The Financial Industry Regulatory Authority (FINRA) has issued Regulatory Notice 20-21 (the “Regulatory Notice”) which allows retail communications concerning private placement offerings to present the fund’s internal rate of return (IRR) under certain conditions. In particular, the Regulatory Notice prescribes that such information must be “calculated in a manner consistent with the Global Investment Performance Standards (GIPS) adopted by the CFA Institute and includes additional GIPS-required metrics such as paid-in capital, committed capital and distributions paid to investors.”
Notably, neither FINRA nor CFA Institute require a firm to claim firm-wide compliance with the GIPS standards in order to satisfy the requirements of the Regulatory Notice. As long as the information is calculated and presented in a manner consistent with the GIPS standards, a firm will have met its obligations with regard to the Regulatory Notice.
If you have questions about what your firm needs to do to comply with this Regulatory Notice, we are here to help. Please send us a note at info@guardianperformancesolutions.com.
