AIMR Invites Public Comment On Proposed `Globalization' of Its Performance Presentation Standards.

Business Editors

CHARLOTTESVILLE, Va.--(BUSINESS WIRE)--Oct. 24, 2000

Should the uniform industry guidelines for how North American investment managers calculate and report their investment performance be modified to make them compatible with comparable global standards?

The Association for Investment Management and Research thinks so, and has issued a request for public comment on 11 specific modifications, additions and deletions that the organization says should be made to the AIMR Performance Presentation Standards (AIMR-PPS(TM)) that 75% of U.S. and 65% of Canadian investment managers use to calculate and market their performance.

A detailed description of all proposed changes, with instructions on how to submit written comments, is posted on AIMR's Web site at www.aimr.org/standards/pps. The public comment period will continue through Dec. 31.

While voluntary within the industry, compliance with AIMR-PPS standards is widely viewed as a competitive necessity since it allows investors to make "apples-to-apples" comparisons of results among individual investment management firms - and at the same time to have confidence that the numbers have been calculated fairly and ethically and all material information has been disclosed.

The proposed changes would make AIMR-PPS standards consistent with the Global Investment Performance Standards (GIPS(TM)) that AIMR subsequently initiated and which are now being adopted worldwide, while keeping them relevant to the North American market. But AIMR says the impact of the changes should be minimal, since the newer global standards were based on the AIMR-PPS standards in North America to begin with.

Still, the changes should interest investment management firms of all sizes throughout North America, whether they serve individual or institutional clients. The changes would also affect the consulting firms, software vendors and verification firms, such as Arthur Andersen and PricewaterhouseCoopers, that serve money management professionals. The changes would require some adaptation to software programs and orientation of verification services, for instance.

But according to AIMR's vice president for standard-setting, Jessica Mann, CFA, "The proposed changes are an important next step in supporting the convergence to one worldwide performance standard. With rapid globalization of the investment industry, it is important that managers complying with the North American standards have a `passport' to compete on an equal footing, anywhere in the world. This will be achieved though these changes, which will eventually lead to endorsement of AIMR-PPS as the North American version of GIPS."

Mann noted that an AIMR committee of investment practitioners that has developed the specific recommendations "worked to change the substance of the AIMR-PPS standards as little as possible to avoid confusion and minimize the costs of compliance."

The recommended changes relate, for example, to fee-schedule disclosures, disclosure of business and personnel activities that could impact a firm's investment performance, risk disclosures and verification methods.

AIMR pioneered the development and implementation of its Performance Presentation Standards throughout the 1990s. Since the AIMR-PPS standards were first established in 1993, AIMR has periodically revised them through interpretations and new requirements to maintain their relevance and effectiveness. AIMR subsequently led the development of comparable global standards - GIPS - to encourage full and ethical disclosures to investors throughout the world and to help firms in countries with minimal presentation standards to compete for business on a level playing field with firms from countries with more stringent standards.

The Association for Investment Management and Research(R) is a non-profit organization of 45,000 financial analysts, portfolio managers and other investment professionals from 95 countries. It administers the Chartered Financial Analyst(TM) program globally, with CFA(R) candidates enrolled from 135 countries. Three-quarters of AIMR's members hold the CFA charter. AIMR's membership also includes 97 local societies and chapters in 21 countries. Headquartered in Charlottesville, Va., U.S.A., AIMR has a staffed office in Hong Kong and is preparing to open an office in Europe. More information is available by calling 800/247-8132 or 804/951-5499 or visiting www.aimr.org.