Q1. Which of the following statements regarding GIPS is least accurate?

A)   To stay GIPS compliant, a firm must abide by GIPS guidelines even when conflicting with local or country-specific regulations.

B)   A GIPS objective is to promote global “self-regulation.”

C)   GIPS allows clients to have more confidence in reported performance.

Q2. The Global Investment Performance Standards (GIPS) were designed to be applied with the goal of full disclosure and fair representation of investment performance in all instances EXCEPT:

A)   when applicable local laws or regulations conflict with the GIPS, in which case, firms must comply with local laws and fully disclose the conflict.

B)   when a composite includes nondiscretionary funds to which the GIPS are not applicable.

C)   when a firm or composite has been in existence for less than five years, in which case, less stringent standards apply.

Q3. The El Rey Investment Company, located in Barcelona, Spain, is in the process of adopting the Global Investment Performance Standards (GIPS) for the current fiscal year. One of the GIPS standards is in direct conflict with Spanish investment reporting regulations. In order to be in full compliance with GIPS, El Rey must:

A)   comply with the GIPS standard and make full disclosure of the conflict.

B)   choose either the GIPS standard or the local regulation, whichever is the more conservative approach, and make full disclosure of the conflict.

C)   comply with the local regulation and make full disclosure of the conflict.

Q4. According to the Global Investment Performance Standards (GIPS), where existing laws or regulations already impose performance presentation standards, firms:

A)   that comply with local requirements will be in compliance with GIPS as long as the scope and nature of the conflict is fully disclosed.

B)   must comply with the GIPS standards, because they are the globally accepted standards for the investment industry.

C)   are strongly encouraged to comply with the GIPS standards in addition to those local requirements.

答案和详解如下：

Q1. Which of the following statements regarding GIPS is least accurate?

A)   To stay GIPS compliant, a firm must abide by GIPS guidelines even when conflicting with local or country-specific regulations.

B)   A GIPS objective is to promote global “self-regulation.”

C)   GIPS allows clients to have more confidence in reported performance.

Correct answer is A)

To stay GIPS compliant, firms are required to comply with local laws even if they conflict with GIPS. However, the discrepancy must be disclosed.

Q2. The Global Investment Performance Standards (GIPS) were designed to be applied with the goal of full disclosure and fair representation of investment performance in all instances EXCEPT:

A)   when applicable local laws or regulations conflict with the GIPS, in which case, firms must comply with local laws and fully disclose the conflict.

B)   when a composite includes nondiscretionary funds to which the GIPS are not applicable.

C)   when a firm or composite has been in existence for less than five years, in which case, less stringent standards apply.

Correct answer is A)

In the case of a conflict, GIPS require that firms comply with local or country-specific laws or regulations rather than GIPS, but must fully disclose the nature and scope of the conflict.

Q3. The El Rey Investment Company, located in Barcelona, Spain, is in the process of adopting the Global Investment Performance Standards (GIPS) for the current fiscal year. One of the GIPS standards is in direct conflict with Spanish investment reporting regulations. In order to be in full compliance with GIPS, El Rey must:

A)   comply with the GIPS standard and make full disclosure of the conflict.

B)   choose either the GIPS standard or the local regulation, whichever is the more conservative approach, and make full disclosure of the conflict.

C)   comply with the local regulation and make full disclosure of the conflict.

Correct answer is C)

A GIPS requirement is that firms comply with the local law and make full disclosure of the conflict.

Q4. According to the Global Investment Performance Standards (GIPS), where existing laws or regulations already impose performance presentation standards, firms:

A)   that comply with local requirements will be in compliance with GIPS as long as the scope and nature of the conflict is fully disclosed.

B)   must comply with the GIPS standards, because they are the globally accepted standards for the investment industry.

C)   are strongly encouraged to comply with the GIPS standards in addition to those local requirements.

Correct answer is C)

Firms are encouraged, though not required, to comply with both GIPS and the local requirements, and also disclose any local laws and regulations that conflict with the GIPS standard. Note that this question is not asking about local laws that are in conflict with GIPS, but simply about local laws that exist.

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