CFA Institute GIPS Notification Form Updated

March 24, 2016 by  
Filed under Blog, REPORTING, RESOURCES

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The revised GIPS Compliance Form for notifying CFA Institute when firms claim compliance with the GIPS standards is now available. This update reflects the continuation of the requirement initiated in 2015. The form needs to be submitted to CFA Institute by all firms that claim compliance with the GIPS standards by June 30, 2016.  Keep in mind that if your firm completed the form last year, that does not fulfill your obligation for 2016.  Submitting the form is now an ongoing annual requirement in order to maintain compliance with the GIPS standards.

Following is a summary of the changes that were made to the form.

Additions/Modifications:

  • In the “Primary Contact” section, a new question was added stating that CFA Institute “would like to support your firm’s ongoing success” and asking whether they can contact you.  It expects a simple “yes” or “no” response, but it is a required element of the form.
  • Under the “Firm Information” section, there is a new question asking for the submission of the organization’s GIPS firm definition.  A text box is provided so that the specific language used by the firm can be provided.  This question is optional.
  • In the “Firm Type and Structure” section, there are additional geography related questions.  The first question asks where your firm operates. The firm can check a box indicating that the firm is “global” or can specify selected countries and regions from an extensive list of over 200 options. The form then asks if CFA Institute can display the locations where the firm operates on the GIPS website.  This is a required “yes” or “no” question.
  • Under the “Firm Assets and Investment Vehicles” section, the question related to firm’s GIPS Total Firm Assets is worded in the same manner as last year, but the drop down list with asset ranges to select from has been modified to be less granular at the lower range of assets but more granular on the higher end.

The full form is available at http://www.gipsstandards.org/compliance/Pages/compliance.aspx.

Lastly, the CFA Institute released summary statistics related to the findings from the information submitted last year. You can read about this at:  http://cfa.is/1UMQ0XF

Reporting Firm Assets Under Management

January 14, 2015 by  
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For some firms, the assets under management (AUM) reported for GIPS® compliance purposes is different from the AUM reported in regulatory filings such as Form ADV. This is because the requirements related to the accounts that must be included — and how the value of those accounts are measured — differ for a number of reasons. For example, when reporting GIPS® AUM it must be presented net of leverage and is not allowed to be grossed up as if the leverage did not exist, which conflicts with some regulatory filing requirements.

Also, when updating compliant presentations, it is important to confirm that the firm’s AUM is consistent with the scope of the definition of the firm and doesn’t include accounts outside of that scope. In addition, be sure that advisory-only assets — assets that the firm doesn’t have authority to execute trades for — are excluded from the firm AUM that is reported for GIPS® compliance purposes.

TIP:

Create and maintain a list of all accounts with the corresponding market values used to calculate the year-end firm AUM. It is important to maintain this list as part of the firm’s books and records, as data may change in a firm’s system and the list can be used to support the AUM total reported.