Template:Nutshell UCITS V 22a

22a(1). The depositary may not delegate to third parties the fund administrator functions set out in Article 22(3) and 22(4) (subscriptions and redemption, calculating NAV, cash monitoring etc).
22a(2). The depositary may delegate the safekeeping functions set out in Article 22(5) but only where:

(a) there is no intent to end-run the UCITS rules;

(b) the depositary can show an objective reason for the delegation;

(c) the depositary has exercised all due care in appointing and monitoring the delegate delegate’s continued performance.

22a(3). The depositary may delegate safekeeping functions only where that delegate:

(a) is competent to look after the assets of the UCITS given to it;

(b) where it holds custodiable assets, the delegate is properly prudentially regulated in its it its own jurisdiction and regularly audited on its custody holdings;

(c) effectively segregates the UCITS assets from its own assets and those of the depositary so they can be clearly identified as belonging to clients of the depositary;

(d) takes steps to ensure that if it is insolvent, the UCITS’s assets that it holds are isolated from its creditors; and

(e) complies generally with Articles 22(2), 22(5), 22(7) and 25.

Where local rules require financial instruments to be held by a local custodian and none are effectively regulated or audited, the depositary may delegate to a non-compliant local custodian only as far as is required by those local rules, and only as long as there are no compliant local custodians, and only where:

(a) the UCITS investors are informed of these circumstances and the associated risks before they invest;

(b) the UCITS management company has instructed the depositary to make the delegation.

The delegate may sub-delegate on the same terms. In such a case, Article 24(2) shall apply mutatis mutandis to the relevant parties.