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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1 Result

Archived

Effective: 1 June, 2009 - 31 December, 2019

Categories: Discretion

Source: GIPS Executive Committee

If a portfolio’s custodian or prime broker, whether selected by the client or not, declares bankruptcy or has been purchased by another organization resulting in the portfolio being subsequently frozen where it cannot be accessed and no trading can occur for a period of time, can that portfolio be treated as non-discretionary for the time the strategy could not be implemented?

Yes, the firm may classify the portfolio as non-discretionary and remove the portfolio from the composite for the period where the strategy could not be implemented. If the firm has removed the portfolio from the composite, the firm must re-include the portfolio in the composite when the firm is able to manage it on a discretionary basis. A portfolio that changes from discretionary to non-discretionary status must be removed from a composite on a prospective basis only; the portfolio must not be removed from the composite retroactively.
Additionally, firms must determine whether this situation rises to the level of a significant event. Firms must disclose all significant events that would help a prospective client interpret the performance record.