Discretion
Within the GIPS standards, discretion is the management company's ability to execute transactions and to make decisions regarding the vehicle's investments on behalf of the investors without their prior approval. There are degrees of discretion. However not all investor imposed restrictions or investor approval rights will necessarily cause a portfolio to be non-discretionary. GIPS describes a discretionary portfolio as one for which the investors have not imposed restrictions or requirements that impede the manager from fully executing the defined and approved strategy.