INK Canadian Insider Index. Methodology

Transcription

1 INK Canadan Insder Index Mehodology December 204

2 Table of Conens Inroducon Elgbly Crera... 3 Index Consrucon... 8 Index Manenance... Index Daa... 5 Index Governance... 6 Index Dssemnaon... 7 Appendx... 8 Conac Informaon Dsclamer INK Canadan Insder Index Mehodology

3 Inroducon The INK Canadan Insder Index s desgned o measure he performance of a baske of 50 Torono Sock Exchange (TSX) lsed growh and value socks wh sgnfcan nsder buyng and ownershp. Insder holdngs are consdered by some o be a srong predcor of performance. The Index seeks o capure he reurns of TSX lsed growh and value socks by usng propreary facors whch ncorporae nsder buyng and ownershp. Consuens are equal weghed a each sem-annual rebalancng. Hghlghs Ths smar-bea Index provdes exposure o he broad Canadan marke usng INK Research's propreary INK Edge V.I.P. screenng crera of valuaons nsder commmen and prce srengh characerscs. Ths resuls n a unque rsk/reurn profle whch provdes exposure o growh and value equy secures preferred by nsders. The Index uses an equal-wegh mehodology as opposed o a marke capalzaon weghed mehodology seekng o provde he benef of allowng he Index o buy low and sell hgh a each rebalancng. INK Canadan Insder Index Mehodology 2

4 Elgbly Crera The INK Selecon Pool of elgble secures ncludes hose socks lsed on he TSX - for whch () radng repors on he Sysem for Elecronc Dsclosure by Insders (SEDI ) exs; and () dsclosure of fundamenal sock daa va nsuonal daa servces such as Mornngsar CPMS s avalable. In addon he Selecon Pool of elgble secures ncludes only hose equy secures wh a mnmum marke capalzaon of $25 mllon an average daly monhly raded value of $25000 and a mnmum prce of $0.20. Secures of an ssuer for whch nsder reporng exempons exs (gven by regulaors o a drecor or offcer n relaon o he sale of any class of secures) are no elgble. Index Incluson Facors The consuen selecon process denfes socks ha rank he hghes overall based on he percenle rankng of each facor whn he hree INK Edge V.I.P. caegores of valuaons nsder commmen and prce srengh. In calculang a sock's overall rank INK weghs each V.I.P. caegory equally and concurrenly. The facors ranked whn each caegory are: () Value Rankng For each sock he percenle rank for each of he followng facors s deermned. The percenle ranks across hese facors are averaged on an equal bass o deermne he value caegory rank for each sock: Tralng 2 monh P/E Tralng 2 monh prce-o-book rao Tralng 2 monh prce-o-sales rao Tralng 2 monh Enerprse Value o EBITDA rao Tralng 2 monh prce-o-cash flow or prce-o-cash Shareholder yeld (ralng 2 monh buyback yeld plus dvdend yeld) (2) Insder Commmen Rankng For each sock he percenle rank for each of he followng facors s deermned. The percenle ranks across hese facors are averaged on an equal bass o deermne he Insder Commmen caegory rank for each INK Canadan Insder Index Mehodology 3

5 sock: Recen ne dollar offcer and drecor buyng Offcer & Drecor benefcal holdngs of equy secures Insder nensy based on he number of nsders wh ne buyng (3) Prce Momenum Rankng For each sock he percenle rank for each of he followng facors s deermned. The percenle ranks across hese facors are averaged on an equal bass o deermne he Prce Momenum caegory rank for each sock: 3 monh prce reurn 6 monh prce reurn 2 monh prce reurn The Index wll nclude 50 of he hghes rankng socks based on INK's Edge V.I.P rankng process (cu-off rankng) whch also mee he marke capalzaon lqudy and ransacon facors below. Marke Capalzaon A sock mus have an ousandng Marke Capalzaon of a leas $250 mllon and a Floa Marke Capalzaon of $00 mllon a me of ncluson. Lqudy Monhly radng value: A sock mus have an average monhly radng value of more han or a leas $2 mllon over he pas year and n he monh pror o he rebalance. Prce: A sock mus have a mnmum share prce of $3.00. Transacons INK Canadan Insder Index Mehodology 4

