INTRODUCTION

WRWDORIQLQHZHHNVRIKLJKLQWHQVLW\FRPEDWZDVDQH[WUDRUGLQDU\DFKLHYHPHQW ,W UDQNVZLWK WKHPRVW VXFFHVVIXOPLOLWDU\FDPSDLJQVRIDOO WLPH LQFOXGLQJ WKH ,VUDHOL YLFWRULHV RI DQG DQG WKH*HUPDQ VXFFHVVHV RYHU3RODQG DQG )UDQFHDQGLQPDQ\ZD\VVXUSDVVHVHYHQWKRVH+LVWRULDQVDQGGHIHQVHDQDO\VWV ZLOOVWXG\WKHVHFDPSDLJQVIRUGHFDGHVWRFRPHDWWHPSWLQJWRGUDZDOOSRVVLEOH OHVVRQVIURPRXUVXFFHVVDQG,UDT¶VIDLOXUH /LNHPDQ\FRQIOLFWVWKDWDULVHVXGGHQO\DQGHQGTXLFNO\WKHRXWFRPHRIWKH

*XOI:DUZDVODUJHO\GHWHUPLQHGLQWKH\HDUVDQGGHFDGHVWKDWSUHFHGHGLW7KH 86DUPHGIRUFHVKDGXQGHUJRQHDUHPDUNDEOHWUDQVIRUPDWLRQLQWKHVDQG V WKDW ODLG WKH JURXQGZRUN IRU RXU VWXQQLQJ YLFWRULHV LQ DQG $PD]LQJO\WKDWWUDQVIRUPDWLRQKDGHQYLVLRQHGDFRPSOHWHO\GLIIHUHQWZDUIURP WKH RQH WKH DUPHG IRUFHV DFWXDOO\ IRXJKW 7KH V\VWHPV WKDW ZH EXLOW DQG WKH VROGLHUV ZKRPZH WUDLQHG ZHUH DOO GHVLJQHG WR ILJKW WKH 6RYLHW 8QLRQ LQ WKH &HQWUDO )URQW LQ (XURSH 7KDW WKH\ ZHUH DEOH WR VHUYH VR ZHOO LQ GHVWUR\LQJ 6DGGDP¶V DUP\ LV WHVWLPRQ\ WR WKH EDODQFH RI WKH WUDQVIRUPDWLRQ DQG WKH IOH[LELOLW\WKDWLWSURYLGHGWRRXUIRUFHV 7KH WUDQVIRUPDWLRQ RI WKH V DQG V KDG WKUHH PDMRU FRPSRQHQWV

WHFKQRORJ\ SURIHVVLRQDOLVP DQG WUDLQLQJ RI ZKLFK WKH ODVW WZR ZHUH FORVHO\ LQWHUUHODWHG 7KH LPSRUWDQFH RI $PHULFD¶V WHFKQRORJ\ KDV EHHQ UHSHDWHGO\

H[DJJHUDWHG LQ WKH DFFHSWHG H[SODQDWLRQV IRU RXU YLFWRULHV 7KHUH FDQ EH OLWWOH GRXEWKRZHYHU WKDW WKH WHFKQRORJLFDO WUDQVIRUPDWLRQVRI WKHVDQGV DQGRIWKHVIRUWKHPRVWUHFHQWZDUSOD\HGFULWLFDOUROHVLQHQDEOLQJRXU IRUFHVWRZLQVRUDSLGO\DQGGHFLVLYHO\ %HJLQQLQJ LQ WKH ODWH V DQG HDUO\ V DOO RI WKH DUPHG VHUYLFHV

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

IURPWKH$UDE±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

WHFKQRORJLFDOHGJHRYHU6DGGDP¶V WURRSVZKRZHUHXVLQJREVROHWHDQGSRRUO\ PDLQWDLQHG6RYLHWHTXLSPHQW7KHPRVWDGYDQFHGDLUFUDIWDQGWDQNVLQ6DGGDP¶V DUVHQDO ZHUH KRSHOHVVO\ RXWFODVVHG E\ $PHULFD¶V ZHDSRQV DQG RXU DELOLW\ WR LQWHJUDWHVDWHOOLWHLQWHOOLJHQFHDQGWKH*OREDO3RVLWLRQLQJ6\VWHPLQWRRXUSODQV DQGWKHLUH[HFXWLRQ7HFKQRORJLFDOVXSHULRULW\LVQRWHQRXJKWRJXDUDQWHHYLFWRU\ KRZHYHUOHWDORQHVXFKDRQHVLGHGDQGIRUXVH[WUHPHO\ORZFDVXDOW\YLFWRU\ 7HFKQRORJ\ LV RQO\ DV JRRG DV WKH WURRSV WKDW XVH LW DQG E\ $PHULFD¶V WURRSV ZHUH WKH EHVW LQ WKH ZRUOG WKDQNV WR WKH RWKHU WZR HOHPHQWV RI WKH

