The release of the GIPS 2020 Exposure Draft is an exciting milestone in the development of the Global Investment Performance Standards (GIPS). The volunteers and CFA Institute staff worked hard to assemble performance presentation standards that reflect industry best-practices and that are useful and practical.
The GIPS 2020 Exposure Draft can be found at www.gipsstandards.org. Check out the website for full details.
At a high level, the GIPS 2020 Draft reflects changes to make it more relevant for many firms in the investment industry, including:
- Alternatives managers
- Investment advisors that manage broadly distributed pooled funds
- Asset owners
The GIPS 2020 Draft is proposing several changes that would impact all firms claiming compliance, including:
- The option to use money weighted returns (such as IRR), instead of time-weighted returns
- Enhanced flexibility for firms to advertise their GIPS compliance
- The option for firms to present pooled fund reports, while eliminating the need for single fund composites.
Public comment is a critical element of the standard-setting process. After reading the Draft, check out this document containing questions for public comment. Although you are free to comment on anything relating to the GIPS 2020 Draft, this document raises key questions that the GIPS Executive and Technical Committees have relating to the draft. The questions in the document can be found here. The comment period runs until December 31, 2018.
We will be issuing additional alerts with more details about the provisions in the Draft. If you have any questions in the interim, or would like to discuss how these new provisions may impact your business, please don’t hesitate to contact us.
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