1DOLQL-XQHMD
&RQVWLWXWLRQDO$PHQGPHQWWR0DNH
(GXFDWLRQD)XQGDPHQWDO5LJKW
,VVXHVIRUD)ROORZXS/HJLVODWLRQ
1DOLQL-XQHMD
1DWLRQDO,QVWLWXWHRI(GXFDWLRQ3ODQQLQJDQG$GPLQLVWUDWLRQ
%6UL$XURELQGR0DUJ1HZ'HOKL,QGLD
0DUFK
1,(3$2FFDVLRQDO3DSHU
,QWURGXFWLRQ
&RQWHQWV
6HFWLRQ,
&RPSXOVRU\(GXFDWLRQYV&RPSXOVRU\6FKRROLQJ
&RQVWLWXWLRQDO3URYLVLRQVIRU3URWHFWLQJ
WKH5LJKWRIWKH&KLOG
([LVWLQJ/HJLVODWLRQIRU&RPSXOVRU\(GXFDWLRQ
,V(GXFDWLRQ&RPSXOVRU\LQ6WDWHV:KHUH(GXFDWLRQ$FWV
KDYHEHHQ3DVVHG"
3DFHRI&RPSXOVRU\(GXFDWLRQLQ,QGLD /LVWRI&RPSXOVRU\(GXFDWLRQ$FWV
6HFWLRQ,,
/HJLVODWLRQVIRU&RPSXOVRU\(GXFDWLRQLQ,QGLD
)URP&RPSXOVLRQWR3HUVXDVLRQ$3ROLF\6KLIW
&RPSXOVLRQ± $QGWKH%XUGHQRI$SDWK\ 6HFWLRQ,,,
5HFHQW'HYHORSPHQWV/HDGLQJWRWKH WK &RQVWLWXWLRQDO$PHQGPHQW
)ROORZXS/HJLVODWLRQWRWKH)XQGDPHQWDO5LJKWW R(GXFDWLRQ
&RQFXUUHQW6WDWXVRI(GXFDWLRQ
&HQWUDO/HJLVODWLRQDQG3DQFKD\DWL5DM,QVWLWXWLRQV
3HRSOH¶V'HPDQGIRU(GXFDWLRQ
'HPDQGIRU(GXFDWLRQRI6DWLVIDFWRU\4XDOLW\
5DWLILFDWLRQRI&RQYHQWLRQRQ5LJKWVRIWKH&KLOG
3DUOLDPHQWDU\6WDQGLQJ&RPPLWWHH+5'5HFRPPHQGDWLRQV
6HFWLRQ,9
7KH1HHGIRU1HZ&HQWUDO/HJLVODWLRQ
:KDW6KRXOGWKH/DZ'HWHUPLQH"
3RVVLEOH,VVXHV
&RQFOXVLRQ
5HIHUHQFHV
1DOLQL-XQHMD
/LVWRI7DEOHV
&RPSXOVRU\(GXFDWLRQ$FWV3UHVHQWO\LQ)RUFHLQ
6WDWHV87VRI,QGLD
'DWDRQ(QIRUFHPHQWRI&RPSXOVRU\(GXFDWLRQLQ,QGLD
VLQFH,QGHSHQGHQFH± 1XPEHURI3URVHFXWLRQV
'DWDRQ(QIRUFHPHQWRI&RPSXOVRU\(GXFDWLRQLQ,QGLD
VLQFH,QGHSHQGHQFH± 1XPEHURI1RWLFHV,VVXHG$OO,QGLD
'DWDRQ(QIRUFHPHQWRI&RPSXOVRU\(GXFDWLRQLQ,QGLD
VLQFH,QGHSHQGHQFH± 8WWDU3UDGHVK
1DOLQL-XQHMD
&RQVWLWXWLRQDO$PHQGPHQWWR0DNH(GXFDWLRQD
)XQGDPHQWDO5LJKW
,VVXHVIRUD)ROORZ8S/HJLVODWLRQ
,QWURGXFWLRQ
$QXPEHURIUHFHQWHIIRUWVKDYHEHHQLQLWLDWHGLQ,QGLDWRPDNHHOHPHQWDU\
HGXFDWLRQ D IXQGDPHQWDO ULJKW RI HYHU\ FKLOG :LWK WKH SDVVLQJ RI WKH UG
&RQVWLWXWLRQ$PHQGPHQW%LOOE\WKH/RN6DEKDWKHORZHUKRXVHRI3DUOLDPHQWRQ
WK 1RYHPEHU DQG WKHQ E\ WKH XSSHUKRXVH WKH 5DM\D6DEKD RQ WK RI
0D\DPDMRUVWULGHZDVZLWQHVVHGLQWKHHYROXWLRQRIWKH UG &RQVWLWXWLRQ
$PHQGPHQW%LOOLQWRWKH WK &RQVWLWXWLRQ$PHQGPHQW$FW:LWKWKLV$FWIRUWKH
ILUVWWLPHVLQFHWKHIUDPLQJRIWKH&RQVWLWXWLRQ ZDVD)XQGDPHQWDO5LJKWDGGHGWR
WKH &RQVWLWXWLRQ RI ,QGLD %HILWWLQJO\ IRU ,QGLD ZLWK WKH ODUJHVW QXPEHU RI
LOOLWHUDWHVLQWKHZRUOGWKLVILUVWDGGLWLRQWRWKH)XQGDPHQWDO5LJKWVOLVWUHODWHVWR
HGXFDWLRQ 7KH ,QGLDQ &RQVWLWXWLRQ QRZ JXDUDQWHHV HL JKW \HDUV RI HOHPHQWDU\
HGXFDWLRQWRHDFKDQGHYHU\FKLOGLQWKHFRXQWU\
+RZWKLVVKDOOEHLPSOHPHQWHGDQGE\ZKRPDQGLQZKDWPDQQHUVKDOOEH
GHFLGHG E\DOHJLVODWLRQ WKDWLVWREHGUDIWHGDVDIROORZ XSWRWKH&RQVWLWXWLRQDO
$PHQGPHQW6XEVHTXHQWWRWKHDPHQGPHQWWKHIROORZLQJDUWLFOHVKDOOEHLQVHUWHG
DIWHU$UWLFOHRIWKH&RQVWLWXWLRQQDPHO\
³$ 7KH 6WDWH VKDOO SURYLGH IUHH DQG FRPSXOVRU\ HGXFDWLRQ WR DOO
FKLOGUHQ RI WKH DJH RI VL[ WR IRXUWHHQ \HDUV LQ VXFK PDQQHU DV WKH 6WDWH
PD\E\ODZGHWHUPLQH´
$UWLFOHZLOO QRWDVZDVEHLQJFRQVLGHUHGHDUOLHUEHGHOHWHG,QVWHDGWKH
FRQWHQWRIWKH$UWLFOHRIWKH&RQVWLWXWLRQLVEHLQJVXEVWLWXWHGE\
'U 1DOLQL -XQHMD )HOORZ 6FKRRO DQG 1RQ )RUPDO (GXFDWLRQ 8QLW 1DWLRQDO ,QVWLWXWH RI
(GXFDWLRQDO 3ODQQLQJ DQG $GPLQLVWUDWLRQ 1,(3$ % 6UL $XURELQGR 0DUJ 1HZ
'HOKL,QGLD
1,(3$2FFDVLRQDO3DSHU
³ 7KH 6WDWH VKDOO HQGHDYRXU WR SURYLGH HDUO\ FKLOGKRRG FDUH DQG
HGXFDWLRQIRUDOOFKLOGUHQXQWLOWKH\FRPSOHWHWKHDJHRIVL[\HDUV´
,Q$UWLFOH$RIWKH &RQVWLWXWLRQ DIWHUFODXVHMWKH IROORZLQJ FODXVHLV
EHLQJDGGHG
³NZKRLVDSDUHQWRUJXDUGLDQWRSURYLGHRSSRUWXQLWLHVIRUHGXFDWLRQWR
KLVFKLOGRUDVWKHFDVHPD\EHZDUGEHWZHHQWKHDJHRIVL[DQGIRXUWHHQ
\HDUV´
7KHUHIRUH DV PD\ EH QRWHG IURP DERYH WKH SURYLVLRQV RI $UWLFOH $
LWVHOIVWDWH WKDWWKH\ DUHWREHLPSOHPHQWHG LQVXFKPDQQHUDVWKH 6WDWHPD\E\
ODZGHWHUPLQH$VVXFK WKHOHJLVODWLRQWKDWZRXOGJLYHHIIHFWWRW KHSURYLVLRQV
WRWKLVFODXVHZRXOGSOD\DGHWHUPLQLQJUROHLQWKHIXWXUHRI,QGLDQHGXFDWLRQ 7KH TXHVWLRQEHIRUHWKHFRXQWU\DWWKLVMXQFWXUHLV ± KRZ VKRXOGWKLVDOO
LPSRUWDQW SLHFHRI OHJLVODWLRQ EH IUDPHGLQ RUGHUIRULW WRHQVXUHWKDWHYHU\
FKLOGLVDVVXUHGRIWKHULJKWWRHGXFDWLRQ" &DQRQHOHDUQIURPWKHH[LVWLQJVWDWH
OHJLVODWLRQRQFRPSXOVRU\HGXFDWLRQRUGRHV FRPSXOVRU\ HGXFDWLRQQRWILWLQZLWK
WKHSUHVHQWµULJKWV¶EDVHGSHUVSHFWLYHVLQZKLFKHGXFDWLRQLVDµ5LJKW¶DQGQRWD
FRPSXOVLRQRQDSHUVRQ
&DQZHGUDZLQVSLUDWLRQIURPFRPSXOVRU\HGXFDWLRQODZVIURPRWKHUSDUWV
RIWKHZRUOGDQGIURPUHFHQW81GRFXPHQWVRQWKHULJKWVRIWKHFKLOG"
,QGLD LV D VLJQDWRU\ WR WKH &RQYHQWLRQ RQ WKH 5LJKWV RI WKH &KLOG &5&
DQG LV WKHUHIRUH FRPPLWWHG WR EULQJLQJ LWV LQWHUQDO OHJLVODWLRQ LQ OLQH ZLWK WKH
DJUHHPHQWV LQ WKH UDWLILHG &5& 2QH RI WKH PDMRU DUWLFOHV LQ WKH &RQYHQWLRQ
FRPPLWV,QGLDWKXV
³6WDWH SDUWLHV UHFRJQLVH WKH ULJKW RI WKH FKLOG WR HGXFDWLRQ DQG ZLWK D
YLHZ WR DFKLHYLQJ WKLV ULJKW SURJUHVVLYHO\ DQG RQ WKH EDVLV RI HTXDO
RSSRUWXQLW\ WKH\ VKDOO LQ SDUWLFXODU D 0DNH SULPDU\ HGXFDWLRQ
FRPSXOVRU\DQGDYDLODEOHIUHHWRDOO´
1DOLQL-XQHMD
7KH$PHQGPHQWWRWKH&RQVWLWXWLRQDQGWKHSURSRVHGOHJLVODWLRQWRIROORZ
LWDUHLQFRQVRQDQFHZLWKWKLVFRPPLWPHQWDO VR%XWWKHTXHVWLRQUHPDLQVRQHRI
IUDPLQJ WKH ODZ DSSURSULDWHO\ 7KHUH PD\ EH PDQ\ SUHGLFDPHQWV WKDW ZH PD\
QHHG WR FRQIURQW LQ WKLV FRQWH[W )RU H[DPSOH VRPH RI WKH TXHVWLRQV WKDW
LPPHGLDWHO\FRPHWRPLQGLQWKLVFRQWH[WDUH
x :K\GRHVWKHULJKWWRHGXFDWLRQQHHGWREHVKLIWHGIURP3DUW,9RIWKH
,QGLDQ &RQVWLWXWLRQ 'LUHFWLYH 3ULQFLSOHV RI 6WDWH 3ROLF\ WR 3DUW ,,,
)XQGDPHQWDO5LJKWV
x :K\ LV QHZ OHJLVODWLRQ QHHGHG IRU JLYLQJ WKLV ULJKW DQ RSHUDWLRQDO
PHDQLQJZKHQDOPRVWHYHU\6WDWHDOUHDG\KDVD& RPSXOVRU\(GXFDWLRQ
$FW"
x 6KRXOGWKH µ6WDWH¶PDNH &HQWUDO/HJLVODWLRQRUVKRXOGWKHIHGHUDOVWDWH
JRYHUQPHQWVGUDIWWKHLURZQOHJLVODWLRQVIRUHQVXULQJWRHYHU\FKLOGIUHH
DQGFRPSXOVRU\HGXFDWLRQ"
x 6KRXOGWKHOHJLVODWLRQUHODWHWRRQO\WKHQHZDUWLFOH $WKXVUHVWULFWLQJ
LWVHOIWRWKH\HDUROGFKLOGRUVKRXOGLWUHODWHWRWKHHQWLUHFRQWHQW
RIWKH$PHQGPHQWDQGLQFOXGHOHJLVODWLYHSURYLVLRQIRUHDUO\FKLOGKRRG
FDUHDQGHGXFDWLRQWKHQHZ$UWLFOHDVZHOODVWKHIXQGDPHQWDOGXW\
RISDUHQWV$UWLFOHN"
x :KRP VKRXOG WKH OHJLVODWLRQ HPSRZHU" 7KH SDUHQWV WR GHPDQG
HGXFDWLRQIURPWKHµ6WDWH¶" 2U WKHµ6WDWH¶ WRFRPSHOSDUHQWVWRVHQG
WKHLU FKLOG WR VFKRRO" 2U WKH &HQWUH WR FRPSHO WKH IHGHUDO VWDWH
JRYHUQPHQWV WR SURYLGH HGXFDWLRQDO IDFLOLW LHV DQG DWWHQGDQFH
DXWKRULWLHV"6HFRQGO\KRZVKRXOGWKLVEHGRQH"
x :KR ZLOO LPSOHPHQW WKH SURYLVLRQV RI WKH OHJLVODWLRQ" &DQ &HQWUDO
OHJLVODWLRQ EH PDGH IRU WKH WKLUG WLHU ERGLHV WR LPSOHPHQW VLQFH
3DQFKD\DWL5DM,QVWLWXWLRQV35,VDUHD6WDWHVXEMHFW "
x :KDW VKRXOG EH WKH UROH SOD\HG E\ 3DQFKD\DWL 5DM ,QVWLWXWLRQV LQ WKH
SURYLVLRQ DQG HIIHFWLYH LPSOHPHQWDWLRQ RI IXQGDPHQWDO ULJKWV" 6KRXOG
WKHIROORZXSOHJLVODWLRQGHILQHWKHLUUROH":KRVKRXOGGHILQHWKLVUROH"
:KDW DXWKRULW\ DQG UHVRXUFHV QHHG WR EH JL YHQ WR WKHVH LQVWLWXWLRQV"
:KDW FDSDELOLWLHV GR WKH\ KDYHQHHG WR KDYH LQ RUGHU WR SOD\ D
PHDQLQJIXOUROH"
1,(3$2FFDVLRQDO3DSHU
x :KHQ IUHH DQG FRPSXOVRU\ HGXFDWLRQ EHFRPHV D IXQGDPHQWDO ULJKW ±
ZKDWVKRXOGEHµIUHH¶"6KRXOGHGXFDWLRQLQSULYDWHVFKRROVDOVREHIUHH"
6KRXOGWKHFHQWUDOOHJLVODWLRQVSHFLI\ZKDWVKRXOGEHIUHH"
x +RZFDQSDUHQWVEHEURXJKWRQERDUG":KDWVKRXOGEHWKHLUUROH":KDW
VKRXOG EH RXU SRVLWLRQ UHJDUGLQJ SHQDOWLHV IRU QRQ LPSOHPHQWDWLRQ RI
WKHSURYLVLRQVRIWKH$FW"
x 6KRXOG SULYDWH LQVWLWXWLRQV KDYH D UROH W R SOD\ LQ WKLV QDWLRQDO
HQGHDYRXU"+RZFDQWKH\EHEURXJKWLQ"
x $µGHPDQG¶KDVEHHQYRFDOL]HGLQWKHSRSXODUOLWHUDWXUHDQGLQVHPLQDUV
DQGZRUNVKRSVIRU³HGXFDWLRQRIVDWLVIDFWRU\TXDOLW\´&DQµ6DWLVIDFWRU\
4XDOLW\¶EHGHILQHGLQPRUHVSHFLILFWHUPV"
$VRQHPD\VHHWKHLVVXHVFDQUXQTXLWHGHHSDQGIRUWKHXQLQLWLDWHGWKLV
ZKROH GHEDWHFDQ EH VRPHZKDW EHZLOGHULQJ $Q DWWHPSW KDVEHHQPDGH LQ IRXU
VHFWLRQV RI WKLV SDSHU WKHUHIRUH WR SUHVHQW KDSSHQLQJV UHODWHG WR WKH ULJKW WR
HGXFDWLRQ LQ WKHLU FRQFHSWXDO DQG KLVWRULFDO SHUVSHFWLYHV EHIRUH UHWXUQLQJ WR
LQWULFDFLHV RI WKH LVVXHV WKDW ZH QHHG WR DGGUHVV LQ IUDPLQJ WKH IROORZ XS
OHJLVODWLRQ
6HFWLRQ , GLVFXVVHV EULHIO\ WKH FRQFHSWV RIL FRPSXOVRU\HGXFDWLRQ DQG
LLWKHULJKWWRHGXFDWLRQDQGDOV RWKHUHODWLRQVKLSEHWZHHQWKHWZR,WLQWURGXFHV
WKHH[LVWLQJFRQVWLWXWLRQDOSURYLVLRQVIRUWKHFKLOGLQ,QGLDDVZHOODVWKHH[LVWLQJ
DFWVLQIRUFHIRUPDNLQJHGXFDWLRQFRPSXOVRU\
6HFWLRQ,,SURYLGHVKLVWRULFDOEDFNJURXQGRIFRPSXOVRU\HGXFDWLRQLQ ,QGLD
LQ RUGHU WR XQGHUVWDQG WKH SUHYLRXV DWWHPSWV LQ WKLV GLUHFWLRQ DQG WR XQGHUVWDQG
VRPHRI WKH SUREOHPVWKDWRQH FDQHQFRXQWHULQDWWHPSWLQJ WRSURYLGHHGXFDWLRQ
IRUDOOFKLOGUHQ
6HFWLRQ,,,RXWOLQHVVRPHRIWKHUHFHQWGHYHORSPHQWVLQWKHSDVWG HFDGHRU
VRWKDWKDYHVHUYHGWRUHVXUUHFWWKHFRQFHUQIRUSURYLGLQJDOHJLVODWLYHJURXQGLQJ
WRPDVVHGXFDWLRQDQGWRSDYHZD\IRUWKH UG &RQVWLWXWLRQDO$PHQGPHQW%LOO
1DOLQL-XQHMD
)LQDOO\ 6HFWLRQ ,9 GLVFXVVHV LVVXHV UHODWHG WR WKH SUHVHQW IROORZ XS
OHJLVODWLRQ WR WKH QHZ$UWLFOH$RIWKH &RQVWLWXWLRQ RI,QGLD,WDOVRGLVFXVVHV
ZK\ RXU H[LVWLQJ &RPSXOVRU\ (GXFDWLRQ $FWV QR ORQJHU VHUYH DQG ZK\ D QHZ
OHJLVODWLRQLVQHHGHGWRGD\
3XW WRJHWKHU WKHVH VHFWLRQV PD\ PDNH WKH UHDGHU SDLQIXOO\DZDUH WKDW WKH
OHJLVODWLRQPD\E\QRPHDQVEHVXIILFLHQW5DWKHULWLVDQHFHVVDU\ILUVWVWHSDQG
WKHUHIRUHGHVHUYHVWREHWDNHQZLWKDOOVHULRXVQHVVDQGVLQFHULW\
7KHXQGHUO\LQJFRQFHUQUXQQLQJWKURXJKRXWLVWKDWZKDWLVQHHGHGWRGD\LV
QRWMXVWOHJLVODWLRQLQWKHROGF RPSXOVRU\HGXFDWLRQPRXOGZKLFKRQO\OD\VGRZQ
ZKDWIDFLOLWLHV DUHWREHSURYLGHGDQGGLFWDWHVZKDWZLOOKDSSHQWRWKRVHZKRGR
QRW DYDLO RI WKHP EXWD OHJLVODWLRQ WKDW ZLOO HQIRUFHWKH ULJKWV RIHYHU\FKLOGWR
TXDOLW\HGXFDWLRQ
1,(3$2FFDVLRQDO3DSHU
6HFWLRQ,
7KH WHUP µFRPSXOVRU\ HGXFDWLRQ¶ WHQGV WR HOLFLW GLIIHUHQW PHDQLQJV DQG
LQWHUSUHWDWLRQV IURP GLIIHUHQW SHRSOH 0RVW RIWHQ FRPSXOVRU\ HGXFDWLRQ LV
LQWHUSUHWHGLQWHUPVRIPDQGDWRU\DWWHQGDQFHUHTXLUHPHQWVRUDVWKHILUVWVWDJHRI
HGXFDWLRQ1RWYHU\RIWHQ LWLV FRQQHFWHGZLWKWKH ULJKWWRHGXFDWLRQDQGHYHQ
WKHQWRPRVWSHRSOHFRPSXOVRU\HGXFDWLRQDQGULJKWWRHGXFDWLRQPHDQPRUHRU
OHVV WKH VDPH WKLQJ +RZHYHU WKHUH LV D VOLJKW EXW LPSRUWDQW GLIIHUHQFH 7KH
³5LJKW WR (GXFDWLRQ´ FRXOG DOVR EH DSSOLFDEOH W R DGXOWV +HQFH ZKLOH V\VWHPV
