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 {{tag|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> | [[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 {{tag|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 | 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]]. | ||
Revision as of 13:29, 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 can “re-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.