Template:UCITS V 22a(3)

3. The functions referred to in Article Template:Ucitsprov may be delegated by the Template:Ucitsprov to a third party only where that third party at all times during the performance of the tasks delegated to it:

(a) has structures and expertise that are adequate and proportionate to the nature and complexity of the assets of the UCITS or the management company acting on behalf of the UCITS which have been entrusted to it;

(b) for custody tasks referred to in point (a) of Article Template:Ucitsprov, is subject to:

(i) effective prudential regulation, including minimum capital requirements, and supervision in the jurisdiction concerned;

(ii) an external periodic audit to ensure that the financial instruments are in its possession;

(c) segregates the assets of the clients of the Template:Ucitsprov from its own assets and from the assets of the Template:Ucitsprov in such a way that they can, at any time, be clearly identified as belonging to clients of a particular depositary;

(d) takes all necessary steps to ensure that in the event of insolvency of the third party, assets of a Template:Ucitsprov held by the third party in custody are unavailable for distribution among, or realisation for the benefit of, creditors of the third party; and

(e) complies with the general obligations and prohibitions laid down in Article Template:Ucitsprov, Template:Ucitsprov and Template:Ucitsprov and in Article Template:Ucitsprov.

Notwithstanding point (b)(i) of the first subparagraph, where the law of a third country requires that certain financial instruments be held in custody by a local entity and no local entities satisfy the delegation requirements laid down in that point, the Template:Ucitsprov may delegate its functions to such a local entity only to the extent required by the law of that third country, only for as long as there are no local entities that satisfy the delegation requirements, and only where:

(a) the investors of the relevant UCITS are duly informed, prior to their investment, of the fact that such a delegation is required due to legal constraints in the law of the third country, of the circumstances justifying the delegation and of the risks involved in such a delegation;

(b) the investment company, or the management company on behalf of the UCITS, has instructed the depositary to delegate the custody of such financial instruments to such a local entity.

The third party may, in turn, sub-delegate those functions, subject to the same requirements. In such a case, Article Template:Ucitsprov shall apply mutatis mutandis to the relevant parties.