6 A sock mus have no more han a maxmum of 0 non-radng days n he prevous 6 monhs excludng days emporarly haled for a vald reason such as he dssemnaon of news. Inelgble Secures Equy ype secures such as common shares ordnary shares ncome russ and rus uns are elgble. Preferred shares warrans opons and smlar dervaves as well as fxed ncome secures ncludng converble debenures are no elgble. Mulple classes of shares When an ssuer has mulple classes of lsed equy secures he more lqud class of shares wll be added o he Index. The Marke Capalzaon es wll be appled based on he combned value of he mulple classes. Rebalancng The consuen socks of he Index are revewed and updaed sem-annually. Consuens are equally-weghed a each rebalance usng he prce a he close on he rebalancng. Meanng Index shares are deermned based on he close prces as a he rebalance dae. All INK Selecon Pool socks are ranked n each of he hree INK Edge V.I.P. crera caegores of valuaons nsder commmen and prce momenum. For each caegory he lowes ranked sock offers he lowes expeced reurn opporuny whle he hghes ranked sock offers he bes expeced opporuny. Each V.I.P. caegory rank for a sock s equally weghed o calculae an overall sock rankng. Ths ls s furher evaluaed o ensure ha each secury has a mnmum ousandng marke cap of a leas $250 mllon and a mnmum floa marke cap of a leas $00 mllon. In addon each secury mus mee he followng lqudy hresholds: Monhly radng value: an average monhly radng value of $2 INK Canadan Insder Index Mehodology 5

7 mllon over he pas year and n he pas monh. Prce: A mnmum share prce of $3.00. A maxmum of 0 non-radng days n he prevous 6 monhs excludng days emporarly haled for a vald reason such as he dssemnaon of news. The op 50 overall ranked secures whch mee he lqudy crera are elgble for ncluson. In he even one or more secury has he same cu-off rankng he 50 lm may be exceeded. Each rebalance occurs afer he close of rade on he hrd Frday of May and November. If hs s no a Busness Day he rebalance s conduced on he precedng Busness Day. The Index uses daa endng Aprl 30 and Ocober 3 for evaluaon of he socks a he respecve rebalance. Daa sources for he rebalance nclude SEDI and Mornngsar CPMS. Rebalancng resuls are announced on or abou he second Frday n May and November. Index Shares are deermned based on he closng prces as a he rebalance dae. On each Adjusmen Day each Index Consuen s weghed equally. Addons Sock elgbly for addon o he Index s consdered a he me of each scheduled sem-annual rebalancng. A spn-off from an Index Consuen wll be added o he Index and wll be subsequenly assessed for connued elgbly a he nex scheduled rebalancng. If here s an nra-semannual rebalance corporae or regulaory acon ha leads o a deleon he nex hghes ranked sock (accordng o he INK Edge V.I.P. crera) as a he close of radng on he busness day mmedaely pror o he deleon wll be added o he Index a he same wegh as he deleed sock. Deleons INK Canadan Insder Index Mehodology 6

8 A each rebalancng a curren Index Consuen may be deleed from he Index f fals o mee he marke capalzaon lqudy and ransacon requremens or f falls below he op 30% of INK's V.I.P rankng. A sock wll be deleed from he Index beween scheduled rebalancngs f ceases o rade on an elgble sock exchange due o corporae or regulaory acon or f ceases o repor nsder flngs on SEDI. A sock may also be removed before he nex scheduled rebalancng f he Index Consrucon Team becomes aware of maers of serous fraud or regulaory acon whch has or could mpar he company's lsng on an elgble sock exchange or radng lqudy. Addonally a sock may be deleed from he Index a any me f any senor offcer or drecor of he ssuer receves an nsder reporng exempon from regulaors. Uncerany wh respec o he ssuer's ably o connue as a gong concern may also lead o deleon from he Index. Buffer Rule Socks whch are already Consuens of he Index ha are whn he op 30% of he Selecon Pool ranked n he INK Edge V.I.P. rankng process wll reman n he Index as long as hey connue o mee he aforemenoned marke cap and lqudy crera rules. However he Index Consrucon Team may a s dscreon nclude an elgble sock n he Index ha falls below he op 30% bu remans n he op 50% of he Selecon Pool ranked by he V.I.P. rankng process o enhance dversfcaon. The Index Consrucon Team may also nclude more han 50 socks due o lqudy consderaons. INK Canadan Insder Index Mehodology 7

