Ratings and Conflicts Management

Reviewing and Rating Products

The recommendations contained in Select Equities research reports are based on the rating system below.

Rating Explanation
LONG TERM BUY Select Equities expects the security to appreciate by 10% or more in price over a period exceeding 12 months.
BUY Select Equities expects the security to appreciate by 10% or more in price within the next 12 months.
SPECULATIVE BUY Select Equities expects the security to appreciate by 10% or more in price within the next 12 months. Select Equities believes that an investment in the security carries a particularly high level of risk due to the immature stage or nature of the issuer’s business model.
HOLD Select Equities does not expect the security to appreciate or depreciate by 10% or more in price within the next 12 months.
SELL Select Equities expects the security to depreciate by 10% or more in price within the next 12 months.

Spread of Ratings

Spead of Ratings

Firm Ratings from the Period of Dec 2014 to Nov 2016

Conflicts Management Policy

Select Equities has adopted the following processes to help manage conflicts of interest insofar as its research is concerned.

Conflict of Interest Mechanism Arrangement
Fees paid by an issuer to Select Equities for research coverage. Avoid Select Equities does not charge fees to issuers for the provision of research coverage.

The firm does not commit to provide research coverage during non-deal meetings with issuers, or to secure corporate mandates with issuers.
Fees paid by an issuer to Select Equities for the provision of non-research services, for example placing or underwriting an issue of new securities. Avoid Select Equities will not publish an initiation of research report on an issuer following entry into a corporate mandate with the issuer and for a period of 28 days after completion of the mandate.

In the case where research coverage already exists, Select Equities will not publish a research report update on an issuer following entry into a corporate mandate with the issuer and for a period of 5 business days after completion of the mandate.

In the case where research coverage does not currently exist, Select Equities may publish factual information in relation to the issuer or offer, although such information shall not contain a recommendation, valuation or forecasts prepared by the firm.
  Disclose Select Equities shall disclose any material conflicts of interest arising in the preceding 12 month period in research reports that it publishes. For the purposes of this policy we define a disclosable interest as one where the fee paid to the firm exceeds $100,000.
Research services generate brokerage and adviser commission. Control Select Equities research reports are authored by appropriately qualified and experienced personnel.

Research reports are reviewed and signed off by a supervisory analyst of the firm prior to publication.

Information on the firm’s spread of ratings is provided above.

Historical research ratings are available to the firm’s clients on request.

Services provided by Select Equities’ advisers are monitored and supervised by the firm’s directors.
Awareness of market sensitive information that is not generally available, including advance knowledge of a Select Equities research report rating. Avoid Select Equities advisers cannot deal or advise in securities when they are in possession of inside information. The firm employs stock related embargos when appropriate.

Access to information is controlled within the business, including by the segregation of research and dealing functions. 

Select Equities advisers cannot trade in securities connected to an issuer before a scheduled research report on the issuer is published and for a period of 2 business days after publication of the report.
  control All Select Equities advisers’ securities holdings and trading is executed by the firm, and is monitored and supervised by the firm’s directors.
Existing holdings of securities where Select Equities research coverage is provided. Avoid Select Equities research report authors cannot trade inconsistently with a recommendation contained in one of their research reports for a period of 5 business days after the release of the report.
  control All Select Equities advisers’ securities holdings and trading is executed by the firm, and is monitored and supervised by the firm’s directors.
  Disclose Select Equities shall disclose any material conflicts of interest in research reports that it publishes. For the purposes of this policy we define a disclosable interest as one where the securities holding exceeds 10% of the research report author's portfolio and $50,000.
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