|
|
| (15 intermediate revisions by the same user not shown) |
| Line 1: |
Line 1: |
| This is the provision that requires [[AIFM]]s to appoint a single depositary for each [[AIF]] that they manage. Note also the parallell concept of a depositary under UCITS V, and the handy [[Depositary comparison under AIFMD and UCITS|comparison}} between the two regimes.
| | {{aifmdanat|21| |
| | [[File:Texas book depository.png|450px|thumb|center|He ain’t heavy.]] |
| | }}''See also [[depositary lite]]''<br> |
|
| |
|
| That, in a {{nutshell}}, provides:
| | The person appointed by an {{aifmdprov|AIF}} to handle [[subscription]]s and [[redemption]]s, monitor cashflows, look after the {{aifmdprov|AIF}}’s assets — all that kind of thing. |
| | | The key parts of AIFMD insofar as they relate to {{aifmdprov|depositary}} are: <br> |
| ==={{aifmdprov|21}}: {{aifmdprov|Depositary}}===
| | *{{aifmdprov|21(4)}} - {{aifmdprov|avoiding conflicts of interest}} <br> |
| {{aifmdprov|21(1)}}: '''Single depositary per [[AIF]]''': [[AIFM]] must ensure each [[AIF]] has a single Depositary.<br>
| | *{{aifmdprov|21(5)}} - {{aifmdprov|location of depositary}} <br> |
| {{aifmdprov|21(2)}}: '''Written contract''': Appointed by written contract meeting certain minimum criteria of {{tag|AIFMD}}. <br> | | *{{aifmdprov|21(6)}} - {{aifmdprov|conditions to appointment of depositary in a third country}} <br> |
| {{aifmdprov|21(3)}}: '''Eligibility criteria''': a depositary must be <br> | | *{{aifmdprov|21(7)}} - {{aifmdprov|general responsibilities of depositary}} <br> |
| :(a) An authorised EU credit institution; <br>
| | *{{aifmdprov|21(11)}} - {{aifmdprov|criteria for delegating depositary functions to third parties}} <br> |
| :(b) an EU investment firm meeting certain capital adequacy criteria; <br>
| | *{{aifmdprov|21(12)}} - {{aifmdprov|Liability for loss of assets}} <br> |
| :(c) an entity subject to prudential regulation that is deemed ok under {{eudirective|2009|65|EC}} <br>
| | *{{aifmdprov|21(13)}} - {{aifmdprov|Liability not affected by delegation except in certain circumstances}} <br> |
| For Non-EU [[AIF]]s the depositary can be an equivalent credit institution or investment firm outside the EU (I think). There are also exceptions for illiquid [[AIF]]s that don't invest in custody assets. <br>
| | *{{aifmdprov|21(14)}} - {{aifmdprov|further provisions for where third party is in a third country}} <br> |
| {{aifmdprov|21(4)}}: '''Conflict management''': To avoid conflicts between [[AIFM]], [[AIF]] and investors: <br> | | {{depositary}} |
| :(a) {{tag|AIFM}} can't be a depositary <br>
| | {{sa}} |
| :(b) a Prime Broker to an [[AIF]] can't be a depositary unless appropriate Chinese walls and conflict management processes are in place; however it may delegate of custody tasks as per {{aifmdprov|21(11)}} (and {{aifmdprov|21(8)}}; <br>
| | *{{aifmdprov|Depositary lite}}'' |
| {{aifmdprov|21(5)}}: '''Jurisdiction''': Depositary must be established in either:<br> | | {{ref}} |
| :(a) home Member State of the [[AIF]]; <br>
| |
| :(b) for non-EU [[AIF]]s, in the country of the [[AIF]], the home Member State of the [[AIFM]], or i the "Member State of reference of the [[AIFM]] (don't you just LOVE THIS GAME???!) <br>
| |
| {{aifmdprov|21(6)}}: '''Additional criteria for non-EU [[AIF]]s''': If established in a non-EU state per {{aifmdprov|21(5)}}(b), there are certain other conditions that must be met; <br> | |
| {{aifmdprov|21(7)}} '''Depositary obligations re cash''': The depositary is required to ensure that: <br> | |
| :AIF's cashflows are properly monitored <br>
| |
| :subscription payments are properly received and booked in the depositary's accounts <br>
| |
| {{aifmdprov|21(8)}}: '''Depositary's obligations re safekeeping of assets''': [[AIF]]'s assets are entrusted to the depositary for safekeeping as follows: <br> | |
| :(a) for custody assets: <br>
| |
| ::(i) depositary should hold in custody all assets that can be registered in its books or physically delivered to it; <br>
| |