9 Index Consrucon Weghng Approach The Index Consuen socks are equally weghed a he me of rebalancng: W = /N Where represens he h sock n he Index and N represens he oal number of consuen company socks n he Index. Index Calculaons The Index Level a any gven me s calculaed accordng o he followng formula: Index n x * p * f = = D wh: x = Number of Index Shares of he Index Consuen on Tradng Day p = Prce of Index Consuen on Tradng Day f = Foregn exchange rae o conver he Prce of Index Consuen on Tradng Day no he Index Currency D = Dvsor on Tradng Day Afer he close of radng on each Adjusmen Day he new Dvsor s calculaed as follows: D n ( p * f * x ) = = Index Ths Dvsor s vald wh sar of ndex calculaon on he followng Busness Day. INK Canadan Insder Index Mehodology 8

10 Accuracy The value of he Index wll be rounded o wo decmal places. The Number of Shares of he Index Consuens wll be rounded o negers. Tradng Prces wll be rounded o four decmal places. Adjusmens Indexes wll be adjused for sysemac changes n prces once hese become effecve. Ths requres he new Number of Shares of he affeced Index Consuen o be calculaed on an ex-ane bass. The Index s adjused for dsrbuons capal ncreases rghs ssues spls par value conversons and capal reducons. Dvdends and oher dsrbuons Dvdend paymens and oher dsrbuons are ncluded n he oal reurn verson Index. Dvdend paymens cause an adjusmen of he Dvsor of he oal reurn ndex verson. The new Dvsor s calculaed as follows: D + n ( p * f = = D n = * x ( p ) ( x * f * x * y ) * g ) wh: p = Prce of Index Consuen on Tradng Day f = Foregn exchange rae o conver he Prce of Index Consuen on Tradng Day no he Index Currency x = Number of Index Shares of he Index Consuen on Tradng Day y = Dsrbuon of Index Shares of he Index Consuen on Tradng Day g = Foregn exchange rae o conver he amoun of he dsrbuon of he Index Consuen on Tradng Day no he Index Currency INK Canadan Insder Index Mehodology 9

11 D = Dvsor on Tradng Day D + = Dvsor on Tradng Day + INK Canadan Insder Index Mehodology 0

12 INK Canadan Insder Index Mehodology Index Manenance Corporae acons prncples Followng he announcemen by a company ncluded n he Index of he erms and condons of a corporae acon he Index Calculaor deermnes wheher such corporae acon has a dluon concenraon or oher effec on he prce of he Index Consuen. If hs should be he case he Index Calculaor shall make he necessary adjusmens ha are deemed approprae n order o manan he prevous weghs on he dae on whch he adjusmen shall come no effec. Capal ncreases (Rghs ssuance) In he case of capal ncreases wh ex-dae + he Index s adjused as follows: wh: x + = Number of Index Shares of Index Consuen on Tradng Day + x = Number of Index Shares of he Index Consuen on Tradng Day B = Shares receved for every share held wh: p = Prce of Index Consuen on Tradng Day p + = Hypohecal Prce of Index Consuen on Tradng Day + s = Subscrpon Prce n he Index Consuen currency wh: p = Prce of Index Consuen on Tradng Day * B x x + = + B B s p p + + = + * [ ] = = = = n n n x f p f p x f p x x f p D D ) * * ( ) * * ( ) * * ( ) * * (

13 f = Foregn exchange rae o conver he Prce of Index Consuen on Tradng Day no he Index Currency x = Number of Index Shares of he Index Consuen on Tradng Day p + = Hypohecal prce of he Index Consuen on Tradng Day + x + = Number of Index Shares of he Index Consuen on Tradng Day + D = Dvsor on Tradng Day D + = Dvsor on Tradng Day + Share spls To manan he curren ndex weghng n he case of share spls wh ex-dae on Tradng Day + s assumed ha he prces change n rao of he erms of he spl. The new Number of Index Shares s calculaed as follows: x + = x * B wh: x = Number of Index Shares of he affeced Index Consuen on Tradng Day x + = Number of Index Shares of he affeced Index Consuen on Tradng Day + B = Shares afer he share spl for every share held before he spl Sock dsrbuons (Sock dvdends) In he case of sock dsrbuons wh ex-dae on Tradng Day + s assumed ha he prces change accordng o he erms of he dsrbuon. The new Number of Index Shares s calculaed as follows: x + = x *( + B) wh: x = Number of Index Shares of he affeced Index Consuen on Tradng Day x + = Number of Index Shares of he affeced Index Consuen on Tradng Day + B = Shares receved for every share held INK Canadan Insder Index Mehodology 2

