The Spaulding Group Presents


The Ultimate Guide to
The 2020 GIPSⓇ Standards

Part I - The First Exposure Draft (2020 GIPS Standards, everything but verification)

About this Guide

A significant change is planned for the Global Investment Performance Standards (GIPS) in 2020, the newest version of the Standards is coming, and we felt that organizing key information into a single, easily digestible guide, would help those that these changes will impact better understand what’s occurring

The guide will be issued in three parts (and perhaps a fourth):

  • Part I: Covers the first exposure draft (2020 GIPS Standards Exposure Draft ) which was issued August 31, 2018
  • Part II: Will address the second exposure draft (2020 GIPS Standards for Verifiers Exposure Draft, released in October 2018) which deals with verification. This part of the Ultimate Guide will be published in late November or early December 2018.
  • Part III: Will cover the final version of GIPS 2020 Standards, and is expected to be published by July 31, 2019.

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Who Is This Guide For?

To put it simply, anyone who works with, complies with, or is thinking of complying with GIPS standards can benefit from reading this guide. Those who are most effected by the proposed changes are firms and institutions who claim, or plan to claim, compliance. But even consultants, verifiers, and other industry participants who are aware of and care about these Standards will want to take the time to study this guide.

Table of Contents


Chapter

1

Briefly, What is GIPS

A Brief History

The Global Investment Performance Standards is a set of rules that specify how to present past performance to prospective clients or to key stakeholders. They were developed partly to avoid countries developing their own standards. They create, in a sense, a “level playing field” for asset managers to compete globally. 


Chapter

2

What is Occurring to GIPS and Why

As mentioned in Chapter 1, there have been two revisions to the original 1999 edition of GIPS (in 2005 and 2010). There was an expectation that the Standards would be reviewed every five years for possible revision. No changes were made in 2015, but many are planned for 2020.


Chapter

3

What is an Exposure Draft

While the CFA Institute “owns” the GIPS standards, they have created an Executive Committee (EC), as well as several subcommittees, to administer the Standards. 


Chapter

4

What to Know About the GIPS 2020 Exposure Draft

In the past it was common for the exposure draft to be provided in a red-lined format, so that readers could more easily see what wording has been changed, added, or removed. In the case of the GIPS 2020 Exposure Draft, this wasn’t a good idea, given the massive amount of changes that are being made.


Chapter

5

What Are Some of the Proposed Major Changes

Organization
As noted in Chapter 4, the organization of the Standards has changed dramatically, with the segregation of rules into three major areas:
∙traditional separate accounts
∙pooled funds
∙asset owners.


Chapter

6

What are our Thoughts on These Changes

We won’t go over all of our thoughts on what is being proposed, as our comment letter is available on line. Rather, we’ll touch on some of the more significant items.


Chapter

7

What You Need to do to be Heard

We recommend that you download a copy of the Exposure Draft.
Please review it. It’s long, so perhaps focus on those parts that are most germane to you and your firm.
Please submit your comments to standards@cfainstitute.org.


Chapter

8

GIPS 2020 Calendar

The initial exposure draft was issued just before its deadline of August 31, 2018. The verification exposure draft, which we will discuss in Part II, was issued just before its deadline of October 31, 2018.