H[LVW LQ VHYHUDO FRXQWULHV WR IRUFH SDUHQWV WR VHQG WKHLU FKLOGUHQ WR VFKRRO DGXOW
HGXFDWLRQLVQRWDVDUXOHFRPSXOVRU\VLQFHDGXOWVFDQFKRRVHZKHWKHURUQRWWKH\
ZDQWWRWDNHDGYDQWDJHRIWKHIDFLOLWLHVSURYLGHGWRWKH PIRUHGXFDWLRQ7KHDLPRI
FRPSXOVRU\HGXFDWLRQLVWR SURWHFW FKLOGUHQ¶VULJKWWRHGXFDWLRQEHFDXVHFKLOGUHQ
KDYH QR ZD\ RI DVVHUWLQJ WKDW ULJKW IRU WKHPVHOYHV ZKHQ WKURXJK QHJOHFW RU
LJQRUDQFHQRDWWHQWLRQLVSDLGWRWKLVQHHG
&RPSXOVRU\HGXFDWLRQLVD OVRXVHGV\QRQ\PRXVO\DQGLQWHUFKDQJHDEO\ZLWK
WKHILUVWVWDJHRIIRUPDOHGXFDWLRQZKLFKLQPRVWFRXQWULHVLVFRQJUXHQWZLWKWKH
\HDUVLQZKLFKHGXFDWLRQLVDOVRµFRPSXOVRU\¶
³&RPSXOVRU\ (GXFDWLRQ 7KDW ZKLFK PXVW EH DWWHQGHG RU XQGHUWDNHQ E\
WKH ODZ RI D SDUWLFXODU FRXQWU\ RU VWDWH 7KH OHJDO UHTXLUHPHQW PD\ EH
HGXFDWLRQ IURP D FHUWDLQ VWDUWLQJ DJH RU LW PD\ EH HGXFDWLRQ XS WR D
FHUWDLQVWDQGDUG´
,QWHUQDWLRQDO'LFWLRQDU\RI(GXFDWLRQ/RQGRQ
$QRWKHU PHDQLQJ RI WKH WHUP WHQGV WR UHIHU WR W KH UHTXLUHPHQWV IURP
FKLOGUHQDQGJRYHUQPHQWVLQUHODWLRQWRWKLVVWDJH ± WKHUHTXLUHPHQWEHLQJWKDWWKH
FKLOGUHQPXVWDWWHQGVFKRRODQGWKDWWKHJRYHUQPHQWPXVWSURYLGHWKHVHVFKRROV
7KH IROORZLQJ GHILQLWLRQ RI FRPSXOVRU\ HGXFDWLRQ UHIHUV WR WKHVH PDQGD WRU\
FRQGLWLRQV
1DOLQL-XQHMD
³&RPSXOVRU\(GXFDWLRQ7KHOHJDOUHTXLUHPHQWVLQDOOVWDWHVPDQGDWLQJ
PLQLPDO VFKRRO DWWHQGDQFH DQQXDOO\ IRU FKLOGUHQ EHWZHHQ ODWHVW VFKRRO
VWDUWLQJDJHVDQGHDUOLHVWVFKRROOHDYLQJDJHVVSHFLILHGE\WKHLQGLYLGXDO
VWDWHV VWDWHV FRUUHVSRQGLQJO\ UHTXLUH SURYLVLRQ RI SXEOLF HGXFDWLRQ
WKURXJKZKLFKOHJDOVFKRRODWWHQGDQFHUHTXLUHPHQWVPD\EHPHW´
7KH&RQFLVH'LFWLRQDU\RI(GXFDWLRQ
&RPSXOVRU\ VFKRROLQJ SXWV D GXW\ RQ WKH FKLOG WR DWWHQG VFKRRO DQG
FRUUHVSRQGLQJGXW\RQWKHSDUHQWVWR VHQGWKHFKLOGWRVFKRRO,QWKHSDVWWZRRU
WKUHH FHQWXULHV RQH FDQ ILQG DUWLFOHV LQ PDQ\ &RQVWLWXWLRQV GHILQLQJFRPSXOVRU\
HGXFDWLRQDVD FKLOG¶VGXW\,QFDVHRIQRQREHGLHQFHWKHVWDWHRUJDQVVXFKDVWKH
SROLFHDQGWKHFRXUWVDUHUHTXLUHGWRWDNHD FWLRQ
:KHQ &RPSXOVRU\ HGXFDWLRQ LV SHUFHLYHG DV D ULJKW WKH IRFXV VKLIWV WR
µVHOIDVVHUWLRQ¶ 7KLV LV WKH PHDQLQJ RI FRPSXOVRU\ HGXFDWLRQ SURSDJDWHG E\
OLEHUDO DQG VRFLDOLVW SKLORVRSKHUV SROLWLFLDQV DQG HGXFDWLRQLVWV DV D YHKLFOH IRU
VDIHJXDUGLQJDKXPDQULJKWIRUSHRSOHµXQGHUDJH¶
7KH 81(6&2 <HDUERRN RI (GXFDWLRQ YLHZHG FRPSXOVRU\
HGXFDWLRQ DV D ULJKW 7KXV DV D ULJKW LW KDV VKLIWHG IURP EHLQJ DSSOLHG WR WKH
SRSXODWLRQ DV D SDVVLYH VXEMHFW WR QRZ PDLQO\ DSSOLHG WR WKH VWDWH DV DQ DFWLYH
VXEMHFW VXFKWKDW
³7KH FRPSXOVRU\ QDWXUH RI HGXFDWLRQ UHIHUV QRW RQO\ WR WKH FKLOG¶V
REOLJDWLRQWRUHFHLYHLWEXWDOVRWRWKHVWDWH¶VREOLJDWLRQWRSURYLGH´
81(6&2,QWHUQDWLRQDO<HDU%RRNRI(GXFDWLRQ9RO;;;9,,,
&RPSXOVRU\(GXFDWLRQYV&RPSXOVRU\6FKRROLQJ
,Q VRPH FDVHV µFRPSXOVRU\ HGXFDWLRQ¶ UHTXLUHPHQWV FDQ EH PHW HYHQ
ZLWKRXW DWWHQGLQJ VFKRRO ,Q VXFK FDVHV LW LV WKH DFKLHYHPHQW RI D VWDJH RI
HGXFDWLRQ WKDW LV WKH GHWHUPLQLQJ IDFWRU DQG QRW WKH DWWHQGDQFH RI WKH FKLOG DW D
VFKRRO ,Q PDQ\ FRXQWULHV WKH FRQGLWLRQV RI FRPSXOVRU\ HGXFDWLRQ PD\ EH PHW
WKURXJKKRPHVFKRROLQJRUWKURXJKWKHSURYLVLRQRIHGXFDWLRQWKURXJKVRPHRWKHU
1,(3$2FFDVLRQDO3DSHU
PHDQV7KHIROORZLQJGHILQLWLRQIURPDQ$PHULFDQSXEOLFDWLRQDOVRUHIHUVWRWKLV
µDFKLHYHPHQWRIREMHFWLYHV¶PHDQLQJRIWKHWHUPLQDGGLWLRQWRWKHPRUHFRPPRQ
PHDQLQJV UHODWHG WR WKH UHTXLUHPHQWV WR DWWHQG VFKRRO DQG WKH UHTXLUHPHQWV WR
SURYLGH VFKRROLQJ IDFLOLWLHV 6XFK GHILQLWLRQV RI FRPSXOVRU\ HGXFDWLRQ GUDZ
DWWHQWLRQ WR WKH GLVWLQFWLRQ EHWZHHQ FRPSXOVRU\ VFKRROLQJ DQG FRPSXOVRU\
HGXFDWLRQ
³&RPSXOVRU\ (GXFDWLRQ WKH SUDFWLFH QRZ FRPPRQ WR DOO VWDWHV
WHUULWRULHV DQG SRVVHVVLRQV RI WKH XQLWHG VWDWHV RI UHTXLULQJ VFKRRO
DWWHQGDQFH E\ ODZ UHVSRQVLELOLW\ WR EH SODFHG RQ WKH SDUHQWV LQ VRPH
VWDWHVKLVWRULFDOO\WKHUHTXLUHPHQWWKDWHYHU\FKLOGVKRXOGEHDEOHWR
UHDGDQGZULWHE\DFHUWDLQDJHFRPPRQO\\HDUVVFKRRODWWHQGDQFHQRW
EHLQJ PDQGDWRU\ WKH UHTXLUHPHQW WKDWD SROLWLFDOVXEGLYLVLRQSURYLGH
HGXFDWLRQIRUWKHVFKRRODJHSRSXODWLRQ´
*RRG7KLUG(GXFDWLRQDO'LFWLRQDU\RI(GXFDWLRQ
2SHUDWLRQDOO\ WRR WKHUH LV DQ LPSRUWDQW GLIIHUHQFH EHWZHHQ FRPSXOVRU\
HGXFDWLRQ DQGFRPSXOVRU\VFKRROLQJ&RPSXOVRU\ VFKRROLQJ UHTXLUHVFRPSXOVRU\
DWWHQGDQFHDWDSXEOLFVFKRROLHLWUHIHUVWRD VSHFLILFSURFHVVZKHUHE\HGXFDWLRQ
LV WR EH WUDQVDFWHG &RPSXOVRU\ HGXFDWLRQ RQ WKH RWKHU KDQG UHIHUV RQO\ WR WKH
RXWSXWLHWRWKHIDFWWKDWOHDUQLQJPXVWWDNHSODFHJLYLQJOLWWOHRUQRHPSKDVLVWR
ZKHUHLWWDNHVSODFHDVORQJDVLWLVDFWXDOO\WDNL QJSODFH
7KH SUHVHQW VWDWH HGXFDWLRQ DFWV LQ ,QGLD E\ DQG ODUJH PDNH HGXFDWLRQ
UDWKHU WKDQ VFKRROLQJ FRPSXOVRU\ +RZHYHU WKH\ PDNH LW D UHTXLUHPHQW IRU WKH
FKLOG WR DWWHQG DQ DSSURYHG VFKRRO EXW DW WKH VDPH WLPH VFKRROLQJ FDQ EH
H[HPSWHG LI WKH FKLOG LV VKRZQ WR EH DFTXLULQJ WKH UHTXLUHG HGXFDWLRQ WKURXJK
VRPHRWKHUPHDQV,QPRVWFRXQWULHVLQ(XURSHZLWKWKHH[FHSWLRQRI*HUPDQ\
DQGHYHQLQWKH8.ODZVDOORZFKLOGUHQWREHHGXFDWHGDWKRPH3HWULH$
ODUJHQXPEHURI6WDWHVLQWKH86$ DOVRHPSKDVLVHHGXFDWLRQDQGQRWQHFHVVDULO\
VFKRROLQJEXWRWKHUVVWLOOUHTXLUHDWWHQGDQFHDWVFKRROV
1DOLQL-XQHMD
(PSKDVLVRQWKHRXWSXWRIHGXFDWLRQDSSHDUVWRKDYHGHILQLWHDGYDQWDJHVLQ
FRQWH[WVZKHUHDOWHUQDWHPRGHVRILQVWUXFWLRQDUHPRUHDSSURSULDWH,QFUHD VLQJO\
WHFKQRORJLFDODGYDQFHVDUHPDNLQJ LW SRVVLEOHIRU OHDUQLQJ WRWDNH SODFHWKURXJK
µGLVWDQFH¶ RU µRSHQ¶ VFKRROLQJ PRGHV $V DOO HGXFDWLRQLVWV DUH DZDUH DOWHUQDWH
PRGHV RI HGXFDWLRQ KDYH EHHQ XVHG ZLWK DGYDQWDJH LQ WKH FDVH RI µGLIILFXOW WR
UHDFKSRSXODWLRQV¶DQGJURXSVZLWKDGLIIHUHQWFXOWXUHRUZD\RIOLIH VXFKDVIRU
H[DPSOH SHULSDWHWLF WHDFKHUV IRU QRPDGLF SRSXODWLRQV SDUW WLPH RU IOH[LEOH
FODVVHVIRUFKLOGUHQRIFHUWDLQJURXSVVXFKDVILVKHUPHQEULGJHFRXUVHVIRUGURS RXWFKLOGUHQGLVWDQFHHGXFDWLRQWKURXJKSRVWUDGLRDQGWHOHYLVLRQIRUUHPRWHDUHDV
HWF 0DQ\ FKLOGUHQ DUH RXW RI VFKRRO LQ XUEDQ DUHDV ± HYHQ WKRXJK WKHUH LV QR
GHDUWKRIVFKRROLQJIDFLOLWLHV$SSURSULDWHPHWKRGRORJLHVZLOOQHHGWREHHYROYHG
WRDGGUHVVWKHQHHGVRIVOXPFKLOGUHQVWUHHWFKLOGUHQDQGRWKHUXUEDQRXW RIVFKRRO
FKLOGUHQ
,QRSWLQJIRUFRPSXOVRU\HGXFDWLRQRYHUVFKRROLQJWKHHPSKDVLVZLOOVKLIW
IURP JHWWLQJ WKH FKLOGUHQ LQWR VFKRROV WR WKH WDVN RI GHWHUPLQLQJ ZKHWKHU RU QRW
WKH\ DUH DFWXDOO\ OHDUQLQJ :LWK F KLOGUHQ¶V OHDUQLQJ EHLQJ HYDOXDWHG DW GHILQLWH
VWDJHVLWPD\EHSRVVLEOHWRVKLIWWKHDFWLYLW\LQVFKRROVIURPWKHULWXDODVSHFWVRI
PDUNLQJ WKH DWWHQGDQFH RI WKH WHDFKHUV DQG WKH SXSLOV WR DFWXDO WHDFKLQJ DQG
OHDUQLQJ
2QWKH RWKHUKDQG WKHUHLVWKHHT XDOO\REYLRXVGDQJHURIVXFKSURYLVLRQV
EHLQJPLVXVHGE\VWDWHDJHQFLHVWRDYRLGLQFXUULQJWKHFRVWRISURYLGLQJVFKRROV
,W PD\ EH ZRUWK SRLQWLQJ RXW DW WKLV VWDJH WKDW LQ WKH ,QGLDQ FRQWH[W DQG
H[SHULHQFH LW LV FRPSXOVRU\ VFKRROLQJ WKDW PD\ EH QHHGHG GHVSLWH WKH REYLRXV
DGYDQWDJHV RI FRPSXOVRU\ µHGXFDWLRQ¶ 6RPH RI WKH SUHVHQW HGXFDWLRQDO
GLVDGYDQWDJHVRIPDQ\DUHDVVWHPIURPWKHQRQ SURYLVLRQRIVFKRROLQJIDFLOLWLHVLQ
WKH SDVW DQG DOVR WKH QRQ HQIRUFHPHQW RI DGHTXDWH VWDQGDUGV RI WHDFKLQJ DQG
OHDUQLQJ$WLJKWHUODZPD\EHQHHGHGIRUVRPHWLPHLQRUGHUWRHQVXUHDWOHDVWWKH
1,(3$2FFDVLRQDO3DSHU
SURYLVLRQRIPLQLPXPIDFLOLWLHVDQGVRPHHIIRUWVWRHQVXUHWKDWFKLOGUHQDUHIUHHG
IURPRWKHUZRUNLQRUGHUWRJHWDQHGXFDWLRQ
&RQVWLWXWLRQDO3URYLVLRQVIRU
3URWHFWLQJWKH5LJKWRIWKH&KLOG
,Q WKH ,QGLDQ &RQVWLWXWLRQ SULRU WR WKH WK $PHQGPHQW $FW WKUHH
$UWLFOHV LQ WKH &RQVWLWXWLRQ KDG WKH FKLOG DV WKHLU VSHFLILF IRFXV 7KHVH ZHUH
$UWLFOHVDQGGHDOLQJZLWKSURKLELWLRQRIFKLOGUHQIURPEHLQJHPSOR\HG
LQIDFWRULHVPLQHVRULQRWKHUKD]DUGRXVHPSOR\PHQWGHYHORSPHQWDQGSURWHFWLRQ
RIWKHWHQGHUDJHRIFKLOGUHQDQGIUHHDQGFRPSXOVRU\HGXFDWLRQ
$UWLFOH
1R FKLOG EHORZ WKH DJH RI \HDUV VKDOO EH HPSOR\HG WR ZRUN LQ DQ\
IDFWRU\RUPLQHRUHQJDJHGLQKD]DUGRXVHPSOR\PHQW
$UWLFOH
7KH VWDWH VKDOO GLUHFW LWV SROLF\ WRZDUG VHFXULQJ WKDW WKH WHQGHU DJH RI
FKLOGUHQ LV QRW DEXVHG DQG WKDW FLWL]HQV DUH QRW IRUFHG E\ HFRQRPLF
QHFHVVLW\ WR HQWHU DYRFDWLRQ XQVXLWHG WR WKHLU DJH RU VWUHQJWK DQG WKDW
FKLOGUHQ DUH JLYHQ RSSRUWXQLWLHV DQG IDFLOLWLHV WR GHYHORS LQ D KHDOWK\
PDQQHUDQGLQFRQGLWLRQVRIIUHHGRPDQGGLJQLW\DQGWKDWFKLOGKRRGDQG
\RXWK DUH SURWHFWHG DJDLQVW H[SORLWDWLRQ DQG DJDLQVWPRUDO DQG PDWHULDO
DEDQGRQPHQW
$UWLFOH
7KHVWDWHVKDOOHQGHDYRXUWRSURYLGHZLWKLQDSHULRGRIWHQ\HDUVIURPWKH
FRPPHQFHPHQWRIWKH&RQVWLWXWLRQIRUIUHHDQGFRPSXOVRU\HGXFDWLRQIRU
DOOFKLOGUHQXQWLOWKH\FRPSOHWHWKHDJHRI\HDUV
$SDUWIURPWKHVH WKH MXGJPHQW RIWKH6XSUHPH&RXUWLQWKH FDVHRI
-3 8QQL .ULVKQDQ DQG RWKHUV YV VWDWH RI $QGKUD 3UDGHVK DQG RWKHUV ,6&&ZDV DOVRFRQVLGHUHGWRKDYHWKH VWDWXV RID)XQGDPHQWDO5LJKW7KH$SH[
&RXUWKDGGHFODUHG ³7KH SDVVDJHRI\HDUV PRUHWKDQ IRXUWLPHVWKHSHULRG
VWLSXODWHGLQ$UWLFOHKDVFRQYHUWHGWKHREOLJDWLRQFUHDWHGE\WKH$UWLFOHLQWRDQ
HQIRUFHDEOHULJKW$WOHDVWQRZWKHVWDWHPXVWKRQRXUWKHFRPPDQGRI$UWLFOH
DQGPDNHLWDULJKW´
1DOLQL-XQHMD
$FFRUGLQJ WR WKLV MXGJPHQW ³5LJKW WR (GXFDWLRQ LV LPSOLFLW LQ DQG IORZV
IURPULJKWWROLIHJXDUDQWHHGXQGHU$UWLFOH´DQG ³(YHU\FKLOGRIWKLVFRXQWU\
KDV D ULJKW WR IUHH HGXFDWLRQ XQWLO WKH DJH RI WKHUHDIWHU KLV ULJKWV DUH
FLUFXPVFULEHGE\WKHHFRQRPLFFDSDFLW\DQGGHYHORSPHQWRIWKH6WDWH´
([LVWLQJ/HJLVODWLRQIRU&RPSXOVRU\(GXFDWLRQ
:KHWKHURU QRWWKHULJKWWRHGXFDWLRQLVDIXQGDPHQWDOULJKWODZVFDQEH
DQGKDYHEHHQPDGH IRUFRPSXOVRU\HGXFDWLRQLQ,QGLD2QHRIWKH PRVW UHFHQW
DFWVRQWKLVVXEMHFWLQ,QGLDZDVLQWKH6WDWHRI6LNNLPLQWKH\HDU6RPH
VWDWHV VXFK DV 0DKDUDVKWUD DQG 0DGK\D 3UDGHVK DUH SUHVHQWO\ LQ WKH SURFHVV RI
DPHQGLQJWKHLUH[LVWLQJDFWVIRUIUHHDQGFRPSXOVRU\HGXFDWLRQ
7DEOH EHORZ SUHVHQWV D OLVW RI WKH DFWV FXUUHQWO\ LQ IRUFH IRU PDNLQJ
HGXFDWLRQ IUHH DQG FRPSXOVRU\ LQ GLIIHUHQW VWDWHV87V LQ WKH FRXQWU\
0DQ\
SHRSOH LQFOXGLQJ HYHQ HGXFDWLRQDO DGPLQLVWUDWRUV GLG QRW NQRZ WKDW ,QGLD KDV D
QXPEHURIDFWVIRUFRPSXOVRU\HGXFDWLRQ$VWXG\FRQGXFWHGLQIRXQGWKDW
RYHUSHUFHQWRIWKHHGXFDWLRQDODGPLQLVWUDWRUVVXUYH\HGZHUHQRWDZDUHRIWKH
H[LVWHQFHRIFRPSXOVRU\HGXFDWLRQDFWVLQWKHLUVWDWHV+RZHYHUDZDUHQHVVRIWKH
VDPHKDVJURZQVLQFHWKHUHFHQWFRQVWLWXWLRQDODPHQGPHQW
1,(3$2FFDVLRQDO3DSHU
61R