14 Calculaon of he Index n he even of a Marke Dsrupon Even An Index s no calculaed n he even of a Marke Dsrupon Even. If he Marke Dsrupon Even connues over a perod of egh Tradng Days he Index Calculaor calculaes he Index value akng no accoun he marke condons prevalng a hs pon n me he las quoed Tradng Prce for each of he Index Consuens as well as any oher condons ha deems relevan for calculang he Index value. Exraordnary adjusmen If a company ncluded n he Index s removed from he Index beween wo Adjusmen Days due o an Exraordnary Even f necessary he Index Consrucon Team shall desgnae a successor. The nex hghes ranked sock (accordng o he INK Edge V.I.P. crera) as a he close of radng on he busness day mmedaely pror o he deleon wll be added o he Index a he same wegh as he deleed sock. Once he adjusmen decson s made INK Research wll announce he changes whch under normal crcumsances wll be 3 o 5 busness days before mplemenaon. In crcumsances where as of he Exraordnary Adjusmen Day no sock mees all crera as oulned n he secon Incluson Facors he wegh of he company exng he Index wll be dsrbued proporonally among he remanng Index componens. Currency of Calculaon Canadan Dollars Base Dae The Index s based on 000 as a he close of radng on he day before he sar dae of November Calculaon of he Index change n calculaon mehod The applcaon by he Index Calculaor of he mehodology descrbed n hs documen s fnal and bndng. The Index Calculaor shall apply he mehodology descrbed above for he composon and calculaon of he Index. INK Canadan Insder Index Mehodology 3

15 However s possble ha due o marke envronmen regulaory legal fnancal or ax reasons changes o be made o hs mehodology may be requred. The Index Calculaor may also make changes o he erms and condons of he Index and he mehodology appled o calculae he Index whch deems o be necessary and desrable n order o preven obvous or demonsrable error or o remedy correc or supplemen ncorrec erms and condons. The Index Calculaor s no oblged o provde nformaon on any such modfcaons or changes. The Index Calculaor wll endeavour o ensure he calculaon mehodology heren s appled on a conssen bass. INK Canadan Insder Index Mehodology 4

16 Index Daa From he Base Dae he Index Calculaor wll source prcng from rades execued on he respecve Exchanges. Hsorcal daa before he Base Dae are sourced from hrd-pary daa provders. Prces and calculaon frequency The prce of he Sample Index s calculaed on each Busness Day based on he prces on he respecve Exchanges on whch he Index Consuens are lsed. The mos recen prces of all Index Consuens are used. The Index s calculaed every Busness Day from 9:30 am o 4 pm Easern Tme. In he even ha daa canno be provded o he prcng servces of Boerse Sugar AG he Index canno be dsrbued. Any ncorrec calculaon s adjused on a rerospecve bass. Real-Tme Calculaon The Index wll be calculaed real-me and wll be dsrbued hrough major daa vendors such as Reuers and Bloomberg. INK Canadan Insder Index Mehodology 5

17 Index Governance Index polces are managed and revewed by INK. Index mehodologes are perodcally revewed n lgh of marke developmens and research. Through s arrangemen wh Solacve AG Index calculaons are consanly monored for mehodologcal negry. INK's n-house specalss are responsble for overseeng he manenance of he Index polces as well as he Index Consrucon Team. INK may also esablsh an Index advsory commee o provde he Index Consrucon Team advce on Index polcy and governance. INK has sole dscreon over he Index and s mehodology. Ths ncludes bu s no lmed o changes o he Index mehodology and nerpreaon and applcaon of he Index mehodology. Index Calculaor INK has conraced wh Solacve AG o provde daly Index prcng and manenance. INK Canadan Insder Index Mehodology 6

18 Index Dssemnaon The Index s publshed va he prce markeng servces of Boerse Sugar AG and s dsrbued o all afflaed vendors. Each vendor decdes on an ndvdual bass as o wheher he wll dsrbue/dsplay he Index va hs nformaon sysems. Tckers Name WKN ISIN RIC Bloomberg Tcker Currency INK Canadan Insder Index SLA0K DE000SLA0K9.INKCINP INKCINP Index CAD INK Canadan Insder Toal Reurn Index SLA0K2 DE000SLA0K27.INKCINT INKCINT Index CAD Webses: hp://ndex.nkresearch.com hp:// hp:// INK Canadan Insder Index Mehodology 7

