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Depositary - UCITS V Provision: Difference between revisions
Depositary - UCITS V Provision (view source)
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===Comparison of {{tag|UCITS}} and {{tag|AIFMD}} [[depositary]] regimes=== | ===Comparison of {{tag|UCITS}} and {{tag|AIFMD}} [[depositary]] regimes=== | ||
The main differences between an [[AIFMD depositary]] and a [[UCITS depositary]] are: <br> | The main differences between an [[AIFMD depositary]] and a [[UCITS depositary]] are: <br> | ||
*'''Exclusion of liability''': An [[AIFMD depositary]] can, but a [[UCITS depositary]] cannot, contractually exclude its liability when it [[delegate]]s the safekeeping function to a third party<ref>See [[UCITS liability for delegation]].</ref>; and <br> | |||
*'''Disclosure''': {{tag|UCITS V}} prospectuses must describe any delegation of safekeeping arrangements, identifying the delegate, and spelling out any [[conflict of interest]] that may arise. | |||
*'''No [[rehypothecation]]''': Per Art. {{ucits5prov|22(7)}}, the depositary can’t [[reuse]] fund assets to offset its costs of lending on margin to the {{t|UCITS}}<ref>UCITS shouldn’t generally ''be'' buying on margin, of course.</ref> (though it can put them into an [[Agent lending|agency lending]] programme). | |||
{{ | ===Delegation of safekeeping=== | ||
All the good oil is in Art. {{ucits5prov|22a}}. | |||
===General duties of a [[UCITS depositary]]=== | ===General duties of a [[UCITS depositary]]=== | ||
Article {{ucits5prov|22(3)}} notes the {{ucits5prov|depositary}}’s general duties. | Article {{ucits5prov|22(3)}} notes the {{ucits5prov|depositary}}’s general duties. | ||
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:''(20) It is necessary to lay down the conditions for the {{ucits5prov|delegation}} of the depositary’s safekeeping duties to a third party. Delegation and sub-delegation should be {{ucits5prov|objectively}} justified and subject to strict requirements in relation to the suitability of the third party entrusted with the delegated function, and in relation to the due skill, care and diligence that the depositary should employ to select, appoint and review that third party. For the purpose of achieving uniform market conditions and an equally high level of investor protection, such conditions should be aligned with those applicable under Directive {{eudirective|2011|61|EU}}. Provisions should be adopted to ensure that third parties to which safekeeping functions have been delegated have the necessary means to perform their duties and that they segregate the assets of the UCITS.'' | :''(20) It is necessary to lay down the conditions for the {{ucits5prov|delegation}} of the depositary’s safekeeping duties to a third party. Delegation and sub-delegation should be {{ucits5prov|objectively}} justified and subject to strict requirements in relation to the suitability of the third party entrusted with the delegated function, and in relation to the due skill, care and diligence that the depositary should employ to select, appoint and review that third party. For the purpose of achieving uniform market conditions and an equally high level of investor protection, such conditions should be aligned with those applicable under Directive {{eudirective|2011|61|EU}}. Provisions should be adopted to ensure that third parties to which safekeeping functions have been delegated have the necessary means to perform their duties and that they segregate the assets of the UCITS.'' | ||
===Dull comparison between [[UCITS depositary]] and [[AIFMD depositary]]=== | |||
{{depositarycomparison}} | |||
{{ | {{sa}} | ||
* | *[[AIFMD Depositary]]. | ||
*The important parts relating to delegation are set out in Article {{ucits5prov|22a}}. | *The important parts relating to delegation are set out in Article {{ucits5prov|22a}}. | ||
{{ref}} | |||