7DEOH&RPSXOVRU\(GXFDWLRQ$FWV3UHVHQWO\LQ)RUFH
LQ6WDWHV87VRI,QGLD
6WDWH87
$QGKUD3UDGHVK
$VVDP
%LKDU
*RD
+DU\DQD
+LPDFKDO
3UDGHVK
-DPPX
.DVKPLU
.DUQDWDND
.HUDOD
*XMDUDW
1DPHRIWKH$FW
$QGKUD3UDGHVK(GXFDWLRQ$FW$FW1RRI
7KH$VVDP(OHPHQWDU\(GXFDWLRQ
3URYLQFLDOLVDWLRQ$FW$VVDP$FW1RRI
%LKDU3ULPDU\(GXFDWLRQ$PHQGPHQW$FW
%LKDUDQG2ULVVD(GXFDWLRQ$FWRI DV
DPHQGHGE\%LKDU$FW,9RI
7KH*RD&RPSXOVRU\(OHPHQWDU\(GXFDWLRQ$FW
*RD$FW1RRI
*XMDUDW&RPSXOVRU\3ULPDU\(GXFDWLRQ$FW
*XMDUDW$FW1R;/,RI
3XQMDE3ULPDU\(GXFDWLRQ$FW
7KH+LPDFKDO3UDGHVK&RPSXOVRU\3ULPDU\
(GXFDWLRQ$FW$FW1RRI
7KH-DPPXDQG.DVKPLU(GXFDWLRQ$FW
$FW1R;,RI
7KH.DUQDWDND(GXFDWLRQ$FW.DUQDWDND
$FW1RRI)LUVWSXEOLVKHGLQWKH
.DUQDWDND*D]HWWH([WUDRUGLQDU\RQWKH WK GD\
RI-DQXDU\
7KH.HUDOD(GXFDWLRQ$FW$FW1RRI
$VDPHQGHGE\$FWVRIRI
DQGRI
0DGK\D3UDGHVK 7KH0DGK\D3UDGHVK3ULPDU\(GX FDWLRQ$FW
0DGK\D3UDGHVK$FW1RRI
0DKDUDVKWUD
7KH%RPED\3ULPDU\(GXFDWLRQ$FW
%RPED\$FW1R/;,RI$VPRGLILHGXSWR
WK $SULO
3XQMDE
3XQMDE3ULPDU\(GXFDWLRQ$FW1R
5DMDVWKDQ
7KH5DMDVWKDQ3ULPDU\(GXFDWLRQ$FW$FW
1RRI
6LNNLP
7KH6LNNLP3ULPDU\(GXFDWLRQ$FW$FW
1RRI
7DPLO1DGX
7KH7DPLO1DGX&RPSXOVRU\(OHPHQWDU\
1DOLQL-XQHMD
61R
6WDWH87
8WWDU3UDGHVK
:HVW%HQJDO
'HOKL
1DPHRIWKH$FW
(GXFDWLRQ$FW$FW1RRI
8QLWHG3URYLQFHV3ULPDU\(GXFDW LRQ$FW
83$FW1RRI
8QLWHG3URYLQFHV'LVW%RDUGV3ULPDU\
(GXFDWLRQ$FW83$FW1RRI
$GDSWHGDQGPRGLILHGE\WKH$GDSWDWLRQRI
/DZV2UGHU
:HVW%HQJDO3ULPDU\(GXFDWLRQ$FW:HVW
%HQJDO1RRI
7KH'HOKL3ULPDU\(GXFDWLRQ$FW$FW
1RRI
&RQVLGHULQJ WKDW FRPSXOVRU\ $FWV DOUHDG\ H[LVW WR FRYHU PRVW SDUWV RI
,QGLDRQHPD\ZRQGHUZK\DQHZOHJLVODWLRQLVQHHGHG6HFWLRQ,9RIWKLVSDSHU
VKDOODGGUHVVWKLVTXHVWLRQ6HFRQGO\GRHVLWPHDQWKDWHGXFDWLRQLVFRPSXOVRU\
LQWKHVWDWHVZKHUHWKHVH$FWVDUHSUHVHQWO\LQIRUFH"7KLVDVVXPSWLRQLVKRZHYHU
QRWVWULFWO\FRUUHFWDVVKDOOEHVHHQEHORZ
,V(GXFDWLRQ&RPSXOVRU\LQ6WDWHV
:KHUH&RPSXOVRU\(GXFDWLRQ$FWV+DYH%HHQ3DVVHG"
$OWKRXJKPDQ\RIWKHVWDWHVLQ,QGLDKDYHSDVVHGOHJLVODWLRQ³WRSURYLGHIRU
IUHH DQG FRPSXOVRU\ SULPDU\ HGXFDWLRQ´ SRSXODUO\ UHIHUUHG WR DV µ&RPSXOVRU\
(GXFDWLRQ$FWV¶WKHIDFWUHPDLQVWKDWWKH\GRQRWE\WKHPVHOYHVPDNHHGXFDWLRQ
µFRPSXOVRU\¶ EXW RQO\ µHQDEOH¶ WKH µORFDO DXWKRULWLHV¶ WR FKRRVH WR GR VR 7KH
SUHVHQW &RPSXOVRU\ (GXFDWLRQ $FWV DUH WKHUHIRUH PHUH µHQDEOLQJ OHJLVODWLRQV¶
)RUWKHUHDVRQWKDWWKHVHDFWVFDQDSSO\RQO\WRDµORFDODUHD¶IRUZKLFKDVFKHPH
PXVWEHSUHSDUHGDQGSDVVHGWKHVHDFWVFDQQRWFRYHUWKHZKROH6WDWH7KHUHIRUHLW
ZRXOGQRWEHFRUUHFWWRVD\WKDWHGXFDWLRQLVDFWXDOO\FRPSXOVRU\LQVWDWHVKDYLQJ
FRPSXOVRU\HGXFDWLRQDFWV
7RHQDEOHHGXFDWLRQWREHPDGHFRPSXOVRU\XQGHUWKHVHDFWVDQXPEHURI
IXUWKHUDFWLRQVDUHLQYROYHGVXFKDVL3UHSDUDWLRQRIDVFKHPHE\WKHVSHFLILHG
1,(3$2FFDVLRQDO3DSHU
DXWKRULW\ WR PDNH HGXFDWLRQ FRPSXOVRU\ LQ DQ DUHD LL 2EWDLQLQJ *RYHUQPHQW
DSSURYDOIRUWKHVFKHPHDQGLLL1RWLILFDWLRQRIDVFKHPHRIFRPSXOVLRQZLWKLQ
WKHVSHFLILHGDUHD
2QFHDVFKHPHLVSDVVHGRIILFHUVZRXOGIXUWKHUL3UHSDUHOLVWVRIFKLOGUHQ
ZKRVKRXOGEHJRLQJWRVFKRRODQGVHQGQRWLFHVWRWKHLUSDUHQWVDQGLL$VFHUWDLQ
DWWHQGDQFHVWDWXVRIHDFKFKLOGDQGLIQHFHVVDU\XVHFRHUFLYHPHDVXUHVWREULQJ
QRQDWWHQGLQJFKLOGUHQWRVFKRRO
7KHELJTXHVWLRQWKDWPLJKWZRUU\PDQ\SHRSOHLVZKHWKHUSDUHQWVZLOOJR
WRMDLOLIHGXFDWLRQLVPDGHFRPSXOVRU\" 7KHDQVZHULVVLPSO\µ1R¶1RQHRIWKH
SUHVHQWµFRPSXOVRU\HGXFDWLRQDFWV¶KDYHDQ\SURYLVLRQIRUVHQGLQJSDUHQ WVWRMDLO
IRUIDLOLQJWRVHQGWKHLUFKLOGUHQWRVFKRRO,QIDFWDVVKRZQLQ6HFWLRQ,,YDULRXV
RIILFLDOGRFXPHQWVWHVWLI\WKDWFRPSXOVRU\HGXFDWLRQ$FWVZHUHEHLQJHQIRUFHGLQ
LQGHSHQGHQW ,QGLD 1RQH RI XV ZKR ZHUH DURXQG DW WKDW WLPH KDV KHDUG RI DQ\
SDUHQWKDYLQJJRQHWRMDLOIRUIDLOLQJWRHGXFDWHWKHLUFKLOGUHQ
1DOLQL-XQHMD
6HFWLRQ,,
3DFHRI&RPSXOVRU\
(GXFDWLRQLQ,QGLD
$W WKLV VWDJH PDQ\ PD\ ZDQW WR NQRZ ZKDW KDSSHQHG WR WKH SUHYLRXV
OHJLVODWLRQV IRU FRPSXOVRU\ HGXFDWLRQ ,W LV D PDWWHU RI FRQFHUQ WKDW IXWXUH
OHJLVODWLRQ ZRXOG QRW PHHW WKH VDPH IDWH DV WKH HDUOLHU RQHV 6WDUWLQJ ZLWK WKH
VWRU\RIKRZFRPSXOVRU\HGXFDWLRQILUVWFDPHRQWRWKHVWDWXWHERRNVLQ,QGLDDQG
WKHQ QDUUDWLQJ KRZ DQG ZK\ WKHVH DFWV ZHUH WKHQ DV D GHOLEHUDWH SROLF \
µIRUJRWWHQ¶WKLVVHFWLRQOLVWVWKHFRPSXOVRU\HGXFDWLRQDFWVWKDWKDYHEHHQSDVVHG
LQ,QGLDRYHUDSHULRGRIWLPHLQDQDWWHPSWWRKLJKOLJKWWKHPHVVDJHWKDWXQOHVVD
KLJK SULRULW\ LV DFFRUGHG WR HGXFDWLRQ RI WKH PDVVHV HVSHFLDOO\ LQ EXGJHWDU\
DOORFDWLRQVWKHQHZOHJLVODWLRQFRXOGPHHWWKHVDPHIDWHDVWKHDFWVLQIRUFH
$WWHPSWV WR PDNH WKH ULJKW WR IUHH DQG FRPSXOVRU\HGXFDWLRQ DYDLODEOHWR
WKH ,QGLDQFKLOGEHJDQDOLWWOHPRUHWKDQDFHQWXU\DJR0DQ\FKDQJHVWKDWKDG
WDNHQ SODFHLQWKH WK FHQWXU\(XURSHKDGWKHLULPSDFWRQ,QGLDQFRQWHPSRUDU\
OLIHDQGSHUFHSWLRQV7KLVZDVWKHSHULRGRIHPHUJHQFHRIWKHPLGGOHFODVVRIWKH
UDWLRQDOLVWLFDQGLQGLYLGXDOLVWLFSKLORVRSKLHVDQGRIWKHµQDWLRQVWDWH¶:LWKWKHVH
QHZLGHDVHPHUJHGQHZFRQFHSWV UHJDUGLQJHGXFDWLRQDVDULJKWRIDOOWKHFLWL]HQV
DQG DV D GXW\ RI WKH VWDWH ,Q WKH ODWWHU KDOI RI WKH WK FHQWXU\ WKH HGXFDWHG
,QGLDQVLQWKHLUWUDYHODEURDGQRWLFHGWKHVHFKDQJHVRQWKH&RQWLQHQWDVZHOODVLQ
*UHDW %ULWDLQ 7KH\ QRWLFHG LQ SDUW LFXODU WKH GLIIHUHQFH LQ WKH HQWLWOHPHQW RI
FLWL]HQVLQ(QJODQGDQGLQ%ULWLVK,QGLD
:KHQ LQ (QJODQG SDVVHG OHJLVODWLRQ WR PDNH HGXFDWLRQ IUHH DQG
FRPSXOVRU\ D GHPDQG ZDV UDLVHG LQ ,QGLD WR SURYLGH VLPLODU IDFLOLWLHV LQ LWV
FRORQLHV $ QXPEHU RI HGXFDWHG ,QGLDQV GHSRVHG EHIRUH WKH ,QGLDQ (GXFDWLRQ
&RPPLVVLRQ LQ DQG DVNHG IRU ODZV WR EH PDGH WR PDNH HGXFDWLRQ
FRPSXOVRU\DQGWRZHDQFKLOGUHQDZD\IURPODERXULQIDFWRULHVDQGRWKHUNLQGVRI
1,(3$2FFDVLRQDO3DSHU
XQVXLWDEOH ZRUN 'HVDL )URP WKLV SRLQW RQZDUG V EHJDQ WKH VWUXJJOH IRU
PDNLQJDYDLODEOHWKLVVDPHULJKWWRHYHU\FKLOGLQ,QGLD
7RVKRZWRWKH%ULWLVKWKDWVXFKLGHDVZHUHQRWWRRµ8WRSLDQ¶LQWKH,QGLDQ
FRQWH[W D QXPEHU RI SULQFHO\ VWDWHV VXFK DV %DURGD 7UDYDQFRUH 0DQLSXU HWF
LQWURGXFHG OHJLVODWLRQ LQ WKHLU VWDWHV WR PDNH HGXFDWLRQ FRPSXOVRU\ 6DL\LGDLQ
,QVWHDGRIJRLQJLQWRWKHGHWDLOVRIWKLVSROLWLFDOEDWWOHDEULHIRYHUYLHZRI
WKHPDMRUKLVWRULFDOHYHQWVLQFKURQRORJLFDORUGHULVSUHVHQWHGEHORZ
&RPSXOVRU\(GXFDWLRQ$FWVSDVVHGLQ%ULWDLQ 'HPDQGIRU
VLPLODUWUHDWPHQWIRU,QGLDQV
,QGLDQ(GXFDWLRQ&RPPLVVLRQ ± ,QGLDQOHDGHUVGHPDQGSURYLVLRQIRU
PDVVHGXFDWLRQDQG&RPSXOVRU\(GXFDWLRQ$FWV
0DKDUDMDRI%DURGDLQWURGXFHV&RPSXOVRU\(GXFDWLRQIRUER\VL Q
$PUHOL7DOXN
0DKDUDMDRI%DURGDH[WHQGV&RPSXOVRU\(GXFDWLRQWRUHVWRIWKH
VWDWH
*RSDO.ULVKQD*RNKDOHPDNHVDSOHDWRLPSHULDOOHJLVODWLYH&RXQFLO
IRULQWURGXFWLRQRIIUHHDQG&RPSXOVRU\(GXFDWLRQ
*RNKDOHSURSRVHV 3ULYDWHPHPEHUV%LOO5HMHFWHG
6K9LWKDOEKDL3DWHOVXFFHHGVLQJHWWLQJ%LOOSDVVHG
)LUVW/DZRQ&RPSXOVRU\(GXFDWLRQSDVVHG3RSXODUO\.QRZQDV
3DWHO$FW
(YHU\3URYLQFHLQ%ULWLVK,QGLDJHWV&RPSXOVRU\(GXFDWLRQ$FWRQ
LWV 6WDWXWH%RRN
+DUWRJ&RPPLWWHH5HFRPPHQGDWLRQIRUEHWWHUTXDOLW\QRWTXDQWLW\
KLQGHUVVSUHDGDQGGHYHORSPHQWRISULPDU\HGXFDWLRQ
1DOLQL-XQHMD
3RVW:DU3ODQIRU(GXFDWLRQDO'HYHORSPHQWLQ,QGLD6DUJHQW3ODQ
SURSRVHVVFKHPHIRU,QGLDWRDFKLH YHXQLYHUVDOHOHPHQWDU\HGXFDWLRQ
LQE\\HDUV
:D\V DQG 0HDQV .KHU &RPPLWWHH VHW XS WR H[SORUH ZD\V DQG
PHDQVRIDFKLHYLQJ8((ZLWKLQWHQ\HDUVDWOHVVHUFRVW
&RQVWLWXHQW$VVHPEO\6XEFRPPLWWHHRQ)XQGDPHQWDO5LJKWVSODFHV
IUHH DQGFRPSXOVRU\HGXFDWLRQRQOLVWRI)XQGDPHQWDO5LJKWV ³&ODXVH (YHU\FLWL]HQLVHQWLWOHGDVRIULJKWWRIUHHSULPDU\HGXFDWLRQ
DQGLWVKDOOEHWKHGXW\RIWKH6WDWHWRSURYLGHZLWKLQDSHULRGRIWHQ\HDUV
IURP WKH FRPPHQFHPHQW RI WKLV &RQVWLWXWLRQ IRU IUHH DQG FRPSXOVRU\
HGXFDWLRQIRUDOOFKLOGUHQXQWLOWKH\FRPSOHWHWKHDJHRIIRXUWHHQ\HDUV´
$SU $GYLVRU\ &RPPLWWHH RI WKH &RQVWLWXHQW $VVHPEO\ UHMHFWV IUHH DQG
FRPSXOVRU\HGXFDWLRQDVDIXQGDPHQWDOULJKW6HQGVFODXVHWROLVWRI
³QRQMXVWLFLDEOH IXQGDPHQWDO ULJKWV´ ODWHU WHUPHG DV µ'LUHFWLYH
3ULQFLSOHVRI6WDWH3ROLF\
1RY 'HEDWHLQ&RQVWLWXHQW$VVHPEO\UHPRYHVWKHILUVWOLQHRIWKLVFODXVH
QRZ $UWLFOH LH ³(YHU\ FLWL]HQ LV HQWLWOHG DV RI ULJKW WR IUHH
SULPDU\ HGXFDWLRQ DQG LW VKDOO EH WKH GXW\ RI WKH 6WDWH WR´ DQG
UHSODFHV LW ZLWK ³7KH 6WDWH VKDOO HQGHDYRXU WR´ DQG 'U %5
$PEHGNDUFODULILHV WKDWWKHREMHFWLYHRIDUWLFOHLVQRWUHVWULFWHGWR
IUHHSULPDU\ HGXFDWLRQ ³7KHFODXVHDVLWVWDQGVDIWHUWKHDPHQGPHQWLV
WKDWHYHU\FKLOGVKDOOEHNHSWLQDQHGXFDWLRQDOLQVWLWXWLRQXQGHUWUDLQLQJ
XQWLO WKH FKLOG LV RI \HDUV´ ««³D SURYLVLRQ LV PDGH LQ DUWLFOH WR
IRUELG DQ\ FKLOG EHLQJ HPSOR\HG EHORZ WKH DJH RI 2EYLRXVO\ LI WKH
FKLOG LV QRW WR EH HPSOR\HG EHORZ WKH DJH RI WKH FKLOG PXVW EH NHSW
RFFXSLHGLQVRPHHGXFDWLRQDOLQVWLWXWLRQ7KDWLVWKHREMHFWRIDUWLFOH
DQGWKDWLVZK\,VD\WKHZRUGSULPDU\LVTXLWHLQDSSURSULDWH´
$UWLFOH RI WKH 'LUHFWLYH 3ULQFLSOHV RI 6WDWH 3ROLF\ RI WKH QHZO\
DGRSWHG&RQVWLWXWLRQRI,QGLDSURYLGHVWKDW
³7KH6WDWHVKDOOHQGHDYRXUWRSURYLGHZLWKLQDSHULRGRIWHQ\HDUV
IURP WKH FRPPHQFHPHQW RI WKLV &RQVWLWXWLRQ IRU IUHH DQG
FRPSXOVRU\ HGXFDWLRQIRUDOOFKLOGUHQXQWLOWKH\FRPSOHWHWKHDJH
RIIRXUWHHQ\HDUV´
1,(3$2FFDVLRQDO3DSHU
/HJLVODWLRQVIRU&RPSXOVRU\(GXFDWLRQLQ,QGLD
,QWKHVSDFHRIWKHODVWFHQWXU\DQXPEHURIDFWVKDYHEHHQSDVVHGLQ,QGLD
WRHQDEOHHGXFDWLRQWREHPDGHIUHHDQGFRPSXOVRU\7KHOLVWRIVXFKOHJLVODWLRQV
SDVVHGLQ,QGLDERWKEHIRUHDQGDIWHULQGHSHQG HQFHLVSURGXFHGEHORZ7KLVOLVW
KRSHIXOO\FRPSOHWHGRHVQRWKRZHYHULQFOXGHDOOWKHFXUUHQWDFWVLQIRUFH7KH
OLVW RI µ$FWV LQ )RUFH¶ ZDV SUHVHQWHG LQ 7DEOH HDUOLHU 7KLV ORQJ OLVW RI DFWV
VKRXOG DW WKH YHU\ OHDVW VHUYH WR HPSKDVL]H WKH SRLQW WKDW LI OHJLVODWLRQ DORQH
FRXOG KDYH DFKLHYHG XQLYHUVDOLVDWLRQ RI HOHPHQWDU\ HGXFDWLRQ ,QGLD ZRXOG KDYH
DFKLHYHG 8(( E\ QRZ 'HVSLWH WKLV LPSUHVVLYH DUPRU\ RI OHJLVODWLRQ ,QGLD KDV
WKH ODUJHVW QXPEHU RI LOOLWHUDWHV LQ WKH ZRUOG DV ZHOO DV WKH ODUJHVW QX PEHU RI
ZRUNLQJFKLOGUHQ:KDWLVLPSRUWDQWLVKRZWKLVDUPRU\ZDVXVHGRUQRWXVHGWR
ILJKWLOOLWHUDF\
/LVWRI&RPSXOVRU\(GXFDWLRQ$FWV
3UH,QGHSHQGHQFH
7KH%RPED\3ULPDU\(GXFDWLRQ'LVWULFW0XQLFLSDOLWLHV$FW
7KH%HQJDO3ULPDU\(GXFDWLRQ$FW
7KH%LKDUDQG2ULVVD3ULPDU\(GXFDWLRQ$FW
7KH3XQMDEFRPSXOVRU\(GXFDWLRQ$FW
7KH8QLWHG3URYLQFHV3ULPDU\(GXFDWLRQ$FW
7KH%RPED\&LW\3ULPDU\(GXFDWLRQ$FW
7KH&HQWUDO3URYLQFHV3ULPDU\(GXFDWLRQ$FW
7KH0DGUDV3ULPDU\(GXFDWLRQ$FW
7KH3DWLDOD3ULPDU\(GXFDWLRQ$FW
7KH%LNDQHU6WDWH&RPSXOVRU\3ULPDU\(GXFDWLRQ$FW
