- A foster the notion of industry “self-regulation” on a global basis.
- B encourage fair, global competition among investment firms without creating barriers to entry.
- C are ethical standards for investment performance presentation to ensure fair representation and full disclosure of investment performance.
Ethical And Professional Standards MCQ - Ethical And Professional Standards Section 2
- A firms should adhere to the minimum requirements of the GIPS standards, but adhering to the recommendations is optional.
- B firms should adhere to the minimum requirements and recommendations of the GIPS standards.
- C it is enough if firms comply with the standard related to Performance Presentation in the CFA Institute Standards of Practice Handbook.
To achieve best practice in calculation and presentation of performance,
firms should adhere to the minimum requirements and recommendations
of GIPS standards.
- A Statements referring to the calculation methodology as being “in accordance,” “in compliance,” or “consistent” with the Global Investment Performance Standards, or similar statements, are prohibited.
- B Firms must provide a complete list of composite descriptions to any prospective client that makes such a request.
- C For periods beginning on or after 1 January 2010, total firm assets must be the aggregate fair value of all fee-paying portfolios managed by the firm.
The condition for total firm assets is for periods beginning on or after 1
January, 2011, and includes both fee-paying and non-fee-paying
portfolios.
- A Firm must be defined as an investment firm, subsidiary, or division held out to clients or prospective clients as a distinct business entity.
- B Total firm assets must exclude assets assigned to a sub-advisor.
- C Firms must document their policies and procedures used in establishing and maintaining compliance with the GIPS standards.
