Q & A Database
The GIPS Standards Q&A database contains questions and answers (Q&As) on various searchable topics that provide additional interpretation on an issue. Q&As are considered to be authoritative guidance and must be followed in order to claim compliance with the GIPS standards.
Content from prior Q&As was included in the GIPS Standards Handbook as much as possible and many Q&As were archived. Change the Status drop-down filter to "Archived" to see the archived Q&As.
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ArchivedEffective: 1 December, 2013 - 31 December, 2019Categories: Wrap Fee PortfoliosSource: GIPS Executive Committee
We manage SMA portfolios for approximately 45 SMA sponsors. We are able to maintain satisfactory supporting records for 44 of those 45 SMA sponsors. For one SMA sponsor, we are unsure whether what we have would be considered adequate supporting records. We intend to exclude them from our firm’s assets and definition of the firm, and claim compliance for the remainder of our SMA business (the other 44 SMA sponsors). Can we do so?
The concept of compliance with the GIPS standards must be applied on a firm-wide basis. While there is some flexibility in defining a firm, an organization may not choose to exclude a portion of its assets from its firm definition simply because it cannot satisfy the recordkeeping requirements of the GIPS standards.
That said, one troublesome wrap fee/SMA sponsor would not, in all cases, prevent the firm from claiming compliance. The firm should consider the records that are available for the wrap fee/SMA program and assess whether the firm can place reliance on the records that are maintained. In many instances, some records are available for all portfolios – such as trading records and summary information – regardless of wrap fee/SMA sponsor. Acknowledging that the level of detail may not be ideally what the firm would like to have, the firm may be able to determine that the minimal records available are enough to satisfy the firm’s recordkeeping requirements, enabling it to comply with the GIPS standards.