Template:Nutshell AIFMD 21(11): Difference between revisions
Jump to navigation
Jump to search
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
Line 1: | Line 1: | ||
{{aifmdprov|21(11)}}. The {{aifmdprov|depositary}} may delegate its | {{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; | |||
:(a) it | :(b) it has an {{aifmdprov|objective reason}} for doing so; | ||
:(b) it | :(c) it has exercised all due skill, care and [[due dilly|diligence]] in selecting its {{aifmdprov|delegate}}, and must continuously monitors that {{aifmdprov|third party}}; | ||
:(c) it | :(d) it ensures the {{aifmdprov|delegate}} meets the following conditions: | ||
:(d) it | ::(i) it is sophisticated enough to properly look after the {{aifmdprov|AIF}}’s assets; | ||
::(i) it 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]],; | ||
::(ii) | ::(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}}; | ||
::(iii) it segregates the {{aifmdprov|AIF}}’s assets from its own | |||
::(iv) it does not use the assets without the {{aifmdprov|AIF}}’s prior consent and prior notification to the {{aifmdprov|depositary}}; and | ::(iv) it does not use the assets without the {{aifmdprov|AIF}}’s prior consent and prior notification to the {{aifmdprov|depositary}}; and | ||
::(v) it | ::(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 | 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 | :(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. | :(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> | 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> |
Revision as of 15:36, 5 June 2019
21(11). The depositary may delegate its paragraph 21(8) custody functions (but not its other functions), as long as:
- (a) it isn’t trying to avoid its AIFMD obligations;
- (b) it has an objective reason for doing so;
- (c) it has exercised all due skill, care and diligence in selecting its delegate, and must continuously monitors that third party;
- (d) it ensures the delegate meets the following conditions:
- (i) it is sophisticated enough to properly look after the AIF’s assets;
- (ii) it is effectively regulated, capitalised, supervised and audited to holds financial instruments in custody,;
- (iii) it segregates the AIF’s assets from its own and from those of the depositary so they can be clearly identified as belonging to clients of the depositary;
- (iv) it does not use the assets without the AIF’s prior consent and prior notification to the depositary; and
- (v) it complies with paragraphs 21(8) and 21(10).
Where assets have to be held in a jurisdiction where no local entities are effectively regulated, capitalised, supervised and audited, the 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 depositary informs AIF investors must that such a delegation is required, and why, before they invest; and
- (b) the AIF instructs the depositary to delegate the custody of such financial instruments to such a local entity.
The 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.