GIPS2020 Changes Series – #13 GIPS Advertising Guidelines

Overview

The GIPS Advertising Guidelines is the thirteenth and last section of the GIPS 2020 Exposure Draft.

In light of the changes in the GIPS Standards to specifically include Pooled Funds and Asset Owner Standards, the GIPS Advertising Guidelines have also been expanded and formalized to include advertising for these new areas, beyond the Firm Composite that it was originally focused on.

Key Changes

The key changes worth noting here are:

1. The definition of ‘Advertisement’ has been expanded to include information in Pooled Fund fact sheets and offer documents.

2. The Guidelines have been categorized under Advertisements for Firm Composites, Firm Limited Distribution Pooled Funds, Firm Broad Distribution Pooled Funds and for Asset Owner Total Funds and Composites.

3. The Standards here are further categorized into Requirements and Recommendations as well as for when Advertisement includes performance and when it doesn’t.

4. The compliance statement now includes the line that now cuts across all compliance statements, which is that ‘GIPS is a trademark owned by the CFA Institute’.

5. Other notable Standards include the requirement for Broad Distribution Pooled Funds to include Risk information (13.G.12), Expense Ratio (13.G.8) and Sales Loads (13.H.3) in Advertisements that include performance.

Comments Requiring Feedback

Three comments require your feedback in this section:

1. The first one requests your feedback on whether Firms and Asset Owners should also be required or recommended to present risk measures in GIPS Advertisements as required for Broad Distribution Pooled Funds (Comment #45).

2. The second request your view on whether Firms should be required to include benchmark returns in GIPS Advertisements for Broad Distribution Pooled Funds (Comment #46).

3. The last is whether the definition for the terms Sales Charges and Loads ‘as costs associated with buying or selling shares of a Pooled Fund’, is well understood (Comment #47).

How to Send in Your Comments

We have made it easy for you to go through the comments in bite-sizes and to submit your responses quickly by completing comment survey forms covering the feedback areas requested and more. At the end of the commenting period (December 31, 2018), we will compile all the comments received and forward to the GIPS Organization for review.

Sign-up for free on our Composite Insider platform here to do so.

Alternatively, you can send your written responses to the GIPS Organization.

2018-12-27T10:24:00+00:00

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