SEC staff advises that private fund sponsors that exclude the impact of subscription credit facilities when showing a gross internal rate of return in their advertisements also must exclude such impact when showing the corresponding net internal rate of return. On February 6, 2024, the U.S. Securities and Exchange Commission […]
Continue ReadingHypothetical Performance Under SEC Marketing Rule
Under the SEC Marketing Rule, firms are limited in how they are allowed to distribute and use presentations that include hypothetical performance. All materials that include hypothetical performance – even if only distributed to one individual in a one‐on‐one setting – must be viewed as advertisements. Further, investment advisers are […]
Continue ReadingImpact of FINA Regulatory Notice 20-21 on Performance Presentations
The Financial Industry Regulatory Authority (FINRA) has issued Regulatory Notice 20-21 (the “Regulatory Notice”) which allows retail communications concerning private placement offerings to present the fund’s internal rate of return (IRR) under certain conditions. In particular, the Regulatory Notice prescribes that such information must be “calculated in a manner consistent […]
Continue ReadingNew SEC Marketing Rule – Key Highlights for GIPS® Compliant Firms
The adoption of the SEC’s new Marketing Rule will have broad ramifications on investment advisers’ marketing activities. Following are some of the key areas that may directly impact firms that claim compliance with the GIPS standards and the manner in which they present performance in the future. We have summarized […]
Continue Reading2020 GIPS® Standards – Evolving Real Estate Guidance
One of the objectives that was considered when the 2020 edition of the GIPS standards was drafted was to reduce the amount of asset class specific guidance. The goal was to homogenize the guidance as much as possible so that it could be applied more universally across asset classes. This […]
Continue ReadingImplementing 2020 GIPS® standards
After years of development, the 2020 edition of the Global Investment Performance Standards (the “2020 GIPS® standards”) has been finalized and is now available to the public through the CFA Institute website. The effective date for the 2020 GIPS standards is January 1, 2020,
Continue ReadingSEC Modernizing Advertising Rule
On November 4th, the U.S. Securities and Exchange Commission (SEC) announced proposed amendments intended to modernize the rules under the Investment Advisers Act related to investment adviser advertisements and payments to solicitors.
Continue Reading2020 GIPS® Standards – Use of Carve-Outs
Under the 2020 GIPS standards, firms are allowed to include carve-outs with allocated cash in composites. This is very positive news as firms often have a desire to demonstrate the performance of sub-strategies that are offered as standalone portfolios or components of multi-strategy portfolios. It is expected that a greater […]
Continue ReadingFirms Must Comply Before They Verify
Complying with the Global Investment Performance Standards (GIPS®) is not a one‐time project that, once completed, can be checked off a firm’s to‐do list and set aside. GIPS compliance is an ongoing process that requires continuous maintenance and updates. Even if a firm receives a third‐party GIPS compliance verification, ongoing […]
Continue ReadingTimeline Revisions for GIPS® 2020
On April 18, 2018, CFA Institute announced some significant developments related to the timeline for GIPS 2020, the next edition of the GIPS standards, as well as the status of several guidance statements that are currently pending adoption. First, it was announced that the development of GIPS 2020 is on […]
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