Sub-custodian

A topic of some recent interest in light of AIFMD and UCITS V legislation. Under both regimes a single depositary must be appointed having strict liability for the safe keeping of assets.

Note though that being delegated a custody function is an altogether different thing to being a subcustodian.

A depositary who delegates its custody function won't hold the assets at all - it will pass that responsibility to the prime broker, who will record the end client's interests in the custody assets directly in its books and records.

It may in turn appoint a subcustodian who will hold all the prime broker's client assets in a single omnibus account, in the prime broker's name but marked as "client assets" and therefore unavailable for the prime broker's creditors.

See also

• Custodian
• Prime broker
• Depositary (AIFMD)
• Template:Ucitsprov (UCITS V)

CASS Anatomy™ Go Premium {{{2}}} IMPORTANT: CASS changed quite a bit after MiFID II. This resource therefore may well be out of date, even if it was accurate once, which it might not have been. This is an article about the FCA’s custody and client money rules — client assets — and is fondly known by its chapter in the FCA SourcebookTable of Contents | 1 | 1A | 3 | 5 | 6 (custody rules) | 7 (client money rules) | 7A | 8 | 9 (PBDA) | 10 Comments? Questions? Suggestions? Requests? Insults? We’d love to 📧 hear from you. Sign up for our newsletter.