Delegation of depositary functions - UCITS V Provision: Difference between revisions

Delegation of depositary functions - UCITS V Provision (view source)

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 .   Where a depositary has delegated its safekeeping functions, with regard to assets held in custody, to a third party in accordance with Article 22a of {{eudirective|2009|65|EC}}, it shall remain subject to the requirements of points (b) to (e) of paragraph 1 of this Article. The depositary shall also ensure that the third party complies with the requirements of points (b) to (g) of paragraph 1 of this Article.
+===The carve out for local regulations===
+Is a lot narrower than it would seem to be, and seems on its face to preclude delegating to a local custodian in a jurisdiction where there is no market practice to fully segregate custodian assets from client assets. Perhaps the EU boxwallahs thought such a jurisdiction was too inherently dangerous for UCITS funds to invest in at all. but at any rate the carve-out literally only applies to the lack of effective prudential regulation and capitalisation, rather than the wider segregation criteria:
+:''Notwithstanding point (b)(i) [i.e., prudent regulation and capitalisation]'' of the first subparagraph, where the law of a third country requires that certain financial instruments be held in custody by a local entity and no local entities satisfy the delegation requirements laid down in that point [i.e., prudent regulation and capitalisation] ...''
 {{seealso}}
 *[[UCITS depositary]]
 *[[AIFMD depositary]]