21(11)(d) - AIFMD Provision

Paragraph 21(11)(d), AIFMD

AIFMD, 21(11)(d)

(d) the depositary ensures that the third party meets the following conditions at all times during the performance of the tasks delegated to it:

(i) the third party has the structures and the expertise that are adequate and proportionate to the nature and complexity of the assets of the AIF or the AIFM acting on behalf of the AIF which have been entrusted to it;

(ii) for custody tasks referred to in point (a) of paragraph 21(8), the third party is subject to effective prudential regulation, including minimum capital requirements, and supervision in the jurisdiction concerned and the third party is subject to an external periodic audit to ensure that the financial instruments are in its possession;

(iii) the third party segregates the assets of the depositary’s clients from its own assets and from the assets of the depositary in such a way that they can at any time be clearly identified as belonging to clients of a particular depositary;

(iv) the third party does not make use of the assets without the prior consent of the AIF or the AIFM acting on behalf of the AIF and prior notification to the depositary; and

(v) the third party complies with the general obligations and prohibitions set out in paragraphs 21(8) and 21(10).

(view template)
For fuller context see the whole of 21(11), and also Template:Aimfdprov21(14) which provides what seems on its face to be a rather onerous requirement that the AIF must be able to sue a third party subcustodian directly, see 21(14).