/$:  0F.LQQH\ 
@ .1((&$33,1* 6&$/3,1* 
VHOOHUV

0DVVDFKXVHWWV UHVSRQGHG WR WKH XSURDU RYHU 7D\ORU
6ZLIW·V 7KH (UDV 7RXU DQG SURSRVHG VLPLODU OHJLVODWLRQ

EXW LW
IRFXVHG H[FOXVLYHO\ RQ G\QDPLF SULFLQJ SUDFWLFHV DQG %266OLNH
WUDQVSDUHQF\

7KHVH WZR SLHFHV RI OHJLVODWLRQ VXIIHU IURP WKH
VDPH SLWIDOOV DV WKHLU IHGHUDO FRXQWHUSDUWV IXQGDPHQWDOO\
IDLOLQJ WR GLVLQFHQWLYL]H VFDOSHUV DQG OHDYLQJ WKH HQWLUH
HQWHUSULVH LPPHQVHO\ SURILWDEOH

2YHUDOO PRGHUQ DQWLVFDOSLQJ HIIRUWV DUH ODXJKDEOH WKH
SULYDWH VHFWRU·V DSSURDFK IRFXVHG DV PXFK RQ VHOIGHDOLQJ DV RQ
PLWLJDWLRQ ZKLOH JRYHUQPHQWV SURSRVHG QRWKLQJ PRUH WKDQ D
SDWFKZRUN RI UHJXODWLRQV WKDW RQO\ WDFNOHG WKH ODWHVW PHWKRG RI
H[SORLWDWLRQ

'HVSLWH SXEOLF RXWFU\ OHJLVODWXUHV KDYH
GHPRQVWUDWHG D VWURQJ UHOXFWDQFH WR IXUWKHU LQKLELW WKH DFWLYLWLHV
RI VFDOSHUV EHFDXVH PRUH SXQLWLYH PHDVXUHV UXQ WKH ULVN RI
EXPSLQJ XS DJDLQVW WKH LQYLVLEOH KDQG RI WKH IUHH PDUNHW %XW
WKH\ GR QRW QHHG WR WDNH DQ\ QHZ VWHSV³RQ ERWK VWDWH DQG
IHGHUDO OHYHOV D SRZHUIXO OHJDO VFKHPD DOUHDG\ H[LVWV WR FRPEDW
WKH SUREOHP
,,, .
1((&$33,1*+2: 72 5227 287 6&$/3,1* $1'
3527(&7 &21680(56
:KLOH OHJLVODWXUHV VWUXJJOH WR ILQG WKH SURSHU UHJXODWRU\
WRROV WR PDQDJH VFDOSLQJ WKH VROXWLRQ WKH\ VHHN KDV ODLQ EHIRUH
WKHP IRU QHDUO\ D FHQWXU\ &RQJUHVV HQDFWHG WKH )7& $FW LQ 
DQG DPHQGHG LW LQ  WR FUHDWH DQ DJHQF\ ZLWK DQ LQWHQWLRQDOO\
EURDG PDQGDWH WR UHJXODWH ´XQIDLU RU GHFHSWLYH DFWV RU SUDFWLFHVµ
IURP ERWK FRQVXPHU DQG EXVLQHVV SHUVSHFWLYHV

(OHFWHG
RIILFLDOV XQGHUVWRRG WKDW IUDXG GHFHSWLRQ DQG PDQLSXODWLRQ
XQGHUPLQH WKH IRXQGDWLRQDO SUHPLVH RI HIIHFWLYH DQG FRPSHWLWLYH
PDUNHWV³D FHQWUDO WHQHW RI IHGHUDO DQG VWDWH VHFXULWLHV DQG
DQWLWUXVW ODZV

5HJXODWLQJ VXFK EHKDYLRU ´IDFLOLWDWHV

6%  ² 6 5HJ 6HVV 1< 

´/RRN ZKDW \RX PDGH >WKHP@ GRµ 7D\ORU 6ZLIW /RRN :KDW <RX 0DGH 0H 'R
RQ 5HSXWDWLRQ %LJ 0DFK 5HFV  VHH (OL &XUZLQ ¶7D\ORU 6ZLIW %LOO· 7DNHV RQ -XQN
)HHV '\QDPLF 3ULFLQJ RQ 7LFNHWV LQ 0DVVDFKXVHWWV%
26721&20 0D\  
KWWSVZZZERVWRQFRPQHZVHQWHUWDLQPHQWWD\ORUVZLIWELOOMXQNIHHV
G\QDPLFSULFLQJWLFNHWVPDVVDFKXVHWWV >KWWSVSHUPDFF<--8+0@

+%  UG *HQ &W 5HJ 6HVV 0DVV  6%  UG *HQ &W
5HJ 6HVV 0DVV 

6HH JHQHUDOO\ ,ULQL &KULVWLQD 7VRXQDNDV )DQ WR )DQ 7KH\·UH &KHDWLQJ <RX
$PHULFDQ )DQV· &ROOHFWLYH 1LJKWPDUH DQG WKH 1HHG IRU 8QLIRUP 5HJXODWLRQ RI$PHULFD·V
6HFRQGDU\ 7LFNHWLQJ 0DUNHW+
2)675$ / 5(9   GLVFXVVLQJ WKH
LQHIIHFWLYHQHVV RI H[LVWLQJ DQG SURSRVHG DQWLVFDOSLQJ PHDVXUHV

6HH LQIUD 6HFWLRQ ,,%

+HUULQH VXSUD QRWH  DW 

6HH $QGUHZ .DQGHO (OL]DEHWK %ORFN 7KH ´'H,FLQJµ RI 7LFNHW 3ULFHV $
3URSRVDO $GGUHVVLQJ WKH 3UREOHP RI &RPPHUFLDO %ULEHU\ LQ WKH 1HZ <RUN 7LFNHW ,QGXVWU\
 %522./<1 /$: 5(9,(: >9RO 
FRPPHUFH ZKHUH SHUIHFW FRPSHWLWLRQ LV VWUXFWXUDOO\
XQDWWDLQDEOHµ

6FDOSLQJ UDWKHU WKDQ WHFKQRORJLHV WKDW
H[SRQHQWLDOO\ LQFUHDVH LWV UHDFK FDVWV DVSHUVLRQV RQ OHJLWLPDWH
UHVDOH DQG FUHDWHV WKH LOOXVLRQ RI ´D JHQXLQH VXSSO\DQGGHPDQG
EDVHG IUHH PDUNHWµ

$V VXFK VFDOSLQJ LWVHOI FRQVWLWXWHV ´XQIDLU
RU GHFHSWLYH DFWV RU SUDFWLFHVµ 8'$3 SURKLELWHG XQGHU 6HFWLRQ
RIWKH)7&$FW

DQG SURPXOJDWHG E\ WKH VWDWHV WKURXJK ´/LWWOH
)7& $FWVµ

7KLV VHFWLRQ DUJXHV WKDW WR NQHHFDS VFDOSLQJ³WR UHGXFH
WKH OXFUDWLYH QDWXUH RI WKH SUDFWLFH³WKH )7& DQG VWDWH DJHQFLHV
PXVW XVH WKHLU DXWKRULW\ WR JR DIWHU VFDOSLQJ DV D 8'$3
YLRODWLRQ )XUWKHU SROLF\PDNHUV VKRXOG HQDFW WDUJHWHG UHIRUPV
WKDW LPSURYH WKH HQIRUFHPHQW FDSDELOLWLHV RI H[LVWLQJ FRQVXPHU
SURWHFWLRQ DQG DQWLVFDOSLQJ IUDPHZRUNV
$ ´7LPH LV D )ODW &LUFOHµ

7KH 2VFLOODWLQJ DQG (VVHQWLDO
&KDUDFWHU RI 8'$3
5RPH ZDV QRW EXLOW LQ D GD\ DQG QHLWKHU ZDV WKH QRWLRQ
RI XQIDLU DQG GHFHSWLYH SUDFWLFHV 7KURXJKRXW $PHULFDQ
KLVWRU\ FRQVXPHUV ODFNHG VLJQLILFDQW DYHQXHV RI OHJDO UHFRXUVH
IRU KDUPV FDXVHG E\ XQIDLU LH GHFHSWLYH RU IUDXGXOHQW
EXVLQHVV SUDFWLFHV ZKLFK FRQWUDVWV VKDUSO\ ZLWK WKH SOHWKRUD
RI UHPHGLHV DYDLODEOH WR FRUSRUDWLRQV

,QGHHG DOWKRXJK WKH
GXW\ RI WKH )7& LQ WKH ZRUGV RI -XGJH /HDUQHG +DQG ´LV WR
GLVFRYHU DQG PDNH H[SOLFLW WKRVH XQH[SUHVVHG VWDQGDUGV RI IDLU
GHDOLQJ ZKLFK WKH FRQVFLHQFH RI WKH FRPPXQLW\ PD\
SURJUHVVLYHO\ GHYHORSµ

WKDW IRFXV RQO\ DSSOLHG WR
-/32/·<  ²  H[SODLQLQJ WKDW WKH EDVLV RI VHFXULWLHV DQG DQWLWUXVW
ODZV VWHPV IURP WKH EHOLHI WKDW PDUNHWV QHHG WR EH IUHH RI IUDXG GHFHSWLRQ DQG
PDQLSXODWLRQ WR RSHUDWH HIIHFWLYHO\

52%(57 .8771(5(9(5<7+,1* )25 6$/(7+( 9,578(6 $1' /,0,76 2)
0$5.(76  

.LUNPDQ VXSUD QRWH  DW 

6HH  86& D GHFODULQJ ´XQIDLU RU GHFHSWLYH DFWV RU SUDFWLFH LQ RU
DIIHFWLQJ FRPPHUFHµ XQODZIXO

(J*$&2'( $11  FXUUHQW WKURXJK OHJLVODWLRQ SDVVHG DW WKH
 5HJXODU 6HVVLRQ RI WKH *HRUJLD *HQHUDO $VVHPEO\ 1& *
(167$7$11 
FXUUHQW WKURXJK 6/  RI WKH  5HJXODU 6HVVLRQ RI WKH *HQHUDO $VVHPEO\
1< *
(1%86/$:  0F.LQQH\  VHH .DUQV VXSUD QRWH  DW 

