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Answer: local regulations and disclose conflicts.
## Explanation When there is a conflict between GIPS (Global Investment Performance Standards) and local regulations, firms should: 1. **Comply with local regulations** - Local laws and regulations take precedence over voluntary standards like GIPS 2. **Disclose the conflict** - Firms must disclose the existence of the conflict to maintain transparency This approach aligns with the fundamental principle that legal requirements supersede voluntary professional standards. GIPS are voluntary standards designed to promote fair representation and full disclosure of investment performance, but they do not override local legal requirements. **Key Points:** - GIPS standards are voluntary and designed for global consistency - Local regulations are legally binding - When conflicts exist, firms must follow local law and disclose the conflict - This ensures both legal compliance and transparency to clients/investors Therefore, option B is correct: comply with local regulations and disclose conflicts.
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Where local performance presentation regulations conflict with GIPS standards, GIPS-compliant firms should most likely comply with:
A
the GIPS standards.
B
local regulations and disclose conflicts.
C
the higher standard between local regulations and the GIPS standards.
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