GIPS (effective date)

CFA Level III Portfolio Management
#1

I was hoping someone could help me out with GIPs. I am a little confused about the ‘effective date’ of various standards and how this should be applied.

Throughout the reading it says prior to [a date] since [a date]. If a composite were started in 2000, but then a change happened (Say trade date accounting in 2005), would that composite have to apply this change to portfolios from 2005 onwards, change its records from 2000 or be exempt from the change since it started in 2000 and the change only applies to new composites started after 2005?

If it is the middle one, then remembering all the dates is important. You could have a composite that started in 2000 on the exam and in order to know if it were in compliance, you would need to know when each subsequence change occurred right?

#2

The changes would apply from the effective date. Continuing with your trade vs. settlement date example, if you had a composite that was started in 2000, you could use settlement date accounting through 12/31/2004 but after 1/1/2005 you would have to use trade date accounting in order to claim GIPS compliance. The historical records for the portfolios and composites are not changed retroactively, so you’d keep your historical performance record prior to when the change occurred.