AIMR Compliance
The AIMR Performance Presentation Standards™(AIMR-PPS™) and Global Investment Performance Standards™ (GIPS™) are voluntary reporting guidelines that investment professionals use to ensure fair representation and full disclosure of investment performance. By promoting the standards to employers and investors, and by equipping investment professionals with the understanding they need to apply them correctly, AIMR brings a higher level of transparency and integrity to the investment process.
AIMR Compliance Date
The AIMR Performance Presentation Standards Date is the date that this compliance began, if the composite is constructed in accordance with a standards body.
Standard 5.A.1(a) requires at least 5 years of performance (or a record for the period since firm inception, if inception is less than five years) that is GIPS compliant. This Standard is not intended to prevent a new firm from complying with the Standards until it has one entire twelve month period of performance. If the firm is less than twelve months old, it is permitted to present its performance since inception.
There are only 2 situations in which a firm can state that they are compliant with the GIPS standards:
On a performance presentation that fully adheres to the GIPS standards, including the mandatory 5 years of performance and all applicable disclosures, or
In a statement that includes no performance information.
Currently, firms must not reference compliance with the GIPS standards in statements that include any performance information (unless the statement is on a presentation that fully adheres to the Standards).
Firms may choose to state that they comply with the GIPS standards if no performance information is included, (e.g., press release). Such statements must include a disclosure indicating the definition of the firm as well as how readers of the statement can obtain a compliant presentation and a full list of the firm’s composites.
Consultant questionnaires often require managers to fill in quarterly performance charts. The questionnaires then ask the manager to indicate whether or not the numbers presented in the chart have been prepared in accordance with the GIPS standards.
To claim compliance, the firm must meet the requirements of the GIPS standards on a firmwide basis. Presentations claiming compliance must meet each requirement of the Standards including disclosure requirements. Performance results cannot be "in compliance" unless all the requirements of the Standards are met. Questions regarding whether returns "are prepared" in compliance with the Standards demonstrate a misunderstanding of the meaning of being in compliance with the GIPS standards. However, if the performance numbers used to answer questionnaires are from a GIPS compliant presentation, then the firm can state the information provided is in compliance. Firms must also include a full presentation with their questionnaire response.
To address statements that include performance information, AIMR and the IPC are working to propose GIPS advertising guidelines, based on the principles of the current AIMR-PPS Advertising Guidelines, that will allow firms to advertise that they comply with the GIPS standards, without reproducing an entire compliant presentation. This guidance is to be used in the interim period prior to the adoption of the GIPS guidelines. The proposed guidelines will likely be released for a period of public comment in mid-2002.
Registered Investment Advisor
An RIA (Registered Investment Advisor) is an investment advisor that has filed form ADV with the Securities and Exchange Committee (SEC) under the Investment Advisers Act of 1940. Any entity that oversees in excess of $25 million in client assets is required to file a form ADV with the SEC.
Form ADV This form is used to apply for registration as an investment adviser or to amend a registration. It consists of two parts. Part I contains general and personal information about the applicant. Part 11 contains information relating to the nature of the applicant's business, including basic operations, services offered, fees charged, types of clients advised, educational and business backgrounds of associates and other business activities of the applicant.
Investment Advisers Act of 1940 This law regulates investment advisers. With certain exceptions, this Act requires that firms or sole practitioners compensated for advising others about securities investments must register with the SEC and conform to regulations designed to protect investors. Since the Act was amended in 1996, generally only advisers who have at least $25 million of assets under management or advise a registered investment company must register with the Commission.
SEC Exempt
Investment advisers who need not be registered.
Previous SEC Investigation
Indicates whether there has been an SEC investigation of the asset management firm running a separate account.
Pending SEC Investigation
The SEC generally conducts investigations confidentially for two main reasons. First, we can conduct investigations more effectively if they are not announced publicly. For instance, important documents and evidence can be destroyed quickly if people hear of an investigation. Second, investigations are kept confidential to protect the reputations of companies and individuals if we find no wrongdoing or decide we cannot bring a successful action against them. As a result, the SEC can neither confirm nor deny the existence of any investigation.
An investigation becomes public when the SEC files an action in court or in its internal administrative process.
Previous Litigation
Indicates whether there has been litigation against the asset management firm running a separate account.
Pending Litigation
Indicates whether there is current pending litigation against the asset management firm running a separate account.
Previous Disciplinary Action
Indicates whether there has been disciplinary action taken by regulatory bodies against the asset management firm running a separate account.
Previous Judgment
Indicates whether there has been a judgement(s) registered against the asset management firm running a separate account.
Simulation End Date
If simulated performance is included in the composite, the date at which the composite returns switched from being calculated on a simulated basis to an actual basis.