Ratings and Conflicts Management

Reviewing and Rating Products

Since July 2019 recommendations contained in Select Equities research reports are based on the rating system below.

Rating Explanation
BUY Select Equities expects the security to appreciate by 10% or more in price within the next 12 months.
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.
ACCUMULATE Select Equities expects the security to appreciate by 10% or more in price within the next 12 months, however we do not believe the security has valuation support.

Spread of Ratings

Spead of Ratings

Firm Ratings from the Period of Dec 2016 to Dec 2018

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.

Select Equities does not solicit corporate mandates from issuers where the firm provides research coverage. This policy does not preclude the firm from responding to an invitation, offer or instruction given by such an issuer to execute a mandate, or restrict the firm in regard to executing an instruction received from a client to deal in the issuer’s securities. Nor does it prevent the company from soliciting a mandate from an issuer about whom the firm does not currently provide research coverage.
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 42 days after completion of the mandate.

In the case where research coverage already exists, Select Equities will not publish a research 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 in the interim, 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 director, supervisory analyst or the Head of Research 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 embargoes when appropriate.

Select Equities employees 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. This policy applies when Select Equities initiates the basis upon which a report is produced, but not when a report is written in response to an external event such as a public or market announcement.
  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. This policy is also applied to directors of the firm.
  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 $100,000. This policy is also applied to directors of the firm.
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