Changes, changes, changes ... You win some, you lose some

The long anticipated announcement of the changes to the GIPS(R) standards is beginning to occur. At yesterday's opening session of this year's annual GIPS Conference, we learned of some of what is in store for us: these changes will occur in January 2011. Space doesn't permit me to go into much detail, but I'll highlight some of the changes over the next few days; more details will be provided in our monthly newsletter.

A key point has to do with WHEN the changes take place: what does January 2011 mean? It means that as you report any information in your presentations for periods after January 1, 2011, you must comply with the new requirements. If, for example, you only report annual information, then technically you won't have to include the changes until early 2012 when you will presumably be reporting the 2011 information. This means that the GIPS 2010 changes go into effect in 2011 but may not actually show up until 2012 ... confused?

We can't expect that all of what we want will occur, and so while I'm pleased with some of the changes I'm not with all, but I guess that's okay. Reviewing the 100+ letters that were submitted and deciding what to include is a daunting task that few would envy.

Today I'll only address one change: the planned requirement that firms record for 12 months any time they had corrected material errors in their presentations. This was generally not welcome by the investment community and the GIPS Executive Committee heard this "loud and clear," and so dropped it. BUT, the Error & Correction Guidance Statement still stands, for now, which makes this a requirement effective 1 January 2010! So, what does this mean? Unclear right now: we understand that some changes may occur to the "GS," but until they are you should be prepared to make such announcements in your materials.