WUDQVIRUPDWLRQ RI WKH V DQG V SURIHVVLRQDOL]DWLRQ DQG WKH WUDLQLQJ UHYROXWLRQ 2SHUDWLRQ'(6(57 67250 ZDV WKH ILUVWPDMRU KLJKLQWHQVLW\ FRQIOLFW WKDW WKH

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

9LHWQDP:DURIFRXUVHDQGWRWKHUHVLVWDQFHWRWKHGUDIWWKDWWKDWFRQIOLFWKDG JHQHUDWHG 7KH GHFLVLRQ WR DGRSW VXFK D FRXUVH RI DFWLRQ KDG SURIRXQG FRQVHTXHQFHV RQ WKH IXWXUH GHYHORSPHQW RI$PHULFD¶VPLOLWDU\:H FRXOG QRW KRSH WRPDWFK WKH HQRUPRXV QXPHULFDO VXSHULRULW\ RI WKH 6RYLHW DUPHG IRUFHV ZLWKQXPEHUVRIRXURZQ,QVWHDGWKHSURIHVVLRQDODUPHGIRUFHVZRXOGKDYHWR KROGWKH5HG$UP\DWED\ZLWKVXSHULRUWHFKQRORJ\DQGVNLOO 7KH WHFKQRORJLFDO FRQVHTXHQFHV RI WKDW IDFW KDYH DOUHDG\ EHHQ GHVFULEHG

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

VLPXODWHGH[HUFLVHV(DFKQRZKDVLWVRZQSHUPDQHQWµ5HG7HDP¶RUµ2SSRVLQJ )RUFH¶'HSOR\DEOHXQLWVWKDWKDYHDOUHDG\FRPSOHWHGLQGLYLGXDODQGXQLWWUDLQLQJ WKH%OXH)RUFHRU%/8)25DWWKH1DWLRQDO7UDLQLQJ&HQWHUWKHQURWDWHLQWRWKH EDVHDQGFRQGXFWDVHULHVRIH[HUFLVHVDJDLQVWWKHµ23)25¶2EVHUYHUFRQWUROOHUV HYDOXDWHWKH%/8)25¶VSHUIRUPDQFHXVLQJVRSKLVWLFDWHGVLPXODWLRQWHFKQRORJ\

WKDWWUDFNVWKHPRYHPHQWRIHDFKSLHFHRIHTXLSPHQWDQGGHWHUPLQHVWKHHIIHFWV RIVLPXODWHGZHDSRQVRQWKRVHV\VWHPV 7KHVHH[HUFLVHVDUHLQYDOXDEOHLQDQXPEHURIZD\V)LUVWWKHVKHHUH[SHULHQFH

RIWDNLQJLQWKHFDVHRIWKH17&DEULJDGHVL]HGIRUPDWLRQLQWRWKH&DOLIRUQLD GHVHUWDQGPDQHXYHULQJLWDURXQGKHOSVWRIDPLOLDUL]HDOORIWKHVROGLHUVIURPWKH ORZOLHVW SULYDWH WR WKHEULJDGH FRPPDQGHUZLWK WKH HVVHQWLDOVRIPRYLQJ ODUJH IRUPDWLRQV6HFRQGWKHQHHGWRRSHUDWHDJDLQVWDWKLQNLQJRSSRQHQWZKRLVIUHH WRGHYHORSDQGH[HFXWHLWVRZQSODQVLVWKHEHVWSRVVLEOHWUDLQLQJIRUUHDOFRPEDW 7KLUGWKHH[HFXWLRQRIDVHULHVRIGLIIHUHQWVFHQDULRVDOORZVXQLWVWROHDUQIURP WKHLUPLVWDNHV DQGJURZ LQ VNLOO HYHQZKLOH WKH\ DUH µLQ WKHER[¶ GRLQJ DFWXDO PLVVLRQV)LQDOO\WKHSURFHVVRIWUDLQLQJXSIRUDQ17&RURWKHUFRPEDWWUDLQLQJ FHQWHUURWDWLRQKHOSVFRPPDQGHUVIRFXVRQSUHSDULQJIRUFRPEDWDQGKLJKOLJKW DQGFRUUHFWDQ\GHILFLHQFLHVLQWKHLUXQLWV,WZDVHQWLUHO\IRUWXLWRXVWKDWDOORIWKH VHUYLFHV HVWDEOLVKHG WKHLU WUDLQLQJ FHQWHUV LQLWLDOO\ LQ WKH&DOLIRUQLD GHVHUW DQG ZHUH WKHUHIRUH IDPLOLDU ZLWK WKH VRUWV RI WHUUDLQ DQG FOLPDWLF FRQGLWLRQV WKH\ ZRXOGHQFRXQWHULQWKH3HUVLDQ*XOI $OORIWKHVHHOHPHQWVRIWUDQVIRUPDWLRQ±WHFKQRORJ\SURIHVVLRQDOL]DWLRQDQG

