The Goldman Sachs Group, Inc. (together with its affiliates, "Goldman Sachs" or the "firm") produces research within a definition of "recommendation" under the Commission Directive 2003/125/EC (the “Directive”) including “research recommendations” and "investment research" under chapter 12 of the Financial Conduct Authority’s (“FCA”)  Conduct of Business Sourcebook (“COBS 12”). Global Investment Research Division ("GIR") produces research with respect to equities and related products and certain fixed income securities.

This Policy Statement describes how the European offices of Goldman Sachs ("Goldman Sachs Europe" or "GS Europe") identify and manage potential conflicts in connection with the publication of research. This Policy Statement summarises more detailed policies issued to relevant Goldman Sachs Europe employees and relevant employees of affiliates involved in the production of research distributed by Goldman Sachs Europe.

This Policy Statement applies only to investment research as defined by and produced in accordance with Chapter 12 of the Financial Conduct Authority’s (“FCA”) Conduct of Business Sourcebook (“COBS 12”).

The Goldman Sachs Group, Inc. (together with its affiliates, “Goldman Sachs” or the “firm”) produces investment research as defined in accordance concerning equities and related products and certain fixed income securities within its Global Investment Research Division (“GIR”).   All such research concerning specific securities produced by GIR should be regarded as investment research for the purposes of COBS 12.2. Research produced within GIR which does not make any recommendation concerning specific securities, such as research that discusses macro-economic trends or strategy, and reports or sales commentaries produced by sales and trading personnel, should not be regarded as investment research for purposes of this Policy Statement.

Goldman Sachs International ("GSI") is authorised by the Prudential Regulation Authority (“PRA”) and regulated by the FCA and the PRA. GSI approves research in connection with its distribution in the European Union and the United Kingdom. Goldman Sachs AG and Goldman Sachs International Zweigniederlassung Frankfurt are regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht and may also distribute research in Germany.

The firm is subject to a “Global Research Settlement” entered by a United States District Court on October 31, 2003 and modified on March 15, 2010. Whilst not required to do so, the firm has applied the terms of the Global Settlement on a global basis, subject to limited variations in response to local market practices outside the United States.   The Global Research Settlement does not apply to credit research.

Credit research is produced in accordance with firm policies and procedures designed to satisfy the “Guiding Principles to promote the Integrity of Fixed Income Research” (“BMA Principles”) published in May 2004 by The Bond Market Association (an international trade association). This Policy Statement is adopted by GSI and unless otherwise stated is consistent with the firm’s global policies.

A.  Statement of our Investment Research Principles

In 2002, GIR adopted the principles set out below:

  • GIR and our entire firmwide research effort (Goldman Sachs Research) is committed to providing the highest quality fundamental research and investment opinions to its clients.
  • We aspire to be thought leaders in our fields. We are committed to identifying and rigorously analyzing financial information, strategic issues and trends, both regionally and globally that affect companies, industries and markets and fundamental changes which may have a meaningful impact on future investment values.
  • In order to provide informed investment opinions, we must always exercise exceptional diligence and thoroughness in our work, and have a reasoned basis for our opinions, supported by the appropriate level of independent investigation, inquiry, analysis and judgment.
  • We strive for the professionalism required to create the prevailing wisdom, or where appropriate, to question it. Our stated investment opinions must always reflect the informed views of our research analysts.
  • We recognise that distinguished and independent research is critical to serving our investing and issuing clients in the equity, fixed income, currency and commodities markets worldwide.
  • We understand that special responsibilities inure to us in Goldman Sachs Research and to our firm as a result of the important roles we fill in the various global capital markets.
  • We recognise that potential conflicts, both actual and perceived, may arise both internally within our firm as well as externally from corporate and investor clients, and that it is our responsibility to acknowledge and manage those conflicts in a way that protects our clients and our reputation.
  • We understand that, individually and collectively, we are ultimately responsible for protecting the integrity of our research views and that to do otherwise would compromise the value of all that we do. Integrity, independence and trust in Goldman Sachs Research are cornerstones upon which our reputation is based.

B.  Identifying Potential Conflicts

As reflected above in the Statement of our Investment Research Principles the firm identifies and manages potential conflicts arising from the publication of research. These conflicts can arise with regard to corporate clients, investor clients, the proprietary and agency trading activities of the firm, the firm’s investment banking activities and the interests of the firm’s officers and employees. The policies summarised in sections (C) through (M) describe the way in which the firm seeks to manage these conflicts.