| ::(ii) depositary should ensure the assets are held within segregated accounts in its books opened in the name of the [[AIF]] or [[AIFM]] so they can be clearly identified as belong to the [[AIF]] at all times <br>
| |
| :(b) for non-custody assets there are some rules too <br>
| |
| {{aifmdprov|21(9)}} '''Issuance and cancellation of fund units etc.''': depositary must look after issue and cancellation of shares and units, calculation of [[NAV]]s and so on. <br>
| |
| {{aifmdprov|21(10)}} '''Standard of Conduct''': Depositary must act honestly, fairly, professionally, independently and in the interest of the [[AIF]] and its investors and avoid conflicts of interest. The depositary cannot reuse assets of the [[AIF]] without the [[AIF]]'s prior consent; <br> | |
| {{aifmdprov|21(11)}} '''Limited right of delegation of custody obligations only''': Depositary cannot delegate to third parties, except for safekeeping obligations under paragraph {{aifmdprov|21(8)}}, wherein it is ok as long as: <br> | |
| :(a) not intended to avoid requirements of AIFMD; <br>
| |
| :(b) there is an "{{aifmdprov|objective reason}}" for the delegation. <br>
| |
| :(c) depositary has exercised all due skill, care and diligence in selecting the delegate; <br>
| |
| :(d) the delegate ([[sub-custodian]]): <br>
| |
| ::(i) has adequate expertise and structures <br>
| |
| ::(ii) for custody, is subject to effective prudential regulation; <br>
| |
| ::(iii) segregates client assets from its own assets and the depositary's assets so they can be clearly identified as belonging to clients; <br>
| |
| ::(iv) No uise without prior consent of the [[AIF]] and prior notification to the depositary; <br>
| |
| ::(v) Delegate complies with 21(8) and 21(10). <br>
| |
| certain guff about sub-delegation where required by laws of third party <br>
| |
| {{aifmdprov|21(12)}} '''Liability for loss of assets''': the depositary is liable for the loss of assets by the depositary or a third party to whom custody has been delegated. In the case of such a loss the depositary shall return an identical financial instrument or the corresponding amount to the [[AIF]] without undue delay. It will not be liable if the loss arose as a result of an external event beyond its reasonable control, the consequences of which would have been unavoidable despite all reasonable efforts to the contrary. <br> | |
| {{aifmdprov|21(13)}} '''Liability not affected by delegation except in certain circumstances''': The depositary’s liability is be affected by any delegation under paragraph {{aifmdprov|21(11)}}. However the depositary may discharge itself of liability if it can prove that: <br> | |
| :(a) all requirements for the delegation of its custody tasks set out in the second subparagraph of paragraph {{aifmdprov|21(11)}} are met; <br>
| |
| :(b) a written contract between the depositary and the delegate [[sub-custodian]] expressly transfers the liability of the depositary to that delegate [[sub-custodian]] so that the [[AIF]] can claim directly against it; and <br>
| |
| :(c) [[AIF]] expressly discharges the depositary’s liability under a written contract and establishes an "objective reason" for a discharge. <br>
| |
| {{aifmdprov|21(14)}} '''Discharge of liability for delegates in non-EU jurisdictions in limited circumstances''': Discharge of liability in the case of third parties in Third Countries: when certain conditions met. <br> | |
| {{aifmdprov|21(15)}} '''AIF Investors''': Liability to [[AIF]] investors may be invoked directly or indirectly through the [[AIFM]] <br> | |
| {{aifmdprov|21(16)}} '''Information''': The depositary must make all information it receives in course of performing its duties available to its competent authorities, on request.<br> | |
| {{aifmdprov|21(17)}} '''Certain other measures''': The Commission shall adopt, by means of delegated acts in accordance with Article 56 and subject to the conditions of Articles 57 and 58, certain measures.<br> | |
| | |
| | |
| | |
| {{aifmdanatomy}} | |