GIPS Appendix and Glossary: is it necessary?

Question

Hello everyone, At the end of reading 5 for the ethics part there is a glossary that DOESN‘T have the dashed lines which are used to signal that the material is optional. Does it mean that we will be tested on that ? The thing is that both MM and Schweser don’t cover the glossary why is that ? If its optional why didn’t they dash it? How well should I know all the terms in the glossary especially those related to performance of PE and RE ?

I’m just asking so that I know how in depth I should learn that . Thanks in advance.

AdamsDriver · Answer

Thanks!

Zee Tan · Answer

It's unlikely. The Reading 5 GIPS LOS states:
The candidate should be able to:

a. describe the key features of the GIPS standards and the fundamentals of compliance;

b. describe the scope of the GIPS standards with respect to an investment firm’s definition and historical performance record;

c. explain how the GIPS standards are implemented in countries with existing standards for performance reporting and describe the appropriate response when the GIPS standards and local regulations conflict;

d. describe the nine major sections of the GIPS standards.
The GIPS glossary is complementary to that the LOS but the LOS does not state you need to memorize the glossary nor appendix. As you go through the CFA exam curriculum a lot of the terms would start to get familiar.

I would recommend scanning them all but not spending crazy amounts of time to deep-dive into each term, and skim them again during review time.