7KH0DGUDV3ULPDU\(GXFDWLRQ$FW
7KH%RPED\&LW\3ULPDU\(GXFDWLRQ'LVWULFW%RDUGV$FW
7KH%RPED\3ULPDU\(GXFDWLRQ$FW
7KH$VVDP3ULPDU\(GXFDWLRQ$FW
7KH83'LVWULFW%RDUGV3ULPDU\(GXFDWLRQ$FW
7KH%HQJDO5XUDO3ULPDU\(GXFDWLRQ$FW
7KH-DPPX.DVKPLU&RPSXOVRU\(GXFDWLRQ$FW
7KH%RPED\3ULPDU\(GXFDWLRQ$PHQGPHQW$FW 1DOLQL-XQHMD
7KH3XQMDE3ULPDU\(GXFDWLRQ$FW
7KH0\VRUH(OHPHQWDU\(GXFDWLRQ$FW
7KH7UDYDQFRUH3ULPDU\(GXFDWLRQ$FW
7KH%RPED\3ULPDU\(GXFDWLRQ$FW
3RVW,QGHSHQGHQFH
7KH$VVDP3ULPDU\(GXFDWLRQ$FW
7KH%RPED\3ULPDU\(GXFDWLRQ$FW 7KH&RFKLQ)UHH&RPSXOVRU\3ULPDU\(GXFDWLRQ$FW
7KH0DGK\D3UDGHVK&RPSXOVRU\3ULPDU\(GXFDWLRQ$FW
7KH$MPHU3ULPDU\(GXFDWLRQ$FW
7KH0DGUDV(OHPHQWDU\(GXFDWLRQ$FW
7KH+\GHUDEDG&RPSXOVRU\3ULPDU\(GXFDWLRQ$FW
7KH9LQGK\D3UDGHVK3ULPDU\(GXFDWLRQ$FW
7KH+LPDFKDO3UDGHVK&RPSXOVRU\3ULPDU\(GXFDWLRQ$FW
7KH$VVDP%DVLF(GXFDWLRQ$FW
7KH3(368&RPSXOVRU\3ULPDU\(GXFDWLRQ$FW
7KH%KRSDO6WDWH&RPSXOVRU\3ULPDU\(GXFDWLRQ$FW
7KH0DGK\D3UDGHVK3ULPDU\(GXFDWLRQ$FW
7KH6DXUDVKWUD3ULPDU\(GXFDWLRQ$FW
7KH.HUDOD(GXFDWLRQ$FW
7KH'HOKL3ULPDU\(GXFDWLRQ$FW
7KH$QGKUD3UDGHVK3ULPDU\(GXFDWLRQ$FW
7KH $QGDPDQ DQG 1LFREDU ,VODQGV 3ULPDU\ (GXFDWLRQ 5H JXODWLRQ
7KH0\VRUH&RPSXOVRU\3ULPDU\(GXFDWLRQ$FW
7KH$VVDP(OHPHQWDU\(GXFDWLRQ$FW
$VRQHFDQVHHWKHUHKDVEHHQQRGHDUWKRIOHJLVODWLRQVWRPDNHHGXFDWLRQ
IUHHDQGFRPSXOVRU\RYHUWKH\HDUV$IWHUWKHUH RUJDQL]DWLRQRIWKH6WDWHVPDQ\
QHZDFWVIRUFRPSXOVRU\HGXFDWLRQPRGHOOHGRQWKH'HOKL3ULPDU\(GXFDWLRQ$FW
ZHUH DOVR DGMXVWHG DQG QRWLILHG E\ D QXPEHU RI 6WDWHV 5HFRUGV DQG GDWD
DYDLODEOH ULJKW XQWLO UHSRUW WKDW FRHUFLYH PHDVXUHV ZHUH WDNHQ IRU
HQIRUFHPHQW RI FRPSXOVLRQ $ VDPSOH RI WKH NLQGRI LQIRUPDWLRQ DYDLODEOH IURP
WKHGDWDDUHUHSURGXFHGLQ7DEOHV 1,(3$2FFDVLRQDO3DSHU
7DEOH'DWDRQ(QIRUFHPHQWRI&RPSXOVRU\(GXFDWLRQLQ,QGLDVLQFH
,QGHSHQGHQFH± 1XPEHURI1RWLFHV,VVXHG$OO,QGLD
<HDUV
8UEDQ
1$
1$
1$
1$
1$
1$
1$
1$
1$
1$
1$
1$
1$
5XUDO
1$
1$
1$
1$
1$
1$
1$
1$
1$
1$
1$
1$
1$
7RWDO
1$
&RPSLOHGIURP(GXFDWLRQLQ,QGLD 0LQLVWU\
RI(GXFDWLRQ *RYWRI,QGLD
6RXUFH-XQHMD
1DOLQL-XQHMD
7DEOH'DWDRQ(QIRUFHPHQWRI&RPSXOVRU\(GXFDWLRQLQ,QGLDVLQFH
,QGHSHQGHQFH± 1XPEHURI3URVHFXWLRQV±
)LQHV5HDOLVHG5V$OO,QGLD
<HDUV
8UEDQ
5XUDO
1$
1$
1$
1$ 1$ 1$ 1$
1$
1$ 1$
1$
1$
1$
1$
1$
1$
1$
1$
1$
1$
1$
1$
1$
7RWDO5V
1$
&RPSLOHGIURP(GXFDWLRQLQ,QGLD 0LQLVWU\RI(GXFDWLRQ*RYWRI,QGLD
6RXUFH-XQHMD
1,(3$2FFDVLRQDO3DSHU
7DEOH'DWDRQ(QIRUFHPHQWRI&RPSXOVRU\(GXFDWLRQ LQ,QGLD
VLQFH,QGHSHQGHQFH± &RPSXOVRU\(GXFDWLRQLQ8WWDU3UDGHVK
&RHUFLYH0HDVXUHV7DNHQ
1RRI1RWLFHV
,VVXHG
<HDUV
1RRI
1XPEHURI3URVHFXWLRQV
$WWHQGDQFH
)RU1RQ
)RU1RQ
)LQHV
2UGHUV
(QUROPHQW $WWHQGDQFH
5HDOLVHG
3DVVHG
1$
1$
1$
1$
1$
'DWDQRWUHSRUWHGVWDWHZLVHLQWKLV\HDU
1$
1RRI
$WWHQGDQFH
2IILFHUV
1$1RWDYDLODEOH
&RPSLOHGIURP(GXFDWLRQLQ,QGLD*RYHUQPHQWRI,QGLD 0LQLVWU\RI(GXFDWLRQ*RYHUQPHQWRI,QGLD
6RXUFH-XQHMD
1$
1RWPXFKLQIRUPDWLRQFDQEHIRXQGKRZHYHUWRGHVFULEHWKHZD\LQZKLFK
FRPSXOVLRQZDVHQIRUFHG(YHQVR VRPHLGHDRIWKHVDPHFDQEHJOHDQHGIURPWKH
6DUJHQW5HSRUWRIZKLFKFDQGLGO\VWDWHGWKDW
³,W FDQQRW EH VDLG WKDW LQ DQ\ RI WKHVH DUHDV HYHQ LQ WKH 3XQMDE
FRPSXOVLRQ LV UHDOO\ HIIHFWLYH ,W FDQ KDUGO\ EH VR ZKHUH WKHUH LV QR
RUJDQL]HGV\VWHPRIWUDLQHGDWWHQGDQFHRIILFHUVWRVHHWKDWFKLOGUHQDWWHQG
VFKRRODQGWKHFRXUWVDUHGLVLQFOLQHGWRHQIRUFHWKHODZ´
1DOLQL-XQHMD
7KHHQIRUFHPHQWRIWKHVH$FWVQHFHVVLWDWHGWKHSURYLVLRQRIPDQ\IDFLOLWLHV
WRHQDEOHFKLOGUHQWRDWWHQGVFKRRO8QGHUPDQ\RIWKHDFWVD QGHVSHFLDOO\RIWKH
VJRYHUQPHQW ZDVHYHQREOLJHGWRSURYLGHDOWHUQDWHIRUPVRIVFKRROLQJIRU
WKRVH FKLOGUHQ ZKR FRXOG QRW DWWHQG UHJXODU IXOO WLPH IRUPDO VFKRROV %XW LQ D
VLWXDWLRQ LQ ZKLFK VXIILFLHQW PRQH\ ZDV QHYHU PDGH DYDLODEOH WR SURYLGH WR
HQRXJKVFKRROVQRUWRSURYLGHWKHHQDEOLQJFRQGLWLRQVIRUFKLOGUHQWRPDNHLWWR
VFKRRO WKHUH VHHPHG OLWWOH SRLQW LQ SURVHFXWLQJ WKRVH ZKR FRXOG QRW VHQG WKHLU
ZDUGV WR VFKRRO $OVR LW ZDV JHQHUDOO\ SHUFHLYHG WKDW SDUHQWV FRXOG QRW UDWKHU
WKDQGLGQRWVHQGWKHLUFKLOGUHQWRVFKRRO
)URP DURXQG RQZDUGV WKH HQIRUFHPHQW RI FRPSXOVRU\ HGXFDWLRQ
ZDV GHOLEHUDWHO\ GLVFRXUDJHG -XQHMD WUDFHV WKH SURFHVV E\ ZKLFK
FRPSXOVLRQZDVGLVFRQWLQXHG:KDWLVLPSRUWDQWIRURXULPPHGLDWHSXUSRVHLVWR
WU\ DQG XQGHUVWDQG ZK\ GHVSLWH WKH &RQVWLWXWLRQDO GLUHFWLYH LQ IDYRXU RI
FRPSXOVRU\ HGXFDWLRQ LW ZDV E\ D SROLF\ GHFLVLRQ DFWLYHO\ GLVFRXUDJHG 7KH
JURXQGV IRU WKH GLVFRQWLQXDQFH RI FRPSXOVRU\ HGXFDWLRQ LQ WKH VL[WLHV KROG D
OHVVRQ IRU DQ\ IXWXUH $FWV WK DW PD\ EH IUDPHG WR GHOLYHU IUHH DQG FRPSXOVRU\
HGXFDWLRQWR,QGLDQFKLOGUHQ
)URP&RPSXOVLRQWR3HUVXDVLRQ$3ROLF\6KLIW
$OWKRXJK PDQ\ DFWV IRU IUHH DQG FRPSXOVRU\ HGXFDWLRQ ZHUH LQWURGXFHG
ZLWK JUHDW HQWKXVLDVP LQ ,QGLD ERWK EHIRUH DQG DIWHU LQGHSH QGHQFH WKLV
HQWKXVLDVP IRU HGXFDWLRQ RI WKH PDVVHV ZDV QRWVKDUHG E\ DOO :KHQLWFDPHWR
DOORFDWLRQ RI IXQGV IUHH DQG FRPSXOVRU\ HGXFDWLRQ IRU WKH PDVVHV ZDV QHYHU
FRQVLGHUHGWREHRIKLJKHUSULRULW\WKDQVRPHRWKHUH[SHQGLWXUHVIRUZKLFKPRQH\
ZDV IRXQG 'HVDL 1DLN 8QIRUWXQDWHO\ WKHUH ZDV OLWWOH SURWHVW
DJDLQVWWKLVQRQSURYLVLRQRIIDFLOLWLHVIRUHGXFDWLRQRIWKHPDVVHV
(YHQLQWKH\HDUSHULRG³DIWHUWKHFRPPHQFHPHQWRIWKH&RQVWLWXWLRQ´
ZKHQHYLGHQFHRIJUHDWµHQGHDYRXU¶PD\ KDYHEHHQH[SHFWHGWKHSLFWXUHZDVRQH
1,(3$2FFDVLRQDO3DSHU
RIODFNRISULRULW\WRPDVVHGXFDWLRQ%DVHGRQDQDQDO\VLVRIWKHEXGJHWVSHHFKHV
RI WKH SRVW LQGHSHQGHQFH \HDUV SDUWLFXODUO\ LQ WKH \HDU SHULRG ZKLFK HPEUDFHG ERWK WKH ILUVW DQG VHFRQG ILYH \HDU SODQV µD SHULRG RI UDUH
SROLWLFDOFRKHVLRQ¶-DLQSURQRXQFHGWKDW³WKHUHLVQRWWREHIRXQGHYHQD
SDVVLQJUHIHUHQFHWRHGXFDWLRQOHWDORQHWR$UWLFOHLQWKH%XGJHW6SHHFKHV´
/LNHZLVHWKHDGGUHVVHVRIWKH(GXFDWLRQ0LQLVWHUVWRWKH&HQWUDO$GYL VRU\
%RDUGRI(GXFDWLRQ&$%(ZHUHIXOORIDSRORJ\DQGGHVSDLU
³, PXVW FRQIHVV WKDW , ZDV FRQVLGHUDEO\ GLVDSSRLQWHG ZKHQ WKLV
UHYLVHGSODQZDVGUDZQXS«,DPFRQWLQXLQJZLWKP\HQGHDYRXUV
DQG LW LV P\ UHVROYH WKDW ZH PXVW WU\ WR SURYLGH D UHDVRQDEO H
DOORFDWLRQIRUHGXFDWLRQLQWKHVHFRQGSODQ«´
0DXODQD$EGXO.DODP$]DG&KDLUPDQ¶V$GGUHVV
7ZHQW\WKLUG0HHWLQJRIWKH&$%(-DQXDU\
³, PD\ DGG WKDW RQH RI RXU GLIILFXOWLHV KDV EHHQ WKDW VRPH RI P\
FROOHDJXHV KDYH UHJDUGHG HGXFDWLRQ WR EH D SXUHO\ SURYLQFLDO
VXEMHFW DQG GLG QRW WKHUHIRUH WKLQN LW QHFHVVDU\ WKDW WKH FHQWUDO
JRYHUQPHQW VKRXOG SURYLGH DGHTXDWH IXQGV IRU HGXFDWLRQ (YHQ
ZKHQWKH3ODQQLQJ&RPPLVVLRQZDVVHWXSWKHVLWXDWLRQGLGQRWDW
ILUVWFKDQJH:KHQWKHILUVWGUDIWRIWK HSODQZDVPDGHHGXFDWLRQ
ZDV DOPRVW FRPSOHWHO\ LJQRUHG 7KHUH VHHPHG WR EH D JHQHUDO
YLHZWKDWZHVKRXOGWDNHXSRQO\VXEMHFWVZKLFKZRXOGJLYHTXLFN
UHWXUQV6LQFHWKH\KHOGWKDWHGXFDWLRQFRXOGQRWGRWKLVHGXFDWLRQ
ZDVOHIWRXWRIWKHILUVWGUDIW´
0DXODQD$EGXO.DODP$]DG&KDLUPDQ¶V$GGUHVV
7ZHQW\ILIWK0HHWLQJRIWKH&$%(
,QGHVSHUDWLRQJLYHQWKLVVLWXDWLRQRIQRQ SULRULW\LQIXQGLQJDµGHIDFWR¶
&HQWUDO3ROLF\LQUHVSHFWRIµQRQ HQIRUFHPHQW¶RIFRPSXOVRU\HGXFDWLRQDSSHDUVWR
KDYH EHHQ HQXQFLDWHG DQG FRPPXQLFDWHG WR WKH VWDWHV WR EULQJ DERXW D µVKLIW¶
DZD\IURPWKHSROLF\RIHQIRUFHPHQWRIFRPSXOVRU\DWWHQGDQFH6LQFHHGXFDWLRQ
DW WKDW WLPH ZDV D µVWDWH¶ VXEMHFW D SURFHVV ZDV VHW LQ PRWLRQ WKURXJK WKH
µ1DWLRQDO 6HPLQDUV RQ &RPSXOVR U\ (GXFDWLRQ¶ ZKLFK FRPPHQFHG LQ DQG
ZHUHKHOGDQQXDOO\LQWKHPLGVL[WLHVWREULQJWRDKDOWZKDWHYHUDFWLRQZDVEHLQJ
WDNHQ E\ ZD\ RI HQIRUFHPHQW RI FRPSXOVLRQ )LQDOO\LQ D QHZIRUPDW RI
1DOLQL-XQHMD
GDWDJDWKHULQJ FHDVHGHYHQWRFROOHFWGDWDRQFRPSX OVRU\HGXFDWLRQHYHQWKRXJK
WKHDFWVFRQWLQXHGWRH[LVWRQWKHVWDWXWHERRNV-XQHMD7KHRIILFLDOµGHDWK
NQHOO¶ RI FRPSXOVLRQ LQ ,QGLD FDPH WKURXJK WKH UHFRPPHQGDWLRQ RI WKH &$%(
PHHWLQJRI,WZDVUHFRPPHQGHG
³,Q UHJDUG WR OHJLVODWLRQ RU FRPSXOVLRQ DW WKH SULPDU\ VWDJH WKH %RDUG
ZDV RI WKH YLHZ WKDW ZKHUHDV VWDWXWRU\ SURYLVLRQVPD\EH QHFHVVDU\IRU
VXFK SXUSRVHV DV FROOHFWLRQ RI FHVV WKH UHDOO\ HIIHFWLYH PHWKRG RI
DFKLHYLQJ XQLYHUVDOLW\ LQHGXFDWLRQ LQ WKLVDJHJURXSZRXOGEHH[WHQVLRQ
RIIDFLOLWLHVLQDUHDVQRW\HWFRYHUHGDQGXVHRISHUVXDVLRQLQFHQWLYHV´
([FHUSWIURPSURFHHGLQJVRIWKH
VWPHHWLQJRIWKH&$%(%DQJDORUH
:LWK WKLV RIILFLDO VDQFWLRQ WR UHOHJDWH µOHJLVODWLRQ RU FRPSXOVLRQ DW WKH
SULPDU\VWDJH¶WRWKHVROHSXUSRV HRIFROOHFWLRQRIFHVVWKHµ1DWLRQDO6HPLQDUVRQ
&RPSXOVRU\ 3ULPDU\ (GXFDWLRQ¶ KDYLQJ VHUYHG WKH SXUSRVH RI LQIOXHQFLQJ WKH
FKDQJH LQ WKH VWDWHG SROLF\ DOVR FKDQJHG WKHLU QDPH $IWHU WKH &$%(
UHFRPPHQGDWLRQ WKH\ EHFDPH µ6HPLQDUV RQ (OHPHQWDU\ (GX FDWLRQ¶ DQG WKH
QDWLRQDOHGXFDWLRQDOJRDOZKLFKXSWRWKHQKDGEHHQVWDWHGLQ&HQWUDO*RYHUQPHQW
DQQXDO UHSRUWV DV WKH ³LQWURGXFWLRQ RIXQLYHUVDOIUHHDQGFRPSXOVRU\HGXFDWLRQ´
ZDV FKDQJHG WKHUHDIWHU WR WKH ³DFKLHYHPHQW RI WKH JRDO RI XQLYHUVDO HGXFDWLRQ´
'HVSLWHWKHIDFWWKDW$UWLFOHRIWKH'LUHFWLYH3ULQFLSOHRI6WDWH3ROLF\GLUHFWHG
WKH 6WDWH WR HQGHDYRXU WR SURYLGH IUHH DQG FRPSXOVRU\ HGXFDWLRQ WR DOO FKLOGUHQ
XQWLOWKH\FRPSOHWHWKHDJHRI\HDUVQHLWKHUWKHSROLF\RQHGXFDWLRQQRU
WKHSROLF\VSRNHRIPDNLQJHGXFDWLRQµFRPSXOVRU\¶
-3 1DLN ZKR DW WKDW WLPH ZDV WKH (GXFDWLRQ $GYLVHU WR WKH 8QLRQ
*RYHUQPHQW DQG DOVR WKH 'LUHFWRU RI WKH 6HPLQDUV RQ &RPSXOVRU\(OHPHQWDU\
(GXFDWLRQSURYLGHGHQOLJKWHQPHQWRQWKHXQGHUO\LQJUHDVRQLQJ EHKLQGWKLVSROLF\
VKLIWLQDSXEOLFDWLRQLQ1DLN7KRXJKWKH&RQVWLWXWLRQGLUHFWHGWKH
6WDWH WR SURYLGHIUHH DQG FRPSXOVRU\HGXFDWLRQ HQRXJK PRQH\ ZDV QHYHUPDGH
DYDLODEOHIRUPDNLQJHGXFDWLRQFRPSXOVRU\5DWKHUWKDQJLYLQJXSHIIRUWVIRU WKLV
1,(3$2FFDVLRQDO3DSHU
FRQVWLWXWLRQDOO\ GLUHFWHG FRPSXOVLRQ DOWRJHWKHU LW ZDV GHFLGHG DV PD\ EH VHHQ
IURPWKHH[WUDFWUHSURGXFHGEHORZWRHQIRUFHLWXSWRWKHDJHRIDVGLUHFWHGE\
WKH &RQVWLWXWLRQ EXW IURP WKH DJH RI \HDUV RQZDUGV ± EHFDXVH WKH
&RQVWLWXWLRQGLGQRWVSHFLI\DQ\ORZHUDJHIURPZKLFKFRPSXOVLRQVKRXOGEHJLQ
7KHIROORZLQJ([WUDFWIURPWKH5HSRUWRI:RUNLQJ*URXSRIWKH&$%(RQ
8QLYHUVDO 3ULPDU\ (GXFDWLRQ VKRZV MXVW KRZ WKH ODFN RI IXQGLQJ IRU PDVV
HGXFDWLRQ OHG WR WKH JUDVSLQJ DWGHVSHUDWH HYHQRQHPDQ\ VD\WRGD\VRPHZKDW
LOOXVRU\ PHDVXUHV WR SURYLGH IRU WKH FRQVWLWXWLRQDO GLUHFWLYH RI FRPSXOVRU\
HGXFDWLRQ
³
7KHSUHVHQWSROLF\LVWRFRQVLGHUXQLYHUVDOHQUROPHQWLQWKHDJHJURXS
