Standards

I. The FIRST Research Consortium, founded in May, 2003 as a not-for-profit Association of Standards-Based Research Providers, and recognizing that surveys indicate that three out of every four investors are �most influenced� by an Analyst report, believes it to be in the public�s interest to define the provision of such research, and, in conjunction with ethical Providers, to from time to time establish, promulgate and update acceptable industry-wide umbrella �Standards of Practice,� and to fully inform and educate the industry and the public as to these �Standards� and deviations therefrom.

A. Such research Providers may be defined or classified as follows:

Institutional Research Providers are those that offer analytical research internally, or to institutional or retail clients and/or to the general public. Often such Providers are brokerages or investment banks, and their Analysts may be in-house or contractual.

Subscriber-Based Research Providers are those that offer analytical research to institutional (brokerage, money management, investment banking, hedge fund) clients and/or the investing public in exchange for an annual or monthly subscription fee, and/or a per-report fee.

Sponsored Research Providers are those that offer analytical research to institutional and/or the general investing public for a fee. The fee may be paid by any entity.

B. Standards of Practice for Research Providers as contained in this document and promulgation may be defined as those that:

Are generally applicable to all classifications of Providers and the Analysts that are employed by or contracted to them.

Are specifically applicable to each individual classification of Provider and Analysts that are employed or contracted to such Provider.

Incorporate, where applicable, directly, by reference, rules and regulations, the ethics, standards, guidelines and recommended practices and procedures established by other standards-setting entities, such as the CFA Institute, the National Investor Relations Institute, Investorside, The U.S. Securities and Exchange Commission, the NASD, the New York Stock Exchange, exchanges and institutions outside the U.S. and others. In cases where more than one �standard� conflicts, the higher standard incorporated here for the industry at large shall prevail. Abide by the letter and spirit of all applicable laws and regulations of any and all Government or Self-Regulatory authorities under whose jurisdiction their business falls.

Address the Missions of the �Standards,� first and foremost to a) eliminate or reduce Conflict, b) to maximize Transparency, c) to assure recipients of all research of the qualifications of the Analyst, and to publish the Analyst�s reports, d) to insure Fairness in the timely and knowledgeable usage of research among all classifications of Investor through Full Disclosure, e) to advance independence in coverages by further assurances that the Analyst�s work product is his or hers without influence from any source, f) to accept, where applicable, Independent Monitoring of its stated and/or adopted Procedures and Practices, including these, and g) to accept submission to Peer Review and public disclosure of any deficiencies and if necessary, possible termination from further participation in the process.

C. A Mission of all Research Providers is to eliminate, or minimize Conflict.

To accomplish this objective:

No research Provider, nor active management and/or immediate family members of such active management, with the sole exception of those, such as brokerages or investment banks, in active compliance with the rules or regulations established by an SRO, may own or trade in the equities of any public company under coverage. For such an exception to be acceptable under these �Standards,� full disclosure regarding such ownership and/or trading practices must be contained in each report and in each announcement regarding such reports.

No Analyst employed by a research Provider or his or her immediate family members, may own any investment in, nor trade in the equities of any company he or she covers. Nor may any Analyst covering a company own or trade in the equities of another public company that may be impacted or be perceived to be impacted, either positively or negatively, by the Analyst�s primary coverage of a company in its sector or sphere of influence.

Analysts� incomes shall not be dependent on the outcome of their reports, and Providers� fees, if any, shall not be dependent on the outcome of their reports.

Neither Providers nor Analysts are obligated to provide draft copies of reports to the company, but in the interests of accuracy, such copies may be submitted only to an officer of the company under coverage, absent any discussion of target prices and/or ratings, and for errors and omissions only, to assure that the information contained in the report does not contain material factual omissions or inaccuracies.

Draft copies of reports may not be shown to any subscriber, sponsor or other entity with the sole exception of an officer of the company as stated above.

