As part of the CFA Institute mission to build trust, ethical practices, and integrity in the investment management industry, CFA Society Pakistan and the Global Industry Standard team at CFA Institute led efforts to promote the CFA Institute Global Investment Performance Standards (GIPS®) and the CFA Institute Asset Manager Code™.
Key objective
The key objective of the collaboration was to convince asset management firms and other relevant financial institutions in Pakistan to adopt the standards. Adoption of the GIPS standards in Pakistan will help to upscale the methods of calculating and presenting historical investment performance in companies. The implementation of the Asset Manager code will help to build best ethical practices in the industry.
The GIPS standards have been recognized and adopted by over 1,700 organizations in 46 jurisdictions and the Asset Manager Code has been adopted by over 1,300 firms in 50 countries. These organizations include top asset management firms across the world. CFA Society Pakistan strongly believes that greater adoption of these investment industry standards will help create a distinctive edge for local financial institutions in Pakistan.
Creating awareness
The efforts to create awareness included a workshop on the GIPS standards and a roundtable on the Asset Manager Code for representatives of several asset management companies and other financial institutions, and a series of 23 meetings to promote and discuss the standards.
Karyn Vincent, CFA, Senior Head, Global Industry Standards (GIS), CFA Institute, and Eddie Chan, CFA, Director Professional Conduct Enforcement and Global Industry Standards, CFA Institute, visited Pakistan in February 2020 to conduct the workshop, roundtable session, and meetings.
As a result of these endeavours, regulators including the Pakistan Stock Exchange (PSX) and Securities and Exchange Commission of Pakistan (SECP) increased their knowledge of the CFA Institute investment industry standards.
Local adoption of Code and Standards
CFA Society Pakistan kept a strong follow-up with the companies that were initially approached and successfully enabled two leading asset management companies to claim compliance to the GIPS standards (taking the total count to eight GIPS compliant companies in Pakistan) and one asset management company to claim compliance to the Asset Manager code (taking the number to seven). Also, representatives from over 15 financial institutions in Pakistan became aware of the standards and many are considering implementing them in their companies.
In continuation of its advocacy efforts of last year, CFA Society Pakistan conducted a zoom workshop on "GIPS 2020 Compliance and Implementation" with Karyn Vincent and Eddie Chan as speakers. All the compliant firms who are undergoing transition, along with some of the firms who are potentially looking at compliance, were invited. A representative of SECP, Mr. Nayyer Hussain, also attended the session. The key focus of the workshop was on adoption of the Pooled Funds Report of GIPS 2020, as this will be the first time that GIPS compliant companies in Pakistan will be transiting to Pooled Funds Report instead of GIPS Composite Report with respect to mutual funds being managed by them.
CFA Society Pakistan also promoted the 24th Annual GIPS Standards Conference to asset managers and relevant financial institutions in Pakistan.
Mr. Mohammad Shoaib, Advocacy and GIPS Chair, CFA Society Pakistan, commented: “As Advocacy Chair for Pakistan and a member of the Global Industry Standards Executive Committee of CFA Institute, it is my endeavour to work towards 100% implementation of GIPS 2020 and Asset Manager Code in the asset management industry of Pakistan. GIPS 2020 has made it somewhat easier for firms in Pakistan to adopt GIPS 2020, as most AMCs market mutual funds (broadly distributed pooled funds) which are more common in Pakistan than marketing specific investment strategies (for which GIPS Composite Report is more relevant). We have received very good support from both the industry body known as MUFAP and our regulator SECP. Both are keen to support the industry wise implementation of best ethical and performance measurement standards in Pakistan.”
A list of the firms in Pakistan that claim compliance with the GIPS Standards and the Asset Manager Code is available here.
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