7UXH 'HWHFWLYH 7KH 6HFUHW )DWH RI $OO /LIH +%2 WHOHYLVLRQ EURDGFDVW )HE
 

'(( 35,'*(1 5,&+$5' 0 $/'(50$1&21680(5 3527(&7,21 $1' 7+(
/$:   VHH DOVR 'HH 3ULGJHQ 7KH '\QDPLF 'XR RI &RQVXPHU 3URWHFWLRQ 6WDWH
DQG 3ULYDWH (QIRUFHPHQW RI 8QIDLU DQG 'HFHSWLYH 7UDGH 3UDFWLFHV /DZV$
17,75867
/ -     GHWDLOLQJ WKDW FRQVXPHUV KDG OLPLWHG OHJDO UHPHGLHV XQGHU
IHGHUDO FRPPRQ ODZ XQWLO 8'$3 H[SDQGHG FRQVXPHUV· DELOLWLHV WR VHHN OHJDO UHFRXUVH

)7& Y 6WDQGDUG (GXF 6RF·\  )G   G &LU 
@ .1((&$33,1* 6&$/3,1* 
EXVLQHVVHV

7KH 1HZ 'HDO &RQJUHVV DGGUHVVHG WKLV
VKRUWFRPLQJ DQG DPHQGHG WKH )7& $FW LQ  WR H[WHQG WKRVH
SURWHFWLRQV WR FRQVXPHUV

7KH DPHQGPHQW UHFRJQL]HG ´WKDW
WKHUH ZHUH WRR PDQ\ XQIDLU SUDFWLFHV WR GHILQHµ

DQG LQVWHDG
IRFXVHG RQ HVWDEOLVKLQJ ´VWDQGDUGV RI IDLU GHDOLQJµ DQG
´GHPRFUDWL]>LQJ@ FRQWURO RYHU EXVLQHVV FRQGXFWµ

7KH VXEVHTXHQW HQDFWPHQW RI ´/LWWOH )7& $FWVµ LQ DOO ILIW\
VWDWHV E\  VROLGLILHG WKLV SDUDGLJP VKLIW E\ HVWDEOLVKLQJ
VWDWHOHYHO FRQVXPHU SURWHFWLRQ IUDPHZRUNV WKDW RIIHUHG
UHJXODWRUV DQG FRQVXPHUV D PHDQV WR DGGUHVV LQHIILFLHQFLHV DQG
LQHTXLWLHV LQ WKH PDUNHWSODFH

$OWKRXJK WKHVH VWDWXWHV GLIIHU
VRPHZKDW IURP WKH )7& $FW³WKH\ DXWKRUL]H SULYDWH ULJKWV RI
DFWLRQ DQG DOORZ SUHYDLOLQJ SODLQWLIIV WR FROOHFW DWWRUQH\·V
IHHV

³WKH /LWWOH )7& $FWV UHVHPEOH WKHLU QDPHVDNH DQG DV
VXFK GR QRW GHILQH RU HQXPHUDWH 8'$3

7KHVH ODZV SURPRWH
VWDQGDUGV UDWKHU WKDQ UXOHV WR JRYHUQ 8'$3 ZKLFK JLYHV
HQIRUFHUV IOH[LELOLW\ DQG DOORZV WKHP WR DGDSW WR FRQVWDQWO\
HYROYLQJ SUDFWLFHV WKDW SRWHQWLDOO\ KDUP FRQVXPHUV

,Q SUDFWLFH WKH VFRSH RI XQIDLUQHVV HEEHG DQG IORZHG ZLWK
SROLWLFDO DQG HFRQRPLF KHDGZLQGV ,Q  WKH 6XSUHPH &RXUW
HPEROGHQHG WKH )7& ZKHQ LW XQDQLPRXVO\ FRQFOXGHG LQ )7& Y
6SHUU\ +XWFKLQVRQ &R WKDW WKH )7& ´OLNH D FRXUW RI HTXLW\
FRQVLGHUV SXEOLF YDOXHV EH\RQG VLPSO\ WKRVH HQVKULQHG LQ WKH
OHWWHU RU HQFRPSDVVHG LQ WKH VSLULW RI WKH DQWLWUXVW ODZVµ

%XW
,FDUXV IOHZ WRR FORVH WR WKH VXQ &RUSRUDWLRQV EXVLQHVV JURXSV
QHROLEHUDO HFRQRPLFV DQG DQ DQWLFRQVXPHULVW PRYHPHQW
PRELOL]HG DJDLQVW WKH )7&

7KH DWWDFNV FXOPLQDWHG LQ WKH )7&

7KH 6XSUHPH &RXUW HOXFLGDWHG WKLV GLVWLQFWLRQ LQ )7& Y 5DODGDP &R ,Q
5DODGDP WKH )7& EURXJKW DQ DFWLRQ DJDLQVW WKH SURPRWLRQ RI D GDQJHURXV ´REHVLW\
FXUHµ IRFXVLQJ RQ WKH OLIHWKUHDWHQLQJ ULVN LW SRVHG WR FRQVXPHUV DQG SXEOLF KHDOWK 7KH
&RXUW UHMHFWHG WKH )7&·V XQIDLU EXVLQHVV SUDFWLFH FODLP RQ WKH JURXQGV WKDWLWIDLOHGWR
GHPRQVWUDWH DQ\ KDUP WR FRPSHWLWLRQ 7KH &RXUW OLPLWHG XQIDLUQHVV WR SUDFWLFHV
´UHVRUWHG WR IRU WKH SXUSRVH RI GHVWUR\LQJ FRPSHWLWLRQ RU RI HOLPLQDWLQJ D FRPSHWLWRU RU
RI LQWURGXFLQJ PRQRSRO\VXFK DV WHQG XQIDLUO\ WR GHVWUR\ RU LQMXUH WKH EXVLQHVV RI D
FRPSHWLWRUµ  86   ² 

6HH +HUULQH VXSUD QRWH  DW 

,G TXRWLQJ 6 5(312  DW   UHSULQWHG LQ $17,75867
/(*,6/$7,9( +,6725< 

,G DW 

3UHQWLVV &R[ $P\ :LGPDQ 0DUN 7RWWHQ 6WUDWHJLHV RI 3XEOLF 8'$3
(QIRUFHPHQW+
$59-/(*,6   

,G DW 

6HH 7KRPDV $ 'LDPRQG 7LFNHW 6FDOSLQJ $ 1HZ /RRN DW DQ 2OG 3UREOHP
 8 0
,$/5(9  ² 

&R[ HW DO VXSUD QRWH  DW  VHH +HUULQH VXSUD QRWH  DW 

)7& Y 6SHUU\ +XWFKLQVRQ &R  86    VHH +HUULQH
VXSUD QRWH  DW ²

6HH HJ +HUULQH VXSUD QRWH  DW ² GLVFXVVLQJ WKH ZLGHUDQJLQJ
HIIRUW WR VHYHUHO\ FRQVWUDLQ WKH VFRSH RI WKH )7&·V XQIDLUQHVV GRFWULQH
 %522./<1 /$: 5(9,(: >9RO 
3ROLF\ 6WDWHPHQW

ZKLFK RXWOLQHG D FKDQJHG IRFXV ´DZD\ IURP
SXEOLF SROLF\ DQG WRZDUGV FRQVXPHU LQMXU\ DQG FRQVXPHU
VRYHUHLJQW\µ

&RQJUHVV IRUPDOO\ DGRSWHG WKH QHZ SDUDGLJP LQ
WKH  UHDXWKRUL]DWLRQ RI WKH )7& $FW

ZKLFK VWDWHV WKDW WKH
)7& ODFNV WKH DXWKRULW\ XQGHU 6HFWLRQ WR
GHFODUH XQODZIXO DQ DFW RU SUDFWLFH RQ WKH JURXQGV WKDW VXFK DFW RU
SUDFWLFH LV XQIDLU XQOHVV WKH DFW RU SUDFWLFH FDXVHV RU LV OLNHO\ WR FDXVH
VXEVWDQWLDO LQMXU\ WR FRQVXPHUV ZKLFK LV QRW UHDVRQDEO\ DYRLGDEOH E\
FRQVXPHUV WKHPVHOYHV DQG QRW RXWZHLJKHG E\ FRXQWHUYDLOLQJ EHQHILWV
WR FRQVXPHUV RU WR FRPSHWLWLRQ ,Q GHWHUPLQLQJ ZKHWKHU DQ DFW RU
SUDFWLFH LV XQIDLU WKH &RPPLVVLRQ PD\ FRQVLGHU HVWDEOLVKHG SXEOLF
SROLFLHV DV HYLGHQFH WR EH FRQVLGHUHG ZLWK DOO RWKHU HYLGHQFH 6XFK
SXEOLF SROLF\ FRQVLGHUDWLRQV PD\ QRW VHUYH DV D SULPDU\ EDVLV IRU VXFK
GHWHUPLQDWLRQ

$OWKRXJK WKH PRGHUQ IUDPHZRUN DSSHDUV WR KDPVWULQJ
WKH VFRSH RI 8'$3 LQ SUDFWLFH LW PHUHO\ FKDQJHG KRZ WKH )7&
GHPRQVWUDWHV XQIDLUQHVV

7KH PRGHUQ QRWLRQ RI XQIDLUQHVV DOVR HPERGLHG LQ /LWWOH
)7& $FWV

RSHUDWHV DV DQ REMHFWLYH VWDQGDUG 7KH WKUHH
SURQJHG WHVW UHTXLUHV DQ XQIDLU DFW RU SUDFWLFH  WR FDXVH RU
OLNHO\ FDXVH FRQVXPHUV VXEVWDQWLDO LQMXU\  ´ZKLFK LV QRW
UHDVRQDEO\ DYRLGDEOHµ QRU  ´RXWZHLJKHG E\ FRXQWHUYDLOLQJ
EHQHILWV WR FRQVXPHUV RU WR FRPSHWLWLRQµ

