Major stakeholders in the Nigerian investment market are expected to meet on Tuesday November 21, 2017 to discuss ways to entrench the Global Investment Performance Standards (GIPS) in Nigeria as part of efforts to deepen the capital market and enhance investors’ returns.
The GIPS standards are a set of global minimum requirements and recommendations for calculating and reporting investment performance. When voluntarily and fully complied with, investment managers’ performances are ascertained as plausible and fairly comparable across all regions.
Nigeria, through its country sponsor, endorsed the GIPS standards in May 2015. The Nigerian country sponsor comprises of Fund Managers Association of Nigeria (FMAN), Pensions Operators Association of Nigeria (PenOp), The CFA Society Nigeria, and capital market and pension industry regulators.
At the Nigeria Investment Performance Stakeholders Conference being hosted by King Thrones Limited, an investment advisory firm, the country sponsor and other major stakeholders in the Nigerian investment management industry will deliberate on ways to entrench a market approach to the adoption of the GIPS standards.
Chief Relationship Officer, King Thrones Limited, Mr. Akin Adeniyi , said the conference is aimed at advancing the works of the country sponsor with a view to providing appropriate public information and guidance around the standards’ ideals as well as the framework for its market operations going forward.
“The essentials of this gathering rest on the need first and foremost to sensitise all stakeholders in the market, starting with investors, to their advisers, investment managers, pension funds, insurers, mutual funds, trade groups, regulators, consultants, and a host of others, of the workings and benefits of these standards, and the general expectations in the adoption process by investment management firms,” Adeniyi said.
He noted that the entrenchment of the GIPS standards in Nigeria will increase capital inflow into the Nigerian collective investment market as GIPS standards will create improved performance reporting modalities for the easy ascertainment and comparative analysis of factual historical records and reliable forecasting.
At the conference, during which Director General, Securities and Exchange Commission (SEC), will present a keynote address, stakeholders will have the opportunity to interact and debate on relevant issues, with the primary objective of establishing a clear understanding of the roles and responsibilities of market operators in the journey to attaining compliance with the global investment performance reporting standards.
Adeniyi outlined that GIPS standards will enhance the development of the Nigerian market by further promoting fair representation and full disclosures of facts behind every performance presentation, especially to prospective investors.
“Potential and existing clients are assured that the information shown in a GIPS – compliant performance presentation reflects the results of the presenting firm’s past investment decisions – which is equally crucial in the investor’s final decision-making process. Investors are also assured that the returns are calculated and presented on a consistent basis and that they are objectively comparable for a given strategy to those reported by other firms claiming compliance with the standards,” Adeniyi said.
Since their introduction in 1999, the GIPS standards have gathered momentum with investment management firms worldwide adopting these voluntary and ethical requirements for calculating and presenting historical investment performance. By the operations of both the GIPS Council and the Executive Committee, strong partnerships are formed with country sponsors to promote and educate the GIPS standards, and these have greatly contributed to their rapid global reach.
With the endorsement of its country sponsor of the standards in August, 2017, Kazakhstan became the 41st and most recent country to join the growing list of countries embracing these ethical standards. Nigeria and Denmark had become 30th and 31st respectively on the May 26, 2015.
The Nation Newspaper November 6th, 2017