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PO Box 131 Ferndale, 2160 South Africa
Telephone: +27 11 791-0105 Fax: +27 11 791-0107
Executive Office: Unit 2, West Square, 407 West Avenue, Ferndale, Johannesburg
www.cfa.ac.za
[email protected]
Press Release
Attention Finance Desk
For Immediate Release
7 December 2010
Alert for Investment Managers: Revised Global Investment Performance
Standards (GIPS) Come into Effect in January 2011
Revised standards provide new requirements on risk and valuation
CFA Institute is reminding investment managers that the latest edition of the Global
Investment Performance Standards (GIPS), which CFA Institute announced earlier this year,
will come into effect in January 2011. Changes include risk disclosure and using fair value
reporting methods for investment management firms claiming compliance with the GIPS
standards.
Commenting on the revisions CFA charterholder and executive director of the GIPS
standards at CFA Institute, Jonathan Boersma said, “The GIPS standards, which were
introduced in 1999, advance the principles of fair representation and full disclosure when
presenting historic investment performance. With the demand for greater transparency, the
GIPS standards provide investment managers the opportunity to demonstrate their
commitment to integrity and ethical practice, both of which are critical to building trust.
Investors should ask or, better yet, demand that investment managers comply with the GIPS
standards and that they be verified.”
Some of the most marked changes that will take place in January are:
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Fair Value – The GIPS standards will require that assets be valued using a fair value
methodology when no market value is available. A recommended valuation hierarchy
is included as an appendix in the latest edition.
Risk – Risk should be addressed in the GIPS standards because understanding past
performance requires an understanding of the risks taken to achieve the
performance. Firms will be required to present the standard deviation (widely
accepted as a common measure of portfolio risk) of the monthly returns of both the
composite and the benchmark.
Directors of CFA South Africa TB Berry, CFA; AC Canter, CFA; M Efstathiou, CFA; PJ Knibbs, CFA; E Louw, CFA;
L Raff, CFA; NJ Suliaman, CFA; AD Thompson, CFA; NL Waisberg, CFA
Executive Officer: Ann Marie Wood
CFA South Africa is a society formed under the auspices of the CFA Institute, Charlottesville,
Virginia, USA
CFA and Chartered Financial Analyst are registered trademarks

Compliance Statement and Verification Status – The revised GIPS standards will
require firms to disclose their verification status (i.e. whether they have or have not
been verified) and also require prescribed language describing what is and is not
covered by verification.
Based on the principles of fair representation and full disclosure, the GIPS standards provide
an ethical framework for the calculation and presentation of investment performance for
investment management firms. The GIPS standards benefit investment management firms,
investment consultants, and both prospective and existing clients.
For example:
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Investment managers that adhere to investment performance standards contribute
to investor confidence that the firm’s investment performance is complete and fairly
presented.
Both prospective and existing clients benefit from a global investment performance
standard by having a greater degree of confidence in the performance information
presented to them.
Global standardisation of investment performance reporting gives investors around
the world the additional transparency they need to compare investment managers
and allow managers to fairly compete for new business in foreign markets.
The latest edition reflects the joint cooperation with Country Sponsor organisations in 32
countries that help develop and promote the adoption of the GIPS standards. The revisions
were developed by the GIPS Executive Committee, the CFA Institute governing body for the
GIPS standards, composed of nine senior investment industry members representing
stakeholders around the globe. The GIPS Executive Committee is supported by more than
100 volunteers serving on 15 subcommittees and working groups, each with diverse and indepth industry experience.
For more information about the GIPS standards, visit the GIPS website.
CFA Institute
CFA Institute is the global association for investment professionals. It administers the CFA
and CIPM curriculum and exam programs worldwide; publishes research; conducts
professional development programs; and sets voluntary, ethics-based professional and
performance-reporting standards for the investment industry. CFA Institute has more than
100,000 members, who include the world’s 90,000 CFA charterholders, in 135 countries and
territories, as well as 135 affiliated professional societies in 58 countries and territories.
More information may be found at www.cfainstitute.org.
Directors of CFA South Africa TB Berry, CFA; AC Canter, CFA; M Efstathiou, CFA; PJ Knibbs, CFA; E Louw, CFA;
L Raff, CFA; NJ Suliaman, CFA; AD Thompson, CFA; NL Waisberg, CFA
Executive Officer: Ann Marie Wood
CFA South Africa is a society formed under the auspices of the CFA Institute, Charlottesville,
Virginia, USA
CFA and Chartered Financial Analyst are registered trademarks
About CFA South Africa
CFA South Africa, an affiliate of CFA Institute, serves the investment community of Southern
Africa by promoting the highest standards of professional excellence and integrity. In our
mission to promote global-best-practice, CFA South Africa supports the CFA Code of Conduct
& Standards of Practice and the Chartered Financial Analyst (CFA) Programme. CFA South
Africa members are principally investment and financial service professionals, academics,
and regulators. CFA South Africa is a non-profit organisation that seeks to be financially
sustainable. More information may be found at http://www.cfa.ac.za/index.html
Media Contacts:
CFA Institute
Kathy King
Washington, DC
+1 (434) 227-2177
Email: [email protected]
Sarah-Jane Purvis
New York
+1 (212) 705-1738
Email: [email protected]
Leandi Cameron
South Africa
Cell: 071 606 5553
Email: [email protected]
CFA South Africa
Executive Officer
Ann Marie Wood
Tel: 011-791 0105
Email: [email protected]
Directors of CFA South Africa TB Berry, CFA; AC Canter, CFA; M Efstathiou, CFA; PJ Knibbs, CFA; E Louw, CFA;
L Raff, CFA; NJ Suliaman, CFA; AD Thompson, CFA; NL Waisberg, CFA
Executive Officer: Ann Marie Wood
CFA South Africa is a society formed under the auspices of the CFA Institute, Charlottesville,
Virginia, USA
CFA and Chartered Financial Analyst are registered trademarks