7KH )7&·V 8QIDLUQHVV
3ROLF\ 6WDWHPHQW ZKLFK JXLGHV WKLV DQDO\VLV FRQWRXUV YDULRXV
IDFWRUV DQG OLPLWDWLRQV

8OWLPDWHO\ D IDLU SUDFWLFH IXUWKHUV WKH
SXEOLF JRRG ZKHQ LWV XWLOLW\ RXWZHLJKV DQ\ UHVXOWDQW LQMXULHV
ZKLOH D SUDFWLFH ZKRVH LQMXULHV RXWVWULS LWV FRQWULEXWLRQ WR VRFLHW\
FRQVWLWXWHV DQ XQMXVWLILDEOH DQG XQIDLU SUDFWLFH

6FDOSLQJ D SULYLOHJHG H[WRUWLRQLVW UDFNHW IDOOV VTXDUHO\
ZLWKLQ WKH VFRSH RI 8'$3 7KH H[WHQVLRQ RI VFDOSLQJ·V WHQWDFOHV
DFURVV WKH PRGHUQ HFRQRP\ KDV RQO\ UHLQIRUFHG WKLV LGHD DQG WKH

6HH 3ROLF\ 6WDWHPHQW RQ 8QIDLUQHVV)('75$'( &200·1 'HF  
KWWSVZZZIWFJRYSXEOLFVWDWHPHQWVIWFSROLF\VWDWHPHQWXQIDLUQHVV >KWWSV
SHUPDFF+4=86@

- +2:$5' %($/(6)('75$'( &200·17+( )7&·6 86( 2) 81)$,51(66
$87+25,7<,76 5,6()$// $1' 5(6855(&7,21 0D\   KWWSVZZZIWFJRY
SXEOLFVWDWHPHQWVIWFVXVHXQIDLUQHVVDXWKRULW\LWVULVHIDOODQGUHVXUUHFWLRQ
>KWWSVSHUPDFF.<'$;@ VHH DOVR +HUULQH VXSUD QRWH  DW   GLVFXVVLQJ
%HDOH·V VSHHFK DQG LWV LPSOLFDWLRQV

+HUULQH VXSUD QRWH  DW ²

 86& Q

6HH +HUULQH VXSUD QRWH  DW ²

´7KH DGRSWLRQ RI ¶OLWWOH )7& $FWV· DW WKH VWDWH OHYHO RYHU WKH FRXUVH RI WKH
V DQG V DOVR KHOSHG UHLI\ WKHVH WKUHH IDFWRUV LQWR D ¶UXOH·µ ,G DW 

 86& Q

)RU D GLVFXVVLRQ RI WKH SROLF\ VWDWHPHQW DQG FRXUWV· LQWHUSUHWDWLRQV WKHUHRI
VHH LQIUD 6HFWLRQ ,,,$²

'LDPRQG VXSUD QRWH  DW 
@ .1((&$33,1* 6&$/3,1* 
QHHG IRU FKDQJH

,Q WKH QH[W WKUHH VXEVHFWLRQV WKH EDE\
IRUPXOD FULVLV GHPRQVWUDWHV KRZ VFDOSLQJ PHHWV WKH WKUHHSURQJ
XQIDLUQHVV WHVW DQG WKH QHHG IRU UHJXODWRUV WR DFW

 6FDOSLQJ &DXVHV 6XEVWDQWLDO ,QMXU\
&RXUWV FORVHO\ H[DPLQH WKH OLNHOLKRRG DQG VHYHULW\ RI WKH
UHVXOWLQJ LQMXU\³FDXVH DQG HIIHFW³WR HVWDEOLVK ZKHWKHU D JLYHQ
SUDFWLFH VDWLVILHV WKH ILUVW XQIDLUQHVV SURQJ $Q DFW RU SUDFWLFH
FDXVHV VXEVWDQWLDO LQMXU\ LI LW ´GRHV D VPDOO KDUP WR D ODUJH
QXPEHU RI SHRSOH RU LI LW UDLVHV D VLJQLILFDQW ULVN RI FRQFUHWH
KDUPµ

&RQVXPHU LQMXU\ FDQ RFFXU LQ ´D YDULHW\ RI ZD\Vµ

QDPHO\  PRQHWDU\ RU HFRQRPLF KDUP

 ´>X@QZDUUDQWHG
KHDOWK DQG VDIHW\ ULVNVµ

RU  HPRWLRQDO DQG PRUH VXEMHFWLYH
LPSDFWV ´>L@Q DQ H[WUHPH FDVHµ ZKHUH ´WDQJLEOH LQMXU\ FRXOG EH
FOHDUO\ GHPRQVWUDWHGµ

&RXUWV LQFOXGH WKH FRVW LQ WLPH PRQH\
SURGXFWLYLW\ DQG HQHUJ\ VSHQW E\ FRQVXPHUV ILJKWLQJ RU
DYRLGLQJ D SUDFWLFH ZLWKLQ WKHVH FDWHJRULHV

1RWDEO\
XQIDLUQHVV LV QRW OLPLWHG WR WKH ´PRVW SUR[LPDWH FDXVHµ RI
VXEVWDQWLDO LQMXU\ VR ORQJ DV WKH JLYHQ SUDFWLFH ´LV ERWK D EXW
IRU DQG D SUR[LPDWH FDXVHµ RI WKH UHVXOWLQJ KDUP

,Q RWKHU
ZRUGV ´WKH FRQWULEXWLRQ RI LQGHSHQGHQW FDXVDO DJHQWV GR>HV@
QRW PDJLFDOO\ HUDVH WKH UROHµ D SUDFWLFH SOD\V LQ EULQJLQJ WKH
FRQWHPSODWHG LQMXU\

$OWKRXJK VFDOSHUV PD\ QRW KDYH FDXVHG WKH EDE\ IRUPXOD
VKRUWDJH WKH\ DUH D EXWIRU DQG SUR[LPDWH FDXVH RI D KRVW RI
HFRQRPLF LQMXULHV DV ZHOO DV WKH FDXVH RI VXEVWDQWLDO DQG UHDO
HPRWLRQDO KDUPV WKDW FDQQRW IDLUO\ EH FODVVLILHG DV HLWKHU WULYLDO
RU VSHFXODWLYH )RU %ULGJHW (VKHOPDQ ZKR DOUHDG\ ZRUNHG ´D
IXOOWLPH MRE DQG >DV@ D IXOO WLPH PRPµ WKH EDE\ IRUPXOD FULVLV
DGGHG WKH QHHG WR ´FKHFN RQ )DFHERRN HYHU\ KRXUµ RQ WRS RI KHU
EXV\ VFKHGXOH MXVW WR VHH ZKHUH WR ILQG IRUPXOD

0HDQZKLOH

,G DW 

6HH LG

3ROLF\ 6WDWHPHQW RQ 8QIDLUQHVV VXSUD QRWH 

)7& Y 1HRYL ,QF  )G   WK &LU 

)7& Y $FFXVHDUFK ,QF 1R &9'  :/  DW  ' :\R
6HSW   DII·G  )G  WK &LU 

3ROLF\ 6WDWHPHQW RQ 8QIDLUQHVV VXSUD QRWH 

,G

6HH HJ )7& Y 1HRYL ,QF  ) 6XSS G   6' &DO 
DII·G  )G  WK &LU  KROGLQJ WKDW FRQVXPHUV H[SHQGLQJ ´FRQVLGHUDEOH
DPRXQW>V@ RI WLPH HIIRUW DQG PRQH\µ FDQ VDWLVI\ WKH VXEVWDQWLDO LQMXU\ SURQJ
$FFXVHDUFK  :/  DW  ILQGLQJ WKDW WKH UHVRXUFHV H[SHQGHG FKDQJLQJ
SKRQH FDUULHUV DQG DGGUHVVLQJ XSJUDGHV WR WKH VHFXULW\ DFFRXQWV DUH FRJQL]DEOH LQMXULHV

&PW\ )LQ 6HUYV $VV·Q RI $P /WG Y &)3%  )WK   WK &LU 

1HRYL  )G DW 

%DQNHU VXSUD QRWH HPSKDVLV DGGHG
 %522./<1 /$: 5(9,(: >9RO 
WKH FULVLV OHIW 'DULFH %URZQLQJ ´IUHDNLQJ RXW FU\LQJ RQ WKH IORRUµ
VWUXJJOLQJ WR WHOO KHU KXVEDQG ´, FDQ·W IHHG RXU NLGV , GRQ·W NQRZ
ZKDW WR GRµ

)RU ERWK SDUHQWV DQG XQWROG VFRUHV RI RWKHUV WKH
VKRUWDJH IRUFHG WKHP WR UDWLRQ RU ZDWHU GRZQ IRRG IRU WKHLU
EDELHV DJDLQVW WKH UHFRPPHQGDWLRQV RI KHDOWK H[SHUWV

RU WR
VLIW WKURXJK ´SDJH DIWHU SDJH DIWHU SDJH RI SHRSOH VHOOLQJ IRUPXOD
IRU GRXEOH WULSOH TXDGUXSOH ZKDW LW FRVWV LQ VWRUHVµ WR ILQG RQH
WKH\ FRXOG DIIRUG

6FDOSHUV PDQLSXODWHG WKH EDE\ IRUPXOD
PDUNHW E\ DUWLILFLDOO\ GLVWRUWLQJ VXSSO\ $OWKRXJK WKH PDUNHW
VKDUH RI VFDOSHUV UHPDLQV LQGHWHUPLQDEOH LW GRHV QRW IDFWRU LQWR
WKH VXEVWDQWLDO LQMXU\ DQDO\VLV (YHQ LI VFDOSHUV FRQWURO RQO\ D
IUDFWLRQ RI WKH PDUNHWSODFH WKH\ UHVWULFW VXSSO\ GULYH XS SULFHV
DQG ULVN VXEVWDQWLDO KDUP WR WKH KHDOWK RI FKLOGUHQ

%\
SXUFKDVLQJ EDE\ IRUPXOD ZLWK WKH H[SOLFLW LQWHQWLRQ RI UHVHOOLQJ
DW D PDUNXS VFDOSHUV SUHYHQWHG IDPLOLHV IURP IHHGLQJ WKHLU
FKLOGUHQ GHQLHG FXVWRPHUV DFFHVV WR D IXQFWLRQLQJ IUHH PDUNHW
H[DFWHG DQ XQIDWKRPDEOH SV\FKRORJLFDO WROO DQG PDQLSXODWHG
SULFHV³H[DFWO\ ZKDW 8'$3 ZDV GHVLJQHG WR SUHYHQW
 6FDOSLQJ &DXVHV ,QMXU\ 7KDW ,V 1RW 5HDVRQDEO\
$YRLGDEOH
7KH UHDVRQDEO\ DYRLGDEOH LQMXU\ SURQJ IRFXVHV RQ FKRLFH
&RXUWV H[DPLQH ZKHWKHU DQ XQIDLU SUDFWLFH KLQGHUV ´IUHH DQG
LQIRUPHG FRQVXPHU FKRLFHµ

