Section 6 - R34 / R35 - Asset Mgr Code & GIPS Flashcards
Asset Manager Code (Definition)
- Outlines the thical and profissional responsibility of firms that manage assets on behalf of clients
Asset Manager Code (Goal)
- Set forth a useful framework for all asset managers to provide services in a fair and profissional manner and fully disclose key elements of those services to clients
Asset Manager Principles (List)
- Act in a professional and ethical manner at all times
- Act for the benefit of the client
- Act w/ independence and objectivity
- Act w/ skill, competence and diligence
- Communicate w/ clients in a timely & accurate manner
- Uphold the applicable rules governing capital markets
Asset Manager Principles (List - Resumida)
- Agir íntegro e é ético
- Benefício do Client (3A - Loyalty)
- Independência e Objetividade (1B)
- Skill, Competence and Diligence (5A - Diligence)
- Communicate w/ clients in a timely and accurate manner
Asset Manager Code: 1 - Loyalty to Clients
- Interest of clients > my own
- Preserve confidentiality
- Refuse business relations or gifts that can reasonably affect independence and objectivity
Asset Manager Code: 2 - Investment Process and Actions
- Reasonable care and judgment
- Not engage in market manipulation
- Deal fairly and objectively when communicating investment decisions
- Have reasonable and adequate basis to invest
- New Mandate: - follow mandate, give disclosure
Asset Manager Code: 3 - Trading
Managers must:
1. Not act or cause others to act on MNPI
2. Priority of Transactions
3. Use commissions for stuff that directly assist in investment management
4. Maximize portfolio value with best execution
5. Establish policies to ensure fair trade allocation
Asset Manager Code: 4 - Risk Mgmt
- Policies & Procedures
- Appoint Compliance Officer
- Ensure info given to client (fair, accurate, complete)
- Record Retention
- Qualified Human Capital
- Business plan for disruption
- Firmwide risk mgmt policy
Asset Manager Code: 5 - Performance and Valuation
- Fair, Accurate, Complete
- Use Fair Market Value Prices
Asset Manager Code: 6 - Disclosure
- Communicate timely, ongoing basis
- Ensure disclosures are truthful, accurate, complete
- Include Material Facts (conflicts, disciplinary actions
Asset Manager Code (List)
- Loyalty to Clients
- Investment Process
- Trading
- Risk Management and Compliance
- Performance and Valuation
- Disclosures
GIPS Standards (Definition)
Globally accepted standards for investment management firms in (1) calculating and (2) presenting investment returns to prospective clients and investors
GIPS ideals (List)
Fair Representation and Full Disclosure
Benefits of GIPS
(a) Returns: Objectively comparable
(b) Full Disclosure: Performance History is disclosed
Investment Management Firms
- Industry as a whole
- Reassure investors about veracity of performance results
- Non Compliance = Disadvantage
- Increases competition
GIPS (Scope)
Applies to investment management firms and asset owners that:
(1) Manage assets
(2) Discretionary basis and
(3) Compete for business
GIPS Objectives (List of 5)
- Promote investor interests and investor confidence
- Ensure accurate and consistent data
- Obtain worldwide acceptance of a single standard for calculating and presenting performance
- Pomote fair global competition among investment firms
- Promote industry self-regulation
GIPS Requirements
- Compliance must be firmwide
- All fee paying, discretionary segregate accounts must be assigned to at least one composite