DIWHUXQLYHUVDOHQUROPHQWLQHGXFDWLRQV\VWHP,QWKHQHZSROLF\
DQ DWWHPSW ZRXOG EH PDGH WR PDNH HGXFDWLRQ XQLYHUVDO LQ WKH DJH
JURXSVLGHE\VLGHZLWKH[SDQVLRQRIIDFLOLWLHVIRUWKHDJHJURXS
7KH HPSKDVLVWKXV VKLIWV IURPHQIRUFLQJ HQUROPHQW DQGDWWHQGDQFHLQ
WKH DJH JURXS WR HQIRUFHPHQW RI HQUROPHQW DQG DWWHQGDQFH LQ WKH
DJH JURXS RUGLQDULO\ RQ D SDUWWLPH EDVLV 7KLV LV PRUH
HFRQRPLFDO DQG HIIHFWLYH7KH ODWH 'U =DNLU+XVVDLQXVHGWRVD\ WKDWLI
KHKDGPRQH\WRSURYLGHRQO\WKUHH\HDUVRIHGXFDWLRQIRUWKHFKLOGUHQRI
WKHFRXQWU\DQGWKLVLVSUHFLVHO\WKHSRVLWLRQDWSUHVHQWKHZRXOGUDWKHU
PDNHHGXFDWLRQXQLYHUVDOLQWKHDJHJURXSWKDQLQWKHDJHJURXS
EHFDXVHWKHJURZQXSFKLOGZLOOOHDUQEHWWHUDQGIDVWHUDQGUHPHPEHU
WKLQJVORQJHU+HDOVRHPSKDVLVHGWKDWWKH&RQVWLWXWLRQVSHFLILHVWKHDJH
RIDVWKHXSSHUOLPLWIRUXQLYHUVDOHGXFDWLRQDQGGRHVQRWPHQWLRQWKH
ORZHUDJHOLPLW+HWKHUHIRUHDUJXHGWKDWFRPSXOVLRQLQWKHDJHJURXS
ZRXOG VDWLVI\ WKH &RQVWLWXWLRQDO GLUHFWLYH ZKLOH WKDW LQ WKH DJH
JURXSRUHYHQZRXOGQRW,WLVWKLVVRXQGSROLF\RQHGXFDWLRQDO
DQGFRQVWLWXWLRQDOJURXQGVWKDWLVSURSRVHGWREHJLYHQHIIHFWWRLQWKHVH
UHFRPPHQGDWLRQ´
([WUDFWIURPµ5HSRUWRIWKH:RUNLQJ*URXSRIWKH&$%(RQ
8QLYHUVDO3ULPDU\(GXFDWLRQLQ,QGLD¶UHSURGXFHGLQ1DLN-3
&RPSXOVLRQ± $QGWKH%XUGHQRI$SDWK\
&RPSXOVRU\HGXFDWLRQODZVPDNHLWDGXW\RIWKHJRYHUQPHQWWRSURYLGHWKH
IDFLOLWLHVDQGWKHPHDQVIRUFKLOGUHQWREHDEOHWRJRWRVFKRRO+DGHQRXJKPRQH\
EHHQ DOORWWHG IRU WKH SXUSRVH W KHQ WKH UHJXODU VXUYH\V VWLSXODWHG E\ WKH
1DOLQL-XQHMD
FRPSXOVRU\ HGXFDWLRQ ODZV ZRXOG KDYH EHHQ VHULRXVO\ FRQGXFWHG WR LGHQWLI\
FKLOGUHQ ZKR VKRXOG EH LQ VFKRRO QRWLFHV ZRXOG KDYH EHHQ LVVXHG WR SDUHQWV
LQIRUPLQJWKHPWKDWDVHDWKDVEHHQDOORWWHGWRWKHLUFKLOGLQD VFKRRO6FKRROVDW
UHDFKDEOHGLVWDQFHVZRXOGKDYHEHHQSURYLGHGVWDIIHGDQGVXLWDEO\HTXLSSHG7KLV
ZRXOGKDYHEHHQIROORZHGXSE\HQTXLULHVWRDVFHUWDLQZKHWKHUWKHFKLOGLVJRLQJ
WR VFKRRO DQG LI QRW WKH UHDVRQV IRU QRQ DWWHQGDQFH ZRXOG KDYH EHHQ YHULILHG
2IILFHUVDSSRLQWHGIRUWKHSXUSRVHZRXOGKDYHGHDOWZLWKSUREOHPVDVVRRQDVWKH\
RFFXUUHGDQGPDGHLWSRVVLEOHIRUWKHFKLOGWRJHWHGXFDWLRQVRPHKRZLIQRWLQD
IRUPDOVFKRRO
+DGVXFKDSURFHGXUHEHHQUHJXODUO\IROORZHGKDGWKHUHEHHQDVX IILFLHQW
QXPEHU RI RIILFHUV FKHFNLQJ RQ DWWHQGDQFH FDUU\LQJ RXW VXUYH\V VKRZLQJ
FRQFHUQ ILQGLQJ VROXWLRQV WR SUREOHPV DQG KDG WKHUH EHHQ HQRXJK VFKRROV DQG
WHDFKHUVHQRXJKFRQFHUQIRUOHDUQLQJVXIILFLHQWPRQH\DOORFDWHGWRHGXFDWLRQDV
ZDV WKH FDVH LQ VRPH RWKHU HTXDOO\ SRRU FRXQWULHV ZKR EHFDPH LQGHSHQGHQW
DURXQGWKHVDPHWLPHWKHQ,QGLDPD\KDYHEHHQOLNHWKRVHFRXQWULHVRQHRIWKH
$VLDQ7LJHUVWRGD\
:KDWDSSHDUVVKRFNLQJWRPDQ\RIXVWRGD\LVWKDWWKHUHZDVPXFKDSDWK\
WR WKH GLUHFWLYH SULQFLSOHV HQXQFLDWHG LQ WKH &RQVWLWXWLRQ ,Q IDFW RQH RI WKH
PHPEHUVRIWKH&RQVWLWXHQW$VVHPEO\KDGLQDGGHGDQRWHRIGLVVHQWWRWKH
GLYLVLRQ RI WKH ULJKWV RI WKH SHRSOH LQWR WZR FDWHJRULHV MXVWLFLDEOH DQG QRQ
MXVWLFLDEOH ULJKWV ,Q KLV YLHZ QRQ MXVWLFLDEOH ULJKWV KDG QR PHDQLQJ +H KDG
ZDQWHG WKH $VVHPEO\ WR XQDPELJXRXVO\ GHFODUH DOO ULJKWV DV MXVWLFLDEOH IRU WKH
UHDVRQWKDW
³2QFH DQ XQDPELJXRXV GHFODUDWLRQ RI VXFK D ULJKW LV PDGH WKRVH
UHVSRQVLEOHIRUJLYLQJHIIHFWWRLWZRXOGKDYHWREHVWLUWKHPVHOYHVWR
ILQG ZD\V DQG PHDQV WR JLYH HIIHFW WR LW ,I WKH\ KDG QR VXFK
UHVSRQVLELOLW\ SODFHG XSRQ WKHP WKH\ PLJKW EH LQFOLQHG WR DYDLO
WKHPVHOYHV RI HYHU\ H[FXVH WR MXVWLI\ WKHLU RZQ LQDFWLYLW\ LQ WKH
PDWWHULQGLIIHUHQFHRUZRUVH´
1,(3$2FFDVLRQDO3DSHU
([FHUSWHGIURP1RWHRIGLVVHQWRI.76KDKWRWKH5HSRUW
$SULO2Q5LJKWWR:RUN%6KLYD5DR
'UH]H DQG 6HQ IRXQG LW VWULNLQJ WKDW WKH IDLOXUHV RI JRYHUQPHQW
SROLF\RYHUDQH[WHQGHGSHULRGSURYRNHGVROLWWOHSROLWLFDOFKDOOHQJH7KH\VDLG ³+DG WKH JRYHUQPHQW VKRZQ VLPLODU DSDWK\ DQG LQFRQVLVWHQF\ LQ GHDOLQJ
ZLWK VD\WKH GHPDQGV RIWKH XUEDQ SRSXODWLRQIRU EDVLFDPHQLWLHV RURI
IDUPHUV
RUJDQLVDWLRQV IRU DGHTXDWHO\ KLJK FURS SULFHV RU RI WKH PLOLWDU\
HVWDEOLVKPHQW IRU PRGHUQ KDUGZDUH RU RI WKH :RUOG %DQN IRU VWUXFWXUDO
DGMXVWPHQWPHDVXUHVLWLVVDIHWRSUHGLFWWKDWDPDMRUSROLWLFDOEDWWOHZRXOG
KDYHIROORZHG7KHIDFWWKDWWKHJRYHUQPHQWZDVDEOHWRJHWDZD\ZLWKVR
PXFK QHJOHFW LQ WKH ILHOG RI SULPDU\ HGXFDWLRQ UHODWHV WR WKH ODFN RI
SROLWLFDOFORXWRIWKHLOOLWHUDWHPDVVHV,WDOVRUHIOHFWVWKHIDFWWKDWWKHVRFLDO
YDOXH RI EDVLF HGXFDWLRQ KDV EHHQ QHJOHFWHG QRW RQO\ E\ JRYHUQPHQW
DXWKRULWLHVEXWDOVRLQVRFLDODQGSROLWLFDOPRYHPHQWV´
)XUWKHU WKH\ FRXOG ZHOOKDYHEHHQHFKRLQJ ZKDW6DL\LGDLQHWDO
KDGVDLGVRPHWKLUW\\HDUVHDUOLHU
³%XW ZDV LW MXVW VZHHW UHDVRQDEOHQHVV
DQG WKH DSSUHFLDWLRQ RI WKH
GLIILFXOWLHV IDFLQJ WKH *RYHUQPHQW ZKLFK PDGH WKH SHRSOH UHIUDLQ IURP
WDNLQJLWWRWDVNIRULWVIDLOXUHWRJLYHLPPHGLDWHH IIHFWWRVHFWLRQRIWKH
&RQVWLWXWLRQ" 1R VXFK LQGXOJHQFH ZDV VKRZQ E\ WKHP LQ RWKHU PDWWHUV
7KHQHZ*RYHUQPHQWZDVPHUFLOHVVO\FULWLFL]HGIRUPDQ\VLQVRIRPLVVLRQ
DQG FRPPLVVLRQ HVSHFLDOO\ E\WKHRSSRVLWLRQ SDUWLHVRIWKH ULJKWDQG WKH
OHIWEXWWKHTXHVWLRQRIFRPSXOVRU\HGXFDWLRQZDVQRWPDGHDQLPSRUWDQW
LVVXH E\ DQ\ SURPLQHQW SHUVRQ RU SROLWLFDO SDUW\ (YHQ LQ WKH UHFHQW
JHQHUDO HOHFWLRQV ZKHQ HDFK SROLWLFDO SDUW\ SURPLVHG WKH HOHFWRUDWH D
KHDYHQ RQ HDUWK
RI LWV RZQ SDUWLFXODU EUDQG QRQH RI WKHV H SURPLVHG
KHDYHQV KHOG RXW DQ\ SURVSHFW RI XQLYHUVDO DQG IUHH SULPDU\ HGXFDWLRQ
ZKHWKHUYROXQWDU\RUFRPSXOVRU\,QIDFWQRHOHFWLRQPDQLIHVWRDWWDFKHGD
JUHDWLPSRUWDQFHWRDQ\DVSHFWRIWKHHGXFDWLRQDOSUREOHP´
1DOLQL-XQHMD
*KRVK DOVR FRPPHQWLQJ RQ WKH QH JOHFW RI SROLFLHV IRU WKH
HGXFDWLRQRIWKHSRRUVDLG
³7KH 0XGDOLDU &RPPLVVLRQ DV ZHOO DV WKH 5DGKDNULVKDQ &RPPLVVLRQ
ZKLFK FDPH EHIRUH LW GZHOW H[FOXVLYHO\ ZLWK WZR DUHDV RI HGXFDWLRQ LQ
ZKLFKWKHUXOLQJHOLWHJURXSVZHUHLQWHUHVWHG%RWKWKHVHVHFWLRQ VUHFHLYHG
KXJHDOORFDWLRQVRIIXQGVDQGXQGHUZHQWUDSLGXQSODQQHGDQGXQFRQWUROOHG
H[SDQVLRQV UHVXOWLQJ LQ GHWHULRUDWLRQ RI VWDQGDUGV DQG FUHDWLRQ RI VHYHUH
SUREOHPVRIHGXFDWHGXQHPSOR\PHQW2QWKHRWKHUKDQGWKHSURJUDPPHV
RIDGXOWHGXFDWLRQDQGOLTXLG DWLRQRILOOLWHUDF\FRQWLQXHGWREHQHJOHFWHGDV
LQ WKH SDVW ,Q HOHPHQWDU\ HGXFDWLRQ WKH HYLOV RI ZDVWDJH DQG VWDJQDWLRQ
FRQWLQXHG XQDEDWHG DV QR VWUXFWXUDO FKDQJHV OLNH PXOWLSOH HQWU\ RU SDUW WLPHHGXFDWLRQZHUHLQWURGXFHG´
1DLN ZDV SDUWLFXODUO\ FULWLFDO RI WKH HOLWHRULHQWHG JURZWK RI
HGXFDWLRQ ± ³DOO SURJUDPPHV RI HGXFDWLRQDO UHIRUP ZKLFK ZHUH PHDQW IRU WKH
UXOLQJFODVVHVZHUHVXFFHVVIXOO\LPSOHPHQWHGRQDSULRULW\EDVLV7KHVHLQFOXGHG
H[SDQVLRQRIDJULFXOWXUDOHQJLQHHULQJDQGPHGLFDOHGXFD WLRQWKHGHYHORSPHQWRI
HOLWH LQVWLWXWLRQV DQG DV ,,7V DQG ,,0V ODUJH H[SDQVLRQ RI SXEOLF DQG VSHFLDO
VFKRROV HVSHFLDOO\ WKRVH ZLWK (QJOLVK PHGLXP WKH H[SDQVLRQ RI PHULW
VFKRODUVKLSVPRVWRIZKLFKDUHEDJJHGE\WKHLUFKLOGUHQDQGVRRQ%XWWKHUHK DV
EHHQQRPRYHPHQWWRLPSURYHWKHVWDQGDUGRIOLYLQJRIWKHSRRUHUVHFWLRQVRIWKH
VRFLHW\ DQG QR PRYHPHQW WR EXLOG XS WKHLU DZDUHQHVV DQG WKHLU RUJDQL]DWLRQV WR
KHOS WKHP WR FRPH LQWR WKHLU RZQ &RQVHTXHQWO\DOO SURJUDPPHVRI HGXFDWLRQDO
UHFRQVWUXFWLRQ PHDQW IRU WKH SHRSOH KDYH ODQJXLVKHG HJ XQLYHUVDO HOHPHQWDU\
HGXFDWLRQOLTXLGDWLRQRIDGXOWLOOLWHUDF\HWF´
$W WKH ULVN RI GLJUHVVLRQ LW PD\ EH LQWHUHVWLQJ WR QRWH KRZ WKLV XQ FRQWUROOHGH[SDQVLRQ
LQWKHV\VWHPZDVYLHZHGE\WZRSROLF\ PDNHUV± VHSDUDWHG
E\\HDUV± DWWKHKHOPRIDIIDLUVLQHGXFDWLRQLQ,QGLD$Q$GGLWLRQDO6HFUHWDU\
(OHPHQWDU\ (GXFDWLRQ *RYHUQPHQW RI ,QGLD FDXWLRXVO\ DGPLWV WR WKH DGGLWLRQDO
IDFWRUIHHGLQJH[SDQVLRQRIKLJKHUDQGWHFKQLFDOHGXFDWLRQEHLQJ³WKHGHPDQGLQ
SROLWLFDO PDUNHWV IRU H[SDQVLRQ RI LQVWLWXWLRQV RI DOOW\SHV´ $\\DU ZKLOH
1DLN ZKR LQ WKH VL[WLHV DQG HDUO\ VHYHQWLHV ZDV (GXFDWLRQDO $GYLVRU
PDNHVDVWDWHPHQWRQWKHLQWHQVLW\RIYHVWHGLQWHUHVWLQH[SDQVLRQVD\LQJ
1,(3$2FFDVLRQDO3DSHU
³(IIRUWVWRFRXQWHUVX FKGHPDQGVZHUHPHWZLWKKRVWLOLW\EHFDXVHQRRQH
VHHPHG WR DSSUHFLDWH WKH SRLQW WKDW DOO VHFRQGDU\ DQG KLJKHU HGXFDWLRQ
LQYROYHVDVXEVLG\ZKLFKJRHVWRWKHZURQJVRFLDOJURXSV:HZHUHLQIDFW
FDOOHG IRROV ZKR WU\ WR HGXFDWH WKRVH ZKR GR QRWFRPHWRVFKR RO DQGGR
QRW ZDQW WR OHDUQ 7KH ILUVW GXW\ RI D *RYHUQPHQW ZH ZHUH WROG ZDV WR
HGXFDWHWKRVHZKRZHUHZLOOLQJWROHDUQ7KHWDVNRIHGXFDWLQJWKRVHZKR
GRQRWHYHQZDQWWROHDUQVKRXOGFRPHODWHU´
2QH RI WKH IDFWRUV SHUFHLYHG WR EH EHKLQG WKH SROLWLFD O GHPDQG IRU
H[SDQVLRQ ZDV WKH IDFW WKDW LW QRW RQO\ DEVRUEHG WKH SURGXFWV RI WKH HGXFDWLRQ
V\VWHP ZLWKLQ WKH V\VWHP LWVHOI DV WHDFKHUV DQG LQ WKH DEVHQFH RI HPSOR\PHQW
EHFDPH D FDXVH IRU VWXGHQWV WR OLQJHU ZLWKLQ WKH V\VWHP 1DLN ,W ZDV
DUJXHG DOVR WKDW H[SDQVLRQ FRQWLQXHG ³IRU LW WHVWLILHG WR WKH JRYHUQPHQW
V
FRPPLWPHQW WR WKH &RQVWLWXWLRQ %XW WKHUH ZDV QR LGHD RU PHWKRG WR PDNH
XQLYHUVDOHOHPHQWDU\HGXFDWLRQDFRKHUHQWSURMHFW´.ULVKQD.XPDU
)LQDOO\WKH 6XSUHPH&RXUWLQLWV ODQGPDUN MXGJPHQWLQWKHFDVH RI8QQL
.ULVKQDQ-3YVWKHVWDWHRI$QGKUD3UDGHVKVWHSSHGLQDQGVWDWHG
³,QWKLVFRQWH[W ZHIHHOFRQVWUDLQHGWRVD\WKDWWKHDOORFDWLRQRIDYDLODEOH
IXQGVLQ,QGLDGLVFORVHVDQLQYHUVLRQRISULRULWLHV
,Q GHFODULQJ WKH 'LUHFWLYH 3ULQFLSOH D )XQGDPHQWDO 5LJKW LW FKLGHG WKH
JRYHUQPHQWIRUWKHODFNRIDFKLHYHPHQWRIWKHJRDOVRI$UWLFOHDQGDVNHG
+DVLWQRVLJQLILFDQFH",VLWDPHUHSLRXVZLVKHYHQDIWHU\HDUV RIWKH
&RQVWLWXWLRQ"&DQWKHVWDWHIORXWWKHVDPHGLU HFWLRQVHYHQDIWHU\HDUVRQ
WKH JURXQGV WKDWWKHDUWLFOHPHUHO\ FDOOV XSRQ LW
WR HQGHDYRXU WRSURYLGH
WKHVDPH"´
1DOLQL-XQHMD
:LWKWKLVMXGJPHQWWKHWLGHZDVVHHQWRWXUQLQWKHGLUHFWLRQRIDPHQGPHQW
RI WKH &RQVWLWXWLRQ WR JLYH WR FKLOGUHQ DQ XQDPELJXRXV ULJ KW WR IUHH DQG
FRPSXOVRU\HGXFDWLRQ
7KHVH OHVVRQV RI KLVWRU\ VHUYH WR VKRZ WKDW LQ WKH DEVHQFH RI D µZLOO¶
FRPSXOVRU\HGXFDWLRQDFWVDORQHFDQQRWDFKLHYHHGXFDWLRQRIWKHPDVVHV7KHODFN
RI SULRULW\ WR PDVV HGXFDWLRQ H[SUHVVHG LQ WHUPV RI LQDGHTXDWH IXQGLQJ HQVXUHG
WKDWVXIILFLHQWIDFLOLWLHVZHUHQHYHUSXWLQSODFHQRUZHUHWKHFRQGLWLRQVFUHDWHGWR
HQDEOHDOOFKLOGUHQWRJRWRVFKRRO8OWLPDWHO\WKHHQIRUFHPHQWRIWKHVHDFWVZDV
DOVRVWRSSHG
7KHFRQWLQXHGLOOLWHUDF\RIWKHPDVVHVUHFDOOVWRPLQGW KHIDPRXVVWDWHPHQW
³,Q WKLV ZRUOG WKHUH LV QR OLWHUDWH SRSXODWLRQ WKDW LV SRRU QR LOOLWHUDWH
SRSXODWLRQWKDWLVRWKHUWKDQSRRU´
*DOEUDLWK-.
