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The need
for an improved model of financial analysis and research
in public companies became apparent in recent years when
failures in the historic system caused disturbances in
the financial markets resulting in a loss of shareholder
confidence and value. The Shareholders Research
Alliance ("SRA") was established to bring
more transparency to the market, by supporting and
monitoring professional, unbiased and ethical financial
analysis and research especially of smaller public
companies. The resulting improved market efficiencies
will benefit both corporations and shareholders.
Shareholders benefit as better understanding of a
company’s business plans, future potential and risks
provide improved decision making tools for private and
institutional investors.
Companies
benefit, because studies indicate that equity of public
corporations trade with greater volume when investors
have access to unbiased, professional analysis.
Increased liquidity in turn creates a more efficient
market, especially benefiting smaller investors who are
a prime source of capital for small companies.
The
Shareholders Research Alliance encourages
professional, agnostic, credible research in non-covered
and under-covered smaller public companies trading in
the U.S. markets. Its September 2005 foundation was a
direct result of testimony at meetings of the U.S.
Security and Exchange Commission (SEC) Advisory
Committee on Smaller Public Companies calling for this
type of program. Since, the SEC has publicly supported
models like that of the SRA as a step towards improved
market transparency.
Cornerstone
of the SRA’s activities will be a monitoring process
that allows only those research providers to align
themselves with the SRA who subscribe to a code of
conduct. The SRA will monitor the processes of the
aligned research providers and make them transparent to
the investing public thus eliminating bias and conflicts
of interest between company, research provider and
independent analysts.
The
Shareholders Research Alliance is a not for
profit association led by private investors. It invites
independent research providers, companies and others in
the financial community to join its efforts, programs
and processes.
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