The firm has appointed an Investment Research Ombudsman for GIR. The ombudsman is available to all members of GIR with respect to any issues regarding conflicts and perceived inappropriate influences, whether from within the firm or from external sources, such as investors who may own significant positions in covered companies or management of covered companies. The Investment Research Ombudsman reports to both the firm’s CEO and the Chairman of the Audit Committee of the Board of Directors.

C.  Organisation: Supervision and Management of Analysts

In 2002, GIR became a separate division of the firm, reporting to the firm’s Executive Office. GSI equity analysts report to the Directors of Research for Equities in Europe, the FCA CF29 Significant management director reporting to the firm’s Global Chief Operating Officer of GIR based in New York.

There are no credit analysts located in our European offices. However, credit research is available to our global client base, and some credit analysts produce research on fixed income securities of non-United States issuers.  Analysts are not supervised by, and do not report to, investment banking personnel or personnel who directly supervise day-to-day sales and trading activities.

D.  Segregation of Research Functions

GIR has 1) established controls designed to prevent analysts obtaining non-public or proprietary information from other areas of the firm, and 2) implemented procedures to prevent analysts’ independence from being compromised by any interactions that they might have with the firm’s investment bankers or Securities Division personnel.

The firm has adopted policies and procedures and conducted training of analysts, such that they may receive non-public information only in accordance with clear wall-crossing procedures. These procedures include obtaining appropriate approvals of research management and compliance, logging and reviewing such approvals and imposing appropriate restrictions on the permitted activities of analysts concerned while the information remains non-public.

1.    Relationship with Investment Banking Division:

  • Physical and systems access is limited to personnel in those groups. Analysts are physically separated from these groups and are not permitted to have access to these areas or to their computer systems.

  • Under the Global Research Settlement, communications between the Investment Banking Division and GIR are generally restricted and permitted communications between the Investment Banking Division and GIR may only take place in the presence of a “chaperone” from the firm’s Compliance Department.

2.    Relationship with Securities Division:

  • GIR analysts are permitted physical access to the firm’s trading floor and sales and marketing groups but are not seated with sales and trading desks.

  • GIR analysts may not have regular access to systems, screens or reports showing either firm or client positions, and must certify internally at the time of research publication that neither the views expressed in nor timing of the publication of such research has been influenced by knowledge, if any, or firm or client position(s) in the relevant securities.

E.  Analyst Personal Views

Analysts are required to certify in each research report that i) the views expressed in the report accurately reflect their personal views about the subject company or companies and its or their securities, and ii) 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.

F.   Limiting the Extent of our Analyst Involvement in Activities Other Than the Preparation of Research

Analysts interact with investing clients, providing them with informed and impartial research opinions. Analysts participate in and facilitate a continuing dialogue between investors and corporate issuers. Analysts frequently discuss their opinions with the firm’s sales and trading personnel.

Analysts are not permitted to participate in sales pitches for investment banking mandates and are not permitted to make presentations or actively participate in road shows relating to an investment banking transaction.

Analysts are permitted to perform certain other roles where the firm believes that it would not compromise their independence or the appearance thereof, including:

  • Discussing the merits of a proposed transaction with investment banking colleagues.
  • Discussing industry sector trends with investment banking colleagues.
  • Assisting in due diligence.
  • Advising on market sentiment and pricing and structuring of securities offerings.
  • Investor education relating to an investment banking transaction.
  • Education of the firm’s sales force relating to an investment banking transaction.
  • Participation in presentations at widely-attended conferences.

G.  Factors used in Determining Analysts’ Remuneration

GIR analysts’ remuneration is determined exclusively by GIR management in conjunction with firm management. Investment banking personnel may not have any input into such decisions. Investment banking personnel are not permitted to perform or contribute to annual appraisals of analysts.

Analysts’ remuneration is not directly linked to specific investment banking transactions, but may be related to the firm’s overall performance which includes investment banking results.

In GIR under the Global Research Settlement, a significant portion of an equity analyst’s compensation is based on the quality and accuracy of the analyst’s research. GIR management employs a series of metrics and surveys in such determination.

