- CFA Exams
- CFA Level I Exam
- Topic 10. Ethical and Professional Standards
- Learning Module 4. Introduction to the Global Investment Performance Standards (GIPS)
- Subject 4. Fundamentals of Compliance
CFA Practice Question
Select the correct statement(s).
II. Firms can use third-party performance measurement only if the third-party is GIPS-compliance.
III. Third parties can construct GIPS-compliance composites for firms.
I. Firms cannot adopt the revised GIPS standards for performance presentations of 2005.
II. Firms can use third-party performance measurement only if the third-party is GIPS-compliance.
III. Third parties can construct GIPS-compliance composites for firms.
Correct Answer: III
Firms can use such composites in a GIPS-compliant presentation only if the composites meet the requirements of the GIPS standards.
I. Although the effective date of the revised standards is December 31, 2005, early adoption is encouraged by CFA Institute.
Firms can use such composites in a GIPS-compliant presentation only if the composites meet the requirements of the GIPS standards.
User Contributed Comments 4
| User | Comment |
|---|---|
| AUAU | Why "II" not correct |
| adamzell | The third-party cannot be GIPS-compliant if it doesn't manage assets, by definition. |
| williamko | For the explanation of the answer I, the revised GIPS standards were adopted in 2010 and effective on 1 Jan 2011 which I found in the study notes. |
| UcheSam | Third-party firm might be GIPS compliant but design composites that is not GIPS compliant. So, investment firm getting composite should focus on the composite being compliant not the third-party firm. |