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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Archived

Effective: 1 November, 2012 - 31 December, 2019

Categories: Benchmarks

Source: GIPS Handbook, 3rd Edition

Firm A manages an equity composite in which the investment strategy has attempted to mirror the S&P 500. Firm A now wants to expand the investment strategy to include non-U.S. large-cap equities and change the benchmark to a blended index of the S&P 500 and the MSCI EAFE indices. If Firm A discloses the date of, description of, and the reason for the benchmark change and explains how the new index is created and rebalanced, is that sufficient for Firm A to continue claiming compliance with the GIPS standards?

No. In this case, because the benchmark defined the strategy for the composite, a change in the benchmark results in a change to the investment strategy. A material change in the strategy results in the need for Firm A to create a new composite reflecting the new strategy.

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