The Global Investment Performance Standards (GIPS) are a set of standardized, industry-wide ethical principles that guide investment firms in calculating and presenting their investment performance to clients. Established by the CFA Institute, GIPS aim to promote transparency, consistency, and comparability in performance reporting across the global investment industry. By adhering to GIPS, firms ensure that performance results are complete, accurate, and presented in a manner that facilitates fair comparisons between different investment managersIn the context of the Chartered Financial Analyst (CFA) Level 3 curriculum, particularly within the Ethical and Professional Standards segment, GIPS play a crucial role in upholding integrity and ethical responsibility. CFA candidates are expected to understand the importance of ethical reporting and the implications of misleading performance data. GIPS compliance demonstrates a firm’s commitment to ethical practices, aligning with the CFA Institute’s emphasis on professionalism and fiduciary dutyGIPS standards cover various aspects of performance presentation, including the calculation methodologies, disclosure requirements, composite construction, and verification processes. Firms must establish composites that accurately represent the strategies they offer, ensuring that only similar investment portfolios are grouped together. Additionally, GIPS require firms to disclose relevant information that allows clients to assess the risk and return profiles of investments comprehensivelyAdhering to GIPS also involves regular third-party verification to confirm that a firm’s performance presentation meets all standard criteria. This verification process enhances credibility and builds trust with clients and stakeholders. For CFA professionals, understanding GIPS is essential not only for compliance purposes but also for fostering a culture of ethical reporting and accountability within their organizationsOverall, the Global Investment Performance Standards serve as a foundational framework that supports ethical behavior in performance reporting. By ensuring consistency and transparency, GIPS help protect investor interests, facilitate informed decision-making, and uphold the high standards of professionalism expected from CFA charterholders.