Category Archives: The Verifier

Top Ten Questions about Model Performance

1. What exactly is a “model” portfolio?

A model portfolio is a fictional account that does not include actual assets under management and is typically presented as an ideal combination of securities for a client’s portfolio. It is sometimes known as a “paper traded” portfolio because no buy or sell orders are placed by the manager. Although the firm may have clients with actual portfolios that follow the underlying investment strategy and hold identical securities, a model may vary in regards to security pricing and the timing of buys and sells. As a result, a firm may not have any client portfolios that precisely mirror the model. Continue reading Top Ten Questions about Model Performance

Barclays Point Transition to Bloomberg: 1-Year Countdown

By Russ Glisker, Ariadne Associates, LLC

Bloomberg has recently described its plans for moving Barclays Point into the Bloomberg PORT environment. For the first time since the deal was announced, these descriptions have given Point users a reasonably clear view into the future and a basis for planning how to deal with these significant changes. Continue reading Barclays Point Transition to Bloomberg: 1-Year Countdown

2017 GIPS Compliance Form Now Available

This feature contains important information about the GIPS® firm notification requirement. Specifically, we will cover:

  1. Important information on what is required and not required with respect to completing the form;
  2. New information concerning some of the form’s optional information;
  3. New information regarding firms that have previously submitted a claim of compliance;
  4. A change in procedure regarding submitting corrections to CFA Institute; and
  5. A look at what is anticipated in the future regarding this requirement.

Continue reading 2017 GIPS Compliance Form Now Available

Books and Records for Portability

By Nadeem Aftab, CPA

The first half of 2016 saw a record number of M&A transactions with Registered Investment Advisors – according to a study done by Financial Advisor Magazine. As a verifier, I am seeing more questions on the GIPS® rules surrounding a firm’s portability and the same question always comes up. What is sufficient for books and records? Continue reading Books and Records for Portability

Can Someone Pick Your Lock?

By Alan Jackson, CISSP

In recent years, the SEC has started to ask firms if they are performing regular vulnerability and/or penetration tests. This has caused confusion in the investment advisory industry, stemming from the fact that computer professionals have different definitions of what constitutes a vulnerability or a penetration test. Some testers describe penetration tests as an engagement where they attack a network persistently until they gain access, while some might target specific applications. Vulnerability tests could be described as purely automated scans or as live social engineering exercises where a person tries to trick an employee into giving the tester access. It is no wonder that investment advisors are confused. In order to give more clarity on this subject, I am going to define three terms that may help you select a vulnerability or penetration tester. Continue reading Can Someone Pick Your Lock?

Cyber Security Expectations Continue to Increase for CSA Registrants

On 27 September 2016, the Canadian Securities Administrators (CSA) issued a notice stating that they “expect Market Participants to take steps to protect themselves against cyber threats.” But what does this mean for you? We frequently field confused questions from investment professionals who don’t understand what they should be doing to address cyber security threats.  Many professionals don’t even know what the real threats are. This confusion is compounded by the myriad of regulatory agencies, standards, and laws that investment firms need to comply with. Continue reading Cyber Security Expectations Continue to Increase for CSA Registrants

Danger on the “Internet of Things”

By Alan Jackson, CISSP

A recent attack within the “Internet of Things” (IOT) made me think about a commonality between me and Bill Gates. When Bill Gates built his house more than 25 years ago, he incorporated very sophisticated technologies into each room. Visitors to his house were encoded into a computer system and the system automatically adjusted the lights, temperature, and music in each room to the tastes of the occupants. This technology was way ahead of its time, but over the years home management networks have become more and more common. In fact, I have many devices in my house that are directly connected to my home network. These devices allow me to remotely adjust the temperature, check to see if the lights are off, stream stored videos, and keep track of my grocery needs. These devices are part of the IOT and they include network-connected thermostats, nanny-cams, and smart refrigerators. The IOT also includes industrial controls systems, smart cars, copiers, fax machines, and manufacturing robotic systems. All of these devices have tiny computers in them and a malicious person could take over the computer. Some of you may be thinking, “C’mon Alan, be serious. You have watched The Terminator and The Matrix too many times.” Well it has happened. Continue reading Danger on the “Internet of Things”