hey fellas, how do i intepret the following statement:
“…after presenting 5 years of performance, the firm must present additional annual performance up to a minimum of 10 years”.
is it <=10 or >=10?
after 5 years - show performance presentation 1 year at a time, till you reach 10 years.
So basically the requirement is to show 10 years of compliant performance once it is available. You can’t start dropping off earlier performance until you have reached 10 years of compliant perf.
I would interpret it as for existing firms who wants to start being GIPS compliant, they have to show 5 years of historical performance or more. When they have 10 years, they have to keep the record showing minimum of 10 years.
For brand new firms who want to be GIPS compliant at the beginning, they need to show since inception until 10 years is reached.
5 years vs 10 years of perfomance:
At the beginning, a GIPS-compliant firm presents its first GIPS-compiant performance for five or more years. But, once the firm claims GIPS-compliant, the “rule” is more strict – it has to keep 10 years of performance in the report.
What if the firm is GIPS-compliant in the first year but fails to be compliant in the second year?
Agree with Tulkuu
I have a simliar question along these lines. So the first year that a firm is GIPs compliant are they only required to include 1 years performance…no longer how long they existed prior? Or first year of compliance they need to include 5 years (or since firm inception) and then grow to 10?
My confusion was raised when answering Reading 43 EOC question 26 i included 5 years of returns were ommitted since Note #1 stated that the firm was founded in 1999. Resolution didn’t include them as ommitted. I later saw that the heading for exhibit 1 states Jan 2006 - March 2011. Is that an official statement for when the firm became compliant?
From GIPS (which is pretty much the same as what tulkuu said)
"A firm is required to initially present, at a minimum, five years of annual investment
performance that is compliant with the GIPS standards. If the firm or the composite has
been in existence less than five years, the firm must present performance since the firm’s
inception or the composite inception date."
That answers the majority of my question. So back to question 26. The only way for any returns not to be ommitted this would have to be the initial year of GIPS for this firm…right? How would I know that from the information given? Or since I can’t prove otherwise…must just assume that?
PLease read the extremely tiny footnote which reads:
Notes : 1. Bristol Capital Management is an independent investment management firm founded in November 1999.
agree with you. It make sense the most
Yes that’s the note that made me think that some returns were ommitted from the performance report…but that wasn’t listed as an ommitted item in the resolution.