CFA Institute Monday issued an exposure draft for the application of global investment performance standards to pension funds, endowments, foundations and other institutional asset owners that do not generally compete for money management business.
The move marks the first time that GIPS, a worldwide set of voluntary standards for reporting investment returns for investment management firms, would be applied to asset owners, said Jonathan A. Boersma, executive director, GIPS, at the CFA Institute said in an interview.
“Traditionally, the standards have been applied to asset managers hired to manage those assets” to provide transparency and fair representation of investment performance, said Mr. Boersma.
“But we have had over the years a number of pension funds, endowments, foundations, sovereign wealth funds (that) … from a governance perspective like to be reporting according to some standard” like GIPS.
“There isn’t any standard out there except for GIPS,” Mr. Boersma said. “GIPS wasn’t written with asset owners in mind. So we have developed guidelines (in the exposure draft) to have them apply GIPS. It expands the universe that would use GIPS.”
The CFA Institute, a global association of investment professionals, created and administers GIPS. The institute established the GIPS executive committee as the governing body for the standards.
All comments and replies will be made public unless otherwise requested on the GIPS standards website, according to the exposure draft.
The guidance statement would become effective Jan. 1. 2014.