21(11)(d) - AIFMD Provision

AIFMD Anatomy™ Go Premium {{{2}}} In a Nutshell™ Section 21(11)(d): 21(11)(d) the depositary ensures that the third party complies with the following when performing its delegated tasks: (i) it has adequate structures and expertise proportionate to the nature and complexity of the assets of the AIF entrusted to it; (ii) for custody tasks set out in paragraph 21(8)(a), it is subject to effective prudential regulation, including minimum capital requirements, and supervision in its jurisdiction and an external periodic audit to ensure that the financial instruments are in its possession; (iii) it segregates the depositary’s clients’ assets from its own and the depositary’s own assets so that they can be clearly identified as belonging to clients of a particular depositary; (iv) it does not use the AIF’s assets without first getting the AIF’s consent and telling the depositary; and (v) it generally complies with paragraphs 21(8) and 21(10) when carrying out its obligations. view template Full text This is an unoffical transcription, may be wrong, buggered up, out of date etc. You should Google the original. (d) the depositary ensures that the third party meets the following conditions at all times during the performance of the tasks delegated to it: (i) the third party has the structures and the expertise that are adequate and proportionate to the nature and complexity of the assets of the AIF or the AIFM acting on behalf of the AIF which have been entrusted to it; (ii) for custody tasks referred to in point (a) of paragraph 21(8), the third party is subject to effective prudential regulation, including minimum capital requirements, and supervision in the jurisdiction concerned and the third party is subject to an external periodic audit to ensure that the financial instruments are in its possession; (iii) the third party segregates the assets of the depositary’s clients from its own assets and from the assets of the depositary in such a way that they can at any time be clearly identified as belonging to clients of a particular depositary; (iv) the third party does not make use of the assets without the prior consent of the AIF or the AIFM acting on behalf of the AIF and prior notification to the depositary; and (v) the third party complies with the general obligations and prohibitions set out in paragraphs 21(8) and 21(10). view template Directive 2011/61/EU (EUR Lex) | Implementing regulation 231/2013 (EUR Lex) Navigation directive - 21 (depositary) | 21(4) (conflict management) | 21(8) (custody function) | 21(11) (custody delegation) | 21(12) (liability for loss of assets) | 21(13) (discharge of liability on delegation) | 21(14) (discharge of liability for Non-EU subcustodians) | 36 (depo-lite) | 36(1) implementing regulation DR20 (Due diligence when appointing counterparties and prime brokers) | DR76 (objective reason) | DR89 (Safekeeping duties with regard to assets held in custody) | DR91 (reporting obligations for prime brokers) | DR98 (due diligence) | DR99 (segregation obligation) | DR100 (Loss of custody asset) | Comments? Questions? Suggestions? Requests? Insults? We’d love to 📧 hear from you. Sign up for our newsletter.

For fuller context see the whole of 21(11), and also 21(14) which provides what seems on its face to be a rather onerous requirement that the AIF must be able to sue a third party subcustodian directly, see 21(14).