WKHWUDLQLQJUHYROXWLRQ±SOD\HGFULWLFDOUROHVLQ$PHULFD¶VVXFFHVVLQ2SHUDWLRQ '(6(57 67250DQGDOVRLQ2SHUDWLRQ,5$4, )5(('207KHWHFKQRORJLFDOVWRU\LV ZHOONQRZQDQGKDVEHHQUHFRXQWHGLQQXPHURXVH[FHOOHQWSXEOLFDWLRQV7KHVWRU\ RI WKH SHRSOH RI WKH DUPHG IRUFHV DQG WKHLU LPSRUWDQFH LQ EULQJLQJ DERXW WKH YLFWRU\LVPXFKOHVVZHOOVWXGLHG7KHSUHVHQWZRUNDLPVWRFRUUHFWWKDWGHILFLHQF\ LQ RXU XQGHUVWDQGLQJ RI WKH ILUVW *XOI :DU E\ SURYLGLQJ DQ LQVLJKW LQWR WKH H[SHULHQFHVRIWKHRIILFHUVZKRIRXJKWDQGZRQWKDWFRQIOLFW ,Q)HEUXDU\WKH8QLWHG6WDWHV0LOLWDU\$FDGHP\860$DW:HVW3RLQW

VSRQVRUHGD6\PSRVLXPLQKRQRURIWKHWK$QQLYHUVDU\RI2SHUDWLRQV'(6(57 6+,(/' DQG'(6(57 67250860$KDVEHHQWUDLQLQJRIILFHUVIRUWKHSURIHVVLRQDO $UP\ IRU PRUH WKDQ \HDUV DQG LW VHHPHG DQ DSSURSULDWH YHQXH IRU WKH FHOHEUDWLRQRIWKHXOWLPDWHWULXPSKRIWKHSURIHVVLRQDOIRUFH0RUHWKDQDGR]HQ FXUUHQWDQGIRUPHUPHPEHUVRIWKH860$IDFXOW\DQGVWDIISDUWLFLSDWHGLQWKUHH SDQHOVDWWHQGHGE\KXQGUHGVRIFDGHWVDQGYLVLWRUV 7KHSUHVHQWHUVZHUHDVNHGWRIRFXVRQKRZWKHLUSUHYLRXVH[SHULHQFHVLQWKH

$UP\SUHSDUHGWKHPIRUWKHULJRUVRIFRPEDWLQWKH*XOI7KH\ZHUHVSHFLILFDOO\ DVNHG WR LGHQWLI\ D IHZ RI WKH PRVW LPSRUWDQW FKDOOHQJHV WKH\ IDFHG GXULQJ RSHUDWLRQVDQGFRQVLGHUKRZWKH\ZHUHDEOHWRRYHUFRPHWKRVHFKDOOHQJHV7KH UHVXOWV SUHVHQWHG KHUH LQ DQ HGLWHG DQG VOLJKWO\ H[SDQGHG IRUP SURYLGH H[WUDRUGLQDU\ LQVLJKW LQWR WKHVWUHVVHVDQGFRPSOH[LWLHVRIPRGHUQZDUIDUHDQG KRZ WKH PHQ DQG ZRPHQ RI RXU SURIHVVLRQDO DUPHG IRUFHV DUH WUDLQHG DQG SUHSDUHGWRFRSHZLWKWKHP 2QHRIWKHPRVWVDOLHQWOHVVRQVWKDWZLOODSSHDUIURPWKHFKDSWHUVWKDWIROORZ

LVWKHLPSRUWDQFHRIUHDOLVWLFWUDLQLQJLQKHOSLQJRIILFHUVDQGVROGLHUVWRRYHUFRPH LQGHFLVLRQ DQG IHDU )HDU QRW RQO\ IRU RQHVHOI EXW HVSHFLDOO\ IRU RQH¶V VXERUGLQDWHVFDQEHSDUDO\]LQJLQFRPEDW7KHVHQVRU\H[SHULHQFHVRIPRGHUQ

