Page 43 - CFA - Day 1 & 2 Course Notes
P. 43
LOS 5.a: Describe the key features 5. The GIPS Standards
of the GIPS standards and the
fundamentals of compliance.
Key Characteristics of GIPS
Fundamentals of compliance contain both requirements and recommendations:
Definition of the firm—
requirements: Definition of the firm—
recommendations
Apply GIPS on a firm-wide basis.
Firm must be defined as a distinct business unit. Include the broadest definition of
the firm, including all geographical
Total firm assets include total market value of offices marketed under the same
discretionary and non-discretionary assets, brand name.
including fee-paying and non-fee-paying
accounts.
Include asset performance of sub-advisors, as
long as the firm has discretion over sub-advisor
selection.
If a firm changes its organization, historical
composite results cannot be changed.
