Ethical And Professional Standards MCQ - Ethical And Professional Standards Section 2
B is incorrect because the GIPS standards cannot be applied only to
certain portfolios or composites. C is incorrect because firms must
comply with applicable laws and regulations regarding the calculation and
presentation of performance.
- A Firms must not present performance or performance-related information that is false or misleading.
- B Statements referring to the performance of a single, existing client portfolio as being “calculated in accordance with the Global Investment Performance Standards” are prohibited, except when a GIPS-compliant firm reports the performance of an individual client’s portfolio to that client.
- C Firms are required to provide a compliant presentation for any composite listed on the firm’s list of composite descriptions to any existing client only that makes such a request, and not a prospective client.
Firms must provide a compliant presentation for any composite listed on
the firm’s list of composite descriptions to any prospective client that
makes such a request.
- A Historical composite performance may be changed to reflect changes in a firm’s organization.
- B When the firm jointly markets with other firms, the firm claiming compliance with the GIPS standards must be sure that it is clearly defined and separate relative to other firms being marketed, and that it is clear which firm is claiming compliance.
- C If the firm does not meet all the requirements of the GIPS standards, the firm must not represent or state that it is “in compliance with the Global Investment Performance Standards except for . . .”.
Even when there is a change in a firm’s organization, the historical
composite performance must not be altered.
IPS provisions for presentation and reporting require that at least 5 years
of compliant performance must initially be shown.