KROGLQJ VXFK LQWHUIHUHQFH
´UHDVRQDEO\ DYRLGDEOH LI FRQVXPHUV ¶KDYH UHDVRQ WR DQWLFLSDWH
WKH LPSHQGLQJ KDUP DQG WKH PHDQV WR DYRLG LW· RU LI FRQVXPHUV
DUH DZDUH RI DQG DUH UHDVRQDEO\ FDSDEOH RI SXUVXLQJ SRWHQWLDO
DYHQXHV WRZDUG PLWLJDWLQJ WKH LQMXU\ DIWHU WKH IDFWµ

6XFK
PDUNHW IDLOXUH

SUHYHQWV WKH IRUFHV RI VXSSO\ DQG GHPDQG ´IURP
PD[LPL]LQJ EHQHILWV DQG PLQLPL]LQJ FRVWVµ

ZKLFK MXVWLILHV

6DQGRYDO HW DO VXSUD QRWH 

,G

-HVVHO\Q &RRN 3DUHQWV $FFXVH 2QOLQH 6HOOHUV RI 3ULFH *RXJLQJ RQ %DE\
)RUPXOD1%&1
(:6 0D\    30 KWWSVQEFQHZVWRH)PX >KWWSV
SHUPDFF(')3'-@ VHH 'LDPRQG VXSUD QRWH  DW  .KDQ VXSUD QRWH 

6HH 6KHUHH 5DEH 7LFNHW 6FDOSLQJ )UHH 0DUNHW 0LUDJH$0-&5,0/
   VHH 'LDPRQG VXSUD QRWH  DW 

$P )LQ 6HUYV $VV·Q Y )7&  )G   '& &LU 

'DYLV Y +6%& %DQN 1HYDGD 1$  )G  ² WK &LU 
TXRWLQJ 2UNLQ ([WHUPLQDWLQJ &R Y )7&  )G  ² WK &LU 

$Q XQIDLU RU GHFHSWLYH DFW RU SUDFWLFH FDXVHV D ´PDUNHW IDLOXUHµ ZKHQ LW
LQWHUIHUHV ZLWK VHOIUHJXODWRU\ PHFKDQLVPV 6HH -HDQ %UDXFKHU 'HILQLQJ 8QIDLUQHVV
(PSDWK\ DQG (FRQRPLF $QDO\VLV DW WKH )HGHUDO 7UDGH &RPPLVVLRQ%8/5
(9 
 

,G DW  Q
@ .1((&$33,1* 6&$/3,1* 
JRYHUQPHQW LQWHUYHQWLRQ DJDLQVW XQIDLU SUDFWLFHV³WR SXW WKH
IUHH EDFN LQWR IUHH PDUNHWV

6FDOSLQJ FDXVHV VXEVWDQWLDO LQMXU\ WKDW FDQQRW EH
UHDVRQDEO\ DYRLGHG ZKHWKHU WKH KDUP UHIHUV WR WKH KLJKHU SULFHV
SDLG E\ FRQVXPHUV WKH GHQLDO RI DFFHVV WR WKH SULPDU\ PDUNHW
LH UHDVRQDEOH DOWHUQDWLYHV

RU DQ\ RWKHU FRJQL]DEOH LQMXU\

$OWKRXJK PDQ\ VFKRODUV DUJXH VFDOSLQJ GRHV QRW LQWHUIHUH ZLWK
IUHH PDUNHWV

QRWKLQJ GLVSURYHV WKLV QRWLRQ PRUH FOHDUO\³DQG
GHPRQVWUDWHV WKH QHHG IRU ZLGHQLQJ WKH GHILQLWLRQ RI WKH SUDFWLFH
PRUH REYLRXVO\³WKDQ WKH EDE\ IRUPXOD VKRUWDJH 6FDOSHUV PDGH
LW QHDUO\ LPSRVVLEOH IRU 7DUD 5RXW]RQJ ZKRVH FKLOG GHSHQGHG
HQWLUHO\ RQ D VSHFLILF IRUPXOD WR UHDVRQDEO\ DYRLG H[SORLWDWLYH
SULFHV RU ILQG LW QHDUE\

,Q IDFW ´>K@HU KXVEDQG PDGH D VL[KRXU
URXQGWULSµ MXVW WR DYRLG WKH KLJKHU SULFHV RQOLQH³EXW RQFH KHU
UHPDLQLQJ VXSSOLHV GZLQGOHG VKH EURNH GRZQ LQ WKH IDFH RI KHU
JULP QHZ UHDOLW\ ´>L@I LW FRPHV GRZQ WR LW ZH·OO MXVW KDYH WR VWDUW
SD\LQJ WKHVH ULGLFXORXV SULFHV :KDW FKRLFH GR ZH KDYH"µ

0DULFHOOD 0DUTXH] IDUHG OLWWOH EHWWHU DV VKH WRR ´KD>G@ QR RWKHU
FKRLFHµ DQG GHVSHUDWHO\ QHHGHG IRUPXOD IRU KHU WKUHH\HDUROG
GDXJKWHU ´WR VWD\ KHDOWK\ DQG WR VWD\ RXW RI WKH KRVSLWDOµ

7KHVH SDUHQWV OLNH VR PDQ\ RWKHUV FRXOG QRW SRVVLEO\ KDYH
DYRLGHG RU DQWLFLSDWHG WKH FULVLV QRU PLWLJDWHG WKH LQMXULHV DIWHU
WKH IDFW LQ DQ\ UHDVRQDEOH PDQQHU
0DUNHWV FUXPEOH ZKHQ SDUWLHV ´HQJDJH LQ DEXVHV RI PDUNHW
SRZHU >RU@ ¶GULYH RXW FRPSHWLWRUV·µ

DQG VFDOSLQJ IRUFHG IDPLOLHV
WR GLVSURSRUWLRQDWHO\ EHDU WKH EUXQW RI WKH PDUNHW·V FROODSVH
 6FDOSLQJ &DXVHV ,QMXU\ 7KDW ,V 1RW 2XWZHLJKHG E\
&RXQWHUYDLOLQJ %HQHILWV WR &RQVXPHUV
7KH ILQDO HOHPHQW WKDW WKH LQMXU\ RXWZHLJKV WKH EHQHILWV
UHSUHVHQWV DQ HQGOHVVO\ GHEDWHG WRSLF LQ DFDGHPLD

&RXUWV

´1RUPDOO\ ZH H[SHFW WKH PDUNHWSODFH WR EH VHOIFRUUHFWLQJ DQG ZH UHO\ RQ
FRQVXPHU FKRLFH³WKH DELOLW\ RI LQGLYLGXDO FRQVXPHUV WR PDNH WKHLU RZQ SULYDWH
SXUFKDVLQJ GHFLVLRQV ZLWKRXW UHJXODWRU\ LQWHUYHQWLRQ³WR JRYHUQ WKH PDUNHWµ 3ROLF\
6WDWHPHQW RQ 8QIDLUQHVV VXSUD QRWH 

6HH 'LDPRQG VXSUD QRWH  DW 

6HH LQIUD 6HFWLRQ ,,,$

6HH JHQHUDOO\ 0DWWKHZ - 3DUORZ 7KH /DZ DQG (FRQRPLFV RI 7LFNHW
6FDOSLQJ:
$<1( / 5(9   GLVFXVVLQJ WKH HFRQRPLFV RI WLFNHW VFDOSLQJ

6HH &RRN VXSUD QRWH 

,G

6DQGRYDO HW DO VXSUD QRWH 

.DQGHO %ORFN VXSUD QRWH  DW  TXRWLQJ 52%(57 .8771(5
(
9(5<7+,1* )25 6$/(7+( 9,578(6 $1' /,0,76 2) 0$5.(76  

&RPSDUH 6WXUPDQ VXSUD QRWH  GHVFULELQJ %276 DV DQ XQQHFHVVDU\
H[SDQVLRQ RI WKH )7&·V PDQGDWH DQG D ZDVWH RI OLPLWHG UHVRXUFHV DQG +DSSHO
-HQQLQJV VXSUD QRWH  DUJXLQJ WLFNHW VFDOSLQJ LV D QHFHVVDU\ FRPSRQHQW RI D
 %522./<1 /$: 5(9,(: >9RO 
HQJDJH LQ D FRVWEHQHILW DQDO\VLV DQG JHQHUDOO\ ILQG D SUDFWLFH
XQIDLU ZKHQ LW ´SURGXFHV FOHDU DGYHUVH FRQVHTXHQFHV IRU
FRQVXPHUV WKDW DUH QRW DFFRPSDQLHG E\ DQ LQFUHDVH LQ VHUYLFHV
RU EHQHILWV WR FRQVXPHUV RU E\ EHQHILWV WR FRPSHWLWLRQµ

$V ZLWK
PRVW WKLQJV VFDOSLQJ FRPHV ZLWK SURV DQG FRQV 6FDOSLQJ
EHQHILWV WKH PDUNHW E\ HQDEOLQJ SULFH GLVFRYHU\³WKH WUXH SULFH
IRU D JRRG WKDW WKH PDUNHW FDQ EHDU ,Q WKH FRQWH[W RI VQHDNHUV
DQG WLFNHWV LW DOVR SURYLGHV D UHOLDEOH VRXUFH RI JRRGV WR
FRQVXPHUV ZKR PLVVHG WKH VDOH RU ZHUH XQZLOOLQJ WR ZDLW LQ OLQH
EXW DUH ZLOOLQJ WR SD\ D KLJKHU SULFH LQ H[FKDQJH

,Q WKLV ZD\
D VFDOSHU HIIHFWLYHO\ DOORFDWHV WKH OLPLWHG VXSSO\ WR PHHW WKH
GHPDQG

+RZHYHU VFDOSHUV DFKLHYH WKLV EHQHILW RQO\ E\
DUWLILFLDOO\ OLPLWLQJ VXSSO\ DQG FLUFXPYHQWLQJ RUGLQDU\
GLVWULEXWLRQ FKDQQHOV IRUFLQJ RWKHUV WR EX\ IURP WKHLU
PHWDSKRULFDO VWRUH

