Going back in time

An interesting question was posed to me recently; one that I hadn't previously thought about.

A client who wants to become compliant with the Global Investment Performance Standards (GIPS(R)) has three strategies, each of which has been in existence for 20 years, and each having its own composite. The firm wishes to have history for one going back the entire period, for 10 years for the second, and only the minimum five years for the third. Can they do this?

I thought this was a bit of a perplexing problem because a "firm" is compliant, not a "composite." And since the "firm" wouldn't have been "compliant" eight years ago, for example, if only two of the three composites had returns, would that therefore invalidate compliance for those dates? And yet, the standards only require five years (or to the date of the composite's creation, if shorter) of history. And although there's a recommendation that firms go back beyond the five year minimum, there is no stated requirement that firms must be consistent in doing this.

My conclusion was that "best practice" would be where the firm is consistent, but that they could do as they desired. But to be sure I contacted the GIPS help desk, and they confirmed that there was no prohibition on what the firm wanted to do and that they could, as they wished, establish history for different historical periods for the composites. Interesting, I thought; and glad that they concurred with me.