GIPS Compliant

CFA Level I Ethics
#1

Good morning all,

I know this question has been asked several time but I am still a bit confused about the number of years that a company has to report Complimt performance in order to be GIPS Compliant.

my understanding was that it was 5years (except if the composite has been in existence for less than 5 years) and then adding a year every year to reach 10 years and keep 10 years of performances onwards.

the problem is the following practice problem:

”What is the minimum period of compliant performance that a 12-year-old firm must present to comply with the GIPS Standards: A-5 / B-10 / C-12”

i would have said A : 5 years but the correct answer is 10 years. Could someone clarify this answer for me? I thought 5 was the minimum when you claim compliance for the first time.

thanks in advance for your help!

#2

Hi everyone,

Sorry to bother you again with this question. I am still confused about this question and why the curriculum considers answer B as correct.
If any of you had an explanation, it would be really appreciated.

Thanks for your help!

#3

Straight out of the curriculum (emphasis added):

“The GIPS standards require firms to show investment performance for a minimum of five years, or since the inception of the firm or composite if either has existed for less than five years.”

Check for an erratum.

#4

For a 12 years old firm the minimum time frame is 10 years ( as stipulated), it could be 11 or 12 as well.

Compliance is not accorded for firms less than reported performance of 5 years ( you may want to check that). However reporting of 1-3-5 is valid.