StatPro Group plc, a leading provider of portfolio analytics and data solutions for the global asset management industry, is urging the investment community to respond swiftly to the GIPS Executive Committee’s new draft standards.
The governing body of GIPS has published its draft for the 2010 Global Investment Performance Standards and is seeking comment and feedback before 1st July 2009.
Commenting on the draft standards, Chairman of StatPro Group plc and chair of the GIPS Verification/Practitioner Subcommittee, Carl Bacon said: “Provisions that are no longer necessary have been eliminated and new provisions added to promote best practice, as well as quite a number of cosmetic changes. I encourage the investment community to respond swiftly as further changes are still possible. Firms will need no encouragement to comment on issues they dislike, but it’s equally important that they comment on issues that have their full support. It is entirely possible for the Executive Committee to make changes in response to a vocal minority if the contented majority remain silent.”
The most significant revisions are:
1) Fair value - firms will be required to value all portfolios at fair value – valuation guidelines are included in a new appendix.
2) Risk measures - firms will be required to disclose a three-year annualised ex-post standard deviation of the composite and benchmark using monthly data.
3) Compliance statement - there will be three forms of the compliance statement, disclosing if the firm is verified, verified in the past, or not verified. Firms will be given 24 months to keep their verification current.
The GIPS Executive Committee plans to issue a final document in early 2010 with an effective date of 1st January 2011. It is likely that there will be no more major changes after this date for at least five years.