The independence of a report shall be compromised if the Provider or a closely-related entity is also engaged in the provision of consulting, funding, investment banking, investor relations, or promotion, with the exception of agnostic visibility services in which no recommendation is made by the Provider or such entity, and which is fully disclosed and transparent. Maximized visibility services that are non-promotional are endorsed by the U.S. Securities and Exchange Advisory Committee on Smaller Public Companies as part of its Congressional mandate to enhance market liquidity for exchange-listed companies.

If a Provider�s services cross from subscription-based to sponsored, or vice versa, for example, at any time, the Provider is obligated to fully disclose that in its reports and announcements, and to modify its �Standards� to fit the specific Practices required of each segment of its services.

If a Provider perceives any activity in which it may be engaged could be correctly or incorrectly believed by a third party to be a potential Conflict, whether or not the Provider agrees with the perception, the Provider shall disclose and explain the activity.

All research whose findings, either via a report or an announcement about the report, is immediately or at a later date made available to the general public, must be produced for the benefit of shareholders and the investing public, and may not be produced for the benefit of a company, its management or any other entity.

Third party disseminators, such as press release services, financial portals, and research information services shall not hold or exercise any policies or procedures that undermine any of the Standards contained in this document or in any way impede the direct transmission of announcements, reports and other information to the general investing public under the subject companies� tickerized exchange symbols by the ethical Providers adopting these Standards, or that would cede control of such announcements or distributions to the subject companies.

D. A Mission of all Research Providers is to maximize Transparency.

To accomplish this objective:

Research Providers must fully disclose their business models, including the source and amount of fees if a report is Sponsored, or the Subscription fees if a report is part of a subscription fee structure. Such disclosures must be made in both the reports and any and all public announcements.

All such communications shall also meet both the letter and the spirit of U.S. Securities and Exchange Commission Regulation 17(b).

If communications come from the issuer or a third party, it is the responsibility of the Provider to advise the issuer and/or third party that its reports or summaries may not be issued without the inclusion of these full disclosures, and if the Provider is ignored, it is the responsibility of the Provider to so inform the public.

E. A Mission of all Research Providers is to disclose Analyst qualifications and to publish all reports submitted for issuance by its qualified Analysts.

To accomplish this objective:

Only Analysts credentialed by professional peer-reviewed organizations, or otherwise qualified by several years of supervised or supervisory research reporting for recognized financial institutions, and only adherents to the �Standards and Ethics� of the CFA Institute should be allowed to produce research.

The names and credentials of Analysts producing the research must be included in reports published by Research Providers, along with an attestment thereto that the Analyst�s work product is purely his or her own without influence or interference.

Only qualified Analysts shall determine what to publish and when to publish. Research Providers are obligated to distribute the qualified Analyst�s report upon his or her submission.

A Supervisory Analyst or Department head may not hold a previously-qualified Analyst�s report unduly from publication and distribution. If a dispute occurs over the quality of the report or any other matter, the Provider must promptly submit any unresolved issues relating to such a report to a previously-established independent mediation process that works in a timely manner.

F. A Mission of all Research Providers is to insure Fairness in the timely and knowledgeable usage of research among all classifications of Investor through Full Disclosure.

To accomplish this objective:

No announcements subsequent to the distribution of a report to a class of investor, subscriber or other entity shall thereafter be made to the general public or to a classification of investor not included in the initial distribution of a report without also making the same full report available to the recipients of a subsequent announcement, either free, or at a reasonable cost that is comparable to the amount paid by the original recipients.

Where a report has been issued previous to a public announcement, the research Provider has a responsibility to notice the investing public in any subsequent announcement as to the date the report was previously issued, as well as who received the report.

When and if a report is issued to the general investing public, it is the responsibility of the Provider to maximize the Visibility and Distribution Channels in view of the U.S. Securities and Exchange Commission�s Congressional Mandate to maintain market liquidity for the equities of listed public companies, and to insure that all classifications of investor receive the report and/or its summary in an equitable and timely manner.

