Depositary - UCITS V Provision: Difference between revisions

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-You should definitely also check out {{aifmdprov|Depositary}} in the context of {{tag|AIFMD}}.
+{{ucits5anat|22(3)}}
+===Comparison of {{tag|UCITS}} and {{tag|AIFMD}} [[depositary]] regimes===
+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]]===
+Article {{ucits5prov|22(3)}} notes the {{ucits5prov|depositary}}’s general duties.
 Quoth the UCITS Directive {{eudirective|2014|91|EU}}:
-''(12) A UCITS should appoint a single {{ucitsprov|depositary}} having general oversight over the assets of the {{ucitsprov|UCITS}}. Requiring that there be a single depositary should ensure that the depositary has an overview of all the assets of the UCITS and both fund managers and investors have a single point of reference in the event that problems occur in relation to the safekeeping of assets or the performance of oversight functions. The safekeeping of assets includes holding assets in custody or, where assets are of such a nature that they cannot be held in custody, verification of the ownership of those assets as well as record-keeping for those assets.'' <br>
+:''(12) A UCITS should appoint a single {{ucits5prov|depositary}} having general oversight over the assets of the {{ucits5prov|UCITS}}. Requiring that there be a single depositary should ensure that the depositary has an overview of all the assets of the UCITS and both fund managers and investors have a single point of reference in the event that problems occur in relation to the safekeeping of assets or the performance of oversight functions. The safekeeping of assets includes holding assets in custody or, where assets are of such a nature that they cannot be held in custody, verification of the ownership of those assets as well as record-keeping for those assets.'' <br>
-''(13) In performing its tasks, a depositary should act honestly, fairly, professionally, independently and in the interest of the UCITS and of the investors of the UCITS.
+:''(13) In performing its tasks, a depositary should act honestly, fairly, professionally, independently and in the interest of the UCITS and of the investors of the UCITS.
 ''
-''[...]''
+:''[...]''
-''(20) It is necessary to lay down the conditions for the {{ucitsprov|delegation}} of the depositary’s safekeeping duties to a third party. Delegation and sub-delegation should be {{ucitsprov|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.''
-===Comparison of UCITS and AIFMD Depositary Regimes===
-The difference in liability for depositaries between {{tag|AIFMD}} and {{tag|UCITS}} is that <br>
-(i) liability can't be contractually excluded under {{tag|UCITS V}}, and <br>
-(ii) {{tag|UCITS V}} prospectuses must contain a description of any safekeeping arrangements delegated, identification of the delegate, and any [[conflict of interest]] that may arise.
+:''(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}}
-{{ucitsanatomy}}
+{{sa}}
+*[[AIFMD Depositary]].
+*The important parts relating to delegation are set out in Article {{ucits5prov|22a}}.
+{{ref}}