Supp Info GS - Public Comment v.1

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INVESTMENT PERFORMANCE COUNCIL (IPC) INVITATION TO COMMENT: ®Global Investment Performance Standards (GIPS ) Guidance Statement on the Use of Supplemental Information The Association for Investment Management and Research (AIMR) seeks comment on the proposed Guidance Statement addressing the use of supplemental information set forth below. For information on the Guidance Statement process, please see http://www.aimr.org/standards/pps/process.html. Comments must be submitted in writing and be received by AIMR no later than 15 November 2002. All comments and replies will be put on the public record unless specifically requested. Comments should be addressed to: Professional Standards and Advocacy Association for Investment Management and Research P.O. Box 3668 Charlottesville, Virginia 22903 USA Re: GIPS Guidance Statement Fax: [phone] E-mail: [e-mail] AIMR accepts responses by fax or e-mail, but it would be helpful if a hardcopy response is submitted as well. Effective Date This Guidance Statement will apply to all firms from the Effective Date forward. The proposed Effective Date for this Guidance Statement is 1 April 2003. This is the earliest date that the guidance can become effective given the estimated time needed for the public comment and IPC approval process. On this date, the Guidance Statement will replace all previous guidance on the subject. Executive Summary The GIPS standards encourage ...

Informations

• Publié par: Machir
• Nombre de lectures: 8
• Langue: English

Extrait

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INVESTMENT PERFORMANCE COUNCIL (IPC)

INVITATION TO COMMENT:

Global Investment Performance Standards (GIPS

®

)

Guidance Statement on the Use of Supplemental Information

The Association for Investment Management and Research (AIMR) seeks comment on the

proposed Guidance Statement addressing the use of supplemental information set forth below.

For information on the Guidance Statement process, please see

http://www.aimr.org/standards/pps/process.html.

Comments must be submitted in writing and be received by AIMR no later than 15 November

2002. All comments and replies will be put on the public record unless specifically requested.

Comments should be addressed to:

Professional Standards and Advocacy

Association for Investment Management and Research

P.O. Box 3668

Charlottesville, Virginia 22903

USA

Re: GIPS Guidance Statement

Fax: [phone]

E-mail:

[e-mail]

AIMR accepts responses by fax or e-mail, but it would be helpful if a hardcopy response is

submitted as well.

Effective Date

This Guidance Statement will apply to all firms from the Effective Date forward. The proposed

Effective Date for this Guidance Statement is 1 April 2003. This is the earliest date that the

guidance can become effective given the estimated time needed for the public comment and IPC

approval process. On this date, the Guidance Statement will replace all previous guidance on the

subject.

Executive Summary

The GIPS standards encourage firms to present all relevant information to full explain their

performance. Because this supplemental information could have the potential to be misleading

in relation to the firm’s claim of compliance, this Guidance Statement was developed to address

the proper uses of supplemental information.

Comment Requested

AIMR seeks public input on the proposals set forth in this document. Issues to consider in

conjunction with this proposal include:

•

Do you agree with the principles established in the Guidance Statement?

•

Do you agree with the definition of Supplemental Information?

•

Do you agree with the examples of Supplemental Information provided?

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•

Should Supplemental Information be excluded from GIPS verification? If not, how

should Supplemental Information be verified?

•

Do you agree with the proposed Effective Date of this Guidance Statement? If not, when

should the guidance become effective?

If commentators suggest other proposals, AIMR requests that they explain the rationale behind

their proposal.

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Guidance Statement on the Use of Supplemental Information

GIPS Introduction 10.h: GIPS should be applied with the goal of full disclosure and fair

representation of investment performance. Meeting the objective of full and fair disclosure

is likely to require more than compliance with the minimum requirements of GIPS. If an

investment firm applies GIPS in a performance situation that is not addressed specifically

by the standards or is open to interpretation, disclosures other than those required by

GIPS may be necessary. To fully explain the performance included in a presentation, firms

are encouraged to present all relevant supplemental information.

