Template:Nutshell UCITS V 22a(3)

22a(3). The depositary may delegate its Art. 22(5) safekeeping function to a third party only where the delegate at all times:

(a) is competent and equipped to properly hold the assets which have been entrusted to it;

(b) for custody tasks referred to in point (a) of Article 22(5), :

(i) is prudentially regulated, supervised and subject to minimum capital requirements in its own jurisdiction;

(ii) is regularly audited to ensure that it does actually hold the financial instruments;

(c) segregates the UCITS’ assets from its own assets and those of the depositary so that it is always clear they belong to clients of a the depositary;

(d) ensures that if the delegate becomes insolvent, UCITS assets it holds are not available for distribution to the delegate’s creditors; and

(e) complies with the general obligations and prohibitions laid down in Article 22(2), 22(5) and 22(7) and in Article 25.

Where local law requires financial instruments to be held in custody by a local entity and no local entities satisfy the above delegation requirements, the depositary may delegate its functions to such a local entity only as far as is required by local law and as long as there remain no local entities that satisfy the delegation requirements provided that:

(a) it informs investors of the relevant UCITS, before investment, that such a delegation is required, why, and what risks it presents;

(b) the UCITS, has instructed the depositary to make such a delegation.

The delegate may sub-delegate those functions subject to the same requirements and Art. 24(2) will apply mutatis mutandis .