1,(3$2FFDVLRQDO3DSHU
6HFWLRQ,,,
5HFHQW'HYHORSPHQWV/HDGLQJWRWKH
WK &RQVWLWXWLRQDO$PHQGPHQW
,QWKHHDUO\V DVXGGHQUHYLYDORILQWHUHVWZDVREVHUYHGLQWKHPDWWHU
RI VHFXULQJ WKH ULJKW WR IUHH DQG FRPSXOVRU\ HGXFDWLRQ IRU DOO FKLOGUHQ LQ ,QGLD
,QWHUHVWLQJO\QHLWKHUWKH 3ROLF\ RQ(GXFDWLRQ QRULWV 3URJUDPPHRI$FWLRQ
KDGPHQWLRQHGPDNLQJHGXFDWLRQFRPSXO VRU\,WLVEHOLHYHGWKDWFRPPLWPHQWVDW
-RPWLHQLQDQG WKH HYHQWVOHDGLQJWRLWPD\KDYHKDGLWVHFKRHVLQ,QGLDDV
ZHOO +RZHYHU DPRQJ RIILFLDO GRFXPHQWV LW ZDV WKH 5DPDPXUWL &RPPLWWHH
5HSRUWLQRQWKHUHYLHZRIWKHHGXFDWLRQSROLF\Z KLFKILUVWFKLGHGWKH
JRYHUQPHQWIRUQRWSD\LQJDWWHQWLRQWRWKHULJKWWRHGXFDWLRQVD\LQJ ³WKLVSUREOHP
TXDOLILHVIRUEHLQJWKHPRVWIXQGDPHQWDOSUREOHPRIRXUHGXFDWLRQV\VWHP´7KLV
5HSRUWFDOOHGIRUUHFRJQLWLRQRIWKHULJKWWRHGXFDWLRQDVDIXQGDPHQW DOULJKW
$QRXWOLQHRIWKHHYHQWVOHDGLQJXSWRWKHSDVVDJHRIWKH UG &RQVWLWXWLRQ
$PHQGPHQW %LOO WK &RQVWLWXWLRQDO $PHQGPHQW $FW LQ ERWK KRXVHV RI
3DUOLDPHQWLVSUHVHQWHGEHORZ
7KH &RPPLWWHHWR5HYLHZWKH1DWLRQDO3ROLF\RQ(GXFDWLRQ 5DPDPXUWL&RPPLWWHH LQLWVUHSRUWWLWOHGµ7RZDUGVRQ(QOLJKWHQHG
DQG +XPDQH 6RFLHW\ ± 13( ± $ 5HYLHZ¶ FKLGHV WKH
JRYHUQPHQWIRULWVFRQWLQXHGIDLOXUHVLQFHLQGHSHQGHQFHWRIXOILOWKH
&RQVWLWXWLRQDOGLUHFWLYH
³1RZWLPHKDV FRPH WR UHFRJQL]H µ5LJKW WR(GXFDWLRQ¶DV
RQH RI WKH IXQGDPHQWDO ULJKWV RI WKH ,QGLDQ FLWL]HQV IRU
ZKLFKQHFHVVDU\ DPHQGPHQWVWRWKHFRQVWLWXWLRQPD\KDYH
WREHPDGHDQGPRUHLPSRUWDQWO\FRQGLWLRQVEHFUHDWHGLQ
VRFLHW\VXFKWKDWWKLVULJKWZRXOGEHFRPHDYDLODEOHIRUDOO
FKLOGUHQ RI,QGLD´ 3DUD
1DOLQL-XQHMD
0\URQ:LHQHU¶V%RRN³7KH&KLOGDQGWKH6WDWHLQ,QGLD &KLOG
/DERXU DQG (GXFDWLRQ 3ROLF\ LQ &RPSDUDWLYH 3HUVSHFWLYH ´
FUHDWHV ULSSOHV ,WV PDLQ WKHVLV EHLQJ WKDW ,QGLD¶V SRYHUW\ ZDV OHVV
UHOHYDQW DV DQ H[SODQDWLRQ IRU WKH IDLOXUH WR HUDGLFDWH FKLOG ODERXU
DQG HQIRUFH FRPSXOVRU\ HGXFDWLRQ WKDQ WKH EHOLHI V\VWHP RI WKH
PLGGOHFODVVHVWRZKLFKFODVVWKHVWDWHEXUHDXFUDF\DOVREHORQJHG
,QGLD EHFRPHV VLJQDWRU\ WR WKH 81 &RQYHQWLRQ RQ 5LJKWV RI WKH
&KLOG &5&$UWLFOHRIWKLV&RQYHQWLRQVWDWHV
³6WDWHSDUWLHV UHFRJQL]HWKHULJKWRIWKHFKLOGWRHGXFDWLRQ
DQGZLWKD YLHZWRDFKLHYLQJWKLVULJKWSURJUHVVLYHO\WKH\
VKDOOLQSDUWLFXODUDPDNHSULPDU\HGXFDWLRQFRPSXOVRU\
DQGDYDLODEOHIUHHWRDOO«´
$VSDUWRIWKLVDJUHHPHQW,QGLDLVDOVRFRPPLWWHGWRUHYLHZLWVODZV
DQG EULQJ WKHP LQ OLQH ZLWK WKH &RQYHQWLRQ ,QWHUQDWLRQDO WUHDWLHV
VHUYH WR VHW VWDQGDUGV DQG &RXUWV JHQHUDOO\LQWHUSUHW GRPHVWLFODZV
VRDVWRPDLQWDLQKDUPRQ\ZLWKWKH SURYLVLRQVRILQWHUQD WLRQDOODZ
$UWLFOH F RI WKH ,QGLDQ &RQVWLWXWLRQ VWDWHV WKDW WKH 6WDWH VKDOO
HQGHDYRXU WR IRVWHU UHVSHFW IRU LQWHUQDWLRQDO ODZ DQG WUHDW\
REOLJDWLRQV
7KH 6XSUHPH&RXUW-XGJPHQWLQWKHFDVHRI8QQL.ULVKQDQ-3
YV6WDWHRI$QGKUD3UDGHVKDQG RWKHUV6&PDNHV
HGXFDWLRQDIXQGDPHQWDOULJKW
³7KH FLWL]HQV RI WKLV FRXQWU\ KDYH D IXQGDPHQWDO ULJKW WR
HGXFDWLRQ7KHVDLGULJKWIORZVIURP$UWLFOH7KLVULJKW
KRZHYHU LV QRW DQ DEVROXWH ULJKW ,WV FRQWHQWV DQG
SDUDPHWHUVKDYHWR EHGHWHUPLQHGLQWKHOLJKWRI$UWLFOHV
DQG,QRWKHUZRUGVHYHU\FKLOGFLWL]HQRIWKLVFRXQWU\
KDVDULJKWWRIUHHHGXFDWLRQXQWLOKHFRPSOHWHVWKHDJHRI
IRXUWHHQ\HDUV7KHUHDIWHUKLVULJKWWRHGXFDWLRQLVVXEMHFW
WR OLPLWV RI HFRQRPLF FDSDFLW\ DQG GHYHORSPHQW RI WKH
VWDWH´
7KH µ&RPPRQ 0LQLPXP 3URJUDPPH¶ RI WKH 8QLWHG )URQW
*RYHUQPHQW UHVROYHV WR PDNH WKH ULJKW WR IUHH DQG FRPSXOVRU\
HOHPHQWDU\ HGXFDWLRQ LQWR D IXQGDPHQWDO ULJKW DQG WR HQIRUFH LW
WKURXJK VXLWDEOH VWDWXWRU\ PHDVXUHV ,W VHWV XS D FRPPLWWHH 6DLNLD
&RPPLWWHHWRH[DPLQHWKLVSURSRVDO
1,(3$2FFDVLRQDO3DSHU
-DQ 7KH 5HSRUW RI WKH &RPPLWWHH RI 6WDWH (GXFDWLRQ 0LQLVWHUV RQ
,PSOLFDWLRQV RI WKH 3URSRVDO WR 0DNH (OHPHQWDU\ (GXFDWLRQ $
)XQGDPHQWDO5LJKW6DLNLD&RPPLWWHH5HSRUWUHFRPPHQGV
³7KH&RQVWLWXWLRQRI,QGLDVKRXOGEHDPHQGHGWRPDNHWKH
ULJKW WR IUHH HOHPHQWDU\ HGXFDWLRQ XS WR WKH \HDUV RI
DJH D IXQGDPHQWDO ULJKW 6LPXOWDQHRXVO\ DQ H[SOLFLW
SURYLVLRQ VKRXOG EH PDGH LQ WKH &RQVWLWXWLRQ WR PDNH LW
IXQGDPHQWDO GXW\ RI HYHU\ FLWL]HQ ZKR LV D SDUHQW WR
SURYLGH RSSRUWXQLWLHV IRU HOHPHQWDU\ HGXFDWLRQ WR DOO
FKLOGUHQXSWR\HDUVRIDJH´
7KH FRPPLWWHH DOVR UHFRPPHQGHG WKH DPHQGPHQW RI H[LVWLQJ VWDWH
OHJLVODWLRQRQFRPSXOVRU\HGXFDWLRQ
-XO\ 7KH&RQVWLWXWLRQ UG $PHQGPHQW%LOOWDEOHGLQWKH/RN
6DEKD WKLV ZDV IXUWKHU UHIHUUHG WR WKH µ'HSDUWPHQW 5HODWHG
3DUOLDPHQWDU\ 6WDQGLQJ &RPPLWWHH RQ +XPDQ 5HVRXUFH
'HYHORSPHQW¶7KH UG $PHQGPHQW%LOOSURSRVHG
³
$IWHU$UWLFOHRIWKH&RQVWLWXWLRQWKHIROORZLQJDUWLFOH
VKDOOEHLQVHUWHGQDPHO\
³$ 7KH VWDWH VKDOO SURYLGH IUHH DQG FRPSXOVRU\
HGXFDWLRQWRDOOFLWL]HQVRIWKHDJHRIVL[WRIRXUWHHQ\HDUV
7KHULJKWWRIUHHDQGFRPSXOVRU\HGXFDWLRQUHIHUUHG
WR LQ FODXVH VKDOO E\ HQIRUFHG LQ VXFK PDQQHU DV WKH
6WDWHPD\EHODZGHWHUPLQH
7KH VWDWH VKDOO QRW PDNH DQ\ ODZ IRU IUHH DQG
FRPSXOVRU\ HGXFDWLRQ XQGHU FODXVH LQ UHODWLRQ WR WKH
HGXFDWLRQDOLQVWLWXWLRQVQRWPDLQWDLQHGE\WKH6WDWHRUQRW
UHFHLYLQJDLGRXWRI6WDWHIXQGV´
$UWLFOH RI WKH &RQVWLWXWLRQ VKDOO EH UHQXPEHUHG DV
FODXVHRIWKDWDUWLFOHDQGDIWHUFODXVHDVVRUHQXPEHUHGDQG
EHIRUH WKH ([SODQDWLRQ WKH IROORZLQJ FODXVH VKDOO EH LQVHUWHG
QDPHO\
³ 7KHFRPSHWHQWOHJLVODWXUHVKDOOPDNHWKHODZIRUWKH
HQIRUFHPHQW RI ULJKW WR IUHH DQG FRPSXOVRU\ HGXFDWLRQ
UHIHUUHG WR LQ FODXVH RI $UWLFOH $ ZLWKLQ RQH \HDU
IURP WKH FRPPHQFHPHQW RI WKH &RQVWLWXWLRQ (LJKW\WKLUG
$PHQGPHQW$FW
3URYLGHG WKDW D SURYLVLRQ RI DQ\ ODZ UHODWLQJ WR IUHH DQG
FRPSXOVRU\ HGXFDWLRQ LQ IRUFH LQ D 6WDWH LPPHGLDWHO\
EHIRUHWKHFRPPHQFHPHQWRIWKH&RQVWLWXWLRQ(LJKW\WKLUG
1DOLQL-XQHMD
$PHQGPHQW $FW ZKLFK LV LQFRQVLVWHQW ZLWK WKH
SURYLVLRQVRIDUWLFOH$VKDOOFRQWLQXHWREHLQIRUFHXQWLO
DPHQGHG RU UHSHDOHG E\ D FRPSHWHQW OHJLVODWXUH RU RWKHU
FRPSHWHQWDXWKRULW\RUXQWLOWKHH[SLUDWLRQRIRQH\HDUIURP
VXFKFRPPHQFHPHQWZKLFKHYHULVHDUOLHU´
$UWLFOHRIWKH&RQVWLWXWLRQVKDOOEHRPLWWHG
,Q DUWLFOH $ RI WKH &RQVWLWXWLRQ DIWHU FODXVH M WKH
IROORZLQJFODXVHVKDOOEHDGGHGQDPHO\
³N WR SURYLGH RSSRUWXQLWLHV IRU HGXFDWLRQ WR D FKLOG
EHWZHHQ WKH DJH RI VL[ DQG IRXUWHHQ \HDUV RI ZKRP VXFK
FLWL]HQLVDSDUHQWRUJXDUGLDQ´
1RY 7KH 'HSDUWPHQW±5HODWHG 3DUOLDPHQWDU\ 6WDQGLQJ &RPPLWWHH RQ
+XPDQ 5HVRXUFH 'HYHORSPHQW VXEPLWV UHSRUW WR ERWK KRXVHV RI
3DUOLDPHQW DQG UHFRPPHQGV WKDW WKH ELOO EH SDVVHG VXEMHFW WR
FKDQJHV UHFRPPHQGHG E\ LW 7KH PDMRU UHFRPPHQGDWLRQV RI WKH
FRPPLWWHHUHODWHGWR
L
5HWHQWLRQRI$UWLFOHWRFDWHUWRWKH DJHJURXS
LLL
³7KH&HQWUHVKRXOGSUHSDUHRQHVLPSOHOHJLVODWLRQZLWKVRPH
VNHOHWDOIUDPHZRUNZKLFKPD\DOVRLQGLFDWHWKH&HQWUDOVKDUH
LQWKHILQDQFLDOEXUGHQ7KHGHWDLOVFDQEHIRUPXODWHGE\WKH
UHVSHFWLYHVWDWHVDFFRUGLQJWRWKHLUUHTXLUHPHQWV7KH&HQWUDO
*RYHUQPHQWPD\WKHUHIRUHFRQVLGHUZRUNLQJRXWWKH
QHFHVVDU\OHJLVODWLRQ´3DUD
LL
&ODXVH RI WKH SURSRVHG $UWLFOH $ UHODWLQJ WR SULYDWH
LQVWLWXWLRQVPD\EHGHOHWHG
7KH UG %LOOZDVDPHQGHGDQGUHLQWURGXFHGDV &RQVWLWXWLRQ UG
$PHQGPHQW %LOO LQ WKH 3DUOLDPHQW ZLWK WKH IROORZLQJ
SURYLVLRQV
x
x
$IWHU $UWLFOH RI WKH &RQVWLWXWLRQ WKH IROORZLQJ $UWLFOH
VKDOOEHLQVHUWHGQDPHO\
³$ 7KH VWDWH VKDOO SURYLGH IUHH DQG FRPSXOVRU\
HGXFDWLRQ WR DOO FKLOGUHQ RI WKH DJH RI \HDUV LQ VXFK
PDQQHUDVWKH6WDWHPD\E\ODZGHWHU PLQH´
)RU $UWLFOH RI WKH &RQVWLWXWLRQ WKH IROORZLQJ VKDOO EH
VXEVWLWXWHGQDPHO\
1,(3$2FFDVLRQDO3DSHU
x
³ 7KH 6WDWH VKDOO HQGHDYRXU WR SURYLGH HDUO\ FKLOGKRRG
FDUH DQG HGXFDWLRQ IRU DOO FKLOGUHQ XQWLO WKH\FRPSOHWH WKH
DJHRI\HDUV´
,Q $UWLFOH $ RI WKH &RQVWLWXWLRQ DIWHU FODXVH M WKH
IROORZLQJFODXVHVKDOOEHDGGHGQDPHO\
³N :KR LV D SDUHQW RU JXDUGLDQ WR SURYLGH RSSRUWXQLWLHV
IRU HGXFDWLRQ WR KLV FKLOG RU DV WKH FDVH PD\ EH ZDUG
EHWZHHQWKHDJHRIDQG\HDUV´
7KH&RQVWLWXWLRQ UG $PHQGPHQW%LOOZDVGLVFXVVHGDQGSDVVHGE\
XQDQLPRXVYRWHLQWKH/RN6DEKDRQ WK 1RYHPEHUDQGE\WKH5DM\D6DEKD
RQ WK 0D\ ,W DJDLQ ZHQW EDFN WR WKH /RN 6DEKD IRU DSSURYDO RI WKH
FODXVHVWRDPHQGWKHGDWHRIWKH%LOOWR
$FFRUGLQJ WR $UWLFOH RI WKH &RQVWLWXWLRQ WKHUH ZDV QR QHHG IRU
UDWLILFDWLRQE\WKHVWDWHOHJLVODWXUHV$IWHUWKH%LOOUHFHLYHGWKH3UHVLGHQW¶VDVVHQW
LWEHFDPHWKH WK &RQVWLWXWLRQ$PHQGPHQW$FW,WQRZUHPDLQVIRUWKHµ6WDWH¶WR
GHWHUPLQHµE\ODZ¶DVUHTXLUHGE\WKHQHZ $UWLFOH$WKHPDQQHULQZKLFKIUHH
DQGFRPSXOVRU\HGXFDWLRQLVWREHSURYLGHGWRDOOFKLOGUHQLQWKH DJHJURXS
7KHQHZODZDVUHFRPPHQGHGE\WKH3DUOLDPHQWDU\6WDQGLQJ&RPPLWWHHVKDOOEH
DFHQWUDOOHJLVODWLRQ,WLVDQWLFLSDWHGWKDWWKLVVKDO OEHWKHILUVWFHQWUDOOHJLVODWLRQ
RQHOHPHQWDU\HGXFDWLRQ
1DOLQL-XQHMD
6HFWLRQ,9
)ROORZXS/HJLVODWLRQWRWKH
)XQGDPHQWDO5LJKWWR(GXFDWLRQ
$V QRWHGDW WKHRXWVHW$UWLFOH $ VWDWHG ³7KH 6WDWHVKDOO SURYLGHIUHH
DQG FRPSXOVRU\ HGXFDWLRQ WR DOO FKLOGUHQRI WKH DJH RI VL[ WR IRXUWHHQ \HDUVLQ
VXFK PDQQHU DV WKH 6WDWH PD\ E\ ODZ GHWHUPLQH´ 7KH DPHQGPHQW LWVHOI
WKHUHIRUH SODFHV WKH RQXV RI WKH SURYLVLRQ RI WKLV ULJKW RQWR D IROORZ XS
OHJLVODWLRQZKLFKZLOOLQPDQ\ZD\VVKDSHWKHIXWXUHRI,QGLDQ(GXF DWLRQ
7KHTXHVWLRQEHIRUHWKHFRXQWU\DWWKLVMXQFWXUHLV ± KRZVKRXOGWKHODZEH
IUDPHGLQRUGHUIRULWWRHQVXUHWKDWHYHU\FKLOG \HDUVLVDEOHWRDYDLORI
WKHULJKWWRHGXFDWLRQ"
$V VWDWHG HDUOLHU WKHUH DUH DOUHDG\ PDQ\ FRPSXOVRU\ HGXFDWLRQ $FW V LQ
,QGLD,IDQ\WKLQJLVPLVVLQJLWLVWKHZLOOWRDFFRUGIUHHDQGFRPSXOVRU\HGXFDWLRQ
IRUDOOFKLOGUHQDJUHDWHUSULRULW\DQGPRUHIXQGLQJWKDQVRPHRIWKHRWKHUFODLPV
RQWKHOLPLWHGH[FKHTXHU1HYHUWKHOHVVWKHTXHVWLRQVDULVH:K\VKRXOGWKHUHEH D
QHHGWRSUHSDUHQHZ OHJLVODWLRQ":K\GRRXUH[LVWLQJ&RPSXOVRU\(GXFDWLRQ$FWV
QRORQJHUVHUYHWKHSXUSRVH":K\GRHVDQHZFHQWUDOOHJLVODWLRQQHHGWREHIUDPHG
LQ RUGHU WR GHWHUPLQH KRZ WKH ULJKW WR IUHH DQG FRPSXOVRU\ HGXFDWLRQ LV WR EH
GHOLYHUHG WR DOO FKLOGUHQ EHWZHHQ WKH DJHV RI \HDUV"6RPH LVVXHV WKDW PD\
QHHGWREHDGGUHVVHGLQWKHIUDPLQJRIWKLVQHZOHJLVODWLRQDUHSUHVHQWHGKHUH
7KH1HHGIRUD1HZ&HQWUDO/HJLVODWLRQ
0RVWRIWKHFXUUHQW$FWVLQIRUFHIRUFRPSXOVRU\HGXFDWLRQZHUHGUDIW HGLQ
WKH V DQG ZHUH DSSOLFDEOH WR WKDW SHULRG $ QXPEHURI FKDQJHV KDYH WDNHQ
SODFH VLQFH WKHQ LQFOXGLQJ DPHQGPHQWV WR WKH &RQVWLWXWLRQ RI ,QGLD DQG
FRPPLWPHQW WR WKH LQWHUQDWLRQDO WUHDWLHV DQG IRUXPV WKDW KDYH LQ HIIHFW FKDQJHG
1,(3$2FFDVLRQDO3DSHU
WKH µRSHUDWLQJ V\VWHP¶ LQ ZKLFK WKHVH DFWV ZLOO QRZ KDYH WR EH LPSOHPHQWHG
5HFHQW \HDUV KDYH DOVR VHHQ WKHHPHUJHQFH RI D FLYLOVRFLHW\WKDW UHFRJQL]HVWKH
QHHGIRUDPRUHHJDOLWDULDQVRFLHW\DQGLVYRFDOLQWU\LQJ WRVHFXUHULJKWVIRU WKH
GLVDGYDQWDJHG
3HUKDSVVXFKFKDQJHVFRXOGDOVREHDFFRPPRGDWHGWKURXJKWKHIUDPLQJRI
DQHZ6WDWHOHJLVODWLRQ ,QGHHGWKH&RQIHUHQFHRI6WDWH(GXFDWLRQ 0LQLVWHUVDQG
6WDWH (GXFDWLRQ 6HFUHWDULHV 6DLNLD &RPPLWWHH DIWHU FRQVLGHULQJ WKH PDWWHU LQ
GHWDLO UHFRPPHQGHG LQ LWV UHSRUW GDWH G -DQXDU\ WKXV ,Q D GLYHUVH
IHGHUDO SROLW\ VXFK DV RXUV DQG ZLWK WKH 6WDWH EHLQJ WKH PDLQ SURYLGHU RI
HOHPHQWDU\ HGXFDWLRQ WKHUH LV QR QHHG WR HQDFW D &HQWUDO /HJLVODWLRQ PDNLQJ
HOHPHQWDU\ HGXFDWLRQ FRPSXOVRU\ 6WDWHV VKRXOG HLWKHU DPHQG WKHLU H[LVWLQJ
OHJLVODWLRQ RUHQDFWIUHVKOHJLVODWLRQ WRJLYHHIIHFWWRWKHSURSRVHG&RQVWLWXWLRQDO
DPHQGPHQWV
+RZHYHUWKH'HSDUWPHQWDO3DUOLDPHQWDU\6WDQGLQJ&RPPLWWHH ± WRZKLFK
WKH &RQVWLWXWLRQ UG $PHQGPHQW%LOOZDVUHIHUUHGDIWHUKDYLQJEHHQWDE OHGLQ
WKH 5DM\D 6DEKD LQ DQG ZKLFK UHWXUQHG WKH %LOO IRU UHGUDIWLQJ DQG IRU
DFFRPPRGDWLQJVRPHRILWVUHFRPPHQGDWLRQV ± ZDVLQIDYRXURI³QRWOHDYLQJWRR
PXFKWRWKHVWDWHV´DQGKDGUHFRPPHQGHGWKHIUDPLQJRI&HQWUDO/HJLVODWLRQ
$IHZRWKHUFRQVLGHUDWLRQVWKDWXSKROGWKHQHHGIRUDQHZOHJLVODWLRQDOVR
GHVHUYHDWWHQWLRQVRPHRIZKLFKDUHDVIROORZV
&RQFXUUHQW6WDWXVRI(GXFDWLRQ
,W LV RQO\ VLQFH WKDW HGXFDWLRQ DW WKH VFKRRO OHYHO KDV EHHQ RQ WKH
µ&RQFXUUHQWOLVW¶LHWKHOLVWRIVXEMHF WVLQWKH&RQVWLWXWLRQRI,QGLDRQZKLFKERWK
WKH &HQWUH DQG WKH 6WDWH *RYHUQPHQWV FDQ OHJLVODWH :KHQ WKH &RQVWLWXWLRQ RI