7KH SUDFWLFH GLVUXSWV WKH HVVHQWLDOO\
GHPRFUDWLF TXHXH SURFHVV DQG WUDQVIRUPV LW LQWR DQ H[SORLWDWLYH
DQG FODVVLVW DIIDLU

7RGD\ WKH FRVWV FOHDUO\ RXWZHLJK WKH EHQHILWV 6FDOSLQJ
OHDGV WR UHSXWDWLRQDO KDUP IRU FRQVROH PDQXIDFWXUHUV
DXWRPRWLYH FRPSDQLHV DQG RQOLQH UHVHOOHUV ZKHQHYHU JRRGV
FDQQRW EH IRXQG DW DGYHUWLVHG SULFHV

'XULQJ WKH EDE\ IRUPXOD
FULVLV VFDOSHUV H[DFHUEDWHG D QDWLRQZLGH VKRUWDJH SUHYHQWHG
IDPLOLHV IURP FRQYHQLHQWO\ SXUFKDVLQJ IRRG IRU WKHLU EDELHV DW
IDLU SULFHV DQG FUHDWHG DGGLWLRQDO FRVWV IRU IHGHUDO JRYHUQPHQW
VHUYLFHV

7DNHQ WRJHWKHU WKH LQMXU\ WR FRQVXPHUV LQ YDULRXV
VFDOSLQJ FRQWH[WV IDU RXWZHLJKV WKH PLQRU FRQYHQLHQFHV FUHDWHG
E\ LWV SUDFWLFH
IXQFWLRQLQJ VHFRQGDU\ PDUNHW ZLWK 3RUFHOOR VXSUD QRWH  GLVFXVVLQJ KRZ RQOLQH
VFDOSLQJ FRQWLQXHV WR JURZ EH\RQG WKH FRQILQHV RI D SDUWLDOO\ EHQHILFLDO PDUNHWSODFH DQG
-DVNLHU VXSUD QRWH  VDPH

6HH )7& Y -. 3XEO·QV ,QF  ) 6XSS G   &' &DO  TXRWLQJ
)7& Y :LQGZDUG 0NWJ ,QF 1R &9)  :/  DW  1' *D 6HSW
  FI 2UNLQ ([WHUPLQDWLQJ &R Y )7&  )G   WK &LU 

6HH 3DUORZ VXSUD QRWH  DW 

'LDPRQG VXSUD QRWH  DW  6XFK D SUDFWLFH VHHPV PRUH GHVHUYLQJ RI
FRQGHPQDWLRQ WKDQ DSSURYDO WKDW LV ´D SUDFWLFH WKDW UHVXOWV LQ RIIHULQJ D SULYLOHJH RQO\
WR WKH SULYLOHJHGµ LV KDUGO\ FRPPHQGDEOH ,G

&RXUWV GLIIHUHQWLDWH EHWZHHQ UHVHOOHUV DQG LQGLYLGXDOV VHOOLQJ WLFNHWV 6HH
/RVND Y 6XSHULRU &RXUW  &DO 5SWU   &DO 'LVW &W $SS  GHILQLQJ
FRPPHUFLDO UHVDOH 3HRSOH Y -RKQVRQ  1<6G  ² 1< &LY &W 
KROGLQJ WKDW DQ DQWLVFDOSLQJ VWDWXWH GRHV QRW DSSO\ WR LVRODWHG WUDQVDFWLRQV E\ SHRSOH
QRW HQJDJHG LQ D VHOOLQJ RU UHVHOOLQJ EXVLQHVV

6HH 'LDPRQG VXSUD QRWH  DW 

6HH VXSUD QRWH ² DQG DFFRPSDQ\LQJ WH[W

&I /HDK 'RXJODV 86 :LOO &RYHU %DE\ )RUPXOD &RVW IRU /RZ,QFRPH
)DPLOLHV $JULFXOWXUH $JHQF\5
(87(56 0D\    30 KWWSVZZZUHXWHUV
FRPZRUOGXVXVZLOOFRYHUEDE\IRUPXODFRVWORZLQFRPHIDPLOLHVDJULFXOWXUHDJHQF\
 >KWWSV SHUPDFF):0+@ GLVFXVVLQJ WKH FUHDWLRQ RI DWHPSRUDU\
SURJUDP WR FRYHU WKH FRVW RI EDE\ IRUPXOD IRU ORZ LQFRPH IDPLOLHV VHH VXSUD QRWHV ² DQG
DFFRPSDQ\LQJ WH[W
@ .1((&$33,1* 6&$/3,1* 
$V VXFK WKH XQVFUXSXORXV DFW RI VFDOSLQJ FRQVWLWXWHV DQ
XQIDLU SUDFWLFH XQGHU 6HFWLRQ RI WKH )7& $FW DQG WKH
FRUUHVSRQGLQJ VHFWLRQV LQ /LWWOH )7& $FWV

7KH )7& VKRXOG
SURPXOJDWH D QHZ UXOH FRGLI\LQJ VFDOSLQJ DV D SURKLELWHG 8'$3
WKURXJK LWV UXOHPDNLQJ SURFHGXUHV

DQG DOORZ FRQVXPHUV DQG
EXVLQHVVHV WR KHOS VKDSH WKH H[DFW FRQWRXUV RI WKH UHJXODWLRQ
%XWHYHQZLWKWKLVH[SDQGHGSRZHUWKH)7&DORQHFDQQRWHQIRUFH
WKH ODZ $QG JLYHQ WKH VKRUWFRPLQJV DGGUHVVHG LQ 3DUW ,, RWKHU
HQKDQFHPHQWV DUH UHTXLUHG WR SXW DQ HQG WR WKH HSLGHPLF
% 3URSRVDOV WR ,PSURYH (QIRUFHPHQW
7KH SUREOHP ZLWK RQOLQH VFDOSLQJ LV WKH LQFUHDVLQJO\
QHEXORXV DQG HSKHPHUDO QDWXUH RI WKH SURFHVV ([SDQGLQJ
8'$3 WR LQFOXGH VFDOSLQJ VLPSOLILHV HQIRUFHPHQW EXW
JDWKHULQJ HYLGHQFH UHODWHG WR WKH XVH RI ERWV SUHVHQWV DQ
HQIRUFHPHQW FKDOOHQJH 7KH IROORZLQJ SURSRVDOV ZRUN LQ
FRQMXQFWLRQ ZLWK RQH DQRWKHU WR RIIHU ERWK SXEOLF DQG SULYDWH
VROXWLRQV WKDW DOOHYLDWH FKDOOHQJHV ZLWK HQIRUFHPHQW 7KH ILUVW
VXEVHFWLRQ IRFXVHV RQ KRZ D SXEOLF OHGJHU FRXOG GHWHU VFDOSHUV
WKURXJK DFWLRQDEOH WUDQVSDUHQF\ ZKLOH WKH VHFRQG VXEVHFWLRQ
KLJKOLJKWV KRZ UHVDOH UHVWULFWLRQV FDQ IXUWKHU HQKDQFH
HQIRUFHPHQW 7DNHQ WRJHWKHU WKHVH VROXWLRQV DWWDFN WKH
RSSRUWXQLVWLF EHKDYLRU XQGHUSLQQLQJ VFDOSLQJ E\ PDNLQJ WKH
SUDFWLFH ULVNLHU DQG OHVV SURILWDEOH
 /HGJHUV (QDEOH 3ULFH 'LVFRYHU\ DQG 6DOHV 7UDFNLQJ
:KHQ D SHUVRQ SXUFKDVHV D SLHFH RI UHDO SURSHUW\ WKH\
PXVW UHFRUG WKH WUDQVDFWLRQ ZLWK WKH FRXQW\ ZKHUHLQ WKH
SURSHUW\ LV ORFDWHG

6LPLODUO\ FUHGLWRUV PXVW VXEPLW D 8&&
ILOLQJ LQ RUGHU WR SHUIHFW D VHFXULW\ LQWHUHVW DQG SULRULWL]H WKHLU
OLHQ RYHU WKLUG SDUWLHV

7KHVH UHFRUGV SURYLGH QRWLFH WR WKLUG
SDUWLHV DQG IRUPDOO\ HVWDEOLVK D SHUVRQ·V LQWHUHVW LQ UHDO
SURSHUW\ RU FKDWWHO ,Q VR GRLQJ WKHVH ILOLQJV FUHDWH D OHGJHU WKDW

6HH 0XUSK\ Y 0F1DPDUD  $G  ² &RQQ  .XJOHU Y
5RPDLQ  $G   1-  -RQHV Y 6WDU &UHGLW &RUS  1<6G  
1< 6XS &W 

 86& D P

(J &$/&,9&2'(  FXUUHQW ZLWK &K RI  VW ([6HVV DQG
XUJHQF\ OHJLVODWLRQ WKURXJK &K  RI  5HJ6HVV &
2/25(967$7 
FXUUHQW WKURXJK WKH )LUVW 5HJXODU 6HVVLRQ WK *HQHUDO $VVHPEO\  )
/$67$7
 FXUUHQW ZLWK ODZV MRLQW DQG FRQFXUUHQW UHVROXWLRQV DQG PHPRULDOV WKURXJK
2FWREHU   LQ HIIHFW IURP WKH  6SHFLDO % 6HVVLRQ DQG WKH  ILUVW UHJXODU
VHVVLRQ  ,
//&20367$7   FXUUHQW WKURXJK 3$  RI WKH  5HJ
6HVV

8&&   $0/,16781,)/&200·1 
 %522./<1 /$: 5(9,(: >9RO 
UHFRUGV WKH KLVWRU\ RI LQWHUHVWV LQ D SDUWLFXODU SURSHUW\
LGHQWLI\LQJ LQIRUPDWLRQ DERXW WKH LQWHUHVWHG SDUWLHV DQG
DGGLWLRQDO GDWD VXFK DV SULFHV GHVFULSWLRQV DQG ORFDWLRQV
UHODWHG WR WKH SURSHUW\ DPRQJ RWKHU WKLQJV
,Q WKH FRQWH[W RI VFDOSLQJ QXPHURXV DXWKRUV KDYH
VXJJHVWHG WKDW WKH EORFNFKDLQ RIIHUV D YDOXDEOH QHZ WHFKQRORJ\
XQLTXHO\ VXLWHG DV DQ DQWLIUDXGFRXQWHUIHLW WRRO IRU WLFNHWV

