SBI Asset Management Company is the first Indian financial company to follow the compliance norms of Global Investment Performance Standards (GIPS). The firm has been independently verified by ACA Performance Services, LLC for the period of April 1, 2014, through March 31, 2019.

GLOBAL INVESTMENT PERFORMANCE STANDARDS (GIPS) are the recognized standard for calculating and presenting investment performance around the world. Compliance with the GIPS standards has become a firm’s “passport” to market investment management services globally.

In a press release, Ashwani Bhatia, MD and CEO, SBI AMC said, “SBI AMC believes in its values STAKE that stand for Service, Transparency, Accountability, Knowledge and Ethics. The direction of becoming a GIPS compliant entity is a step towards abiding by our belief in the values.”

SBI AMC adopting global standards makes it one of the top companies adhering to the highest ethical standards.

As per the latest edition of 2020 GIPS standards“Why Is a Global Investment Performance Standard Needed”, is explained.

The financial markets and the investment management industry have become increasingly global in nature. The growth in the types and number of financial entities, the globalization of the investment process, and the increased competition among investment management firms all demonstrate the need to standardize the calculation and presentation of investment performance.

Further the document outlines, the mission and objectives:


The mission of the GIPS standards is to promote ethics and integrity and instil trust through the use of the GIPS standards by achieving universal demand for compliance by asset owners, adoption by asset managers, and support from regulators for the ultimate benefit of the global investment community.


  • Promote investor interests and instil investor confidence
  • Ensure accurate and consistent data
  • Obtain worldwide acceptance of a single standard for calculating and presenting performance.
  • Promote fair, global competition among investment firms
  • Promote industry self-regulation on a global basis

And one of the key objectives of the GIPS standards is to obtain worldwide acceptance of a single standard for the calculation and presentation of investment performance in a fair and comparable format that provides full disclosure. To facilitate the implementation of the GIPS standards, CFA Institute, together with the GIPS standards governing bodies, creates and administers the GIPS standards while local GIPS Standards Sponsors help to promote them.

Key concepts of the GIPS standards that apply to firms include the following:

  • The GIPS standards are ethical standards for investment performance presentation to ensure fair representation and full disclosure of investment performance.
  • Meeting the objectives of fair representation and full disclosure is likely to require more than simply adhering to the minimum requirements of the GIPS standards. Firms should also adhere to the recommendations to achieve best practice in the calculation and presentation of performance.
  • Firms must comply with all applicable requirements of the GIPS standards, including any Guidance Statements, interpretations, and Questions & Answers (Q&As) published by CFA Institute and the GIPS standards governing bodies.
  • The GIPS standards do not address every aspect of performance measurement and will continue to evolve over time to address additional areas of investment performance.
  • The GIPS standards require firms to create and maintain composites for all strategies for which the firm manages segregated accounts or markets to segregated accounts. Firms must include all actual, fee-paying, discretionary segregated accounts in at least one composite defined by investment mandate, objective, or strategy. Pooled funds must also be included in any composite for which the pooled fund meets the composite definition. Firms must maintain and make available information about all of the strategies they manage using composites or pooled funds. These requirements prevent firms from cherry-picking their best performance.
  • The GIPS standards rely on the integrity of input data, the quality of which is critical to creating accurate performance presentations. The underlying valuations of portfolio holdings drive performance. It is essential for these and other inputs to be accurate. The GIPS standards require firms to adhere to certain calculation methodologies to allow for comparability across firms.


The effect of complying with GIPS standards is beneficial for both, asset management companies and investors. It serves as a global passport for the changing times of globalisation in terms of investments. Asset managers and, both, existing and prospective clients benefit from an established global standard for calculating and presenting investment performance.

Benefits for AMCs

  • Investment practices, regulation, performance measurement, and reporting of performance vary considerably from country to country. But by implementing and adhering to a global standard, firms in countries with minimal or no investment performance standards can compete for business on an equal footing with firms from countries with more-developed standards.
  • Firms from countries with established practices can have more confidence in being fairly compared with local firms when competing for business in countries that have not previously adopted performance standards.
  • Performance standards that are accepted globally enable investment firms to measure and present their investment performance so that investors can readily compare investment performance among firms.

Benefits for Investors:

  • It is one of the best practices for advisors, it gains investors’ confidence.
  • Organizations that adhere to investment performance standards help assure investors and beneficiaries that the firm’s and the asset owner’s investment performance is complete and fairly presented.
  • Both prospective and existing clients of investment firms as well as asset owner oversight bodies benefit from a global investment performance standard by having a greater degree of confidence in the performance information presented to them.

This article first appeared on PersonalFN here

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