hi: so when are subadvisory’s portfolio are required in included in as total asset under the firm? 100% discretionary? or the portion of subadvisory’s portfolio the firm have 100% discretionary over? and for the questions regarding none compliance, is everything from disclosure section required to be shown on the statement? (ie, def of the firm, description of composite, etc etc) what exactly is the required historical data for initial claim of compliance, 5 years or 10 yrears? I’ve been having trouble with this one since lv.1. what if the firm is only 3 yrs old, can it show 3 yrs of compliance data and state it is in compliance, provided after its claim of compliance the firm follow up by 7 more yrs of compliance data presentation?
This one is the answer to your first question: “or the portion of subadvisory’s portfolio the firm have 100% discretionary over” That’s really the only concrete question I could glean out of your post, honestly.
sorry, lemme rephrase: 1. what’s the criterion for including subadvisory’s asset in firm’s total asset, does the firm have to have 100% discretionary over the subadvisory’s asset? what if the firm has only discretionary over 50% of the asset? 2. are the disclosure section required? i.e, whenever manager prepares reportiong, he/she has to disclose all 26 disclosure requirement? 3. can a firm present 5 yrs result and say it is in compliance?
added question for disclosure requirement: what happens if the firm has no inconsistency in foreign exchange rate, no minimum asset level, doesn’t use external leverage and derivative, not subjective to bundle fee, and doesn’t have pre 2000 non compliant data presented? does the firm have to explicitly state : there is no inconsistency in foreign exchange rate, no minimum asset level, no external leverage, etc etc?
Lemme help you with the 3rd question: You are supposed to have 10 years of compliance data. You can link pre-2001 non-compliant data by explaning why it is not compliant. This would occur if you were in lets say 2005 and you were established in 1995. As you keep adding new years of compliant data, you keep eliminating th pre-2001 non-compliant data until you have 10 years of compliant data. Lets say the firm was founded in 2005. You need to have compliant information since inception, so you need to show data from 2005 and keep adding to it until you have 10 years (i.e. in 2015) So, yes, a firm can present 5 years and say it is in compliance. No simulated performance is to be added.
let me add 1 cent with sparty’s post. no simulated performance is allowed under GIPS requirements.
what about those disclosure requirement, sample exam answer suggested disclose all that’s relevant to the firm and presentation. how do you define “relevant”, don’t mention anything that’s not present in the firm? also for that 5 yr requirement question: say the firm is founded in 1992, now it’s 2002, what happens in this case, 2 yr for initial claim of compliance?