%ORFNFKDLQ WHFKQRORJ\ IXQFWLRQV VLPLODUO\ WR D ODUJH SXEOLF
OHGJHU RU FHQWUDOL]HG ILOLQJV WKDW FDQ WUDFN LQWHUHVWV LQ SURSHUW\
LQ WKDW HDFK DQG HYHU\ WUDQVIHU RI DQ DVVHW LV UHFRUGHG

7KH
EORFNFKDLQ FDQ WKXV YHULI\ WKH DXWKHQWLFLW\ RI HDFK WLFNHW³RQO\
WLFNHWV SXUFKDVHG RQ WKH EORFNFKDLQ DQG LVVXHG E\ D VSHFLILF
XVHU ZRXOG IXQFWLRQ DV D OLFHQVH WR D FRQFHUW RU HYHQW
%ORFNFKDLQ FRXOG DOVR WUDFN LQIRUPDWLRQ VXFK DV WKH SXUFKDVH
SULFH GDWH RI SXUFKDVH DQG DQ\ VXEVHTXHQW WUDQVDFWLRQV %XW
ODUJHVFDOH LPSOHPHQWDWLRQ RI WKH EORFNFKDLQ SUHVHQWV D KLJK
GHJUHH RI ULVN ERUQH SULPDULO\ E\ FRQVXPHUV DV WKH PDUNHW
UHPDLQV ODUJHO\ XQUHJXODWHG

LQ DGGLWLRQ WR FRQFHUQV
UHJDUGLQJ WKH QHJDWLYH HQYLURQPHQWDO LPSDFW RI WKH
WHFKQRORJ\

1HYHUWKHOHVV WKHVH VFKRODUV LQGLUHFWO\ VXSSRUWHG
WKH DVVHUWLRQ WKDW D OHGJHUEDVHG V\VWHP FDQ HIIHFWLYHO\ RSHUDWH
DV DQ DQWLIUDXG RU DQWLVFDOSLQJ PHDVXUH
5HTXLULQJ UHVHOOHUV WR UHFRUG DOO VDOHV RQ D SXEOLF OHGJHU
SURYLGHV QXPHURXV HQIRUFHPHQW EHQHILWV $ OHGJHU V\VWHP

%UDQGRQ )HUULFN 7KH 7LPHV 7KH\ $UH D&KDQJLQ· ,QFRUSRUDWLQJ %ORFNFKDLQ
1HWZRUNV LQWR WKH (YHQW 7LFNHW ,QGXVWU\7
(;5(9(17632576 /  ²
 /HZLV 5LQDXGR &RKHQ $LQ·W 0LVEHKDYLQ· $Q ([DPLQDWLRQ RI %URDGZD\ 7LFNHWV
DQG %ORFNFKDLQ 7RNHQV:
$<1( / 5(9  ² ²  (OHIDQW VXSUD
QRWH  DW ²

:KDW LV %ORFNFKDLQ 7HFKQRORJ\ ,%0 KWWSVZZZLEPFRPWRSLFV
EORFNFKDLQ >KWWSVSHUPDFF*8/54<8@

6HH &DURO5*RIRUWK+RZ 1LIW\ %XW $UH 1IWV 6HFXULWLHV &RPPRGLWLHV RU
6RPHWKLQJ (OVH"  80.& / 5
(9   ²  *DUJL &KDXGKXUL
-DPHV 0DVHOOD ,,, $UH 1)7V 6HFXULWLHV" $QDO\VLV RI WKH 1%$ 7RS 6KRW /LWLJDWLRQ DQG
2WKHU 1)75HODWHG $FWLRQV-'6
835$ 0DU   KWWSVZZZMGVXSUDFRP
OHJDOQHZVDUHQIWVVHFXULWLHVDQDO\VLVRIWKHQED >KWWSVSHUPDFF'.5
=*./@

6HH $QGUHZ 6FXUULD 6RPD %LVZDV )7; &ROODSVHV LQWR %DQNUXSWF\ 6\VWHP
7KDW 6WLOO +DVQ·W )LJXUHG 2XW &U\SWR:
$// 67 - 1RY    $0
KWWSVRQZVMFRP7&VH]. >KWWSVSHUPDFF(7%<8@ GHVFULELQJ WKH UDSLG FROODSVH
RI D SURPLQHQW FU\SWRFXUUHQF\ H[FKDQJH $XGUH\ &DUOHWRQ 1HZ <RUN·V 1HZ 0LQLQJ %DQ
%HJLQV WKH :DU $JDLQVW &U\SWR·V &OLPDWH 6LQV '
$,/< %($67 XSGDWHG -XQH  
 30 KWWSVZZZWKHGDLO\EHDVWFRPQHZ\RUNVWDWHVFU\SWRPLQLQJEDQPHDQVD
IRJJ\IXWXUHIRUELWFRLQDQGRWKHUV >KWWSVSHUPDFF*4/;05.@ -RQ +XDQJ &ODLUH
2·1HLOO +LURNR 7DEXFKL %LWFRLQ 8VHV 0RUH (OHFWULFLW\ 7KDQ 0DQ\ &RXQWULHV +RZ ,V
7KDW 3RVVLEOH"1<
7
,0(6 6HSW   KWWSVQ\WLPVH:'L] >KWWSVSHUPD
FF+'-;<:@
@ .1((&$33,1* 6&$/3,1* 
DVVRFLDWHV D VSHFLILF LWHP ZLWK LWV RZQHUVHOOHU

VSHFLILHV WKH
SXUFKDVH SULFH RQ WKH GDWH RI SXUFKDVH DQG WUDFNV WKH LWHP·V
VXEVHTXHQW FLUFXODWLRQ 7KLV FRQFHSW LV QRWKLQJ QHZ 0DQ\
PDQXIDFWXUHUV DOUHDG\ XWLOL]H VHULDO QXPEHUV WR WUDFN WKH
RZQHUVKLS RI WKHLU SURGXFWV )RU H[DPSOH HYHU\ FDU KDV D XQLTXH
9HKLFOH ,GHQWLILFDWLRQ 1XPEHU WKDW DOORZV PDQXIDFWXUHUV WR
HIILFLHQWO\ LVVXH UHFDOOV DQG VLPSOLILHV SURRI RI RZQHUVKLS FRQFHUQV
IRU ODZ HQIRUFHPHQW DPRQJ RWKHU EHQHILWV 7KH XVH RI VHULDO
QXPEHUV DOVR GLUHFWO\ EHQHILWV FRQVXPHUV ZKHQ WKH\ H[SHULHQFH
LVVXHV RU ZDQW WR UHJLVWHU WKHLU SURGXFWV ZLWK D PDQXIDFWXUHU

7KH WLFNHW LQGXVWU\ DOUHDG\ XVHV XQLTXH LGHQWLILHUV WR SUHYHQW
FRXQWHUIHLWLQJ DQG DWWHPSW WR FXW GRZQ RQ VFDOSLQJ

$ OHGJHU V\VWHP SURYLGHV UHWDLOHUV RU PDUNHWSODFHV ZLWK
WKH PHDQV WR HQIRUFH SXUFKDVH OLPLWV SHU FXVWRPHU EHFDXVH WKH
SXEOLF UHFRUG SURYLGHV WKH LGHQWLI\LQJ LQIRUPDWLRQ QHHGHG WR
FKHFN IRU DQ\ YLRODWLRQV )RU H[DPSOH VXSSRVH ILIWHHQ ´GLIIHUHQWµ
$PD]RQ XVHUV VHQW ILIW\ LGHQWLILDEOH XQLWV RI EDE\ IRUPXOD WR D
VLQJOH DGGUHVV DQG WKH IRUPXOD ODWHU VKRZHG XS RQ H%D\ DW D
KLJKHU SULFH :LWK D OHGJHU V\VWHP LQ SODFH SXUFKDVHUV
EXVLQHVVHV DQG UHJXODWRUV FRXOG HDVLO\ LGHQWLI\ WKLV FOHDU
LQVWDQFH RI IRUPXOD VFDOSLQJ DQG DFW DFFRUGLQJO\ 7KLV W\SH RI
WUDQVSDUHQF\ DOLJQV ZLWK WKH SURSRVHG %266 $FW ZKLFK
SURPRWHV WUDQVSDUHQF\ DV D PHDQV RI OHYHOLQJ WKH SOD\LQJ ILHOG
IRU FRQVXPHUV LH UHGXFLQJ 8'$3 LQ WKH WLFNHW PDUNHW E\
UHTXLULQJ WKH GLVFORVXUH RI LQIRUPDWLRQ PDWHULDO WR WLFNHW
SXUFKDVHUV

0RUH LPSRUWDQWO\ D SXEOLF OHGJHU PDNHV WUDFNLQJ
VFDOSHUV RU VFDOSHG WLFNHWV HDVLHU IRU SULYDWH FRPSDQLHV DQG
SXEOLF HQIRUFHUV E\ UHGXFLQJ WKH GLIILFXOWLHV DVVRFLDWHG ZLWK
HYLGHQFH FROOHFWLRQ
8OWLPDWHO\ D OHGJHU V\VWHP FRQVWLWXWHV D VLQJOH EORFN LQ
D FKDLQ RI VHFXULW\ PHDVXUHV WKDW GLVLQFHQWLYL]H VFDOSLQJ E\
UHTXLULQJ VLJQLILFDQW OHYHOV RI WUDQVSDUHQF\ WR LQFUHDVH WKH
FKDQFH RI UHYHDOLQJ VFDOSHUV ZKR VKURXG WKHPVHOYHV LQ
DQRQ\PLW\ WR KLGH WKHLU FULPLQDO HQWHUSULVHV

3HUVRQDO LQIRUPDWLRQ FDQ UHPDLQ EHKLQG DQ RQOLQH VHFRQGDU\ PDUNHW·V
ILUHZDOO DV XQDXWKRUL]HG GLVSOD\V RI VXFK LQIRUPDWLRQ FRQVWLWXWH D GLIIHUHQW XQIDLU DQG
GHFHSWLYH DFW RU SUDFWLFH XQGHU 6HFWLRQ RI WKH )7& $FW

