Compliance

  1. We employ an exceedingly conservative approach to compliance issues. Our analysts have Series 65 licenses. We are currently notice-filed in Florida, New York, Rhode Island, Illinois, and Texas.
     
  2. Our channel check surveys have always been voluntary and reliant on store-manager discretion whether to participate in a market research study. We only survey store-level managers, and acknowledge to our respondents that they may not be able to answer our questions. Our questions only pertain to their individual store locations, and relate to both their business trends and manager sentiments. Our survey samples are normally 5%-10% of a chain’s total locations, with smaller percentages typical in the case of very large chains. A small number of our recent surveys have yielded 12%-15% samples.
     
  3. Our ADV Part 2 Brochure addresses various factors about our business, including our client relationships, compliance practices, and affiliations. We have not been involved in any disciplinary situations. Our Code of Ethics was revised to specifically bar our management and associates from any personal investments in the consumer sector; this had been our informal practice previously. Each year our management and staff are required to review our Code of Ethics and insider information policies and certify their compliance.
     
  4. We issue new and renewing clients a two-page subscription agreement letter which details the services being provided, payment terms, confidentiality, and other matters. This includes our representation that we will comply with all laws, regulations, and ethical standards, including those pertaining to Material Non-Public Information (MNPI). To be in full compliance with regulations, we work with our clients to gain their full approval of the terms of each agreement letter. Some clients have composed their own contracts, which we have accepted.
     
  5. We have consistent operational processes, research methodology, and staff training to prevent the gathering of MNPI and the potential subsequent insider trading activity. The immaterial information gathered through our surveys are compiled into data which our clients input into their mosaic approach to investment decisions. We do not provide financial analysis, technical analysis, or other important inputs into our clients’ decision-making process; we therefore do not issue “buy” or “sell” recommendations. Our clients use other research firms, including our competitors, when evaluating the companies we research.
     
  6. Integrity ResearchCompliance, a division of Integrity Research Associates LLC (“Integrity”), finds Beacon Consumer Insights’ compliance practices to be consistent with industry best practices for market research and survey firms and is issuing an accreditation effective May 14, 2013. In achieving accreditation, Beacon has demonstrated that it follows each of the Key Compliance Control as defined in our best practices for market research and survey firms, as well as a majority of the overall best practices for market research and survey firms, which can be found on the link to its website. Best practices are based upon: industry surveys, recent case law, regulator sentiment, applicable laws, rules and regulations, and are intended to reduce risks related to confidential and potentially material, non-public information and other potential compliance-related risks.