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CFA Institute – Exposure Draft Guidance Statement on Firms Managing only Broad Distribution Pool Funds

Letter Summary:

CFA Institute established the GIPS Standards Technical Committee as the governing body for the Global Investment Performance Standards (GIPS®). The GIPS Standards Technical Committee, which is responsible for technical oversight of the GIPS standards, requested comment on the proposal regarding the Guidance Statement on Firms Managing Only Broad Distribution Pooled Funds.

Overview of the Council’s Comments:

The Canadian Investment Performance Council (CIPC) has submitted comments on the Exposure Draft Guidance Statement regarding firms managing only Broad Distribution Pooled Funds (BDPFs). Highlights include:

• General Usefulness: CIPC finds the draft helpful, especially in jurisdictions lacking robust regulation. However, it flags concerns about compliant firms not producing GIPS Reports for BDPFs.
• Compliance Without Reports: Council members were split. Some support compliance if equivalent disclosures are made elsewhere, while others worry this weakens GIPS integrity.
• Recordkeeping & Error Correction: The CIPC supports a flexible approach for RFPs and consultant databases, recommending — not requiring — adherence to GIPS policies due to technical constraints.
• Verification & Disclosure: The council agrees that BDPF-only firms should be eligible for verification, but urges clearer disclosures about any limits to compliance or verification for prospective investors.
• Applicable Provisions: The CIPC broadly agrees with Sections 1 and 2, but recommends excluding Provision 1.A.19. It suggests clarifying that BDPF GIPS Reports remain optional and proposes adjusting the language in the applicability chart for transparency.