The following are factors which may be taken into account by GIR management when determining an analyst’s remuneration:

  • the quality and accuracy of the analyst’s research;
  • the analyst’s individual performance and productivity;
  • the performance of the analyst’s team;
  • evaluations by investing clients and firm employees (including salespeople and trading desk and risk management personnel) other than investment banking personnel;
  • the size and trading value of, the profitability of, and the potential interest of the firm’s investor clients in research with respect to, the asset class covered by the analyst;
  • the analyst’s seniority, reputation and experience; and
  • the market for hiring and retaining analysts.

H.  Policies concerning Inducements Given to or Given by Analysts

Analysts are not permitted to accept any remuneration or other benefit from an issuer or any other party in respect of the publication of research.

Analysts are not permitted to accept any inducement for the production of favourable research.

These restrictions do not preclude the acceptance of reasonable corporate hospitality in accordance with the firm’s general policies regarding gifts and entertainment.

I.     Recording and Monitoring Analysts’ Personal Interests and Personal Account Dealing

Analysts are prohibited from trading or owning publicly available securities or ‘related financial instruments’ issued by companies in their industry area of coverage. The analyst’s industry area of coverage extends to all companies in the industry the analyst covers, not just to those companies currently covered by GS analysts. However, an analyst’s industry area of coverage is generally limited to his/her geographic industry area of coverage unless the analyst has global coverage.

Prior approval is required for investments in private companies or private funds and also for any outside business activities such as directorships, or earned income from a source other than their employment at the firm. An analyst may not perform services for remuneration for a company covered by such analyst either on behalf of the firm or in a personal capacity.  Analysts cannot invest in private companies in their industry area of coverage.

All GIR employees must obtain pre-approval from GIR Compliance to buy or sell any publicly available equity securities and equity linked securities, including convertibles and derivatives; bonds; closed-end mutual funds; and any other comparable investment vehicle.

Analysts (and household members of analysts) may not serve as an officer, director, employee or advisor to a company in the analyst’s coverage area.

J.   Fact-checking with companies

In accordance with GIR policies, analysts are permitted to prepare a separate schedule of facts from the unpublished report for fact-checking with subject companies, but not with the Investment Banking Division. Equity and credit analysts may not provide a subject company with a written draft summary.

K.  Dissemination and Termination of, and Impact of the Firm acting as Financial Advisor on, Coverage

Decisions on coverage are made by GIR management. In making such decisions GIR management may consider input from various sources, including investors, managers of the firm’s Securities Division and, to the extent permitted by the Global Research Settlement or BMA Principles as applicable, Investment Banking Division.

In general, the policy of GIR management is to cover companies where the firm has had a lead role in the companies’ offering of securities.

GIR’s policy is to ensure that statements by analysts that are new and material achieve broad, global dissemination both to clients and sales/trading personnel.

The decision to terminate coverage of an issuer must be approved by GIR management. The firm publishes a final note stating that coverage has been terminated.

Where the firm is acting in an advisory capacity in a publicly announced merger or strategic transaction involving a company, in addition to compliance with any applicable rules or regulations (e.g., the UK City Code on Takeovers and Mergers), if GIR management views the proposed merger or strategic transaction as material to the analysis of the security such that the analyst cannot responsibly analyse the rating for the security and, if the security is an equity security, the target price for the stock, the investment rating and target price, if any, will be suspended temporarily and the security shown as “not rated”.

L.   Disclosure of Interests

The full list of GIR disclosures can be viewed at:

M. Offering Related Research

In accordance with common practice in the UK, from time to time, GSI publishes research (commonly termed “pre-deal” research) prior to an offering of securities where GSI also has an investment banking mandate in respect of the offering. Although not containing ratings or price targets, pre-deal research published by GSI in these circumstances will be considered investment research for the purposes of COBS 12.2. Decisions as to whether to provide pre-deal research are made by GIR management. In connection with publishing pre-deal research GS Europe has adopted procedures designed to:

  • Prevent the promise of favourable coverage (and requirements that decisions on coverage should remain with GIR management).
  • Ensure the factual consistency of pre-deal research with any related prospectus or selling document, including procedures allowing review for factual accuracy by investment bankers and issuers.
  • Disclose GS Europe’s involvement in the transaction.