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24 March 2020

Achieving GIPS Compliance: Transparency Takes Center Stage

By Kate Kleinbaum

This past September a record number of attendees gathered in Scottsdale, Arizona for the 23rd Annual GIPS Standards Conference. No doubt, every attendee was drawn in by the chance to discuss the new 2020 edition of the GIPS standards, released on June 30, 2019. After all, it’s difficult to discuss the art of composite construction with your friends and family – it’s better to save your thoughts to share over a delicious lunch of “conference” chicken with other compliance professionals. 

The new 2020 edition of the standards continues to further the cause of transparency and comparability in performance presentations. By consolidating requirements buried in various guidance statements and reorganizing the standards, the newest edition helps not only investment management firms, but also asset owners and verifiers to locate what they need.

SS&C Advent has various teams and products committed to helping firms achieve GIPS compliance. On my team, GIPS compliance is especially important to us. Our solution, APX goes beyond simply providing a place for all manner of input data and trusted source for performance calculation. The core calculations for time-weighted return (TWR) and money-weighted-rate of return (MWRR) remain consistent even as other elements of the standards have changed for 2020. APX, and Axys before it, are tools that help firms automate their processes and procedures to systematize GIPS-compliant returns.  

In our upcoming 2020 release, we will be building on the tools that firms already have available and providing reporting changes that will make it easier for firms to produce a GIPS-compliant presentation with less intervention in Microsoft Excel or other third-party tools.

The recent changes in the GIPS standards have been an opportunity to look at the processes firms have developed to produce GIPS compliant reports with fresh eyes. Over the years, this is an area of priority in APX as many of our clients claim compliance. In our recent releases, we’ve added a number of items to help firms that are already GIPS-compliant or headed in that direction:

  • A new Composite Management report that helps clarify and validate the membership of composites.
  • Enhancements to the existing Composite Membership report to help calculate number of portfolios and assets at period end.

Firms of all types are find that GIPS compliance is a “must have” or differentiator in the marketplace. As the industry moves further toward increased transparency, we will continue to match those needs by making performance transparent in APX, as well. We are closely monitoring the changes and will continually look for ways to further implement the GIPS guidance for our clients.

To learn more about GIPS please watch this The 2020 GIPS® Standards and Emerging Performance Trends webinar or contact our team.