G. A Mission of all Research Providers is to participate in applicable Independent Monitoring of their procedures, processes and Practices, as well as submission to Peer Review to further assure recipients of research and/or the general investing public that those procedures are employed and implemented in Practice as stated and disclosed.

To accomplish this objective:

Research Providers adopting these Standards shall, where applicable and permissible, accept independent monitoring of their procedures, processes and Practices by an independent entity, such as the not-for-profit Shareholders Research Alliance, Inc., as the officers of the FIRST Research Consortium may engage for these purposes.

Research Providers adopting these Standards must accept submission to Peer Review by the FIRST Research Consortium, and to participate in the process of Peer Review for other Members, including but not limited to serving on a Peer Review committee or panel. All Members may vote for such committee. The Chair may appoint any qualified committee Members to serve on a specific Peer Review panel. Those engaged in Peer Review are empowered to take any action, at their sole determination, from recommendations for changes in procedures to disciplinary sanctions to termination from Membership in the FIRST Research Consortium, except that termination must be unanimous by the committee and subsequently approved by the entire Consortium. A company subject to Peer Review may not participate in its own determination but may submit any information to those serving in the process prior to any vote or determination.

Research Providers adopting these Standards shall encourage their Analysts to join applicable organizations and societies such as the CFA Institute that have Peer Review for their own memberships and/or credentialed Members.

II. The Investorside Research Association, is a non-profit trade association of investment research providers that do not engage in investment banking, company consulting or research-for-hire. Its members constitute the leading investment research firms in the world, providing research that works purely for investors. The business model for Investorside members is primarily via Subscriptions and/or fee-per-report.

A. The Investorside Research Association serves its members through three primary functions:

Certifying Research Providers � Investorside certifies that its members are free of investment banking, consulting, and research-for-hire conflicts and provides certified member firms with the trademarked Investorside Seal.

Promoting the Growth of Independent Research � Through Investorside.org, annual conferences and regular media communication, Investorside markets its member firms to individual and institutional investors.

Promoting Government Policy, that Encourages the Use of Independent Research � Investorside represents its members' interests before regulators, law-makers and members-of-industry, promoting the use of investment research that is aligned with investor interests.

B. The Investorside Research Association has promulgated a publicly-available Code of Ethics for Certified Providers of Investorside Research that are endorsed and further adopted by the FIRST Research Consortium, and further promulgated by reference in these �Standards Of Practice For Research Providers,� and extended as specific to the Subscriber-based segment of independent research providers:

To be worthy of investor trust, members shall:

Maintain Highest Standards of Integrity and Professionalism:

Act and conduct all business with the highest standards of integrity and professionalism in the provision of investment research.
 

Abide by the letter and spirit of all applicable laws and regulations of any and all Government or Self-Regulatory authorities under whose jurisdiction their business falls.
 

Encourage the highest standards of integrity and professionalism by Investorside members. Not conduct or represent any business which would subordinate or be inimical to investor interests or undermine the mission of the Investorside Research Association.

Promote Truth and Fair Representation in Investment Research:

Endeavor to restore investor trust in investment research through the truthful and fair representation of the Investorside logo and seal on only conflict-free research.
 

Uphold and promote the principles of truth in advertising and fair representation, through the provision of accurate and meaningful research disclaimers and marketing materials.
 

Align their financial interests with those of investors and not of the companies who are the subject of investment research coverage.
 

Avoid even the appearance of impropriety by the forthright and proactive disclosure of all personal or proprietary interest in the subject or outcome of their research coverage.

Serve Investors Forthrightly:

Conduct no investment banking services, nor primarily perform company consulting.
 

Commit to educate investors how they can protect themselves by seeking transparency and accountability as to how portfolio commissions are spent for research and how credit ratings are funded.

