Explain the basic requirements for claiming GIPS compliance, including how the firm is defined and how it defines discretion

The first decision is how the firm is defined: it must be the entity held out to the public, such as an independent adviser or distinct business unit, and that definition fixes total firm assets, which include every portfolio, discretionary or not. Compliance is firm-wide and all-or-nothing: the firm must meet every applicable requirement, follow the law where it conflicts and disclose the conflict, avoid false or misleading information, and document its policies and procedures. It must present at least five years of compliant history, or since inception, building to ten. It must also define discretion, the ability to implement the intended strategy, because every actual, fee-paying, discretionary segregated account must sit in at least one composite. Partial compliance cannot be claimed.