GIPS 20/20 Consultation Paper

The GIPS Executive Committee (“EC”) is preparing for a full re-write of the GIPS standards, which they are referring to as GIPS 20/20. It is referred to as GIPS 20/20 as it is a “vision” for the future of the standards and because it also is intended to be rolled out in the year 2020.

The EC has never put out a consultation paper of this kind before; typically the only opportunity to comment is after new guidance is already drafted. This is your opportunity to help shape the future of the standards by submitting your comments in response to the questions they pose in the consultation paper. To provide feedback, please send your comments to standards@cfainstitute.org by 16 July 2017.

The full GIPS 20/20 Consultation Paper is available on the GIPS Standards website. The areas of focus include:

  • The structure of the standards to ensure they are applicable to all types of investment managers as well as to asset owners
  • Specific treatment of pooled funds, to build on the Guidance Statement on Broadly Distributed Pooled Funds currently in place
  • Adjustments to the way asset-class specific guidance is structured in the standards (e.g., guidance specific to private equity and real estate)
  • Expanded use of internal rates of return (IRR) where appropriate
  • The frequency at which portfolios are required to be valued
  • Providing compliant presentations to existing clients and pooled fund investors
  • Options for reporting “advisory-only” assets (e.g., UMA) that do not currently fit within a firm’s assets under management (AUM)
  • The inclusion of non-fee paying portfolios in composites
  • References to the firm’s claim of GIPS compliance
  • Timeliness and frequency for updating compliant presentations
  • The use of estimated trading expenses
  • Whether any required statistics or disclosures can be removed as well as if any statistics or disclosures not currently required should be added

Whether you agree or disagree with the potential changes discussed, the EC greatly appreciates any feedback provided. If you only have an opinion on some of the topics, it is okay to respond to the portions you wish. Your response does not need to be formal and could even be a simple email.

We are in the process of composing our comments and strongly encourage you to do the same. If there are any aspects of the consultation paper you do not understand, feel free to contact us and we can help give you context or clarify the concerns involved.