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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Effective

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Archived

Effective: 1 November, 2012 - 31 December, 2019

Categories: Valuation

Source: GIPS Handbook, 3rd Edition

Should securities lending income be included in the investment firm’s performance?

The GIPS standards provide comparability of the performance of investment managers by utilizing composites, which are based on investment strategy. Typically, securities lending is not an active part of the portfolio strategy. Therefore, unless the securities lending is a part of the strategy defined by and at the discretion of the investment manager, for purposes of reporting performance for the GIPS standards, securities lending income should be treated like an external cash flow and subtracted from performance results in order to get an accurate representation of the investment manager’s ability to implement the intended strategy of the portfolio. Firms should disclose how securities lending income is treated.

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