This feature contains important information about the GIPS® firm notification requirement. Specifically, we will cover:
- Important information on what is required and not required with respect to completing the form;
- New information concerning some of the form’s optional information;
- New information regarding firms that have previously submitted a claim of compliance;
- A change in procedure regarding submitting corrections to CFA Institute; and
- A look at what is anticipated in the future regarding this requirement.
Firm specific information will be kept confidential; summary information or statistics from the database may be released publicly. The information gathered will help stakeholders better understand trends that indicate where growth in the adoption of the GIPS standards is taking place. The deadline for firms to notify CFA Institute of their claim of compliance is 30 June 2017 with information as of 31 December 2016.
COMPLETING THE FORM
The requirement for firms to notify CFA Institute of their claim of compliance with the GIPS standards became effective 1 January 2015. The notification form has been posted on the GIPS standards website and is now operational for 2017.
When the next version of the GIPS standards is updated, this new requirement will be included as a numbered provision. Until that time, this requirement is documented in the form of a Q&A. The Q&A has been posted to the GIPS standards website and reads:
Are GIPS-compliant firms required to notify CFA Institute of their claim of compliance?
Yes. Effective 1 January 2015, firms are required to notify CFA Institute of their claim of compliance with the GIPS standards by submitting the GIPS Compliance Form which is available on the GIPS standards website. The notification must be submitted annually by 30 June with data as of prior year-end.
The form is divided into sections and contains required and optional information.
Required Information: Required information is identified with a red asterisk (*). The Primary Contact and Firm Information sections are straightforward. It should be noted that they added a “Role” section that was not in the original form. the new form allows for a second contact to be listed. Additionally, new for 2017, you may request access to the form filed in 2016 to edit existing information and to renew compliance instead of completing the form in its entirety again:
Firm Website: The “Website Address” field appears only after you select “Yes” to “Does your firm have a website?” The “Firm name as it should appear on the GIPS website” also only appears after you select “Yes” to “Can CFA Institute display your firm’s name…”
Firm Type: Firm Type and Structure asks for information about your firm. Most of this information is optional. The last two sections were added recently and are required to be answered. “Asset Owners” are considered to be “…entities that manage investments, directly and/or through the use of external managers, on behalf of participants, beneficiaries, or the organization itself (‘asset owners’). These entities include, but are not limited to, public and private pension funds, endowments, foundations, family offices, provident funds, insurers and reinsurers, sovereign wealth funds, and fiduciaries.” All others claiming GIPS should select “Asset Manager.”
Subsidiaries: If you are a subsidiary of a larger parent company, select “Yes” even if your parent does not claim GIPS compliance. If you select “Yes,” then the “Parent Company Name” field appears.
Firm Operation Locations: If the firm is global, the blue [+] can be clicked to select each individual country in which the firm operates. Multiple countries can be selected.
Total Firm Assets: The Firm Assets and Investment Vehicles section is also optional. You may choose to answer these questions to the best of your ability or ignore them. Regarding GIPS Total Firm Assets, this number should correspond to your GIPS defined firm, which may differ from your regulatory reporting for your legal entity. Furthermore, only ranges are reported, so it is not necessary to have final reconciled numbers before completing the form. These values should be reported as of 31 December. The investment vehicle section has been added to the original form.
Year firm first claimed compliance: Regarding Verification History, the “Year firm first claimed compliance” field has been removed from the original version.
Verification Status: “Has your firm been verified within the last 24 months?” is a required field. You should select “Yes” only if the “through” date of your most recent (presumably Ashland Partners’) opinion letter is 31 December 2014 or later. This means that you do not need to wait for your 2015 GIPS verification to be completed in order to say you are verified. The basis for this date is from the following Q&A:
Our firm has been in compliance with the GIPS standards since 2000. We obtained a verification from an independent verifier which covered the periods from 1 January 1995 through 31 December 2002. It is now 2011 and we have adopted the 2010 edition of the GIPS standards. May we still use the claim of compliance that states we are independently verified even though it is several years since our last verification? May we indicate that we have been verified when replying to consultant questionnaires or RFPs?
A firm that was verified for any period of time in the firm’s history may use the claim of compliance for a verified firm, because the periods for which the firm was independently verified are clearly stated within the claim of compliance. However, in the situation described above, it would be misleading to state or imply that the firm is currently verified. For example, when answering a consultant questionnaire or RFP question asking whether the firm is verified where the firm is not able to state the periods for which the firm has been verified, it would not be appropriate for the firm to simply answer “yes.” A firm may indicate that it is verified only if the end date of the period(s) covered by the latest verification report is not more than 24 months ago, or if the firm is able to indicate the periods verified in the response to such a question.
Categories: Verification Date Added: May 2010 Source: The GIPS Standards 2010 edition
Confirmation: Once the blue “Submit” button is clicked, the contact email address on the form should receive a confirmation email.
If corrections need to be made to submitted information, firms are advised to NOT RESUBMIT THE FORM. This differs from the FAQ published on the CFA website. All changes can now be made through the link request access to edit the existing firm information in the gray box at the top of the page, which takes you to a new form for 2017. In order to complete this form, you will need the current firm name and contact information submitted on the main form. If the information matches, the contact will receive an email with a link to edit the firm’s information. If two contacts were submitted, the data for either contact may be used.
QUESTIONS ABOUT THE FORM OR REQUIREMENT
CFA Institute has put out a Q&A on the notification requirement. Some Q&A worth highlighting are:
Who will have access to the information provided?
Only CFA Institute staff will have access to the firm-specific information provided. No volunteers, committee members, or other third parties will have access to the firm-specific information.
Will CFA Institute check any of the information provided?
No, CFA Institute will not test the information for accuracy. The information provided will be self-reported by the firms claiming compliance. The GIPS standards are ethical standards and we expect that firms will provide truthful, accurate information. Failure to do so would violate the GIPS standards and invalidate a firm’s claim of compliance.
All other questions, comments and concerns should be directed to email@example.com.
UPCOMING ACTIVITY WITH RESPECT TO THE FORM AND REQUIREMENT
- The GIPS Verification Sub-Committee is creating guidance on the firm notification requirement with respect to verifier responsibilities, specifically, whether firms need to update their verification status after 30 June and the role of the verifier in this process.
- There will probably be changes and/or improvements to the form over time. CFA Institute views this as “version 3.0.”
- In May, Ashland Partners will be reaching out to our clients to confirm that this requirement has been met, so expect a call from us around that time.
GIPS® is a trademark of CFA Institute.