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Depositary lite - AIFMD Provision: Difference between revisions
Depositary lite - AIFMD Provision (view source)
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{{aifmdanat|36}} | {{aifmdanat|36| | ||
For EU AIFMs that market non-EU AIFs to professional investors in the EU, AIFMD does away with the need for the fund to have a full-blown [[Depositary - AIFMD Provision|depositary]], but you do need to monitor cash flows, look after [[custody]] assets and manage [[subscription|subscriptions]] and [[redemption|redemptions]]. | [[File:Texas book depository.png|450px|frameless|center]] | ||
}}For EU AIFMs that market non-EU AIFs to professional investors in the EU, AIFMD does away with the need for the fund to have a full-blown [[Depositary - AIFMD Provision|depositary]], but you do need to monitor cash flows, look after [[custody]] assets and manage [[subscription|subscriptions]] and [[redemption|redemptions]]. | |||
These three functions don’t have to be carried out by the same dude. An administrator might handle [[subscription]]s and [[redemption]]s and cashflow monitoring, and a [[prime broker]] might handle the [[custody]] function. When a prime broker does this, we call this a “depositary lite”, or “depo-lite” function. Unlike a full-blown {{aifmdprov|depositary}}, a depo-lite does ''not'' have strict liability for loss of a {{aifmdprov|Non-EU AIF}}’s assets, but it still has to give some commitments, and — it being the labyrinthine European Union and everything — these are described in a convoluted way, involving | These three functions don’t have to be carried out by the same dude. An administrator might handle [[subscription]]s and [[redemption]]s and cashflow monitoring, and a [[prime broker]] might handle the [[custody]] function. When a prime broker does this, we call this a “depositary lite”, or “depo-lite” function. Unlike a full-blown {{aifmdprov|depositary}}, a depo-lite does ''not'' have strict liability for loss of a {{aifmdprov|Non-EU AIF}}’s assets, but it still has to give some commitments, and — it being the labyrinthine European Union and everything — these are described in a convoluted way, involving | ||
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===Appointment language=== | ===Appointment language=== | ||
You could, and many fastidious [[legal eagles]] will, descend into the pit of a cavernous drafting oubliette trying to explain exactly | You could, and many fastidious [[legal eagles]] will, descend into the pit of a cavernous drafting oubliette trying to explain exactly what a depositary lite does — the interplay between full depositaries and custody only, and full and lite depositary status is enough to send many of them into a funk; interjecting mirroring UK legislation into the game will put them into a bottomless pit of despair. In a fit of affection, we humbly offer the following: | ||
{{ | {{quote|'''Depositary lite''': <br> | ||
(a) Where, for the purposes of the Alternative Investment Fund Managers Regulations 2013 (UK AIFMR), you are a “third country AIF” you may appoint us to act as your “Article 36 custodian”. We will carry out that appointment according to prevailing regulations and technical standards as they apply to Article 36 custodians. <br> | (a) Where, for the purposes of the Alternative Investment Fund Managers Regulations 2013 (“'''UK AIFMR'''”), you are a “third country AIF” you may appoint us to act as your “Article 36 custodian”. We will carry out that appointment according to prevailing regulations and technical standards as they apply to Article 36 custodians. <br> | ||
(b) Where the EU Alternative Investment Fund Managers Directive (EU AIFMD) applies, an “Article 36 custodian” means an entity appointed under Article 36(1)(a) of EU AIFMD to carry out the safekeeping of financial instruments that can be held in custody.}} | (b) Where the EU Alternative Investment Fund Managers Directive (“'''EU AIFMD'''”) applies, an “Article 36 custodian” means an entity appointed under Article 36(1)(a) of EU AIFMD to carry out the safekeeping of financial instruments that can be held in custody.}} | ||
===[[Prime broker]] as depositary lite=== | ===[[Prime broker]] as depositary lite=== | ||
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WE SHALL SEE. | WE SHALL SEE. | ||
By the way, the picture is of the Texas Book Depository, where there is a ''light'' on. Geddit?? | |||