Delegation of depositary functions - UCITS V Provision
According to recital 15 of the level 2 delegated regulations under UCITS V (makes you weep, doesn't it) “when delegating safekeeping functions to a third party in accordance with Article 22a of 2009/65/EC (EUR Lex), the Template:Ucitsprov is required to implement and apply an appropriate and documented procedure to ensure that the delegate complies with the requirements of Article 22a(3) of that Directive at all times. In order to ensure a sufficient level of protection of assets, it is necessary to set out certain principles that should be applied in relation to the delegation of safekeeping functions.”
22a - delegation of depositary functions
Article Template:UCITS Vprov, [[Template:UCITS V]] ([[Template:Template:UCITS V_22a|view template]])
{{Template:UCITS V Article 22a}}
Article 13 level 2 delegated regulations under UCITS V
Safekeeping duties with regard to assets held in custody
1. A depositary shall be deemed to comply with the requirements set out in point (a) of Article 22(5) of 2009/65/EC (EUR Lex) with respect to financial instruments to be held in custody where it ensures that:
- (a) the financial instruments are properly registered in accordance with Article 22(5)(a)(ii) of 2009/65/EC (EUR Lex);
- (b) records and segregated accounts are maintained in a way that ensures their accuracy, and in particular record the correspondence with the financial instruments and cash held for UCITS;
- (c) reconciliations are conducted on a regular basis between the Template:Ucitsprov’s internal accounts and records and those of any third party to whom safekeeping has been delegated in accordance with Article 22a of 2009/65/EC (EUR Lex);
- (d) due care is exercised in relation to the financial instruments held in custody in order to ensure a high standard of investor protection;
- (e) all relevant custody risks throughout the custody chain are assessed and monitored and the management company or the investment company is informed of any material risk identified;
- (f) adequate organisational arrangements are introduced to minimise the risk of loss or diminution of the financial instruments, or of rights in connection with those financial instruments as a result of fraud, poor administration, inadequate registering or negligence;
- (g) the UCITS’s ownership right or the ownership right of the management company acting on behalf of the UCITS over the assets is verified.
2. Where a depositary has delegated its safekeeping functions, with regard to assets held in custody, to a third party in accordance with Article 22a of 2009/65/EC (EUR Lex), it shall remain subject to the requirements of points (b) to (e) of paragraph 1 of this Article. The depositary shall also ensure that the third party complies with the requirements of points (b) to (g) of paragraph 1 of this Article.
UCITS Anatomy
This is an article about undertakings for collective investment in transferable securities directive (UCITS).
Resources: UCITS IV (2009/65/EC (EUR Lex)) | UCITS V (2014/91/EU (EUR Lex)) | ESMA Guidance on UCITS | Depositary comparison under AIFMD and UCITS
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