The Performance Analyst Group of Australia (P Group) officially became part of the Financial Services Council (previously known as the Investment & Financial Services Association (IFSA)) as a forum under the Investment Board Committee. The P Group is essentially a forum for industry professionals interested in all aspects of performance measurement.
The charter of the P Group is:
"a forum for investment professionals to discuss and develop ideas, concepts and theories relating to performance measurement and analysis, and produce working papers for submission to industry associations and regulators"
The current Chair of the P Group is Stuart Hoy from J.P. Morgan Chase.
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The P Group was formed as a result of the industry’s desire to standardise performance methodology, and was further bolstered by the ISC (APRA) Working Party, which formed a Working Group to develop performance standards for Australia. The initial working party had representatives from the ISC, AIMA, the Institute of Actuaries and the Australian Custodial Services Group. The emphasis of the group was to create a set of performance standards for Australia to alleviate the need for the ISC to regulate the industry with regard to performance measurement.
The P Group’s initial role in developing the Standards had been one of providing ‘technical advice’. Members of the P Group provided the majority of the resources in getting the Standards developed through sub-committees. This development work resulted in widely accepted and recognised Investment Performance Standards being introduced into the Australian market in 1998, with the release of the Australian Investment Performance Measurement & Presentation Standards (AIPMPS).
In July 1999, these Standards were adopted by the Financial Services Council (formerly known as the Investment & Financial Services Association (IFSA)) as an official Guidance Note (IFSA 1GN) and renamed as The Australian Investment Performance Standards (AIPS), when IFSA launched these and other standards. In January 2006, the predecessor Standards (AIPMPS and AIPS) were replaced by GIPS of which the P Group is the endorsed sponsor.
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The P Group currently has over 300 members, and attendance at P Group Key Issues Presentations (KIPs) is usually quite strong, with average forum attendance in the region of 40-50 members. Key Issues Presentations are normally held in Sydney, with teleconference links to other locations (Melbourne, Brisbane etc) established so that all members may participate.
The majority of P Group members are performance analysts (Investment Management, Custody & Asset Consulting) who typically work for member companies of the Financial Services Council. There is also a growing number of members from asset consulting firms, and other ancillary service firms such as Accounting firms and other such service providers.
Membership of the P Group is open to all member companies of the Financial Services Council (FSC) without charge. Non-members of the FSC may also join the P Group by sending a request mail to email@example.com.
All performance analysts and those involved with the Standards are encouraged to join the P Group as a forum to keep informed on performance issues and changes to the Standards.
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The Australian Investment Performance Standards
The Australian Investment Performance Standards (AIPS) were originally introduced as the Australian Investment Performance Measurement & Presentation Standards (AIPMPS) on 1 January 1998. In July 1999, the name changed from AIPMPS to AIPS when the Investment & Financial Services Association (IFSA) adopted AIPS as a Guidance Note (No.1) for its members.
In 2001, after considerable consultation with the Australian industry, it was decided that Australia should participate in the Global Investment Performance Standards (GIPS) framework and develop a Country Version of GIPS (CVG). (Note: The Investment Performance Council (IPC) is the governing body of GIPS and oversees all of AIMR's investment performance standards activities. The IPC operates as a "think tank" for performance measurement, presentation, and research and develops new performance standards as needed by the industry.)
Prior to the release of AIPS as a CVG, several other countries had adopted the GIPS framework, making a compelling case to do the same. Participation in the GIPS framework assists in reducing barriers to entry, not least by the recognition of a single standard. Firms are able to compete alongside other firms who are compliant with GIPS, Translations of GIPS or endorsed Country Versions of GIPS.
On 25 June 2002, the Australian Investment Performance Standards, the Australian Version of GIPSTM, was officially endorsed by the Investment Performance Council (IPC) as a Country Version of GIPS, effective from 1 July 2002.
In July 2002, the IFSA Board of Directors resolved to adopt the Australian Investment Performance Standards (AIPS), the Australian Version of GIPSTM as IFSA Guidance Note No. 1 effective from 1 July 2002.
In January 2006, the predecessor Standards (AIPMPS and AIPS) were replaced by GIPS of which the P Group is the endorsed sponsor.
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P Group Operating Committee
The sponsor of GIPS is the Performance Analyst Group of Australia (P Group). The P Group Operating Committee is responsible for administering GIPS on behalf of the P Group.
The objectives of the P Group Operating Committee are:
- Promotion of the Australian Investment Performance Standards, the Australian Version of GIPSTM.
- Maintaining GIPS in line with the Country Version of GIPS (CVG) endorsement conditions specified by the IPC Country Standards Sub Committee (CSSC).
- Preparation of official Australian industry responses to all GIPS Executive Committee request for comment documents.
- Resolution of local issues that require amendments to GIPS.
- Issuance of GIPS Guidance Statements.
As GIPS have been endorsed by the GIPS Executive Committee as a Country Version of GIPS, all interpretations, clarifications, guidance statements and GIPS provisions (which represent the core of GIPS) that are issued by the GIPS Executive Committee will also apply to GIPS. Any such GIPS Executive Committee releases will immediately supersede an GIPS specific equivalent and must be adhered to in order to maintain compliance with GIPS. As part of the GIPS Executive Committee endorsement conditions, the P Group Operating Committee has made an undertaking to ensure that GIPS are updated in line with any revisions to GIPS. The Australian industry will be informed in the event that any changes are to be made.
The P Group Operating Committee is also responsible for providing interpretations and/or clarifications for those AIPS provisions that are not included in GIPS and therefore, specific to Australia.
From time to time, the P Group Operating Committee will also release guidance statements that relate specifically to Australia, e.g., After-Tax Performance Measurement. Guidance Statements issued by the P Group Operating Committee are not required to be complied with. However, it is recommended that firms adopt the provisions incorporated in these releases, as they will often reflect best practice within Australia. The P Group Operating Committee was formerly known as the AIPS Editorial Committee.
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Structure of the P Group
The following diagram shows how the P Group fits in with the Financial Services Council structure:
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