GIPS Report Distribution Policy

During the fourth quarter of 2020, the United States Investment Performance Committee (USIPC), in conjunction with CFA Institute, conducted a survey of US GIPS firms to learn about the GIPS policies and procedures that firms claiming compliance with the Global Investment Performance Standards (GIPS®) are using to implement the requirements for distributing GIPS Reports.

After the survey, the GIPS 2020 changes elaborated on the existing GIPS Report distribution rules to require those firms claiming compliance to adequately demonstrate that the GIPS Reports were actually being distributed to the prospects. Verifiers are now required to test that the distribution is actually ocurring, and will most likely be looking for some type of policy, including a GIPS distribution log.

Requiring the distribution of GIPS Reports helps to further improve transparency within the industry. Getting this information to prospects allows for the proper evaluation of managers, with similar strategies, prior to making an investment decision.

• The key term here is 'reasonable effort'.  As long as the case can be made and proven that a 'reasonable effort' was made, your firm will have satisfied these requirements.

• A firm cannot 'pick and choose' to whom to present a GIPS Report.

• Posting your GIPS Report on your website is a 100% good thing to help to satisfy this requirement.

• A firm may provide a GIPS Report in either hard copy or electronic format, such as an email attachment. The report MUST be delivered to the Prospective Client and not simply directed to 'look at our website' for further information. The compliant presentation must be delivered in some way, shape or form.

• Providing your report in all prospective client pitch books is a must. This basically satisfies the requirement.

• RFP's and Consultant databases are also considered ongoing prospective clients, so make sure you upload the report, if you can.

• Provide your Wrap Sponsor contact with an annually updated report, with a letter stating what GIPS is, and why you are sending this to him/her, and ask that they provide this to all prospective clients in their marketing materials. The wrap manager contact could include this in the new account package or the firm's ADV as well. Please note that you cannot control whether or not the Wrap contact actually does what you have requested him/her to do. But, your firm has 'made the reasonable effort'.

• A Verifier will ask for logs/proof of how you track the distribution of your GIPS Reports, and will ask for sample reports, logs, etc.

• A firm should also keep track of whom received the requested reports, and which version. This will help when/if a revised report is needed to be sent.

• The reports really only need to be updated once a year, therefore, once they are finalized, make it part of your procedures to provide to all prospective clients when finalized.

• Please note that during any Verification, the Verifier will ask for a GIPS Report to be created for an additional composite on your list of Firm Composites. Therefore, please expect to create a report for an additional non-marketed composite during the Verification process. This falls in line with the 'ability to create' requirement. It is just good practice to create them all, and update them at the same time. It's just less painful when you get the request and then you don't have to run around in a panic trying to assemble the data and create it.

• Please note you are NOT required to provide a GIPS Report to current clients. However, current clients can qualify as prospective clients, IF they are interested in a different strategy.

A GIPS Report distribution log will likely contain some, if not all of the following items:

• Date of distribution

• Recipient of the report (individual and firm name), along with the contact information

• GIPS Report version that was sent

• Method of distribution (email, mail, etc)

• Provided By information

Keep it simple. The log can be in a spreadsheet, Word document or in your CRM system.

In (enter month) of each year, all GIPS Reports for marketed composites are updated with the prior year’s Final performance information, after following the Firm’s False or Misleading Information Review procedures.  Once the annual GIPS verification is completed, (person responsible) then follows its GIPS Report Dissemination process to send all updated/final presentations to any prospective clients.  (Person responsible) ensures the GIPS Reports are provided to all Prospective Clients through the following methods:

• All GIPS Prospective clients have access to our website, which contains the Marketed GIPS Reports.

• All current & prospective client presentation books that are prepared include the latest GIPS Report for that product.

• All 3rd party databases and consultant relationships are provided with a yearly GIPS report.

• All RFPs & questionnaire inquiries are also provided with a yearly report.

All GIPS Report Creation procedures and logs regarding the distribution process can be found here (insert your network location).