Newsletter Archive: December 2009

 

GIPS Newsletter

 

New Q&As Posted on the GIPS Website
Three new Q&As have been added to our database providing additional guidance on carve-outs. These Q&As address the application of the requirement that carve-outs must not be included in composites unless the carve-out is actually managed separately with its own cash balance for periods beginning on or after 1 January 2010. Firms are reminded that compliance with the GIPS standards also includes adherence to all Q&As and other guidance. The new Q&As can be found by searching the GIPS Q&A database for a key word or for all entries updated on or after December 2009.

 

Get Ready for 2010!
Remember the following GIPS provisions are effective 1 January 2010:

  1. A.3 For periods beginning 1 January 2010, FIRMS MUST value PORTFOLIOS on the date of all LARGE EXTERNAL CASH FLOWS.
  2. A.4 For periods beginning 1 January 2010, FIRMS MUST value PORTFOLIOS as of the calendar month-end or the last business day of the month.
  3. A.6 For periods beginning 1 January 2010, COMPOSITE returns MUST be calculated by asset weighting the individual PORTFOLIO returns at least monthly.
  4. A.7 For periods beginning 1 January 2010, CARVE-OUT returns are not permitted to be included in single asset class COMPOSITE returns unless the CARVE-OUTS are actually managed separately with their own cash balances.

In addition, the Error Correction Guidance Statement (PDF) is effective 1 January 2010. Firms should also review the recently released error correction Q&A (PDF).

 

GIPS 2010
The GIPS Executive Committee (EC) expects to formally adopt the revised GIPS standards in January, with an effective implementation date of 1 January 2011. Please visit the GIPS website to review the latest EC key decisions regarding the expected revisions to the Standards.

 

GIPS Conference
The European GIPS Standards Conference will be held on 24−25 February 2010 in London and will offer firms an invaluable look into the changes to the Standards and what challenges they may face in the coming years. Subject experts will share best practices on implementation and application of the Standards as well as speak to the key issues and major developments in performance measurement. For complete details, please visit our website.

 

New Translation Approved
The GIPS Executive Committee has endorsed the 12th official translation of the GIPS standards. A link to the Dutch translation submitted by Netherlands Country Sponsor, VBA - Beroepsvereniging van Beleggingsprofessionals, can be found on the GIPS website.

 

New Country Sponsor
The GIPS Executive Committee has announced that The CFA Society of Hungary and the Association of Hungarian Investment Fund and Asset Management Companies have formed a joint sponsorship and has officially endorsed them as the official sponsor of the GIPS standards for the Hungary market. The CFA Society of Hungary was previously the official GIPS Hungary Country Sponsor, and remains a part of the 32 country alliance. (To view all groups involved in GIPS promotion and development, visit our website.

 

Managing the Business of Asset Management
Have decreased revenues and increased expenditure further aligned hedge fund managers with traditional managers and forced them to think more about running their business as well as their assets? Will hedge fund managers embrace the GIPS standards? Holly Miller, partner at Stone House Consulting, LLC and member of the GIPS Promotion & Awareness Subcommittee, provides insight. To view the article, visit our website (PDF).

 

Staying Current
Stay up to date by signing up for the GIPS Newsletter, the GIPS RSS feed, and follow us on Twitter. Please visit www.gipsstandards.org for additional information and resources, including podcasts from the recent GIPS Standards Annual Conference in Boston.