(J 5HFDOO 6HUYLFH &DPSDLJQ /RRNXS92/.6:$*(1 KWWSVZZZYZFRP
HQUHFDOOVKWPO >KWWSVSHUPDFF1=-+9$5@

6HH JHQHUDOO\ -DVNLHU VXSUD QRWH  GLVFXVVLQJ HIIRUWV LQ WKH WLFNHWLQJ
LQGXVWU\ WR SURKLELW FRXQWHUIHLWLQJ

([DPSOHV RI GLVFORVXUH LQ WKH FRQWH[W RI D WLFNHW LQFOXGH ZKHQ DQG DW ZKDW
SULFH LW ZDV SXUFKDVHG ZKHQ DQG DW ZKDW SULFH LW ZDV SXW XS IRU UHVDOH LI LW FKDQJHG
KDQGV DQG LI VR KRZ PDQ\ WLPHV LW PRYHG DQG WKH DXWKHQWLFLW\ RI WKH LWHP EDVHG RQ D
YHULILDEOH VHULDO QXPEHU
 %522./<1 /$: 5(9,(: >9RO 
 5HVDOH 5HVWULFWLRQV /LPLW 6FDOSHUV· 3URILWV
0DQ\ RUJDQL]DWLRQV DOUHDG\ SURYLGH UHVWULFWLRQV RQ
UHVDOH QDPHO\ WLFNHWV ZLWK WHUPV LQ D SXUFKDVH DJUHHPHQW

5HFHQWO\ 1LNH UHYLVHG LWV WHUPV RI VDOH ZLWK QHZ SHQDOWLHV
UHLQIRUFLQJ VWULFW SURKLELWLRQV DJDLQVW WKH ´SXUFKDVH RI SURGXFWV
IRU UHVDOHµ DQG RUGHUV WKDW H[FHHG ´SURGXFW SXUFKDVH OLPLWVµ RU
ZHUH ´SODFHG ZLWK DXWRPDWHG RUGHULQJ VRIWZDUH RU WHFKQRORJ\µ

&RXUWV KDYH IUHTXHQWO\ IRXQG SURYLVLRQV IRU OLFHQVHV HJ
WLFNHWV OLPLWLQJ UHVDOH HQIRUFHDEOH VR ORQJ DV WKH UHVWULFWLRQV RQ
UHVDOH DQG WUDQVIHUDELOLW\ DSSHDUHG UHDVRQDEOH DQG FRQVXPHUV
UHFHLYHG HIIHFWLYH QRWLFH RI WKH SURKLELWLRQV

$OWKRXJK WKHVH
UHVWULFWLRQV ZKHQ DSSOLHG WR FKDWWHO KLVWRULFDOO\ SUHVHQWHG D
FKDOOHQJH 86 6XSUHPH &RXUW UXOLQJV H[SDQGHG WKH VFRSH RI
UHDVRQDEOH UHVWULFWLRQV WKDW PDQXIDFWXUHUV FDQ LPSRVH RQ
GHDOHUV RU UHWDLOHUV

(YHQ WKRXJK WKH SURSHUW\ ULJKWV DVVRFLDWHG ZLWK WLFNHWV
GLIIHU VLJQLILFDQWO\ IURP JRRGV WKDW FRQVXPHUV RZQ HJ YLGHR
JDPH FRQVROHV VQHDNHUV HWF PDQXIDFWXUHUV DQG UHWDLOHUV FDQ
VWLOO HQIRUFH DJUHHPHQWV WKDW OLPLW WKH XVH RI SURGXFWV 8QGHU
WKH SURSRVHG *ULQFK $FW D FOLFNZUDS DJUHHPHQW HJ D VDOHV
SROLF\ RU WHUPV RI XVH RQ DQ RQOLQH UHWDLOHU·V ZHEVLWH WKDW
SURKLELWV WKH XVH RI ERWV FRQVWLWXWHV D ´WHFKQRORJLFDO FRQWURO RU
PHDVXUHµ EHFDXVH WKH SROLF\ IXQFWLRQV WR SURWHFW LQYHQWRU\

$V
VXFK 1LNH·V UHFHQW FKDQJH WR LWV WHUPV RI VDOH WR SURKLELW WKH XVH
RI DXWRPDWHG VRIWZDUH WR SXUFKDVH SURGXFWV IDOOV XQGHU WKH VFRSH
RI WKH *ULQFK $FW

7KHUH LV QRWKLQJ QHZ DERXW WKLV DSSURDFK
6HFXULWLHV ODZV DQG UHJXODWLRQV VLPLODUO\ OLPLW³EXW GR QRW
HQWLUHO\ SURKLELW³WKH UHVDOH RI FHUWDLQ XQUHJLVWHUHG RU
FRQWUROOHG VHFXULWLHV XQGHU FHUWDLQ FRQGLWLRQV

7KH ODQJXDJH
GRHV QRW PHDQ WKH\ FDQQRW EH UHVROG 5DWKHU LW SODFHV

$QWKRQ\ - 'UH\HU 0LWFKHOO 3 6FKZDUW] :KRVH *DPH ,V ,W $Q\ZD\ 6SRUW
7HDPV· 5LJKW WR 5HVWULFW DQG &RQWURO 7LFNHW 5HVDOH)
25'+$0 ,17(//35230(',$
(17 / -   

6HH 7HUPV RI 6DOH1,.( KWWSVVZRRVK7/$2= >KWWSVSHUPDFF:&:
1'(&@ 6\NHV VXSUD QRWH 

'DQLHOOH 0RRUH 7KH 7LPHV 7KH\ $UH D &KDQJLQJ 6HFRQGDU\ 7LFNHW 0DUNHW
0RYHV IURP 7DERR WR 0DLQVWUHDP7
(;5(9(17632576 /   

6HH 0DQXIDFWXUHULPSRVHG 5HTXLUHPHQWV)('75$'( &200·1 KWWSV
ZZZIWFJRYDGYLFHJXLGDQFHFRPSHWLWLRQJXLGDQFHJXLGHDQWLWUXVWODZVGHDOLQJV
VXSSO\FKDLQPDQXIDFWXUHULPSRVHGUHTXLUHPHQWV >KWWSVSHUPDFF68$3''@

6HH 0LFKLJDQ VXSUD QRWH  DW  6WRSSLQJ *ULQFK %RWV $FW RI  6
 WK &RQJ 

6HH 6  WK &RQJ  7HUPV RI 6DOH VXSUD QRWH  0LFKLJDQ
VXSUD QRWH  DW 

6HH 5XOH  6HOOLQJ 5HVWULFWHG DQG &RQWURO 6HFXULWLHV 6(& -DQ  
KWWSVZZZVHFJRYUHSRUWVSXEVLQYHVWRUSXEOLFDWLRQVLQYHVWRUSXEVUXOHKWP >KWWSV
SHUPDFF6)+13<+@
@ .1((&$33,1* 6&$/3,1* 
OLPLWDWLRQV RQ UHVDOH E\ UHTXLULQJ D SXUFKDVHU ILUVW WR VDWLVI\
FHUWDLQ FRQGLWLRQV

)RUG·V UHFHQW UHVDOH OLPLWDWLRQV RQ )
HOHFWULF WUXFNV H[HPSOLI\ KRZ D PDQXIDFWXUHU FDQ OLPLW WKH
WHUPV RI XVH IRU SXUFKDVHUV

5HVDOH OLPLWV HIIHFWLYHO\ GHWHU VFDOSHUV EHFDXVH WLPH LV
PRQH\ 7KH ORQJHU WKDW VRPHRQH FDQQRW UHVHOO VRPHWKLQJ WKH
JUHDWHU WKH FKDQFH WKDW WKH VXSSO\ RI WKH JRRG LQFUHDVHV ZKLFK
GHFUHDVHV GHPDQG

0RUHRYHU ZLWK WLFNHWV WKH FORVHU WR WKH
SHUIRUPDQFH GDWH WKH ORZHU WKH SULFH RI WKH VDOH

,I D VFDOSHU
FDQQRW UHVHOO HQRXJK WLFNHWV EHIRUH WKH FRQFHUW WKH\ ZLOO ORVH
VRPH UHWXUQV RQ WKHLU LQYHVWPHQWV
5HVDOH OLPLWDWLRQV LQ SXUFKDVH DJUHHPHQWV DOORZ SXEOLF
DQG SULYDWH SDUWLHV WR LGHQWLI\ YLRODWLRQV DQG SURWHFW DJDLQVW
VFDOSLQJ ZKLOH DOVR DOORZLQJ UHVDOH XQGHU FHUWDLQ FRQGLWLRQV )RU
H[DPSOH VXSSRVH LQ -DQXDU\ 3HUVRQ $ ERXJKW WKUHH WLFNHWV WR
DQ $SULO FRQFHUW IRU KHUVHOI 3HUVRQ % DQG 3HUVRQ & &RPH
0DUFK 3HUVRQ & FDQ QR ORQJHU DWWHQG 1RZ 3HUVRQ $ KDV DQ
H[WUD WLFNHW VKH QR ORQJHU QHHGV 3HUVRQ $ LV OLNHO\ WKHQ WR UHVHOO
WKH WLFNHW WR DQRWKHU IULHQG RU DFTXDLQWDQFH RU DOWHUQDWLYHO\ WR
SODFH LW RQ WKH VHFRQGDU\ PDUNHW MXVW WR JHW LW RII KHU KDQGV³QRW
WR PDNH H[RUELWDQW SURILWV &RPSDUH WKDW WR WKH SUDFWLFHV RI
WRGD\ ZKHUH SHRSOH SXUFKDVH WLFNHWV DQG LPPHGLDWHO\ SODFH
WKHP RQ WKH UHVDOH PDUNHW DW HJUHJLRXV PDUNXSV ,I D UHVDOH
OLPLWDWLRQ ZHUH LQFOXGHG WKHQ UHVHOOHU PDUNHWSODFHV
FRQVXPHUV DQG HQIRUFHPHQW DJHQFLHV FRXOG HDVLO\ GLIIHUHQWLDWH
EHWZHHQ GLIIHUHQW W\SHV RI WLFNHW UHVDOHV³WKDW LV ZKHWKHU WKH
WLFNHW RU JRRG ZDV LPSURSHUO\ SODFHG RQ WKH PDUNHWSODFH :KHQ
FRPELQHG ZLWK WKH OHGJHU V\VWHP GLVFXVVHG SUHYLRXVO\
HQIRUFHPHQW JURXSV ZRXOG WKHQ KDYH WKH LQLWLDO SXUFKDVH SULFH
DQG GDWH IRU D JRRG DORQJ ZLWK DQ\ VXEVHTXHQW LQIRUPDWLRQ
PDNLQJ LW HDVLHU IRU D UHJXODWRU WR GHWHUPLQH ZKHWKHU 3HUVRQ $
ERXJKW D SURGXFW DQG LPPHGLDWHO\ SXW LW RQ WKH PDUNHW DW DQ
H[RUELWDQW PDUNXS RU ZDLWHG WR GR VR ODWHU
7RJHWKHU WKHVH LPSURYHPHQWV EROVWHU WKH HIIHFWLYHQHVV RI
HQIRUFHPHQW XQGHU H[LVWLQJ DQG SURSRVHG DQWLVFDOSLQJ VWDWXWHV

