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 March, 2006 - 31 October, 2012

Categories: Benchmarks

Source: GIPS Handbook, 2nd Edition

Firm C historically used the MSCI EAFE index as the benchmark for the firm’s Global ex-U.S. strategy, even though the strategy included investments in emerging markets and the benchmark did not. When the MSCI ACWI ex-U.S. index was introduced, the firm changed benchmarks because the new index included emerging markets, which more closely represented the firm’s strategy. Is this permissible according to the GIPS standards?

Yes. In this case the firm can change the benchmark to the MSCI ACWI ex-U.S. because it is more representative of the composite’s investment strategy. The firm must disclose the date of the change as well as the reason for the change. If historic data is available for the new benchmark, the firm could consider changing the benchmark retroactively. The firm must disclose if the benchmark has been changed retroactively, provided the change does not violate the spirit of the Standards and the appropriate disclosures are provided.

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