CSSS s policies for managing conflicts of interest in connection with investment research

CSSS’s policies for managing conflicts of interest in connection with
investment research
Introduction
Credit Suisse Standard Securities (Proprietary) Limited (“CSSS”) is the name provided to the Joint Venture
created by Credit Suisse and The Standard Bank of South Africa Limited. References to Credit Suisse or
CS include all of the subsidiaries and affiliates of Credit Suisse, a Swiss Bank, operating under its
investment banking division.       For more information on the structure, please follow the link:
http://www.credit-suisse.com/who_we_are/en/structure.html

This note summarises certain policies (together the “Policy”) adopted by CSSS for the management of
conflicts of interest in connection with investment research. This Policy is not intended to create third
party rights or duties that would not already exist if the policy was not made available, nor does it form part
of any contract between CSSS and any client.

Investment Research
Investment research is material that generally contains either:

    •    Analysis of factors likely to influence the future performance of an investment or issuers; or

    •    Advice or recommendations based on those results or that analysis. It is substantive analysis that
         incorporates the critical and careful consideration and assessment of new and existing facts. Any
         material containing substantive analysis into investments or issuers is likely to be viewed by CSSS
         as investment research.

CSSS’s policy is only to publish investment research that is impartial, independent, clear, fair and not
misleading. Such research may be produced and published only by employees of the Research Department.

Integrity
Investment Research Analysts (“Analysts”) are required to observe high standards of integrity and ethical
behaviour. All investment research reports (“research reports”) must be based on strict standards of
truthfulness and fair dealing, and must be presented in a manner such that they are fair, clear and not
misleading. Analysts are required to ensure that they have a reasonable basis for their analysis and
recommendations. CSSS has policies giving guidance to Analysts regarding the proper presentation of facts
and opinions in research reports, for example regarding verification of facts and the avoidance of
superlative, flamboyant, emotional, libellous or promissory statements. CSSS operates procedures to ensure
the independence of expression of views by Analysts and to prevent improper influence on Analysts’
professional judgement. All personnel, but especially Analysts themselves, are required immediately to
report to either Research senior management or the Compliance Department any improper attempt to
influence or restrict the expression of an Analyst’s views. Analysts are required to certify in each research
report that:

“The views expressed in the report accurately reflect their personal views about any and all of the
investments or issuers to which the report relates; and

No part of the Analyst’s remuneration was, is or will be directly or indirectly related to the specific
recommendations or views expressed in the report.”

Identification of Conflicts
Firms are responsible for identifying and managing any conflicts of interest arising in the business that
might compromise the impartiality of the firm’s research analysts and their research.

Such conflicts could include conflicts between recipients of research reports and CSSS’s investment clients
(in particular sales and trading customers) and the personal interests of CSSS’s officers and employees.

CSSS’s policies in this regard include:
   • The provision of internal guidance and training on the identification of possible issues of conflict
        as and when they arise;

    •    Escalation procedures for ensuring that issues identified are referred to and considered at the
         appropriate level within the Firm, and on use of and reducing the risk of inappropriate exercise of
         influence;

    •    Compliance monitors potential conflicts arising out of the publication of research;

    •    Internal guidance and arrangements for regulating the flow of information between and within
         business areas. These include locating Analysts separately from Sales and Trading employees;
         requiring that any research report is produced in an area away from Sales and Trading businesses
         and having arrangements, including “Chinese Walls” and other information barriers, to stop and
         control the flow of information between the Research Department and other parts of the business;

    •    Editorial guidelines and procedures for supervisory review of research prior to publication; and

    •    Limiting the production and publication of investment research to employees of the Research
         Department and only allowing the publication of investment research that is impartial.

Supervision and Remuneration of Analysts
All members of the Research Department are supervised by Research Management. No members of the
Research Department are directly supervised by, or report directly to Sales and Trading personnel.

All decisions on research coverage, timing and content issues are the responsibility of Research senior
management, subject to any restrictions imposed by Compliance. In making decisions on coverage,
Research senior management may consider input from senior management within Sales and Trading.
However, the final decision on coverage rests with Research senior management.

Analysts’ remuneration is determined by Research senior management, the factors that are taken into
account in determining an Analyst’s remuneration include:

    •    The Analyst’s individual performance and productivity;
    •    The overall quality and accuracy of the Analyst’s research;
    •    Evaluations by investor clients and employees in other parts of CSSS with whom the Analyst
         interacts,
    •    The size and trading value of, the profitability of, and the potential interest of CSSS’s investor
         clients in Research with respect to the asset class covered by the Analyst; and
    •    CSSS’s overall performance.

Analysts’ Activities
Analysts are restricted from roles that could prejudice, or appear to prejudice the independence of their
research or conflict with their duties to the recipients of their research, but are otherwise free to use their
expertise for the benefit of CSSS’s clients, subject to them maintaining independence.

