Template:Aifmddepositarydelegation: Difference between revisions
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You will see the depositary role ''[[in toto]]'' is not really suitable for a [[prime broker]]. The depositary may delegate some of its functions however: | You will see the depositary role ''[[in toto]]'' is not really suitable for a [[prime broker]]. The depositary may delegate some of its functions however: | ||
A prime broker may act as: | A prime broker may act as: | ||
*{{aifmdprov|custodian}}, but will have certain conditions to that appointment (see Article {{aifmdprov|21(11)}} | *{{aifmdprov|custodian}}, but will have certain conditions to that appointment (see Article {{aifmdprov|21(11)}}) | ||
*A | *A “{{aifmdprov|depositary lite}}” to certain non-EU domiciled {{aifmdprov|AIF}}s | ||
That said, the depositary can only delegate in certain circumstances: | |||
*It must have an “{{aifmdprov|objective reason}}” for the delegation. | *It must have an “{{aifmdprov|objective reason}}” for the delegation. | ||
*it must exercise due skill, care and diligence in the selection, appointment and ongoing monitoring of the {{aifmdprov|sub-custodian}}; | *it must exercise due skill, care and diligence in the selection, appointment and ongoing monitoring of the {{aifmdprov|sub-custodian}}; | ||
Revision as of 09:22, 6 October 2016
Delegation of depositary’s functions
You will see the depositary role in toto is not really suitable for a prime broker. The depositary may delegate some of its functions however: A prime broker may act as:
- custodian, but will have certain conditions to that appointment (see Article 21(11))
- A “depositary lite” to certain non-EU domiciled AIFs
That said, the depositary can only delegate in certain circumstances:
- It must have an “objective reason” for the delegation.
- it must exercise due skill, care and diligence in the selection, appointment and ongoing monitoring of the sub-custodian;
- The sub-custodian to whom it delegates:
- must have structures and expertise proportionate to the nature, scale and complexity of the assets of the AIF
- must be subject, in acting as a custodian, to effective prudential regulation and supervision in its local jurisdiction and periodic external audits;
- must segregate AIF assets from its own and the depositary's assets
- may not reuse the AIF’s assets without the AIF's express consent.