,G

6HH 6]\PNRZVNL VXSUD QRWH 

6HH +DSSHO -HQQLQJV VXSUD QRWH  DW ² QRWLQJ WLFNHW SULFHV
GHFOLQH RYHU WLPH GLVFRXQW RIIHUV RIWHQ DSSHDU FORVHU WR WKH HYHQW GD\ DQG WKDW RQOLQH
UHVDOH PDUNHWV JLYH FRQVXPHUV JUHDWHU FRPSDUDWLYH SULFLQJ WR RSWLPDOO\ WLPH SXUFKDVHV

-RDQQD 6 .DR :DLW IRU ,W /DVW0LQXWH 7LFNHWV 3D\ RII ZLWK &KHDSHU 3ULFHV
)
,17,0(6 -XO\   KWWSVZZZIWFRPFRQWHQWFGIEFG
FHEDDEFI >KWWSVSHUPDFF(-500.@
 %522./<1 /$: 5(9,(: >9RO 
&21&/86,21
:KHQ &RQJUHVV HQDFWHG WKH )7& $FW LW LQWHQWLRQDOO\
XVHG YDJXH DQG DPELJXRXV WHUPV WR GHILQH 8'$3 EHFDXVH ´JLYHQ
WKH LQHYLWDELOLW\ RI LQQRYDWLRQ LQ FKLFDQHU\µ

D FRPSUHKHQVLYH
OLVW RI VXFK ZURQJV ZDV VLPSO\ D IRRO·V HUUDQG 5DWKHU WKDQ
PLFURWDUJHWHG OHJLVODWLRQ WKH )7& $FW HPSRZHUHG WKH DJHQF\ WR
DUWLFXODWH WKH ´¶XQH[SUHVVHG VWDQGDUGV RI IDLU GHDOLQJ ZKLFK WKH
FRQVFLHQFH RI WKH FRPPXQLW\ PD\ SURJUHVVLYHO\ GHYHORS·µ DQG
6HFWLRQ VSHFLILFDOO\ ´¶EHDUV PXFK WKH VDPH UHODWLRQ WR WKH
FRPPXQLW\·V HYROYLQJ VWDQGDUGV RI KRQHVW IDLU DQG HWKLFDO
FRQGXFW LQ EXVLQHVV DV WKH GXH SURFHVV FODXVH EHDUV WR WKH
FRPPXQLW\ VWDQGDUGV RI IDLUQHVV DQG MXVWLFH LQ JRYHUQPHQW
DFWLRQ·µ

7KH $PHULFDQ FRQVXPHU IUHTXHQWO\ H[SUHVVHV
ULJKWHRXV IXURU RYHU VFDOSHUV HVSHFLDOO\ WKRVH ZKR XWLOL]H ERWV
DV YLRODWRUV RI IXQGDPHQWDO SULQFLSOHV RI IDLUQHVV 6FDOSLQJ
XQMXVWO\ DQG DUWLILFLDOO\ PDQLSXODWHV WKH VXSSO\ RI JRRGV DW
UHJXODU UHWDLO SULFHV GHSULYLQJ FRQVXPHUV RI WKH RSSRUWXQLW\ WR
HQWHU WKH PDUNHWSODFH RQ IDLU DQG HTXDO WHUPV 7KH SUDFWLFH
HIIHFWLYHO\ GLVWRUWV WKH PDUNHW DQG UHVWUDLQV WUDGH E\
HOLPLQDWLQJ UHDVRQDEOH DOWHUQDWLYHV WKHUHE\ SRVLWLRQLQJ WKH
VFDOSHU LQ D VSDFH IUHH RI RUGLQDU\ SULFH FRQVWUDLQWV ZKLOH
GLUHFWO\ LQIOLFWLQJ PRQRSRO\ KDUP RQ FRQVXPHUV

&RQVXPHUV
FDQQRW DYRLG H[RUELWDQW FRVWV HYHQ WKRXJK WKH\ FDQ IUHHO\ FKRRVH
DPRQJ UHVHOOHUV
6LQFH SURILW PRWLYDWLRQV ZLOO DOZD\V LQHYLWDELOLW\ OHDG WR
LQQRYDWLRQ DQG WKH GLVFRYHU\ RI QHZ ORRSKROHV RU WHFKQRORJLHV WR
FLUFXPYHQW UHJXODWLRQV DQ\ SROLF\ UHJLPH PXVW WDUJHW WKH SURILW
PRWLYDWLRQV XQGHUJLUGLQJ VFDOSLQJ $V VXFK WKH )7& VWDWH
DWWRUQH\V JHQHUDO EXVLQHVVHV FRQFHUQHG DERXW UHSXWDWLRQDO
KDUP DQG RWKHU FRQVXPHU SURWHFWLRQ DJHQFLHV PXVW
UHFRQFHSWXDOL]H VFDOSLQJ DV DQ XQIDLU WUDGH SUDFWLFH DQG
LPSOHPHQW V\VWHPV WKDW PLWLJDWH EDUULHUV WR HQIRUFHPHQW
,QVWLWXWLQJ GLVFORVXUH UHTXLUHPHQWV DQG OLPLWLQJ WKH ZLQGRZ IRU
UHVDOHV ZLOO TXLFNO\ HQKDQFH WKH HQIRUFHPHQW FDSDELOLWLHV RI
H[LVWLQJ DQWLVFDOSLQJ IUDPHZRUNV E\ LQFUHDVLQJ WKH DYDLODELOLW\
RI PDWHULDO LQIRUPDWLRQ DQG WKH QXPEHU RI H\HV ZDWFKLQJ RXW IRU
FRQVXPHU KDUPV
7KH GHEDWH RYHU WKH YDOXH RI VFDOSLQJ UHDFKHG LWV ORJLFDO
FRQFOXVLRQ ZKHQ D VFDOSHU UHVSRQGHG WR SOHDGLQJ SDUHQWV E\

 86& D +HUULQH VXSUD QRWH  DW  HPSKDVLV DGGHG

+HUULQH VXSUD QRWH  DW ²

´$YLUWXDOPRQRSRO\RIWKHEHVWVHDWVLVWKXVDFTXLUHGDQGWKHEURNHUV
DUH HQDEOHG WR GHPDQG H[WRUWLRQDWH SULFHVµ 7\VRQ %URV  86   
6WRQH - GLVVHQWLQJ
@ .1((&$33,1* 6&$/3,1* 
VD\LQJ´JHWRYHULWLWLVQRWLOOHJDO X PD\ GLVOLNH EXW X KDYH
12 ULJKW WR LQWHUIHUH LQ P\ EXVLQHVV SHRSOH GR LW FRQVWDQWO\µ

2QH QHHG RQO\ ORRN WRZDUG WKH VWRULHV RI %ULGJHW (VKHOPDQ 7DUD
%URZQLQJ DQG IDPLOLHV DFURVV WKH FRXQWU\ WR VHH WKDW WKH UHDO
TXHVWLRQ LV ZKDW ULJKW VFDOSHUV KDG WR VXEMHFW WKHP WR WKH DEMHFW
KRUURU RI QRW SURYLGLQJ IRU WKHLU FKLOGUHQ IRU 12 RWKHU UHDVRQ
WKDQ SODFLQJ SURILWV EHIRUH SHRSOH ,W PD\ QRW EH LOOHJDO EXW LW LV
GHILQLWHO\ XQIDLU
=DFKDU\ 0LFKDHO (OYRYH

&RRN VXSUD QRWH 
-' &DQGLGDWH %URRNO\Q /DZ 6FKRRO  %$ 1RUWKZHVWHUQ 8QLYHUVLW\
 , ZLVK WR WKDQN 3URIHVVRU 9LMD\ 5DJKDYDQ IRU KLV FULWLFDO VXSSRUW LQ WKH VXEVWDQWLYH
GHYHORSPHQW DQG UHILQHPHQW RI WKLV QRWHDVZHOODV3URIHVVRU'DQLHOOH7XOO\ IRU KRQLQJ
P\ OHJDO ZULWLQJ VNLOOV DQG DOZD\V OHQGLQJ KHU HDU 6SHFLDO WKDQNV WR %URRNO\Q /DZ
5HYLHZ HVSHFLDOO\ HGLWRUV :LOVRQ %DHU &KDUOLH %RZHU DQG 5HEHND &RKDQ IRU WKHLU
LQYDOXDEOH IHHGEDFN , DOVR ZLVK WR WKDQN P\ SDUHQWV WKH EXWIRU FDXVH RI P\ H[LVWHQFH
DQG DOO RI P\ IDPLO\ IULHQGV FODVVPDWHV SHWV DQG SURIHVVRUV ZKR ILOOHG PH ZLWK
GHWHUPLQDWLRQ DQG OLVWHQHG WR PH UDPEOH RQ DQG RQ DERXW WKLV QRWH )LQDOO\ , FRXOG QRW
KDYH ZULWWHQ WKLV QRWH ZLWKRXW WKH ORYH HQFRXUDJHPHQW DQG WKRXJKWIXO LQVLJKWV RI P\
SDUWQHU $ODQD *UHHQ