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 June, 2009 - 31 December, 2019Categories: General/MiscellaneousSource: GIPS Executive Committee
If a portfolio we manage holds securities that have become illiquid, how should this be reflected for purposes of compliance with the GIPS standards?
Illiquid securities must be valued with the resulting losses reflected in performance. The portfolio must remain in the original composite and must be included in composite performance.
Firms must not claim that illiquid securities are non-discretionary in order to exclude the performance of the illiquid securities from the portfolio or the composite.
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.