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CFA Institute – Exposure Draft of the Guidance Statement for OCIO Strategies
Letter Summary:
In September 2023, CFA Institute issued for public comment an exposure draft of the Guidance Statement for OCIO Strategies. This Guidance Statement explains how to apply the GIPS standards to OCIO portfolios, including how to define OCIO composites. It also addresses other OCIO-specific performance challenges, such as benchmark selection, treatment of legacy assets, and fee transparency.
Overview of the Council’s Comments:
The Canadian Investment Performance Council (CIPC) has submitted its comments on the CFA Institute’s Exposure Draft Guidance Statement for OCIO Strategies. Key feedback includes:
- Applicability Concerns: CIPC finds the definition of “Total OCIO Portfolio” too narrow and recommends allowing for broader characteristics to accommodate varied OCIO structures.
- Recommended Flexibility: CIPC opposes mandating the Required OCIO Composite structure, asset allocation ranges, and disclosure requirements, advocating instead for recommendations to preserve firm-level flexibility.
- Legacy Assets: While supporting the three proposed options for handling legacy assets, CIPC urges clarification through examples and suggests optional disclosure policies.
- Fees and Performance Reporting: The council supports alignment with GIPS® Standards for Firms, recommending that gross- and net-of-fee reporting remain optional, not required.
- Additional Feedback: Suggestions include improving glossary consistency, clarifying examples, and avoiding region-specific exceptions in global standards.
CIPC reaffirms its commitment to advancing practical, inclusive standards and invites continued dialogue on the evolving OCIO framework.