19 Appendx Defnons Index Consuen s each sock currenly ncluded n he Index. A any me he ls of Index Consuens comprsng he Index s avalable from he Index Calculaor s webse. Number of Shares s n respec of an Index Consuen and on any gven Busness Day he number of shares ncluded n he Index. In parcular an Exraordnary Even ncludes - a Merger - a Takeover - a delsng - Insolvency. The Tradng Prce for hs Index Consuen on he day he even came no effec s he las avalable marke prce for hs Index Consuen quoed on he Exchange on he day he even came no effec (or f a marke prce s no avalable for he day he even came no effec he las avalable marke prce quoed on he Exchange on a day specfed as approprae by he Index Calculaor) as deermned by he Index Calculaor and hs prce s used as he Tradng Prce of he parcular Index Consuen unl he end of he day on whch he composon of he Index s deermned accordng o hs mehodology. In he even of he Insolvency of an ssuer of an Index Consuen he Index Consuen shall reman n he Index unl he nex Adjusmen Day. As long as a marke prce for he affeced Index Consuen s avalable on a Busness Day hs shall be appled as he Tradng Prce for hs Index Consuen on he relevan Busness Day. If he sock s suspended from radng followng such an announcemen and does no resume radng before he Adjusmen Day he Index Consrucon Team may decde o use a dfferen prce han he las avalable raded prce pror o he radng suspenson. The Index Consrucon Team may also decde o elmnae he respecve Index Consuen a an earler pon n me pror o he nex Adjusmen Day. The procedure n hs case s dencal o a deleon due o an Exraordnary Even. An Index Consuen s delsed f he Exchange announces pursuan o he Exchange regulaons ha he lsng of he radng n or he ssung of publc quoes on he Index Consuen a he Exchange has ceased mmedaely or wll INK Canadan Insder Index Mehodology 8

20 cease a a laer dae for whaever reason (provded delsng s no because of a Merger or a Takeover bd) and he Index Consuen s no mmedaely lsed raded or quoed agan on an exchange radng or lsng sysem accepable o he Index Calculaor Insolvency occurs wh regard o an Index Consuen f (A) all shares of he respecve ssuer mus be ransferred o a rusee lqudaor nsolvency admnsraor or a smlar publc offcer as resul of a volunary or compulsory lqudaon nsolvency or wndng-up proceedngs or comparable proceedngs affecng he ssuer of he Index Consuens or (B) he holders of he shares of hs ssuer are legally enjoned from ransferrng he shares. A Takeover bd s a bd o acqure an exchange offer or any oher offer or ac of a legal person ha resuls n he relaed legal person acqurng as par of an exchange or oherwse more han 0% and less han 00% of he vong shares n crculaon from he ssuer of he Index Consuen or he rgh o acqure hese shares as deermned by he Index Calculaor based on noces submed o publc or self-regulaory auhores or oher nformaon consdered by he Index Calculaor o be relevan. Wh regard o an Index Consuen a Merger s () a change n he secury class or a converson of hs share class ha resuls n a ransfer or an ulmae defne oblgaon o ransfer all he shares n crculaon o anoher legal person () a merger (eher by acquson or hrough formng a new srucure) or a bndng oblgaon on he par of he ssuer o exchange shares wh anoher legal person (excep n a merger or share exchange under whch he ssuer of hs Index Consuen s he acqurng or remanng company and whch does no nvolve a change n secury class or a converson of all he shares n crculaon) () a akeover offer exchange offer oher offer or anoher ac of a legal person for he purposes of acqurng or oherwse obanng from he ssuer 00% of he shares ssued ha enals a ransfer or he rrevocable oblgaon o ransfer all shares (wh he excepon of shares whch are held and conrolled by he legal person) or (v) a merger (eher by acquson or hrough formng a new srucure) or a bndng oblgaon on he par of he ssuer of he share or s subsdares o exchange shares wh anoher legal person whereby he ssuer of he share s he acqurng or remanng company and does no nvolve a change n he class or a converson of he all shares ssued bu he shares n crculaon drecly pror o such an even (excep for shares held and conrolled by he INK Canadan Insder Index Mehodology 9