,QGLD KDG FRPH LQWR EHLQJ HGXFDWLRQ ZDV D µVWDWH¶ VXEMHFW ,Q LW ZDV
WUDQVIHUUHG RQWR WKH &RQFXUUHQW /LVW ZKLFK LPSOLHG WKD W LQ FDVH WKH 6WDWH ODZV
1DOLQL-XQHMD
GLIIHUHG IURP WKH FHQWUDO OHJLVODWLRQ WKH ODZV RI WKH &HQWUH ZRXOG SUHYDLO
7KHUHIRUHEHIRUHRQO\VWDWHODZVH[LVWHGIRUWKHSURYLVLRQDQGJRYHUQDQFH
RI PDVV HGXFDWLRQ DQG HYHQ WRGD\ LQ WKH DEVHQFH RI DQ\ FHQWUDO OHJLVOD WLRQ LW
UHPDLQVIRUHDFKVWDWHWRGHFLGHZKHWKHURUQRWLWQHHGVDFRPSXOVRU\HGXFDWLRQ
DFW RU WR GHFLGH ZKHWKHU RU QRW LW ZLOO HQIRUFH LW $OO SUHYLRXV OHJLVODWLRQ RQ
FRPSXOVRU\HGXFDWLRQLQ,QGLDZDVDW6WDWHOHYHO$VWKLQJVVWDQGDOPRVWKDOIWKH
6WDWHVDQG87V KDYHQRWHYHQSDVVHGDQ\VXFKODZV,QIDFWWKHUHLVVRIDUQR
FRQFXUUHQWOHJLVODWLRQLQVFKRROHGXFDWLRQWKRXJKLWKDVEHHQSRVVLEOHVLQFH
IRUWKH8QLRQ*RYHUQPHQWWRSDVVD&HQWUDOOHJLVODWLRQRQWKHVXEMHFW
&HQWUDOOHJLVODWLRQDQG3DQFKD\DWL5DM,QVWLWXWLRQV
7KH UG DQG WK &RQVWLWXWLRQDO $PHQGPHQWV KDYH VLQFH SURYLGHG
IRUGHFHQWUDOLVDWLRQRISRZHUVDQGUHVSRQVLELOLWLHVWRDWKLUG WLHURI3DQFKD\DWL5DM
ERGLHV DQG DV VXFK KDYH DGGHG D QHZ FKDSWHU WR WKH SURFHVV R I GHPRFUDWLF
GHFHQWUDOLVDWLRQ LQ ,QGLD 7KH EDVLF IXQFWLRQ RI GHPRFUDWLF GHFHQWUDOLVDWLRQ LV WR
HQVXUH WKDW GHYHORSPHQW SODQQLQJ LV PDGH PRUH UHVSRQVLYH DQG DGDSWDEOH WR
UHJLRQDODQGORFDOQHHGVRIWKHSRSXODWLRQ
(GXFDWLRQ LV RQH RI WKH VXEMHFWV WKDW KDY H EHHQ UHFRPPHQGHG LQ WKH
HOHYHQWK DQG WZHOIWK VFKHGXOHV RI WKH UG DQG WKH WK $PHQGPHQWV WR WKH
&RQVWLWXWLRQIRUWUDQVIHUWRWKH3DQFKD\DWL5DM,QVWLWXWLRQV,WPD\EHDQWLFLSDWHG
WKHUHIRUH WKDW RQFH WKH VWDWHV KDYH FRPSOHWHG WKH WDVN RI GHYROYLQJ SR ZHU DQG
UHVSRQVLELOLWLHV WR WKH WKLUG WLHU RI JRYHUQDQFHWKH LPSOHPHQWLQJ DJHQFLHVRI WKH
IXQGDPHQWDOULJKWRIWKHFKLOGWRHGXFDWLRQLQWKH6WDWHVZRXOGEHWKH3DQFKD\DWL
5DM LQVWLWXWLRQV 7KH H[SHULHQFH RI WKH VWDWHV LQ WKH PDWWHU RI GHYROXWLRQ RI
SRZHUVKDVUDWKHUEHHQVORZ2QWKHRWKHUKDQGVRPHVWDWHVQRWDEO\$QGKUDDQG
.DUQDWDND KDYH HQDFWHG QHZ OHJLVODWLRQV JLYLQJ SRZHU WR SDUHQWV LQ VFKRROV
WKURXJKWKHIRUPDWLRQRI6FKRRO0DQDJHPHQWDQG'HYHORSPHQWFRPPLWWHHV
1,(3$2FFDVLRQDO3DSHU
:LWKWKH UG DQG WK $PHQGPHQWVKRZHYHUZKLOHRQWKHRQHKDQGLWKDV
EHFRPH SRVVLEOH IRU WKH &HQWUDO *RYHUQPHQW WR OHJLVODWH RQ HOHPHQWDU\ DQG
VHFRQGDU\HGXFDWLRQ RQ WKH RWKHUKDQG WKH SRZHUV DQG IXQFWLRQVRI3DQFKD\DWL
5DMLQVWLWXWLRQVKDYHEHFRPHVXEMHFWVRYHUZKLFKRQO\WK H6WDWHJRYHUQPHQWVFDQ
OHJLVODWH ,VWKH &HQWUHWKHUHIRUHDQ\FORVHUWRµOHJLVODWLQJ¶ RQZKDWKDSSHQVLQ
VFKRROHGXFDWLRQDWWKHJURXQGOHYHO"&DQRQHHQVXUHWKDWWKH6WDWH*RYHUQPHQWV
ZLOO QRWMXVWSDVVRQ WKH UHVSRQVLELOLW\IRU LPSOHPHQWDWLRQ RIWKLV ULJKWRQWRWKH
WKLUG WLHU RI JRYHUQDQFH ZLWKRXW VXLWDEO\ HTXLSSLQJ WKHP WR FDUU\ RXW WKHLU
UHVSRQVLELOLWLHV" +RZ GRHV RQH PDQGDWH WKH WUDQVIHU RI ILVFDO UHVRXUFHV WR WKH
3DQFKD\DWL5DMERGLHVLQRUGHUIRUWKHPWRFDUU\RXWWKHLUUHVSRQVLELOLWLHV"
3HRSOH¶V'HPDQGIRU(GXFDWLRQ
7KHEHOLHIWKDWWKHSHRSOHGRQRWZDQWWRVHQGWKHLUFKLOGUHQWRVFKRROVRU
WKDW WKH\GR QRW ZDQW HGXFDWLRQ KDVQRZ EHHQDFFHSWHGE\PRVW DVMXVWDP\WK
2QFH LW LV DFFHSWHG WKDW WKH SHRSOH ZDQW HGXFDWLRQ LW IROORZV WKDW W KH\ GR QRW
QHHG WR EH IRUFHG WR VHQG WKHLU ER\V WR VFKRROV 7KHUHIRUH LQ WKLV FKDQJHG
SHUVSHFWLYHZKDWVKRXOGEHWKHUROHRIOHJLVODWLRQDLPHGDWSURWHFWLQJWKHFKLOG¶V
ULJKWWRHGXFDWLRQ":RXOGWKHODZQHHGWRSXQLVKWUXDQF\"
:KDWLIVRPHSDUHQWVIURP EDFNZDUGFRPPXQLWLHVGRQRWZDQWWRVHQGWKHLU
WHHQDJHG GDXJKWHUV WR VFKRRO" :KDW ZRXOG RQH UHFRJQLVHLQ VXFK D FDVH ± WKH
ULJKW RI WKH SDUHQWV WR EH FRQFHUQHG IRU WKHLU GDXJKWHUV RU WKH FKLOG¶V ULJKW WR
HGXFDWLRQ" +RZ ZRXOG RQH FKDUJH WKH 6WDWH ZLWK WK H GXW\ WR PDNH HGXFDWLRQ
SRVVLEOHIRUVXFKDJLUOFKLOG ± HYHQLILWLVZDQWHGQHLWKHUE\WKHSDUHQWVQRUWKH
FKLOG"
$W WKH VDPH WLPH WKHUH LV DOVR D QHHGWR UHFRJQLVHWKDW IRU PDQ\ UHDVRQV
VRPHSDUHQWVPD\QRWEH DEOH WRVHQGWKHLUFKLOGUHQWRVFKRROV 7KH\PD\QHHGWR
EH VXSSRUWHG LQ YDULRXV ZD\V WR EH DEOH WR HQURO LQ D VFKRRO DWWHQG WKH VFKRRO
UHJXODUO\DQGEHDEOHWRLPELEHHGXFDWLRQXSWRWKHHOHPHQWDU\OHYHO+RZFDQWKH
1DOLQL-XQHMD
ODZVPDGHWRSURWHFWWKHULJKWRIWKHFKLOGWRHGXFDWLRQDOVREHPDGHVHQV LWLYHWR
WKLVUHDOLW\"+RZFDQODZVPDNHHGXFDWLRQSRVVLEOHIRUVXFKFKLOGUHQ"
'HPDQG IRU(GXFDWLRQRI6DWLVIDFWRU\4XDOLW\
,W LV VDLG WKDW HGXFDWLRQ PXVW EH RI VDWLVIDFWRU\ TXDOLW\ 2QO\ ZKHQ
HGXFDWLRQVDWLVILHVTXDOLW\ZRXOGSHRSOHEHZLOOLQJWRS D\WKHRSSRUWXQLW\FRVWRI
VHQGLQJWKHLUFKLOGUHQWRVFKRROV/RJLFDOO\UHFRJQLWLRQRIWKHULJKWRIWKHFKLOGWR
HGXFDWLRQDQGRIWKHSRSXODUGHPDQGIRUHGXFDWLRQDOVRLPSOLFLWO\UHFRJQL]HVWKDW
WKHHGXFDWLRQSURYLGHGPXVWEHWKHNLQGRIHGXFDWLRQWKDWW KHSHRSOHZRXOGZDQW
IRUWKHLUFKLOGUHQ7KH1DWLRQDO3ROLF\RQ(GXFDWLRQUHVROYHG³,WVKDOOEH
HQVXUHGWKDWIUHHDQGFRPSXOVRU\HGXFDWLRQ RIVDWLVIDFWRU\TXDOLW\ LVSURYLGHGWR
DOO FKLOGUHQXSWR\HDUVRIDJH EHIRUHZHHQWHUWKH WZHQW\ ILUVWFHQWXU\´:H
ZLOODOODJUHHWKDWLWLVWLPHWRUHGHHPWKDWUHVROYH%XWWKHTXHVWLRQLV ± +RZWRGR
LW"
5DWLILFDWLRQRI&RQYHQWLRQRQ5LJKWVRIWKH&KLOG
,QGLDKDVDOVRUDWLILHGWKH&RQYHQWLRQRQWKH5LJKWVRIWKH&KLOGDQGLVQRZ
FRPPLWWHG WR D SURJUHVVLYH FKDQJH LQ LWV OHJLVODWLRQ LQ OLQH ZLWK WKH UDWLILHG
FRQYHQWLRQ$WWKHLQWHUQDWLRQDOPHHWVDW-RPWLHQDQG'DNDU,QGLD
FRPPLWWHGLWVHOIWRWKHDFKLHYHPHQWRIWKHJRDORIHGXFDWLRQIRUDOO,WLVH[SHFWHG
WKDW WKH SULQFLSOHV DQG WKH VSLULW RI WKHVH LQWHUQDWLRQDO WUHDWLVHV DQG GHFODUDWLRQV
ZRXOG EH UHIOHFWHG LQ WKH OHJLVODWLRQ RI VXFK LPSRUWDQFH DV WKH IROORZ XS
OHJLVODWLRQWRWKH)XQGDPHQWDO5LJKWWRHGXFDWLRQZKLFKPD\LQFLGHQWDOO\DOVREH
WKHILUVW&HQWUDOOHJLVODWLRQLQHOHPH QWDU\HGXFDWLRQ
3DUOLDPHQWDU\6WDQGLQJ&RPPLWWHH+5'5HFRPPHQGDWLRQV
7KH 'HSDUWPHQW5HODWHG 3DUOLDPHQWDU\ 6WDQGLQJ &RPPLWWHH RQ +XPDQ
5HVRXUFH'HYHORSPHQWWKDWKDGFRQVLGHUHGWKH&RQVWLWXWLRQ UG $PHQGPHQW%LOO
DQG KDG UHWXUQHG LW IRU UHGUDIWLQJ D QG IRU DFFRPPRGDWLQJ VRPH RI LWV
1,(3$2FFDVLRQDO3DSHU
UHFRPPHQGDWLRQVLQ1RYHPEHUKDGPDGHVRPHUHFRPPHQGDWLRQVWKDWKDYH
EHDULQJRQWKHIROORZXSOHJLVODWLRQ
)ROORZXSOHJLVODWLRQ&HQWUDO6NHOHWDO
7KHPRVWVLJQLILFDQWUHFRPPHQGDWLRQLQWKLVFRQWH[WZDVDVVWDWH GHDUOLHU
UHJDUGLQJ WKH QHHG WR IUDPH D &HQWUDO OHJLVODWLRQ ,W KDG UHFRPPHQGHG WKDW WKH
FHQWUDOOHJLVODWLRQVKRXOGEHVLPSOHLWVKRXOGEHVNHOHWDODQGLWVKRXOGLQGLFDWHWKH
&HQWUDO6KDUHLQWKHILQDQFLDOEXUGHQ7KHFRPPLWWHHKDGVDLG
³$IWHU D WKRURXJK GLVFXVVLRQ LQ WKH PDWWHU WKH &RPPLWWHH IHHOV WKDW WKH
&HQWUH VKRXOGQRW OHDYH HYHU\WKLQJ WRWKH 6WDWHV 7KH&HQWUH FRXOGPDNH
RQH VLPSOH OHJLVODWLRQ ZLWK VRPH VNHOHWDO IUDPHZRUN ZKLFK PD\ DOVR
LQGLFDWH WKH &HQWUDO VKDUH LQ WKH ILQDQFLDO EXUGHQ 7KH GHWDLOV FDQ EH
IRUPXODWHG E\ WKH UHVSHFWLYH 6WDWHV DFFRUGLQJ WR WKHLU UHTXLUHPHQWV 7KH
&HQWUDO *RYHUQPHQW PD\ WKHUHIRUH FRQVLGHU ZRUNLQJ RXW WKH QHFHVVDU\
OHJLVODWLRQ´3DUD
3HQDOSURYLVLRQRQSDUHQWVWREHDYRLGHG
7KHFRPPLWWHHPDGHVSHFLILF PHQWLRQRIWKHQHHGWRDYRLGDSURYLVLRQIRU
SHQDOW\ RQ SDUHQWVLQ WKH IROORZ XSOHJLVODWLRQ &RPSXOVLRQWKHFRPPLWWHHIHOW
ZDVRQWKH6WDWH*RYHUQPHQWVWRSURYLGHIRUHVVHQWLDOIDFLOLWLHV,WZDVRIWKHYLHZ
WKDWVRPHSDUHQWVPD\EHWRRSRRUWRVHQG WKHLUFKLOGUHQWRVFKRRO7RTXRWH
³7KH&RPPLWWHHVWURQJO\GHVLUHVWKDWVXFKSHQDOSURYLVLRQVRQWKHSDUHQWV
VKRXOGEHDYRLGHGLQWKHIROORZ XSOHJLVODWLRQWREHPDGH7KH&HQWUHPD\
PDNHQHFHVVDU\SURYLVLRQWRWKLVHIIHFWHLWKHULQWKHIROORZXSOHJLVODW LRQ
RULQWKHJXLGHOLQHVWKDWPD\EHLVVXHGWRWKH6WDWHV7KH&RPPLWWHHIHHOV
WKDWFRPSXOVLRQ VKRXOGEHRQ6WDWH*RYHUQPHQWVWRSURYLGHIRUHVVHQWLDO
IDFLOLWLHV IRU 8(( UDWKHU WKDQ RQ WKH SDUHQWV PDMRULW\ RI ZKRP DUH
VWUXJJOLQJIRUWKHLUVXUYLYDO´3DUD 7KXVRQHPD\QRWHWKDWWKHFRPPLWWHHLVFOHDUWKDWVRPHDFWLRQQHHGVWREH
WDNHQEXWLWLVQRWWKHSHQDO DFWLRQEXWVXSSRUWLYH DFWLRQWKDWLVQHHGHGLQWKHFDVH
RISDUHQWVZKRDUHQRWDEOHWRVHQGWKHLUFKLOGUHQWRVFKRRO
1DOLQL-XQHMD
$SDUWIURPWKHDERYH WZRVSHFLILFGLUHFWLRQVIRUWKHIROORZXSOHJLVODWLRQ
VRPHRIWKHRWKHUUHFRPPHQGDWLRQVRIWKH3DUOLDPHQWDU\6WDQGLQJ&RPPLWWHHDOVR
KDYHDPHVVDJHIRUWKHIROORZXSOHJLVODWLRQ7KHFRPPLWWHHUHFRPPHQGHG
R (PSKDVL]HTXDOLW\DQGLPSURYHFDSDFLWLHVRIWHDF KHUV
R )LQG ZD\V DQG PHDQV WR IDFH FKDOOHQJHV IURP OLWLJDWLRQ WR IROORZ WKH
MXVWLFLDEOHULJKWWRHGXFDWLRQ
R )RUPDOFHUWLILFDWLRQDIWHUWKH WK FODVV
R )UHH HGXFDWLRQ VKRXOG DOVR LQFOXGH YDULRXV RWKHU FRPSRQHQWV VXFK DV
WH[WERRNV VWDWLRQHU\ XQLIRUP RQH PHDO DQG WUDQVSRUWDWLRQ ZKHUHYHU
QHFHVVDU\HWF
R $GPLQLVWUDWLYHUHVSRQVLELOLW\VKRXOGEHOHIWWRVWDWHVIRULPSOHPHQWDWLRQ
DFFRUGLQJWRWKHLUFRQYHQLHQFH
R 'LUHFWLYHSULQFLSOHVWREHIROORZHGZKHUHYHUSRVVLEOH
:KDW6KRXOGWKH/DZ'HWHUPLQH"
5HWXUQLQJWRWKHPDLQTXHVWLRQ ± KRZVKRXOGWKHODZEHIUDPHGLQRUGHU
IRU LW WR HQVXUH WKDW HYHU\ FKLOG LV DVVXUHG RI WKH ULJKW WR HGXFDWLRQ WKH
DWWHPSW VR IDU KDV EHHQ WR SURYLGH D EDFNJURXQG WR WKLV H[HUFLVH &RPSXOVRU\
HGXFDWLRQLVDPHDQVRIVDIHJXDUGLQJWKHFKLOG¶VULJKWWRHGXFDWLRQ7KHH[SHULHQFH
RI LPSOHPHQWLQJ ODZV IRU FRPSXOVRU\ HGXFDWLRQ LQ ,QGLD LQ WKH SDVWFHQWXU\ KDV
VHUYHG WR VKRZ WKDW WKHUH KDV EHHQ OLWWOH DSSUHFLDWLRQ RI WKH QHHG WR DFFRUG D
SULRULW\VWDWXVWR PDVVHGXFDWLRQ 1HYHUWKHOHVVDQHZEHJLQQLQJDSSHDUVWRKDYH
EHHQ PDGH ZLWKD XQDQLPRXVGHFLVLRQ LQ ERWKKRXVHVRI WKH 3DUOLDPHQW WRSODFH
WKH ULJKW WR IUHH DQG FRPSXOVRU\ HGXFDWLRQ RQ WR WKH OLVW RI IXQGDPHQWDO ULJKWV
2WKHUUHFHQWGHYHORSPHQWVDOVRSUH VHQWDQHZIUDPHZRUNRISROLW\DQGVRFLHW\
7KH WDVN EHIRUH XV QRZ EHFRPHV RQH RI UHFRJQLWLRQ RI DOO WKHVH QHZ
FRQFHSWVDQGGHYHORSPHQWVRILPELELQJDOOWKHEDVLFSULQFLSOHVXQGHUO\LQJKXPDQ
ULJKWVFKLOGULJKWVULJKWVRISDUWLFLSDWLRQFRQVWLWXWLRQDO JXDUDQWHHVHWFRIWDNLQJ
1,(3$2FFDVLRQDO3DSHU
LQWRFRQVLGHUDWLRQDQG DFFHSWLQJ DOOWKHUHDOLWLHVRIKXPDQJUHHGVHOILVKQHVVDQG
IDLOLQJV DQG ZHDYLQJ WKHP DORQJ ZLWK RXU FRQFHSW RI JRRG HGXFDWLRQ LQWR D
VWURQJIDEULFWKDWZLOOVHUYHIRUPDQ\\HDUVWRSURYLGHHYHU\FKLOGZL WKWKHDELOLW\
WRVXFFHVVIXOO\QHJRWLDWHLWVZRUOG
,W LV D WDOO RUGHU EXW WKH ILUVW LVVXH WKDW PXVW EH UHVROYHG LV RQH RI
SDUWLFLSDWLRQRIWKHFRPPXQLW\DWODUJH7KHJUHDWHVWEDUULHUWRSDUWLFLSDWLRQKHUHLV
WKH EHOLHI DPRQJ OD\PHQ WKDW ODZPDNLQJ VKRXOG EH OHIW WR ODZ\HUV $ ORRN DW
VRPHRIWKHFRPSXOVRU\HGXFDWLRQVDFWVFDQVKRZWKDWWKHVHDUHEDVLFDOO\GLYLGHG
OLNH UHVHDUFK UHSRUWV LQWR IRXU RU ILYH PDLQ FRPSDUWPHQWV ,Q IDFW D VWXG\ RI D
IHZRIWKHVHDFWVFDQVHUYHWRUHDVVXUHPRVWDFDGHP LFLDQVWKDWLQGHHGWKHDQDORJ\
ZLWKDUHVHDUFKUHSRUWPD\QRWEHWRRIDUIHWFKHG&RQWHQW ZLVHRQHPD\ILQGWKH
IROORZLQJVHFWLRQV
7KH3UHDPEOH,QWURGXFWLRQWRWKHVWXG\
7KH7LWOH
3XUSRVHRIWKH$FW
6FRSHRIWKH$FW
'HILQLWLRQV2SHUDWLRQDOGHILQLWL RQV
0DLQ3URYLVLRQVVSHFLILFREMHFWLYHV
+RZWKHVHSURYLVLRQVDUHWREHLPSOHPHQWHGPHWKRGRORJ\
&KHFNVFURVVFKHFNV3UHFDXWLRQV
6RPHURXWLQHSURYLVLRQVSRZHUWRPDNHUXOHVHWF
3HQDOWLHVIRUFRQWUDYHQWLRQRIWKHSURYLVLRQVRIWKHDFW
0RVWRIWKHVHVHFWLRQVQHHGQRWFRQFHUQXVWKHOD\PHQ/D\PHQKRZHYHU
FDQDQGVKRXOGGHFLGHZKDWPXVWFRQVWLWXWHWKH0DLQ3URYLVLRQVDQGKRZWKH\DUH
WREHLPSOHPHQWHGVXFKDVIRUH[DPSOH³1RIHHVKDOOEHFKDUJHGIURPDQ\FKLOG
1DOLQL-XQHMD
IRUDWWHQGLQJDVFKRROPDLQWDLQ HGRXWRISXEOLFIXQGV´7KHOHJDOGHSDUWPHQWZLOO
ODWHUFRQYHUWLWLQWROHJDOODQJXDJHVXFKDV ³1RIHHVKDOOEHOHYLHGLQUHVSHFWRI
DQ\FKLOGIRUDWWHQGLQJDQDSSURYHGVFKRROZKLFKLVXQGHUWKHPDQDJHPHQWRIWKH
6WDWHJRYHUQPHQWRUDORFDODXWKRULW\´
+RZHYHUHYHQEHIRUHWKLVVWDJHWKHUHLVWKHQHHGWRGHOLEHUDWHRQPDQ\D
WLFNOLVKLVVXHDQGWKHQXPEHURILVVXHVWKDWQHHGWREHFRQVLGHUHGDUHOLPLWHGRQO\
E\WKH FDSDFLW\WRDQWLFLSDWHHYHQWXDOLWLHV$VDVWDUWVRPHRIWKH SRVVLEOHLVVXHV
DUHOLNHWKRVHSUHVHQWHGEHORZ
3RVVLEOH,VVXHV
,
5HODWHGWR)RUPRI/HJLVODWLRQ
x
x
x
x
x
x
+RZ ZLOO D &HQWUDO OHJLVODWLRQ GLIIHU IURP WKH SUHVHQW 6WDWH
OHJLVODWLRQV"
6KRXOG RQH DOVR SUHSDUH D 0RGHO OHJLVODWLRQ E\ &HQWUH IRU WKH
6WDWHV"
