Parties Affected by GIPS

a. explain why the GIPS standards were created, what parties the GIPS standards apply to, and who is served by the standards;

For investment management firms, are the GIPS Standards mandatory or voluntary? Voluntary.

What purpose are the GIPS Standards meant for? GIPS are a way of ensuring that no material misrepresentation of performance takes place.

What Standard of Professional Conduct is completely satisfied by GIPS compliance? GIPS satisfy Standard V (B) Communication with Clients and Prospective Clients.

Who are the primary beneficiaries of GIPS? Current and prospective clients

Why are the GIPS effective at comparing the performance of two different firms? The GIPS allows effective comparisons because the two firms are measuring the same thing in the same way, which would be hard-to-difficult otherwise.

If a firm says they are in compliance with GIPS does the client still need to do due diligence before making an investment? Yes