III. The Association of Standards-Based Independent Research Providers, formerly The FIRST Research Consortium (now the umbrella entity for these expanded �Standards,�) was founded in May, 2003 as an Association of Standards-Based Independent Research Providers. ASBIRP, recognizing that surveys indicate that nearly nine out of ten investors believe �legitimate fee-based research is objective and useful,� and that �Enrollment in standards-based research is an important measure of a companys commitment to transparency and Good Governance,� has promulgated these �Standards for Independent Research Providers, to serve as an ethical bond between Providers, enrolled companies and their shareholders.

A. Standards For Independent Research Providers:

1. Ethical precepts are an essential element of professional independent research, establishing the credibility necessary to understanding and accepting the research Provider�s analytical output. Thus:

a. These Standards incorporate by reference the Analyst �Standards and Ethics of the CFA Institute, the Issuer / Analyst Guidelines jointly adopted by the CFA Institute and National Investor Relations Institute, and the appropriate language in NASD Rule 2711, Regulation AC, as well as other recognized industry guides; and

b. Once a company has enrolled for coverage, the responsibility of the fee-based independent research Provider and its assigned Analyst(s) is to the public and to a company�s shareholders and investors, and not to any company or to management.

  2. Qualified Analysts are fundamental to the production of valid analytics. Thus:

a. Only Analysts credentialed by professional peer-reviewed organizations, or otherwise qualified by several years of supervised or supervisory research reporting for recognized financial institutions, and only adherents to the �Standards and Ethics� of the CFA Institute should be allowed to produce research published by fee-based independent research Providers;

b. The names and credentials of Analysts producing the research shall be included in reports published by independent research Providers, along with an attestment thereto that the Analyst�s work product is purely his or her own without influence or interference; and

c. Only qualified Analysts shall determine what to publish and when to publish. Independent research Providers are obligated to distribute the qualified Analysts report upon publication.

3. Transparency is vital to the publication and dissemination of investment data and fundamental analysis, and is an ethical responsibility of the fee-based independent research Provider. Thus:

a. Fee-based independent research Providers shall disclose all amounts of compensation received or to be received for the preparation, publication and dissemination of research, research summaries or other announcements not only in the reports but also in whatever form such material is disseminated;

b. All such communications shall include the names and identities of the payers, and if a third-party or third-parties, their names and identities, as well as their relationship(s) to the issuer;

c. All such communications shall also meet both the letter and the spirit of U.S. Securities and Exchange Commission Regulation 17(b);

d. If communications come from the issuer, it is the responsibility of the Provider to advise the issuer that its reports or summaries may not be issued without the inclusion of these full disclosures, and if the Provider is ignored, it is the responsibility of the Provider to so inform the public; and further,

e. Ratings and targets shall not be issued as recommendations or stock price predictors, and should not be issued or published in the absence of a full, publicly-accessible report. Where a report has been issued previous to a public announcement, the research Provider has a responsibility to notice the investing public as to the date the report was previously issued, as well as who received the report.

4. Conflicts are inimical to credible professional research. Shareholders and investors need to feel comfortable that research is produced and published in an environment that is as free of Analyst influences as possible. Thus:

a. Analysts shall not own a stake in their ratings. Neither they nor principals of independent research Providers shall own or trade any form of equities of companies under coverage;

b. Analysts should be paid for their initial reports in advance, or if salaried, the Analysts� incomes shall not be dependent on the outcome of their reports; and

c. Independent research should not be under the control of an investment banking department, investor relations or promotional firm or department or executive, and shall not be produced or published under the auspices of an investment bank, investor relations or promotional firm or brokerage.

The Mission of the Standards-based independent research Provider is to provide the investing public with an ethical, qualified, transparent and conflict-lessened fundamental analysis of public companies and their equities. Thus:

a. Adopters of these �Standards for Independent Research Providers� agree to review by the FIRST Research Consortium Independent Research Standards Task Force, and agree that the Consortium may, at its sole determination, suspend, terminate or expel a Provider found to be in violation of these Standards.