:KRP VKRXOG WKH OHJLVODWLRQ DGGUHVV & HQWUH WR VWDWHV" &KLOG WR
µ6WDWH¶"
6KRXOG LW EH D µ%DUHERQHV¶W\SH RI OHJLVODWLRQ RUVKRXOGLWVSHOO
RXWLQGHWDLOZKDWKDVWREHSURYLGHGDQGKRZ"
:KRP ZLOO WKH OHJLVODWLRQ HPSRZHU ± 7KH FKLOG SDUHQW WR
GHPDQG IDFLOLWLHV IRU HGXFDWLRQ IURP WKH 6WDWH 7 KH 6WDWH WR
FRPSHO HYHU\ FKLOG WR DWWHQG VFKRRO DQG SDUHQW WR VHQG 7KH
&HQWUH WR FRPSHO WKH IHGHUDO VWDWH JRYHUQPHQWV35 ERGLHV WR
SURYLGHIDFLOLWLHVIRUHGXFDWLRQ"
:LOO WKH OHJLVODWLRQ EH DSSOLFDEOH WR WKH WKLUG WLHU" :KR ZLOO
LPSOHPHQW WKH SURYLVLRQV RI WKH OHJLVODWLRQ" &DQ &HQWUDO
OHJLVODWLRQEHPDGHIRUWKHWKLUGWLHUERGLHVWRLPSOHPHQW"
,,
3UHDPEOH
,,,
,VVXHV5HODWHGWR6WDWHPHQWRI2EMHFWLYHV
x :KDWVKRXOGWKH3UHDPEOHVD\"
1,(3$2FFDVLRQDO3DSHU
DQG6FRSHRI/HJLVODWLRQ
x
:KDWZLOOEHWKHDLPVDQGREMHFWLYHVRIWKH DFW"
x
:KRP VKRXOGWKH OHJLVODWLRQHPSRZHU"7KH SDUHQWWRGHPDQG
HGXFDWLRQ IURP WKH µ6WDWH¶" 2U 7KH µ6WDWH¶ WR FRPSHO HYHU\
SDUHQW WR VHQG FKLOG WR VFKRRO" 2U WKH &HQWUH WR FRPSHO WKH
IHGHUDO VWDWH JRYHUQPHQWV WR SURYLGH HGXFDWLRQDO IDFLOLWLHV DQG
DWWHQGDQFH DXWKRULWLHV" +RZ VKRXOG WKLV EH UHIOHFWHG LQ WKH
$LPVDQG2EMHFWLYHV"6HFRQGO\KRZVKRXOGWKLVEHGRQH"
x
6KRXOG WKH OHJLVODWLRQ UHVWULFW LWVHOI WR DJH JURXS $UWLFOH
$RIWKH&RQVWLWXWLRQRULQFOXGH(&&(QHZ$UWLFOHDQG
)XQGDPHQWDOGXWLHVRISDUHQWV$UWLFOH $FODXVHµN¶"
x
:LOO WKH ULJKW WR HGXFDWLRQ LQFOXGH WKH RSSRVLWH ULJKW ±QRW EH
HGXFDWHG",IQRWZKDWZLOO EHWKH SHQDOW\IRUQRWSDUWLFLSDWLQJ
LQDQ\HGXFDWLRQDO3URJUDPPH"
5LJKW RI FKLOG WR HGXFDWLRQ ± RU WR µHGXFDWLRQ RI VDWLVIDFWRU\
TXDOLW\¶"&DQRQHPDNHDOHJLVODWLYHSURYLVLRQIRUTXDOLW\"
x
$UWLFOH $ VWDWHV WKDW WKH 6WDWH VKDOO SURYLGH IUHH DQG
FRPSXOVRU\ HGXFDWLRQ WR DOO FKLOGUHQ RI WKH DJH RI VL[ WR
IRXUWHHQ \HDUV LQ VXFK PDQQHU DV WKH 6WDWH PD\ E\ ODZ
GHWHUPLQH 6KRXOG WKH ODZ GHWHUPLQH KRZ WKH FKLOGUHQ ZLOO
KDYH WR FRPH WR WKH VFKRRO RU VKRXOG LW GHWHUPLQH WKH
µSURYLVLRQ¶RILWLHKRZWKHVWDWHVKDOOµSURYLGH¶IRUHGXFDWLRQ
± LHKRZLWVKDOOFRPPLWLWVIXQGVIRUWKLVSXUSRVH"+RZWKHVH
IXQGVVKDOOEHWUDQVIHUUHGIURPFHQWUHWRVWDWHWRWKLUGWLHUERG\
WRLQGLYLGXDOVFKRROV"
x
,9
,VVXHV5HODWHGWR3URYLVLRQV
x
x
x
,VVXHVRI6FKRROLQJ9V(GXFDWLRQ
,VµHGXFDWLRQ¶RUµVFKRROLQJ¶EHLQJPDGHFRPSXOVRU\"
:KDW ZLOO EH FRPSXOVRU\" 7R DWWHQG VFKRRO" 7R DWWDLQ D
JLYHQOHYHORIHGXFDWLRQ":KDWVKRXOGWKHSURYLVLRQVD\"
:KDW LV WR EHWKH SRVLWLRQ UHJDUGLQJ µDOWHUQDWLYH¶VFKRROLQJ"
+RZ ZLOO IOH[LELOLW\ EH LQFRUSRUDWHG ZKHUH QHHGHG E\ WKH
FKLOG"
1DOLQL-XQHMD
x
x
x
x
x
x
x
x
x
x
x
x
x
:KDW LI D VWDWH JRYHUQPHQW ZHUH WR UHJLVWHU HYHU\FKLOG LQ D
µGLVWDQFHHGXFDWLRQ¶SURJUDPPH"
:KDWLIWKHVFKRROLVXQUHFRJQLVHG":KDWDERXWFHUWDLQW\SHV
RIµPDGDUVDV¶"
+RZ ZLOO PRQLWRULQJ EH GRQH RI ZKR LV JRLQJ ZKHUH DQG
ZKLFKFKLOGLVQRWDWWHQGLQJVFKRRO"
:KDWDERXWKRPHWXWRULQJ"
+RZ ZLOO LW EH GHWHUPLQHG WKDW WKH FKLOG KDV DWW DLQHG
HGXFDWLRQXSWRDFHUWDLQOHYHO"
2QZKRPZLOOWKHRQXVOLH ± RQWKHFKLOGWRSURYHWKDWKHVKH
LVUHFHLYLQJHGXFDWLRQRIVDWLVIDFWRU\VWDQGDUGRURQWKH6WDWH
WR WHVW ZKHWKHU RU QRW WKH FKLOG LV UHFHLYLQJ HGXFDWLRQ RI D
VXLWDEOH VWDQGDUG" :KDW VKRXOG EH WKH SURYLVLRQV WKDW ZLOO
WDNHFDUHRIWKHVHLVVXHV"
,VVXHVRI6FKRROLQJ)DFLOLWLHV
3URYLVLRQRILQIUDVWUXFWXUH"
:KDW VKRXOGEHSURYLGHGDQGDFFRUGLQJ WRZKDWFULWHULDDQG
QRUPV"
6KRXOG WKLV EH VSHFLILHG LQ OHJLVODWLRQ RU LQ IROORZ XS UXOHV
JLYHQ WKH H[SHULHQFH WKDW UXOHV UHPDLQ XQPDGH QRW XSGDWHG
IRU\HDUV"
0LFUROHYHOSODQQLQJ"
,VVXHVRI'LVDGYDQWDJHG&KLOGUHQ
:KDW VKRXOG EH SURYLGHG IRU FKLOGUHQ ZLWKRXW SDUHQWV ±
DEDQGRQHG FKLOGUHQ QHJOHFWHG FKLOGUHQ UXQ DZD\ FKLOGUHQ
VWUHHWFKLOGUHQ"
:KDWSURYLVLRQVDUHQHHGHGIRUZRUNLQJFKLOGUHQ"
:KDW SURYLVLRQV VKRXOG EH PDGH IRU GLVDEOHG FKLOGUHQ"
6KRXOG WKHUH EH GLVWLQFWLRQ EHWZHHQ GLIIHUHQW IRUPV RI
GLVDELOLW\HJPHQWDOYLVXDOKHDULQJORFR PRWRUVSDVWLFHWF"
,IVRZLWKZKDWSURYLVLRQV"
1,(3$2FFDVLRQDO3DSHU
x
x
x
x
x
x
:KDW DERXW WKH SRRU WKH FKLOGUHQ RI QRPDGLF PLJUDWRU\
JURXSV UHPRWH DUHDV DUHDV ZKLFK EHFRPH LQDFFHVVLEOH LQ
VRPH SDUWV RI WKH \HDU FKLOGUHQ LQ VOXPV FKLOGUHQ ZKR DUH
RYHUDJH FKLOGUHQ ZKR GURS RXW DQG KDYH WR UHMRLQ ZKDW
SURYLVLRQVDUHQHHGHGIRUWKHV HGLIIHUHQWJURXSV"
,VVXHRIµ)UHH¶(GXFDWLRQ
:KDW VKRXOG EH IUHH" :LOO WKH JXDUDQWHH WR SURYLGH IUHH
HGXFDWLRQ DSSO\ WR SULYDWH VFKRROV" :K\+RZ WR H[HPSW
WKHP"
:KDW ZLOO EH IUHH" 7XLWLRQ" 2U WKH ZKROH VFKRROLQJ
H[SHULHQFH" %RRNV" 8QLIRUP" 6WDWLRQHU\ " 7UDQVSRUW"
%RDUGLQJDQGORGJLQJ"0LGGD\PHDOV"6KRXOGWKHOHJLVODWLRQ
VSHFLI\WKLVRUVKRXOGLWEHOHIWWRµUXOHV¶"
,VVXHRI4XDOLW\DQG6WDQGDUGV
+RZ FDQ RQH PDNH VRPH SURYLVLRQV IRU VXVWDLQHG
LPSURYHPHQWRITXDOLW\RILQGLYLGXDOVFKRROV"
&DQ³6DWLVIDFWRU\´TXDOLW\EHOHJLVODWHG"
+RZFDQRQHPDNHDOHJLVODWLYHSURYLVLRQIRUTXDOLW\"
1DOLQL-XQHMD
x
x
x
x
9
x
,VVXHRI3DUHQWV¶GXW\
+RZ FDQ RQH EULQJ SDUHQWV RQ ERDUG ± VLQFH LW ZLOO EH WKHLU
IXQGDPHQWDO GXW\ WR DOORZ WKHLU FKLOG WR UHFHLYH HGXFDWLRQ ±
ZLWKRXW VXEMHFWLQJ WKHP WR SRWHQWLDO KDUDVVPHQW LQ FDVH RI
JHQXLQHGLIILFXOW\"
:KRZLOOGHWHUPLQHµJHQXLQHQHVV¶RIGLIILFXOW\"
&DQ D JHQXLQH GLIILFXOW\ WDNH DZD\ WKH ULJKW RI WKH FKLOG WR
HGXFDWLRQ"
,VVXHRI3RZHUWR3DUHQWV
&DQVKRXOGWKHSDUHQWVZKRKDYHDVWDNHLQ WKHHGXFDWLRQRI
WKHLUFKLOGUHQKDYHDODUJHUUROHWRSOD\"
&DQWKLVOHJLVODWLRQHPSRZHUWKHP"+RZ"
,VVXHV 5HODWHG 7R (IIHFWLYH ,PSOHPHQWDWLRQ ± *LYLQJ (IIHFW 7R
3URYLVLRQVRI7KH$FW
x
x
x
x
,VVXHRI$GHTXDF\RI)XQGLQJ
+RZ FDQWKH IROORZXS OHJLVODWLRQ HQVXUHWKDW WKLVWLPH WKH
FRPSXOVRU\ SURYLVLRQ RI IDFLOLWLHV ZLOO QRW ODQJXLVK GXH WR
ODFNRIIXQGV"
+RZFDQWKHIROORZXSOHJLVODWLRQHQVXUHWUDQVIHURIVKDUHRI
ILQDQFLDOEXUGHQZKHWKHUIURPWKH&HQWUHWRWKH6WDWHRUIURP
WKH6WDWHWRWKH35ERGLHV"
6SHFLILFDWLRQRI5ROHV
7KH UG DQGWK $PHQGPHQWVWRWKH &RQVWLWXWLRQSURYLGHD
UROH WR WKLUG WLHU ERGLHV 6RPH 6WDWHV KDYH EURXJKW LQ
OHJLVODWLRQ WR JLYH WKHP D UROH LQ HGXFDWLRQ +RZ FDQ WKH
HQYLVDJHGOHJLVODWLRQLQYROYHWKH35ERGLHVHIIHFWLYHO\"
0RQLWRULQJRIZKDWLV+DSSHQLQJ
'RHV WKH PDQQHU RI PRQLWRULQJ RI FRPSOLDQFH E\ 81
$JHQFLHVKDYHDOHVVRQIRUXV"
&RUUHFWLYH0HFKDQLVP± $W1HDUHVW/HYHO
1,(3$2FFDVLRQDO3DSHU
x
9,
:KDW PHFKDQLVP FDQ RQH VXJJHVW DW WKH QHDUHVW OHYHO WR
HIIHFWLYHO\GHDOZLWKJULHYDQFHV"
,VVXHV5HODWHGWR3HQDOWLHV$FFRXQWDELOLW\
x
,VWKHUHDQHHGWRGLVFXVVZKRZLOOJRWRMDLO"
x
:KDW SURYLVLRQV FDQ WKLV DFW LQFOXGH VR WKDW WKHUH DUH
GLVLQFHQWLYHVIRUWKHQRQ LPSOHPHQWDWLRQRIWKHSURYLVLRQVRI
WKHIROORZXSOHJLVODWLRQVXFKDV
x
)XQGDPHQWDOULJKWVDUHDFWLRQDEOHLQFRXUWVDJDLQVWVRPHERG\
± JRYHUQPHQWVRURWKHUV:KRPVKRXOGWKHFHQWUDOOHJLVODWLRQ
SURYLGHIRUWDNLQJDFWLRQDJDLQVW"
)RUQRQSURYLVLRQRIIXQGV
)RUQRQSURYLVLRQRIVFKRROLQJIDFLOLWLHV
)RU QRW DWWHPSWLQJ WR HTXDOL]H GLVDGYDQWDJH RI WKH
GLVDGYDQWDJHG
)RUQRWHQVXULQJTXDOLW\HGXFDWLRQ
7KHUHLVQRGRXEWWKDWWKHDERYHOLVWRILVVXHVLVRQO\VXJJHVWLYH,WFDQE\
QR PHDQV FODLP WR EH D FRPSUHKHQVLYH RQH $V PRUH DQG PRUH PLQGV DGGUHVV
WKLV SUREOHP PRUH LVVXHV ZLOO FRPH WR WKH IRU H DQG LGHDV ZLOO EH JHQHUDWHG RQ
KRZ WRDGGUHVVWKHVHLVVXHVLQWKH IROORZ XSOHJLVODWLRQ 7KH YHU\JHQHUDWLRQRI
PRUHLVVXHVZLOOWXUQWKHIRFXVRIGLVFXVVLRQDZD\IURPLWVREVHVVLRQZLWKSHQDOW\
WR SDUHQWV WR LWV WUXH SXUSRVH RI HQDEOLQJ HYHU\ FKLOG WR KDYH WKH EHQHILW RI D
FXUULFXOXPRITXDOLW\OHDUQLQJIRUDPLQLPXPRIHLJKW\HDUV
1DOLQL-XQHMD
&RQFOXVLRQ
7KLV SDSHU LV DQ DWWHPSW WR HTXLS WKH UHDGHUV ZLWK DQ RYHUYLHZ RI WKH
KLVWRULFDODQGUHFHQWHYHQWVUHODWLQJWRWKHWDVNRIHGXFDWLRQRIWKHPDVVHVLQ,QGL D
,W DOVR DFTXDLQWV WKHP ZLWK VRPH RI WKH LVVXHV VXUURXQGLQJ WKH FRQVWLWXWLRQDO
DPHQGPHQWWRPDNH HGXFDWLRQ LQWRDIXQGDPHQWDOULJKWRIHDFKFKLOG KHQFHWKH
FDVH IRU D IROORZXS OHJLVODWLRQ 7KH IDFW WKDW D IROORZ XS OHJLVODWLRQ VKDOO
GHWHUPLQH WKH PDQQHU LQ ZKLFK WKLV ULJKW VKDOO EH UHDOLVHG HQMRLQV RQ DOO ZHOO ZLVKHUV RI WKLV FDXVH WR DW OHDVW EHFRPH DZDUH RI WKH LVVXHV LQYROYHG LI QRW WR
FRQWULEXWHWKHLUFUHDWLYHLQSXWVWRWKHGUDIWLQJRIDODZWKDWZLOOZRUNWRPDNHWKH
ULJKWWRHGXFDWLRQDUHDOLW\
:H PD\ EHDU LQ PLQG WKDW PRVW SDUHQWVWKHVH GD\VKDYH FRPH WR UHDOL]H
WKH LPSRUWDQFH DQGWKH GHVLUDELOLW\RIJRRGHGXFDWLRQIRUWKHLUFKLOGUHQDQGWKDW
WKRVH ZKR FDQ DUHDOUHDG\ DWWHQGLQJ VFKRRO /HJLVODWLRQ LVQHHGHGPXFK OHVVWR
PDNHWKHFKLOGUHQFRPHWRVFKRROWKDQWRPDNHLWSRVVLEOHIRUWKRVHZKRFDQQRW
,Q WKH FRQWH[W RI UHDOLWLHV RI WKH OLYHV RI FKLOGUHQ RI WKH SRRU WKLV ZRXOG
PHDQ WKDW WKH OHJLVODWLRQ VKRXOG GHDO ZLWK PRUH WKDQ MXVW WKH SURYLVLRQ RI
VFKRROLQJ IDFLOLWLHV DQG LQFHQWLYHV 5DWKHU LW VKRXOG FRQFHUQ LWVHOI ZLWK D ODUJH
DUUD\RILVVXHVUDQJLQJIURPPDNLQJVFKRROLQJDFFHVVLEOHDQGDYDLODEOHWRPDNLQJ
WKHFRQWHQWVDQGSURFHVVHVRIHGXFDWLRQDFFHSWDEOHWRDOO,WVKRXOGPDNHLWD GXW\
RIWKHSURYLGHUVRIHGXFDWLRQWRILQGZD\V DQGPHDQV RIPDNLQJHGXFDWLRQPRUH
DFFHVVLEOHDQGDFFHSWDEOHWRDOOFKLOGUHQ
1,(3$2FFDVLRQDO3DSHU
5HIHUHQFHV
$IOIDQLFLQGHEDWHVGHEDWHVKWP&RQVWLWXHQW$VVHPEO\GHEDWHV
$IOIDQLFLQ&$%(
$\\DU 59 9DLG\DQDWKD µ(GXFDWLRQDO 3ODQQLQJ DQG $GPLQLVWUDWLRQ LQ ,QGLD
5HWURVSHFW DQG 3URVSHFW¶ -RXUQDO RI (GXFDWLRQDO 3ODQQLQJ DQG $GPLQLVWUDWLRQ
9RO9,,1R$SULOSS % 6KLYD 5DR 7KH )UDPLQJ RI WKH &RQVWLWXWLRQ 6HOHFW 'RFXPHQWV ,QGLDQ
,QVWLWXWHRI3XEOLF$GPLQLVWUDWLRQ1HZ'HOKL
'HVDL '0 8QLYHUVDO &RPSXOVRU\ DQG )UHH 3ULPDU\ (GXFDWLRQ LQ ,QGLD
%RPED\,QGLDQ,QVWLWXWHRI(GXFDWLRQ
'UH]H-HDQDQG6HQ$PDUW\D %DVLF(GXFDWLRQDVD3ROLWLFDO,VVXH-RXUQDORI
(GXFDWLRQDO3ODQQLQJDQG$GPLQLVWUDWLRQ9RO,;
*KRVK6& $+LVWRU\RI(GXFDWLRQLQ0RGHUQ,QGLD1HZ'HOKL
2ULHQW/RQJPDQ/WG
*RYHUQPHQWRI,QGLD (GXFDWLRQLQ,QGLD9RO,,
-DLQ /& $UH 2XU %XGJHW 0DNHUV )DLWKIXO WR WKH &RQVWLWXWLRQ ± $ 7RXU RI WKH
%XGJHWV3XQH1DWLRQDO&HQWUHIRU$GYRFDF\6WXGLHV
-XQHMD1DOLQLC5LJKWRIWKH&KLOGWR(GXFDWLRQDODQG,VVXHVLQ,PSOHPHQWDWLRQRI
&RPSXOVRU\ (GXFDWLRQ 3HUFHSWLRQV RI (GXFDWLRQDO $GPLQLVWUDWRUV¶ 1HZ
)URQWLHUVLQ(GXFDWLRQSS
BBBBBBBBBBB &RPSXOVRU\ (GXFDWLRQ LQ ,QGLD WKHSROLF\ LQ SUDFWLFH 1DWLRQDO
,QVWLWXWHRI(GXFDWLRQDO3ODQQLQJDQG$GPLQLVWUDWLRQ0LPHR
BBBBBBBBBBB (QIRUFHPHQWRI&RPSXOVRU\(GXFDWLRQLQ,QGLD7KH(PHUJLQJ
,VVXHV 7KHPH 3DSHU RI WKH C6HPLQDU RQ 3ROLF\ ,VVXHV DQG ,PSOLFDWLRQV RI
(QIRUFHPHQWRI&RPSXOVRU\(GXFDWLRQ
1,(3$
BBBBBBBBBBB 5HSRUW RI WKH 1DWLRQDO &RQVXOWDWLRQ RQ )UDPLQJ WKH )ROORZ8S
/HJLVODWLRQWRWKH)XQGDPHQWDO5LJKWWR(GXFDWLRQ1,(3$PLPHR
.DVK\DS6XEKDVK8QGHUVWDQGLQJWKH&RQVWLWXWLRQ 1HZ'HOKL1DWLRQDO&RXQFLO
RI(GXFDWLRQDO5HVHDUFKDQG7UDLQLQJ
.DXU .XOGLS (GXFDWLRQ LQ ,QGLD 3ROLFLHV 3ODQQLQJ DQG
,PSOHPHQWDWLRQ&KDQGLJDUK&55,'
1DOLQL-XQHMD
.XPDU .ULVKQD 3ROLWLFDO $JHQGD RI (GXFDWLRQ $ 6WXG\ RI &RORQLVW DQG
1DWLRQDOLVW,GHDV1HZ'HOKL6DJH
1DLN - 3 3ROLF\ DQG 3HUIRUPDQFH LQ ,QGLDQ (GXFDWLRQ 1HZ 'HOKL .*
6DL\LGDLQ0HPRULDO7UXVW
BBBBBBBBBBB 7KH (GXFDWLRQ &RPPLVVLRQ DQG $IWHU 1HZ 'HOKL $OOL HG
3XEOLFDWLRQ
3HWULH $PDQGD - +RPH (GXFDWRUV DQG WKH /DZ ZLWKLQ (XURSH ,Q WHUQDWLRQDO
5HYLHZRI(GXFDWLRQ
5HGG\ .1 3DWWHUQ RI )LQDQFLQJ 3ULPDU\ (GXFDWLRQ LQ ,QGLD -RXUQDO RI
(GXFDWLRQDO3ODQQLQJDQG$GPLQLVWUDWL RQ9RO,;L
6DL\LGLDQ .* 1DLN -3 DQG +XVDLQ 6$ &RPSXOVRU\ (GXFDWLRQ LQ ,QGLD
'HOKL8QLYHUVDO
7RPDVHYVNL . *RYHUQPHQWDO+XPDQ5LJKWV2EOLJDWLRQLQ(GXFDWLRQ5LJKWWR
(GXFDWLRQ 3DSHU 1R /XQG 5DXO :DOOHQEXUJ ,QVWLWXWH R I +XPDQ 5LJKWV DQG
+XPDQLWDULDQ/DZ
7KH6XSUHPH&RXUW&DVHV9RO,(DVWHUQ%RRN&RSS 7LODN-%* +RZµ)UHH¶LV)UHH3ULPDU\(GXFDWLRQLQ,QGLD"2FFDVLRQDO3DSHU
1,(3$
81(6&2 ,QWHUQDWLRQDO <HDU %RRN RI (GXFDWLRQ 9RO ;;;9,,, ³3ULPDU\
(GXFDWLRQRQWKH7KUHVKROGRIWKHVW &HQWXU\´
:HLQHU 0\URQ 7KH &KLOG DQG WKH 6WDWH LQ ,QGLD &KLOG /DERXU DQG (GXFDWLRQ
3ROLF\LQ&RPSDUDWLYH3HUVSHFWLYH3ULQFHWRQ3ULQFHWRQ8QLYHUVLW\3UHVV
1DOLQL