Template:Ucits and reuse: Difference between revisions

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[[Financial instruments]] held in custody for a {{tag|UCITS V}} [[fund]] must be segregated, clearly identifiable in the custodian’s books and records as belonging to the [[UCITS]] and critically the {{ucits5prov|depositary}} (or its delegate<ref>If it has delegated the [[custody]] function, like.</ref>) may not rehypothecate those assets for its own account.<ref>[https://www.esma.europa.eu/sites/default/files/library/esma34-45-277_opinion_34_on_asset_segregation_and_custody_services.pdf ESMA opinion on the subject. See also {{ucits5prov|22(7)}}. Good note on it also from [[Matheson Ormsby Prentice|Matheson]] [https://www.matheson.com/images/uploads/publications/UCITS_V_Factsheet_on_Depositaries.pdf here].<ref>
[[Financial instruments]] held in custody for a [[UCITS V]] [[fund]] must be segregated, clearly identifiable in the custodian’s books and records as belonging to the [[UCITS]] and critically the {{ucits5prov|depositary}} (or its delegate<ref>If it has delegated the [[custody]] function, like.</ref>) may not rehypothecate those assets for its own account.<ref>[https://www.esma.europa.eu/sites/default/files/library/esma34-45-277_opinion_34_on_asset_segregation_and_custody_services.pdf ESMA opinion on the subject]. See also [[UCITS V]] Art. {{ucits5prov|22(7)}}. Good note on it also from [[Matheson Ormsby Prentice|Matheson]] [https://www.matheson.com/images/uploads/publications/UCITS_V_Factsheet_on_Depositaries.pdf here].</ref>


A {{t|UCITS}} can [[re-use]] assets on certain conditions, such as that the re-use benefits the UCITS and is in the interests of unit-holders is covered by high quality, liquid collateral under a [[title transfer collateral arrangement]], equal at least to the market value of the reused assets plus a premium. This prohibits [[PB]]-style [[re-hypothecation]] (which is of course allowed under {{t|AIFMD}} structures but allows UCITS to engage in [[securities lending]].
A [[UCITS]] ''can'' “[[re-use]]assets for its ''own'' account on certain [[Condition precedent|conditions]], such as that the re-use benefits the UCITS and is in the interests of unit-holders is covered by high quality, liquid collateral under a [[title transfer collateral arrangement]], equal at least to the market value of the reused assets plus a premium. This prohibits [[PB]]-style [[re-hypothecation]] (which is of course allowed under [[AIFMD]] structures but allows UCITS to engage in [[securities lending]].

Latest revision as of 13:30, 14 August 2024

Financial instruments held in custody for a UCITS V fund must be segregated, clearly identifiable in the custodian’s books and records as belonging to the UCITS and critically the depositary (or its delegate[1]) may not rehypothecate those assets for its own account.[2]

A UCITS canre-use” assets for its own account on certain conditions, such as that the re-use benefits the UCITS and is in the interests of unit-holders is covered by high quality, liquid collateral under a title transfer collateral arrangement, equal at least to the market value of the reused assets plus a premium. This prohibits PB-style re-hypothecation (which is of course allowed under AIFMD structures but allows UCITS to engage in securities lending.

  1. If it has delegated the custody function, like.
  2. ESMA opinion on the subject. See also UCITS V Art. 22(7). Good note on it also from Matheson here.