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Level III Core · Overview of the Global Investment Performance Standards

Background, History and Evolution of GIPS Standards

Updated 9 October 2026 · Fact-checked

The Global Investment Performance Standards (GIPS) are voluntary, ethical standards for calculating and presenting investment performance. They grew from earlier national standards into one global framework. CFA Institute owns them, the GIPS Executive Committee governs their development, and country sponsors support them locally. Know who does what, why they exist and what voluntary means.

Understand Background, History and Evolution of GIPS

Before GIPS, each country had its own rules for reporting investment performance. Two managers could show the same results in different ways. One might drop a poor account. Another might pick a flattering start date. A client comparing them across borders could not trust the comparison.

The response was a set of standards built on earlier work. The Association for Investment Management and Research (AIMR), now CFA Institute, developed the AIMR Performance Presentation Standards (AIMR-PPS), first published in 1993. Other countries had their own standards as well. The GIPS standards were first published in 1999, building on the AIMR-PPS and other national standards. They were then revised in 2005, 2010 and 2020.

GIPS are voluntary. No law forces a firm to comply. A firm chooses to claim compliance to show that it follows best practice in fair representation and full disclosure of performance. GIPS are also described as ethical standards, because the goal is honest and complete reporting. Compliance is claimed on a firm-wide basis. A claimant that claims compliance must meet all the requirements that apply to it. It cannot claim compliance for selected composites only.

The composite rule depends on the type of claimant. For a firm, all discretionary, fee-paying portfolios must be included in at least one composite or pooled fund, as applicable. A pooled fund also needs a GIPS Pooled Fund Report. Asset owners and outside managers follow their own provisions. For example, an asset owner has no fee-paying requirement. It must include all discretionary portfolios in at least one composite or pooled fund.

The standards have been revised over time as markets and products changed. Revisions widened the scope and clarified requirements. The 2020 edition reorganized the standards by type of claimant. It has separate provisions for firms, for asset owners and for outside managers. For pooled funds, it introduced the GIPS Pooled Fund Report, which sits alongside the GIPS Composite Report. Pooled fund provisions were not wholly new in 2020, because earlier editions already covered pooled funds. The 2020 edition changed how they are structured and reported.

CFA Institute owns the GIPS standards. The GIPS Executive Committee is responsible for the governance and development of the standards. Country sponsors are local organizations. They support adoption, promote the standards in their market, help with local translation and questions, and take part in updating the standards. A country sponsor does not own GIPS and cannot change the requirements for its country alone. Use this split of roles when a question asks who does what.

Key rules to remember

Nature of GIPS
GIPS = voluntary + ethical + globally applied standards
Compliance is a choice, not a legal duty. Once claimed, it must be complete.
Ownership and governance
CFA Institute owns; GIPS Executive Committee governs and develops; country sponsors support locally
Sponsors promote and support adoption in their market. They do not own or alter the standards.
Core objective
Fair representation + full disclosure
These two ideas underpin every requirement and recommendation.
Claim of compliance
Claimant-wide claim: all applicable requirements met, or no claim
Compliance is claimed for the firm as a whole, not for selected composites. For a firm, all discretionary, fee-paying portfolios must be in at least one composite or pooled fund, as applicable. Asset owners and outside managers follow their own provisions.

How to solve Background, History and Evolution of GIPS questions

Use this method for any question on the background and evolution of GIPS.

  1. 1Read the command word. Items such as identify, state or explain need different depth.
  2. 2Decide whether the question asks about origin, ownership, scope, or the voluntary nature of GIPS.
  3. 3Recall the chain: the AIMR-PPS (1993) and other national standards fed into the GIPS standards, first published in 1999 and revised in 2005, 2010 and 2020. CFA Institute now owns them.
  4. 4If a role is asked, separate CFA Institute (owner), the GIPS Executive Committee (governance and development) and country sponsors (local support, promotion, input).
  5. 5If compliance is asked, apply the rule: voluntary to adopt, but a firm-wide claim needs all applicable requirements once made.
  6. 6If the 2020 edition is asked, link it to the reorganization by claimant type (firms, asset owners and outside managers) and the GIPS Pooled Fund Report alongside the GIPS Composite Report.
  7. 7Check each option against the exact wording before choosing. Reject options that say GIPS are mandatory or partly satisfied.
  8. 8In an essay, give one clear point per mark available and stop.

Quickest way: Three-test check for GIPS history statements

When to use it: Use when you have little time and four options that sound alike.

  1. Test 1: Does the option call GIPS mandatory or legally required? If yes, reject it.
  2. Test 2: Does the option give ownership to a country sponsor or a regulator? If yes, reject it.
  3. Test 3: Does the option allow partial compliance or claims for selected composites only? If yes, reject it.
  4. Choose the option left that says voluntary, global, ethical, owned by CFA Institute, supported by sponsors.