21 legal person) represen n oal less han 50% of he shares n crculaon drecly subsequen o such an even. The Merger Dae s he dae on whch a Merger s concluded or he dae specfed by he Index Calculaor f such a dae canno be deermned under he law applcable o he Merger. Selecon Pool refers o he unverse of elgble secures for whch INK deermnes s Edge V.I.P. rankngs. Ths nal selecon group s used n order o provde a manageable unverse of Canadan secures for whch o apply he Index consuen selecon process. Exchange s n respec of he Selecon Pool and every Index Consuen he respecve prmary exchange where he Index Consuen has s prmary lsng. The Commee may decde o declare a dfferen sock exchange he Exchange for radng reasons even f he company s only lsed here va a Sock Subsue. Sock Subsue ncludes n parcular Amercan Deposory Receps (ADR) and Global Deposory Receps (GDR). Wh regard o an Index componen (subjec o he provsons gven above under Exraordnary Evens ) he Tradng Prce n respec of a Tradng Day s he closng prce on hs Tradng Day deermned n accordance wh he Exchange regulaons. If he Exchange has no closng prce for an Index Consuen he Index Calculaor wll use he mos recen prce. A Tradng Day s n relaon o he Index or an Index Consuen a Tradng Day on he Exchange (or a day ha would have been such a day f a marke dsrupon had no occurred. The Index Calculaor s ulmaely responsble as o wheher a ceran day s a Tradng Day wh regard o he Index or an Index Consuen or n any oher connecon relang o hs mehodology. A Busness Day s a day on whch he Torono Sock Exchange s open for radng. The Index Calculaor s Solacve AG or any oher appropraely apponed successor n hs funcon. The Index Currency s he currency n whch he Index s denomnaed and shall be Canadan Dollar ( CAD ). Marke Capalzaon s wh regard o each of he shares n he INK Selecon Pool on a Selecon Day or Adjusmen Day he value publshed by Mornngsar CPMS (or a successor) as he Marke Capalzaon for hs day. As a he dae of hs documen Marke Capalzaon s defned by Mornngsar INK Canadan Insder Index Mehodology 20

22 CPMS as he oal dollar value expressed n mllons of dollars of a company's publcly lsed shares. I s calculaed as he closng prce as of he daa dae mes he oal number of shares currenly lsed for radng. Floa Marke Capalzaon s defned by Mornngsar CPMS expressed n mllons of dollars and represens he oal dollar value of a company ha s avalable o be raded publcly. I s calculaed as he closng prce as of he daa dae mes he publcly raded shares (Floa shares). Floa shares are hose shares ha are currenly lsed on he Torono Sock Exchange less hose ha are held n conrol blocks (shares held by 0% owners or as oherwse deermned by Mornngsar CPMS). If Mornngsar CPMS (or a successor): () does no publsh for a Selecon Day a Marke Capalzaon or Floa Marke Capalzaon for a share or () adops anoher mehod for calculang he Marke Capalzaon for all shares or only wh regard o he share n queson or uses dfferen assumpons n calculang he Marke Capalzaon for all shares or only wh regard o he share n queson and n he reasonable assessmen of he Index Calculaor nvolves maeral changes (he Index Consrucon Team makes he decson as o wheher such changes are o be deemed maeral by applyng facors ha n hs reasonable assessmen appear approprae o ) he Index Calculaor wll n s sole dscreon deermne he Marke Capalzaon n respec of he shares or of a share ncluded n he INK Selecon Pool and he respecve Selecon Day eher from anoher publcly accessble source or sources ha n s assessmen are reasonable and approprae n he even ha no oher publcly quoed suable prces are avalable. Selecon Day s eher Aprl 30 or Ocober 3. Adjusmen Day s he hrd Frday of May or hrd Frday of November. An Afflaed Exchange s wh regard o an Index Consuen an exchange a radng or quoaon sysem on whch opons and fuures conracs on he Index Consuen n queson are raded as specfed by he Index Calculaor. A Marke Dsrupon Even occurs f. One of he followng evens occurs or exss on a Tradng Day pror o he openng quoaon me for an Index Consuen: A) radng s suspended or resrced (due o prce movemens ha exceed he lms allowed by he Exchange or an Afflaed Exchange or for oher reasons): INK Canadan Insder Index Mehodology 2