Normal business contact between Analysts and Sales and Trading employees, or between Analysts and
investment clients of CSSS may be permitted, provided this does not give rise to a perception of lack of
impartiality in the Analyst’s research. Such contact allows Analysts to give their views on individual
companies, sectors or other relevant market news, provided they do not disclose the timing or content of
forthcoming research reports or receive other material non-public information in the course of their
dialogue.

Inducements and Inappropriate Influences
CSSS’s policies to prevent any inappropriate influence over Analysts or the preparation of research reports
include:
     • Analysts and other employees of CSSS are not permitted to accept any remuneration or other
         benefit from the company or any other party in respect of the publication of research;

    •   Analysts and other employees of CSSS are not permitted to offer or accept any inducement for the
        production of favourable research, including selective disclosure by a company of material
        information not generally available;

    •   Analysts and other CSSS employees are not permitted to directly or indirectly offer favourable
        research, specific ratings or specific price targets as consideration or inducement for the receipt of
        business or compensation;

    •   Analysts and other CSSS employees are not permitted to directly or indirectly offer or threaten to
        change research, a rating or price target as consideration or inducement for the receipt of business
        or compensation;

    •   Analysts may not discuss unpublished or draft research reports (“unpublished reports”) with
        anyone outside of the Research department including Sales and Trading employees, or any
        portions of such reports, either verbally or in writing, other than with the prior approval of
        Compliance;

    •   The Research department has editorial control over the contents of research reports and no other
        business areas are permitted to review or comment on unpublished reports, other than for the
        purpose of verifying factual information with the prior approval of Compliance;

    •   Companies may be sent unpublished reports for the purpose of verifying their factual accuracy.
        These reports must exclude the research summary, the research rating and price target and be
        marked draft. Any material changes to an unpublished report that are required following the
        verification of factual accuracy by the company, require the approval of Research senior
        management. Any changes to report following a review by the Company for factual accuracy
        checking will also require a disclosure to this effect;

    •   Analysts are located separately from Sales and Trading employees but may have free access to the
        Firm’s trading floors in order to maintain an active dialogue with Sales and Trading employees.

Method and Timing of Publication
The timing and content of unpublished research reports may not be disclosed by any means to anyone,
either inside or outside of CSSS, until the information is broadly disseminated. CSSS’s policies require
research reports to be published or distributed only through its usual channels and to ensure that they are
made available simultaneously to clients and CSSS employees within the Sales and Trading areas.

Where CSSS is restricted due to a securities offering or an investment banking transaction to which it is
connected, CSSS’s policy is to restrict the publication or content of investment research relating to a
company (and potentially on companies related to it) for the duration of the transaction.

Disclosure of Interests and Personal Account Dealing
Where research reports provide an investment view or recommendation regarding a specific security, CSSS
will add disclosures as required by various legal and regulatory requirements. These include:

    •   An explanation of the meaning of the Firm's ratings; information relating to the valuation methods
        used by the Firm; the percentage of securities on which the Firm has a rating of outperform,
        neutral or underperform; and a chart depicting the share price of the companies referred in

research reports over time and the points at which the Firm assigned or changed a rating or price
        target;

    •   Whether CSSS holds 1% or more of the securities of companies referred to in research reports;

    •   Whether research has been sent to any of the companies referred in research reports for fact
        checking and whether it has been changed as a result;

    •   Whether CSSS acts as a market maker in the securities of companies referred to in research
        reports;

    •   Information regarding any directorships or other material relationships of individual officers of
        CSSS with companies referred to in research reports;

    •   Any personal interest of the Analyst or close relations of the Analyst in securities of companies
        referred to in research reports;

    •   Subject to legal and confidentiality constraints on disclosure, current or prospective relationships
        between CSSS and companies referred to in research reports, or the fact that such relationships
        may exist; and

    •   The organisational and administrative arrangements for the prevention of conflicts of interest.

Credit Suisse (“CS”) acts as distributor of CSSS research. As such, in accordance with regulatory
requirements, CSSS research includes certain disclosures in relation to potential material conflicts of
interest disclosures for CS:

    •   Whether CS has managed or co-managed a public offering of securities for the subject companies
        within the last 12 months;

    •   Whether CS expects to receive investment banking related compensation from the subject
        companies in the next three months;

    •   Whether CS holds 1% or more of the securities of companies referred to in research reports;

    •   Whether CS acts as a market maker in the securities of companies referred to in research reports;

Any other material conflict of interest that CS may have with the subject companies discussed in the
research report which may be accessed by the link www.credit-suisse.com/researchdisclosures

The following policies apply to all Analysts with regard to personal account dealing and outside business
activities:

    •   Analysts are generally prohibited from trading in any securities, loans, derivatives or other
        instruments of companies (and their affiliates) in their coverage industry globally, whether or not
        they currently provide research coverage of the company;

    •   Analysts are required to comply with CSSS’s rules on personal account dealing, which include the
        requirement to pre-clear any proposed dealings;

    •   Analysts are prohibited from serving as an officer, director or member of a supervisory board of
        any publicly quoted company;

Analysts are required to comply with CSSS’s rules on outside business activities, which will require
approval from Research Management and Compliance.