Objective reason - AIFMD Provision: Difference between revisions

An objective reason is used un {{aifmdprov|21(11)}} as the grounds for delegating safekeeping functions of a {{aifmdprov|depositary}}. What this means discussed in the recital to the [[AIFMD Delegated Regulation]] (sigh):

(122) When considering an objective reason, the right balance should be established to ensure that the contractual discharge can be effectively relied upon if needed and that sufficient safeguards are put in place to avoid any misuse of the contractual discharge of liability by the depositary. The contractual discharge of liability should under no circumstances be used to circumvent the depositary’s liability requirements under Directive 2011/61/EU. '''''The depositary should demonstrate that it was forced by the specific circumstances to delegate custody to a third party. Contracting a discharge should be always in the best interest of the AIF or its investors, and the AIF or the AIFM acting on behalf of the AIF should make it explicit that they act in such best interest.''''' Examples of scenarios should indicate the situations where a depositary may be considered as not having other options but to delegate custody to third parties.