CFA Group Issues Revised Investment Performance Standards

A news release from the group, the policy setting arm of CFA Institute, said the latest GIPS revision represents the most comprehensive and significant upgrade since their introduction in 1999. They will replace the AIMR-PPS standards – a predecessor to the GIPS version. Used primarily by investment managers in the United States and Canada, the AIMR-PPS standards will fully transition to the GIPS standards on January 1, 2006, according to the announcement.

“Moving to one standard globally should simplify the compliance process, as well as eliminate confusion concerning multiple standards in the North American marketplace,” said Karyn Vincent, chair of the AIMR-PPS Implementation Committee, in the news release “The revised GIPS standards incorporate many of the best practices already followed by many US and Canadian firms. I believe that the changes reflected in the revised GIPS standards will be welcomed by North American firms.”

Based on the principles of fair representation and full disclosure, the GIPS standards provide an ethical framework for the calculation and presentation of investment performance for investment management firms, the news release said. According to the announcement, the GIPS standards investment management firms,  their current and potential investing clients and the clients’ investment consultants.

Global standardization of investment performance reporting gives investors around the world the additional transparency they need to compare investment managers and will allow managers to compete for new business in foreign markets, according to the announcement.

More information is at  http://www.cfainstitute.org/cfacentre/ips/ .