IV. Brokers and dealers must be in compliance with the Regulation Analyst Certification Rule required by the U.S. Securities and Exchange Commission, as well as NYSE Rule 472, NASD Rule 2711, and the anti-fraud provisions of the federal securities law. Regulation AC encompasses not only certification of research reports for analysts falling under its provisions, but also language meant to lessen interference, provide fuller disclosure and transparency, and to lessen conflict, as well as rules on public appearances and so forth. There are additional compliance requirements for brokerage and their analysts. The following contains excerpts from Regulation AC.

Regulation Analyst Certification � U.S. Securities and Exchange Commission:

A. Summary: The Securities and Exchange Commission is adopting new Regulation Analyst Certification ("Regulation AC"). Regulation AC requires that brokers, dealers, and certain persons associated with a broker or dealer include in research reports certifications by the research analyst that the views expressed in the report accurately reflect his or her personal views, and disclose whether or not the analyst received compensation or other payments in connection with his or her specific recommendations or views. Broker-dealers would also be required to obtain periodic certifications by research analysts in connection with the analyst's public appearances. By requiring these certifications and disclosures, Regulation AC should promote the integrity of research reports and investor confidence in those reports.

Effective Date: April 14, 2003.

1. Introduction and Summary of Regulation Analyst Certification (Excerpted)

During 1999, the Commission and Congress began to closely examine research analysts' conflicts of interest. We were particularly concerned that many investors who rely on analysts' recommendations may not know, among other things, that favorable research coverage could be used to market the investment banking services provided by an analyst's firm, and that an analyst's compensation may be based significantly on generating investment banking business. Moreover, news reports stated that some analysts had issued reports that did not reflect their true beliefs and communicated to institutional investors views that differed materially from those expressed in their research reports. Regulation AC, together with other efforts, is intended to address these issues.

On May 10, 2002, we approved rule changes filed by the NYSE and NASD governing analyst conflicts of interest. � Regulation AC is intended to complement other rules governing conflicts of interest disclosure by research analysts, including NYSE Rule 472, NASD Rule 2711, and the anti-fraud provisions of the federal securities law.

On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002 ("SOA"). Section 501 of the SOA requires that rules governing analyst conflicts be adopted within a year of enactment, including rules: limiting the supervision and compensatory evaluation of securities analysts; defining periods in which brokers or dealers engaged in a public offering of a security as underwriter or dealer may not publish research on such security; and requiring securities analysts and brokers or dealers to disclose specified conflicts of interest.

2. Certifications in Connection with Research Reports

As adopted, Regulation Analyst Certification requires that brokers, dealers, and their associated persons that are "covered persons" that publish, circulate, or provide research reports include in those research reports:

a. a statement by the research analyst (or analysts) certifying that the views expressed in the research report accurately reflect such research analyst's personal views about the subject securities and issuers; and

b. a statement by the research analyst (or analysts) certifying either:

i. that no part of his or her compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in the research report; or

ii. that part or all of his or her compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in the research report. If the analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in the research report, the statement must include the source, amount, and purpose of such compensation, and further disclose that it may influence the recommendation in the research report.

All certifications must be clear and prominent.11 If the analyst is unable to certify that the report accurately reflects his or her personal views, distribution of the report by the broker-dealer or covered person would be in violation of Regulation AC. Similarly, if the report does not contain one of the two alternative compensation certifications, distribution of the report by the broker-dealer or covered person would be in violation of Regulation AC,

Research reports generally contain an analyst's summary rating of the security based on his or her particular firm's rating system, as well as an analysis. The summary rating or recommendation is often one word (e.g., buy, sell, overweight), while the analysis may be very detailed and lengthy. Generally, the analysis explains the basis for the rating and provides extensive supplementary information, which, in some instances, significantly qualifies or conditions the stated rating. The Regulation AC certification that the views in the report accurately reflect the analyst's personal views applies to the analysis as reflected in the rating as well as the substance of a research report.

