By Nikola Feliz, CPA, CIPM
I have to say, I have been curious about how verifiers will be expected to ensure firms have notified CFA Institute of their claim of compliance. As I am sure you all know, firms can elect to not be listed on the GIPS® website, so we’ve been waiting, as your verifier, to find out what we will have to do in such cases. Clearly if we can see your name on the website we can check that box in our work, but for those of you who have elected to be kept off the list, what is a verifier to do? Well CFA Institute has answered our questions!
Several new Q&A’s regarding the Firm Notification Requirement have been posted to the GIPS website covering this question and more! I encourage you to go take a look and read through them, if you haven’t already, as they were effective September 30th, and I wanted to cover a couple pertinent items for you today.
Per the Q&A, if your firm has chosen to not have their name on the GIPS website, we, as your verifier, must request the confirmation of the notification you received from CFA Institute. The Q&A specifically notes that a screenshot of the confirmation is acceptable. Also, we must review your policies and procedures regarding the preparation, review and submission of the notification. So, what does that mean? If you haven’t created specific written policies already, you will be hearing from us to help get you in line with this requirement.
Also of note, if you miss that June 30 deadline you are no longer in compliance with the standards and must stop claiming compliance until you do, in fact, submit a GIPS Compliance Form to CFA Institute, so be sure to get those forms submitted in time each year! For firms working on becoming GIPS compliant, the Q&A also clearly delineates the fact that you must submit the notification to CFA Institute once you have met all the requirements of the GIPS standards. For our new clients who are waiting to notify CFA Institute, this would most likely be appropriate when we complete the pre-verification phase of our work. Why then? Well, in order for us to conduct a verification, you technically have to claim GIPS compliance right? As such, you aren’t actually GIPS compliant if you haven’t followed the requirement to submit your notification form to CFA Institute. This step will be necessary in order for us to issue an opinion, so take care of it early and it won’t hold us up at the end of the process!
If you go through the Q&A and have any questions, please reach out to your engagement team. We are here to help!
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