Depositary lite - AIFMD Provision

Non-EU AIFs marketed by an EU AIFM to EU investors through private placement are subject to certain somewhat diminished depositary requirements (Article 36 AIFMD) - this is known as the "depositary lite" or "depo-lite" regime

• An AIFM must ensure one or more entities are appointed to carry out the following duties of:
  • Cash flow monitoring (Article 21(7));
  • Safe keeping of assets, both financial instruments and OTC (Articles 21(8)(a) and 21(8)(b); and
  • Oversight (Article 21(9))
• Unlike Article 21 (which covers the full depositary obligations of an EU AIFM / EU AIF) there is no strict liability for loss of assets for a non-EU AIF, and no requirement to appoint a single depositary - therefore this regime is referred to as "Depositary-Lite" or "Depo-Lite".