Page 41 - CFA - Day 1 & 2 Course Notes
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LOS 5.a: Describe the key features 5. The GIPS Standards
of the GIPS standards and the
fundamentals of compliance.
Key Characteristics of GIPS
To claim compliance, an investment management firm must define its “firm.” This definition
should reflect the “distinct business entity” ..
GIPS are ethical standards for performance presentation which ensure fair representation of
results and full disclosure.
Include all actual fee-paying, discretionary portfolios in composites for a minimum of five
years or since firm or composite inception. After presenting five years of compliant data, the
firm must add annual performance each year going forward up to a minimum of ten years.
Firms are required to use certain calculation and presentation standards and make specific
disclosures.
Input data must be accurate.