23 .. across he whole Exchange; or.2. n opons or fuures conracs on or wh regard o an Index Consuen or an Index Consuen ha s quoed on an Afflaed Exchange; or.3. on an Exchange or n a radng or quoaon sysem (as deermned by he Index Calculaor) n whch an Index Consuen s lsed or quoed; or B) an even ha (n he assessmen of he Index Calculaor) generally dsrups and affecs he opporunes of marke parcpans o execue on he Exchange ransacons n respec of a share ncluded n he Index or o deermne marke values for a share ncluded n he Index or o execue on an Afflaed Exchange ransacon wh regard o opons and fuures conracs on hese shares or o deermne marke values for such opons or fuures conracs; or 2. Tradng on he Exchange or an Afflaed Exchange s ceased pror o he usual closng me (as defned below) unless he early cessaon of radng s announced by he Exchange or Afflaed Exchange on hs Tradng Day a leas one hour before (aa) he acual closng me for normal radng on he Exchange or Afflaed Exchange on he Tradng Day n queson or f earler. (bb) he closng me (f gven) of he Exchange or Afflaed Exchange for he execuon of orders a he me he quoe s gven. Normal exchange closng me s he me a whch he Exchange or an Afflaed Exchange s normally closed on workng days whou akng no accoun afer-hours radng or oher radng acves carred ou ousde he normal radng hours; or 3. A general moraorum s mposed on bankng ransacons n he counry n whch he Exchange s resden f he above-menoned evens are maeral n he assessmen of he Index Calculaor whereby he Index Calculaor makes hs decson based on hose crcumsances ha he consders reasonable and approprae. INK Canadan Insder Index Mehodology 22

24 Conac Informaon Index Managemen and Sales Drecor of Index Managemen INK Research Corp Wes Hasngs Sree Vancouver BC V6E 3T #33 (o) Drecor of Index Sales and Markeng INK Research Corp Wes Hasngs Sree Vancouver BC V6E 3T #333 (o) Informaon regardng Index calculaons Solacve AG Guollesr Frankfur am Man Tel.: +49 (69) Fax: +49 (69) INK Canadan Insder Index Mehodology 23

25 Dsclamer The ncepon dae of he Index was November All nformaon presened pror o he ndex ncepon dae s backesed. Hsorcal reurns for INK Indexes pror o he lve producon dae are calculaed usng he same INK mehodology ha was n place a lve ncepon dae. Backes performance calculaons may no be complee due o lack of daa sources corporae acons and he avalably and relably of daa for specfc secures. Pas performance s no an ndcaon of fuure resuls. Lve applcaon of he mehodology used o consruc he Index may no resul n performance commensurae wh backes reurns. Indexes are unmanaged and whle desgned wh he objecve of beng nvesable hey canno be nvesed n drecly. Any reurns or performance provded whn are for llusrave purposes only and do no demonsrae acual performance. Performance reurns do no nclude he radng of acual asses. Consequenly resuls do no nclude ransacon coss and fees. All nformaon provded by INK s mpersonal and no alored o he needs of any ndvdual group or organzaon. INK may receve compensaon n connecon wh lcensng s ndexes o hrd pares for use n nvesmen producs such as exchange raded funds muual funds or oher vehcles. Do no assume ha any such nvesmen produc wll have performance resuls ha rack he Index or provde posve reurns due o assocaed ransacon coss fees and oher facors such as bu no lmed o marke rsk. Prospecve nvesors n any nvesmen produc whch lcences hs Index are cauoned no o rely on any saemens se forh n hs documen. Prospecve nvesors are advsed o make an nvesmen n any such nvesmen produc only afer carefully consderng he rsks and fees nvolved whch are ypcally explaned n a prospecus or smlar documen prepared by he ssuer of he nvesmen produc. INK s no an nvesmen advsory servce a fnancal planner an nvesmen advsor nor a secures advsor. INK does no purpor o ell people or sugges o people wha hey should buy or sell for hemselves. Nohng heren should be consrued as nvesmen advce. Neher INK nor anyone afflaed wh INK s responsble for any nvesmen decson made. INK has made all reasonable effors o ensure ha all nformaon provded s accurae a he me of ncluson; however here may be nadveren and occasonal errors. INK makes no guaranee of accuracy or compleeness. All nformaon and opnon expressed heren s subjec o change whou noce. INK employees may have an ownershp or nvesmen neres n any sock menoned. Incluson of a secury whn an ndex s no a recommendaon by INK o buy sell or hold such a secury. All nformaon heren s Copyrgh 205 INK Research Corp. All rghs reserved INK s he owner of he rademarks servce marks and copyrghs relaed o s ndexes. INK Edge and INK Research are regsered rade-marks owned by INK Research Corp. The Mornngsar name and logo are he regsered rademarks of Mornngsar. SEDI s a regsered rade-mark owned by he Albera Secures Commsson. INK Canadan Insder Index Mehodology 24