IPC-Invitation to Comment

Professional Standards and AdvocacyAssociation for Investment Management and ResearchP.O. Box 3668Charlottesville, Virginia 22903E-mail: standardsetting@aimr.orgBasle, 27. December 2001A.170.1/SHInvitation to Comment: Performance StandardsDear Madam, Dear SirOn behalf of our Performance Standard experts please accept our thanks for giving usthe occasion to comment on the proposed guidance statements.A. Proposed Guidance Statement on Definition of the FirmDo you agree with the principles established in the Guidance Statement?Basically yes, except for some aspects noted below.Definition of business entity:- A firm can be defined as an entity “using a separate and distinct research proc-ess”. We suggest formulating “using a separate and distinct investment manage-ment and decision-making process”, as limiting the definition to research onlymay not be practicable: Some firms outsource research to third parties while stillmanaging assets at their own discretion.- The statement “if a firm holds itself out as a separate entity yet does not maintainits own autonomous investment process, it cannot be defined as a firm” is ratherobscure. We suggest deleting the sentence for the following reason: the Stan-dards do not provide a clear definition of the term “investment process”, whichleaves it prone to interpretation. Furthermore, the definition may not be applica-ble to multinational firms. For example, a foreign subsidiary of a multinationalbank managing ...