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.

The GIPS Standards Helpdesk is available for individual questions and typically responds to inquiries within 3 business days.

Search by category, status, date range, and/or keyword.

Category

Advertising Aggregate Method Alternative Investments Asset Owner Assimilating Assets Benchmarks Calculation Methodology Carve-Outs Cash Cash Flow Changes to the Standards: 2006 GIPS Client Reporting Client Updates Composite Calculations Composite Changes Composite Construction Consultant Questionnaires Corrections to the 2006 GIPS standards Creation Date Currency Definition of the Firm Disclosures Discretion Dispersion Early Adoption Effective Dates Error Correction Fees FINRA Firm Assets Firm Notification Requirement Fixed Income Fundamentals of Compliance General/Miscellaneous GIPS Reports Inception Date Incubator Funds Information Outside of GIPS Reports Leverage/Derivatives List of Composite Descriptions Lists of Composites and Pooled Funds Minimum Asset Level Model Results New Portfolios/Accounts Non-fee-paying Portfolios Overlay Strategies Partial Period Returns Performance Examinations Performance History/Track Record Pooled Funds Portability Private Equity Providing GIPS Reports Real Estate Recordkeeping Risk Securities Lending Sub-Advised Assets Sub-Advisors Supplemental/Additional Information Terminated Portfolios Total Asset Owner Assets Total Fund Definition Trade-Date Accounting Valuation Verification Wrap Fee Portfolios

Status

Organization Type

Effective

Keyword

1 Result

Archived

Effective: 1 November, 2012 - 31 December, 2019

Categories: Benchmarks

Source: GIPS Handbook, 3rd Edition

Firm B has historically used the Large-Cap Index as the benchmark for its U.S. Equity Composite. However, Firm B recently changed its benchmark retroactively to the Broader Large-Cap Index in the composite presentation. In the compliant presentation, the firm provides the date of the change and explains that the Broader Large-Cap Index is a benchmark that better reflects the composite’s investment history. However, the change was made because the lower return of the Broader Large-Cap Index provided a lower hurdle rate for the returns of the composite. Is this change permissible under the GIPS standards?

No. Firm B has changed its benchmark primarily to improve its historical performance by lowering the benchmark return. Firm B has violated the GIPS standards even though it has technically met the requirements of the GIPS standards by providing the date of, description of, and reason for the change.

Please also see original Q&A