A rating is designed to be a severable summary statement of the analysis in the report. In situations where the analysis significantly qualifies or conditions the stated rating, a communication by the firm or the analyst of only the rating to an investor as representing the analyst's views about the security could be misleading. Further, where the analysis contradicts the stated rating, an analyst and the firm could be in violation of the anti-fraud provisions of the federal securities laws. A rating that contradicts the analysis could also render false the analyst's certification, because the analyst's certification reflects both the analysis as well as the rating.

3. Certifications in Connection with Public Appearances

Under Regulation AC, broker-dealers must make and keep records related to public appearances by research analysts. Specifically, if a broker-dealer publishes, circulates, or provides a research report prepared by a research analyst employed by the broker-dealer or a covered person, the broker-dealer is required to make a record within thirty days after each calendar quarter in which the research analyst made any public appearance, that includes:

A statement by the research analyst attesting that the views expressed by the research analyst in all public appearances during the calendar quarter accurately reflected the research analyst's personal views at that time about any and all of the subject securities or issuers; and

A written statement by the research analyst certifying that no part of such research analyst's compensation was, is, or will be directly or indirectly related to any specific recommendations or views expressed in any such public appearance.

Public appearance means any participation by a research analyst in a seminar, forum (including an interactive electronic forum), or radio or television or other interview, in which the research analyst makes a specific recommendation or provides information reasonably sufficient upon which to base an investment decision about a security or an issuer.

4. Definition of "Research Analyst"

Regulation AC definition covers "any natural person," rather than only "associated persons of a member" (in the case of the SRO rules) or "associated persons of a registered broker or dealer" (in the case of the SOA). Commenters argued that Regulation AC applies to any person, including employees of investment advisers, foreign entities, or any other third party that prepares a research report that is circulated by a broker-dealer or associated persons.

5. Definition of "Covered Person"

Covered person means persons associated with a broker or dealer, but not including an associated person that has no officers or employees in common with the broker or dealer and where the broker or dealer maintains and enforces written policies and procedures reasonably designed to prevent the broker or dealer or any of its controlling persons, officers, or employees from influencing the activities of research analysts and the content of research reports prepared by the associated person. In adopting Regulation AC, we have sought to focus the rule on research that appears to be most susceptible to pressures that might compromise its integrity, for example pressures to generate investment banking business.

We believe that it is unnecessary to apply Regulation AC to research published, circulated, or provided by associated persons who have a sufficient level of independence from the broker or dealer with which they are associated.

V. Enabling and implementing the �Standards of Practice For Research Providers� is both timely and essential to the research community. Events and perceptions that have undermined the �independence� of research dictate that Research Providers in the institutional, subscriber-based and sponsored research sectors act quickly to reform and adopt umbrella ethics and standards, with overriding and universal provisions, while maintaining the specificity unique to each�s own respective missions. These regulations are meant to be voluntarily adopted and implemented by subscribing Providers. The FIRST Research Consortium contemplates educational and community awareness components to achieve participations, and intends to continue to support the individual organizations and entities whose goals are to promote more public trust, more transparency and enhanced disclosures designed to reduce or eliminate conflict, promote �independence� and provide the public with a basic ethical structure for credible research.

A. To accomplish these objectives, a minimum of four Committees will be established:

1. Education and Communications the mission of the Committee is to maintain communications with the media, issue press statements, to educate the public via pronouncements, blogs, seminars, speaking engagements and all means necessary to achieve its objectives.

2. Industry Liaison the mission of the Committee is to maintain relationships with and dialogue between the various entities engaged in establishing standards and ethics in the research community, as well as supporting consumer, investor, and institutional organizations, and where possible to cooperate and collaborate as long as such collaboration does not result in a compromise of key components of these umbrella standards.

3. Standards and Ethics the mission of the Committee is to continually study and recommend revisions in the �Standards of Practice for Research Providers and its specific components where such revisions shall provide fuller protection and transparency to investors, and further promote credibility and trust.

4. Membership and Adoption the mission of the Committee is to expand the universe of research Providers adopting these Standards and participating in the Consortium�s programs and objectives.