View source for Template:Nutshell AIFMD 21(11)

{{aifmdprov|21(11)}}. The {{aifmdprov|depositary}} may delegate its paragraph {{aifmdprov|21(8)}} custody functions (but not its other functions), as long as: <br />
:(a) it isn’t trying to avoid its {{tag|AIFMD}} obligations;
:(b) it has an {{aifmdprov|objective reason}} for doing so;
:(c) it has exercised all due skill, care and [[due dilly|diligence]] in selecting its [[delegate]], and must continuously monitors that {{aifmdprov|third party}};
:(d) it ensures the [[delegate]] meets the following conditions: 
::(i) it is sophisticated enough to properly look after the {{aifmdprov|AIF}}’s assets;
::(ii) it is effectively regulated, capitalised, supervised  and audited to holds [[Financial instrument - AIFMD Provision|financial instruments]] in [[custody]];
::(iii) it segregates the {{aifmdprov|AIF}}’s assets from its own and from those of the {{aifmdprov|depositary}} so they can be clearly identified as belonging to clients of the {{aifmdprov|depositary}};
::(iv) it does not use the assets without the {{aifmdprov|AIF}}’s prior consent and prior notification to the {{aifmdprov|depositary}}; and
::(v) it complies with paragraphs {{aifmdprov|21(8)}} and {{aifmdprov|21(10)}}. 
Where assets have to be held in a jurisdiction where no local entities are effectively regulated, capitalised, supervised and audited, the {{aifmdprov|depositary}} may appoint a local entity which isn’t, but only as long as there are no local entities that satisfy the delegation requirements, and: 
:(a) the {{aifmdprov|depositary}} informs {{aifmdprov|AIF}} investors must that such a delegation is required, and why, before they invest; and
:(b) the {{aifmdprov|AIF}} instructs the {{aifmdprov|depositary}} to delegate the custody of such [[financial instruments]] to such a local entity. 
The {{aifmdprov|third party}} may sub-delegate these functions, subject to the same requirements ''[[mutatis mutandis]]''. Use of a securities settlement system does not count as delegation of custody functions. <br>