Common mistakes in Background, History and Evolution of GIPS

  • Saying GIPS compliance is mandatory for investment firms.

    Students link the word standards with rules enforced by law.

    Fix: Remember that GIPS are voluntary. A firm chooses to claim compliance.

  • Believing country sponsors own or set the standards for their country.

    The name sounds like a local authority.

    Fix: CFA Institute owns GIPS, and the GIPS Executive Committee is responsible for their governance and development. Sponsors promote and support them locally.

  • Allowing partial compliance, such as claiming compliance for some composites only.

    Students confuse voluntary adoption with voluntary choice of requirements.

    Fix: Adoption is a choice. Compliance is claimed firm-wide, so all applicable requirements must be met. For a firm, this includes placing all discretionary, fee-paying portfolios in at least one composite or pooled fund, as applicable. Asset owners and outside managers follow their own provisions.

  • Treating the 2020 edition as a complete rewrite of the purpose of GIPS.

    Students recall that much changed and overstate it.

    Fix: The purpose stays the same: fair representation and full disclosure. The edition reorganized the provisions by claimant type and introduced the GIPS Pooled Fund Report. Pooled fund provisions already existed in earlier editions.

  • Describing GIPS as a national standard from one country.

    Students recall the earlier AIMR-PPS and national standards and mix them up.

    Fix: Earlier national standards fed into one global framework that is used across many countries.

Worked examples

Example 1

A junior analyst says: Our firm must comply with GIPS because it is required by the local securities regulator. Explain whether this is correct, and state who owns the standards.

Show the solution
  1. Check the nature of GIPS. They are voluntary, ethical standards, not law.
  2. A regulator can set its own rules, but GIPS compliance is not itself a legal duty.
  3. So the claim that GIPS compliance is required by regulators is not correct as a description of GIPS.
  4. Identify the owner. CFA Institute owns GIPS, and the GIPS Executive Committee is responsible for their governance and development.
  5. Add the sponsor role. Country sponsors support adoption locally.

Answer: The statement is incorrect. GIPS are voluntary, so a firm chooses whether to claim compliance. CFA Institute owns the standards, the GIPS Executive Committee governs their development, and country sponsors support them in their markets.

Example 2

A firm wants to claim GIPS compliance but plans to meet only the requirements that suit its marketing. Evaluate this plan and explain what a country sponsor can do to help.

Show the solution
  1. Recall that adoption is voluntary, so the firm is free to decide whether to claim compliance.
  2. Recall that a claim of compliance is firm-wide and needs all applicable requirements to be met.
  3. The plan to choose only convenient requirements is therefore not acceptable. Selective compliance would undermine fair representation and full disclosure.
  4. State the sponsor role. A country sponsor can promote the standards and support the firm locally, for example with guidance and questions about local application.
  5. Note that the sponsor cannot waive requirements or change them for the firm.

Answer: The plan is not acceptable. The firm may choose to adopt GIPS, but if it claims compliance it must meet all applicable requirements. A country sponsor can support and guide the firm locally but cannot waive any requirement.

Exam tips

  • Expect item-set questions to test the voluntary nature of GIPS with tempting wording about requirement by law.
  • In essays, a command word like state needs a short answer. Give the fact without extra explanation.
  • Keep the roles apart: CFA Institute owns, the GIPS Executive Committee governs and develops, country sponsors support.
  • If asked what the 2020 edition changed, mention the reorganization by claimant type and the GIPS Pooled Fund Report alongside the GIPS Composite Report. Do not call pooled fund provisions new, and keep the purpose unchanged.
  • Write one point per line in constructed response so each mark is easy to see.

Background, History and Evolution of GIPS in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Background, History and Evolution of GIPS: frequently asked questions

Are GIPS standards mandatory?

No. GIPS are voluntary. A firm chooses whether to claim compliance. Once it claims compliance, it must meet all applicable requirements.

Who owns and governs the GIPS standards?

CFA Institute owns the GIPS standards. The GIPS Executive Committee is responsible for their governance and development. Local country sponsors support the standards in their markets.

What is the role of a GIPS country sponsor?

A country sponsor promotes GIPS in its market and supports firms with local adoption and questions. It also takes part in the development of the standards. It does not own the standards or change their requirements.

What changed in the 2020 edition of GIPS?

The 2020 edition reorganized the provisions by type of claimant: firms, asset owners and outside managers. It also introduced the GIPS Pooled Fund Report for pooled funds, alongside the GIPS Composite Report. Pooled fund provisions existed in earlier editions, and the aim of fair representation and full disclosure stayed the same.

Why were GIPS created?

Performance reporting differed across countries, and results were hard to compare. GIPS provide one global approach so that clients can trust and compare results from different firms.