GIPS Performance Standards

CFA Level I Ethics
#1

With respect to the GIPS performance standards, I would appreciate clarification on the following statement:

“After the firm presents a minimum of five years of GIPS compliant performance, the firm must present an additional year of performance each year, building up to a minimum of 10 years of GIPS-compliant performance”.

As an analogy: Let’s say we have a firm founded in 2008 (6 years ago). Does this mean that since the firm is 6 years old, it would be required to either:

  1. present 6 years of historical performance today, or

  2. present 5 years of historical performance in 2014, and the additional year of historical performance in 2015?

I am quite confused by the historical performance guidelines if a firm is greater than 5 years old; I would be grateful for any clarification. Many thanks in advance.

#2

If the firm starts its GIPS presentation in 2014, it need present only 5 years of performance. In 2015 it would go to 6 years, in 2016 it would go to 7 years, and so on. In 2019 it will be at 10 years; thereafter it presents 10 years (adding the most recent year, dropping the most distant year).