D Flashcards
Describe the 9 major sections of the GIPS standards 178-179
Fundamentals of Compliance
a. Definition of the firm
b. documentation of firm policies and procedures w/ respect to GIPS compliance
c. Complying with GIPS updates
d. Claiming compliance in the appropriate manner
e. appropriate verification statement when a third-party verifier is employed
Input Data
input data should be consistent in order to establish full, fair, and comparable investment performance presentations
Calculation Methodology
Certain methodologies are required for portfolio return calc. and certain other methodologies are required for composite return calculations. Uniformity in methods across firms is required so that their results are comparable.
Composite Construction
Creation of meaningful, asset-weighted composites is important to achieve a fair presentation. Composite performance is based on the performance of one of more portfolios that have the same investment strategy or investment objective. Composite returns are the assets weighted average of the returns of the portfolios that are included in each composite.
Disclosures
The firm must disclouse information about the presentation and the policies adopted by the firm so that the raw numbers presented in the report are understandable to the user. There are some discloures that all firms must make, but some disclousres may not apply to all firms. If a disclousre is not applicable to a specific firm, the firm is not required to include any statement regarding it.
Presentation and reporting
investment performance must be presented according to GIPS requirements. Other firm-specific information not specifically required by GIPS should be included when appropriate.
Real Estate
Certain provisions apply to all real estate investments (land, buildings, etc) regardless of the level of control the firm has over management of the ivnestment. These provisions apply regardless of whether the asset is producing revenue or there is leverage incolced in the investment.
Private Equity
Private equity investments must be valued according to the GIPS PRivate EQuity Valuation PRinciples, which are contained in App. D, unlees the unvestment is an open-end or evergreen fund (whch must follow reg. GIPS) Private equity investments include all investment in companies that are not pblically traded, regardless of their stage of business development. This would include venture capital investments, ownership of a previosuly public company that has been purcahsed (taken private), and mezzanine financing, as well as limited partnership shares in such investments and fund-of-funds investments
Wrap fee/Separately Managed Account (SMA) portfolios
For these portfolios, some of the requirements and recommendations in sections 0 - 5 are supplemented or replaced by the reeuitrements specified in this section