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

WUDLQLQJ F\FOHV LQ WKHLU XQLWV DQG DW WKH FRPEDW WUDLQLQJ FHQWHUV LV HVVHQWLDO WR RYHUFRPLQJ WKLV FRQIXVLRQ DQG IHDU ,Q VRPHFDVHV VROGLHUV UHSRUWHG WKDW WKH\ IRXQGFRPEDWWREHOHVVGLIILFXOW WKDQWUDLQLQJKDGEHHQRWKHUVQRWHGWKDW WKH\ KDGIRXJKWLQFRPEDWH[DFWO\DVLILWKDGEHHQDWUDLQLQJH[HUFLVH:KHQVROGLHUV DQG RIILFHUV DUH ZHOOWUDLQHG WKH\ FDQ IDOO EDFN RQ WKH VLJKWV VRXQGV DQG H[SHULHQFHVRIWKDWWUDLQLQJWRRIIVHWWKHLQFLSLHQWSDQLFFDXVHGE\WKHFRQIXVLRQ DQGWHUURURIWKHEDWWOHILHOG7KHEDWWOHGULOOVXVHGWRUHVSRQGWRVSHFLILFVLWXDWLRQV FRPHDXWRPDWLFDOO\DQGHYHU\RQHEHFRPHVPRUHFRPIRUWDEOHZLWKZKDWLVJRLQJ RQ7KHKLJKOHYHORIWUDLQLQJZDVFULWLFDOWRRXUUDSLGDQGGHFLVLYHVXFFHVV 7KHFRQIXVLRQDQGHYHQIHDURIZDULVE\QRPHDQVFRQILQHGWRFRPEDWOHDGHUV

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

ZDV WKH FRPPDQGHURI WKHWK ,QIDQWU\'LYLVLRQ 0HFKDQL]HG±QRZ WKHUG ,QIDQWU\'LYLVLRQ 7KHYROXPHWKXVRIIHUVSHUVSHFWLYHVIURPPDQ\RIWKHVSHFLDOWLHVUHTXLUHGWR

SXWDQDUP\LQWKHILHOGDQGNHHSLWJRLQJLQDGGLWLRQWRWKRVHQHHGHGWRILJKWDQG GHIHDWWKHHQHP\,WDOVRSURYLGHVDQLQVLJKWLQWRZKDWWKHZDUZDVOLNHIRUSHRSOH RQGLIIHUHQWSDUWVRIWKHEDWWOHILHOGRULQVRPHFDVHVKRZGLIIHUHQWWKHZDUZDV HYHQ IRU XQLWV WKDW ZHUH UHODWLYHO\ FORVH WRJHWKHU ,W LV D VXUYH\ QRW D FRPSUHKHQVLYH VWXG\ %XW PDQ\ RI WKH OHVVRQV RI WKDW ZDU IRXJKW PRUH WKDQ WZHOYH\HDUVDJRUHPDLQUHOHYDQW 2SHUDWLRQ ,5$4, )5(('20 ZDV GLIIHUHQW IURP DQG \HW UHPDUNDEO\ VLPLODU WR

2SHUDWLRQ'(6(57 672507KLVZDU OLNH WKH ILUVWZDVGHFLGHGE\D ODUJHVFDOH PHFKDQL]HGPDQHXYHUDOWKRXJKE\DPXFKVPDOOHUJURXQGIRUFHDJDLQVWDPXFK ZHDNHUHQHP\7KHDLUFDPSDLJQZDVFRQGXFWHGVLPXOWDQHRXVO\ZLWKWKHJURXQG RIIHQVLYHDVRSSRVHGWRWKHGD\DLUZDUWKDWSUHFHGHGWKHILUVWJURXQGZDULQ WKH*XOI1HZZHDSRQVV\VWHPVZHUHXVHGDQGRXULQWHOOLJHQFHFDSDELOLWLHVZHUH PXFKJUHDWHUWKDQWKH\KDGEHHQEHIRUH <HW WKHZDU GLG QRW HQG XQWLO $PHULFDQ WDQNV GURYH WKURXJK WKH VWUHHWV RI

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

VROGLHUV RYHUFRPLQJ WKHLU IHDUV DQG FRQIXVLRQ EHVW WKURXJK WUDLQLQJ DQG H[SHULHQFH7KDWLVDQHWHUQDOOHVVRQRIPLOLWDU\KLVWRU\DQGRQHWKDWVKRXOGQRW EHORVWDVZHFRQWLQXHWRPRYHDORQJWKHSDWKRIWUDQVIRUPLQJWKHDUPHGIRUFHV 7KLV LQWURGXFWLRQZRXOGQRWEHFRPSOHWH LI LWGLGQRWH[SUHVV WKHERXQGOHVV

JUDWLWXGHRILWVDXWKRUDQGWKH$PHULFDQSHRSOHIRUWKHPHQDQGZRPHQZKRULVN WKHLUOLYHVWRGHIHQGIUHHGRPDQGWKHLUFRXQWU\7KLVYROXPHWRJHWKHUZLWKWKH WULXPSKLWFHOHEUDWHVEHORQJVWRWKHPDOO