Definition of Supplemental Information

Supplemental information is defined as any performance-related information that supplements or

enhances a GIPS-compliant presentation; that is, any additional performance-related information

beyond what the GIPS standards require or recommend. Supplemental information does not

include general information regarding the firm or the investment strategy or process.

Guiding Principles

If a firm chooses to show supplemental information, it is important to consider the following

guiding principles:

•

Supplemental information must satisfy the spirit and principles of the GIPS standards: i.e.,

fair representation and full disclosure.

•

Supplemental information must not contradict or conflict with the information provided in

the GIPS-compliant composite presentation.

•

Supplemental information must be clearly labeled and identified as supplemental to a

particular composite presentation.

This guidance statement does not prohibit firms from preparing and presenting information

according to specific requests from prospective clients. However, firms should provide all

prospective clients with a fully compliant presentation prior to or accompanying any

supplemental information.

Adoption Date:

Effective Date: 1 April 2003

Retroactive Application: No

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Examples of Supplemental Information

Supplemental information must relate directly to the GIPS-compliant presentation being

provided to the prospective client. Examples of information that may be presented to

supplement a fully compliant presentation include, but are not limited to:

•

Attribution

•

Sector/country weighting

•

Specific holdings information

•

Peer group comparison

•

Model results

•

Charts and graphs

•

Carved-out returns excluding cash

•

Risk analysis

•

Representative client type returns (like an ERISA account)

Information that is recommended in the GIPS standards and is included in a presentation is not

considered supplemental information. For example, GIPS II.5.B.1.b encourages firms to present

cumulative returns for composite and benchmarks for all periods. These are not supplemental

information and firms that choose to present cumulative returns do not have to label it as such, as

they are recommended under the GIPS standards.

The presentation and location of supplemental information in relation to ‘compliant’ data

depends on the type of supplemental information and its potential to mislead prospective clients.

There are certain situations that allow for the presentation of supplemental and compliant

information on the same page; however, firms should consider that there are also many situations

that call for the separation of supplemental and compliant information. When in doubt, firms are

encouraged to place the supplemental and compliant information on separate pages.

Supplemental Information – Verification

Supplemental information is not subject to verification under the GIPS standards. It is the

ultimate responsibility of the firm to ensure that it abides by the ethical principles and spirit of

the GIPS standards each time it presents performance results.

Application:

1. Can supplemental information be presented on the same page as the GIPS-compliant

presentation?

Yes. The supplemental information can be presented on the same page as long as it

satisfies the guiding principles of supplemental information (i.e., is not misleading, does

not contradict or conflict with the compliant information, is clearly labeled, and

references the appropriate composite presentation that it supplements).

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2. Firm A has a market brochure that describes the firm, staff, and investment process. One

of the pages contains the GIPS-compliant presentation for a specific composite. Do all

the other pages of the brochure need to be labeled as supplemental information?

No. Supplemental information is defined as performance-related information that

supplements or enhances a GIPS-compliant presentation. Supplemental information does

not include general information regarding the firm or the investment strategy or process.

3. XYZ firm created a presentation booklet that primarily highlights performance

information that is considered supplemental. The booklet shows an appropriate GIPS-

compliant presentation in the back of the book as an appendix. Is it acceptable for the

supplemental information to precede any reference to the compliant presentation?

Yes, provided the supplemental information:

•

is not misleading,

•

does not contradict or conflict with the compliant information,

•

is clearly labeled as supplemental, and

•

references the compliant presentation that it is supplemental to.

4. Are there any limits to what can be shown as supplemental information?

The definition and guiding principles of this

Guidance Statement on the Use of

Supplemental Information

are very specific about the types of information that should

and should not be shown in conjunction to a fully-compliant GIPS composite

presentation. When in doubt, firms should always turn their focus to the first guiding

principle of the

Guidance Statement

, which is also the fundamental objective of the

Standards: to ensure fair representation and full disclosure of performance results. By

continually using this principle to guide the calculation and presentation of performance,

firms are sure to satisfy the spirit and provisions of the GIPS standards.