In a first, Indian AMC adopts CFA Institute's Global Investment Performance Standards

Last Updated: Wed, Dec 05, 2018 12:50 hrs
CFA Institute Logo (Image Courtesy: CFA Institute)

Mumbai: CFA Institute, the global association of investment professionals that sets the standard for professional excellence, has added Multi-Act Equity Consultancy Pvt. Ltd. to the growing list of asset management companies that comply with the Global Investment Performance Standards (GIPS).

Multi-Act is the first asset management company from India to adopt the GIPS standards, and the compliance was verified by M. P. Chitale & Co.

Vidhu Shekhar, CFA, Country Head, India, CFA Institute said, "We are excited that the GIPS standards have made their way to India. We congratulate Multi-Act for becoming the first Indian asset management company to be GIPS verified. This serves as an assurance to investors that the firm's investment performance is complete and fairly presented since it enables investors to directly compare one firm's track record with another firm's record."

Globally, more than 1,700 firms have adopted the GIPS standards in 45 markets around the world. Twenty-four of the top 25, and 84 of the top 100 asset management firms claim compliance for some or all of their business, according to data from Cerulli Associates. CFA Institute believes this first step towards industry compliance will lead to greater compliance in India.

"Adopting GIPS allows us to demonstrate to our clients that we hold their interests close to our heart. We strongly support this initiative by the CFA Institute in adopting global best practices in ethical and transparent reporting," said Prashant K. Trivedi, Founder, Multi-Act.

The GIPS standards are ethical standards to ensure fair representation and full disclosure of investment performance. Firms are required to include all actual, fee-paying, discretionary portfolios in at least one composite defined by investment mandate, objective, or strategy to prevent cherry-picking their best performance. The benefits for investors are greater transparency and rigorous commitment to ethical investment reporting.

Sanjay Parikh, Chief Financial Officer at Mahindra Asset Management Company Pvt. Ltd., who leads the efforts to spread GIPS education on behalf of CFA Society India, said: "GIPS standards are set to gain importance in India due to the benefit it brings for investors and firms. We expect more firms to become GIPS verified in the time to come."

CFA Institute has also released the 2020 Global Investment Performance Standards Exposure Draft (PDF) and 2020 GIPS Standards for Verifiers Exposure Draft (PDF) for public review and comment by December 31. This marks an important milestone in the evolution of GIPS and in ensuring their relevance for all asset classes and types of investment managers.



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