Template:Aifmddepositarydelegation

Revision as of 09:22, 6 October 2016 by Amwelladmin (talk | contribs)

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:

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.