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Template:External event beyond its reasonable control: Difference between revisions
Template:External event beyond its reasonable control (view source)
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:''3. Despite rigorous and comprehensive [[due diligence]], it could not have prevented the loss.'' | :''3. Despite rigorous and comprehensive [[due diligence]], it could not have prevented the loss.'' | ||
The “[[omission]] of a sub-custodian to meet its obligations” — albeit through its [[insolvency]] (and associated failures in internal segregation etc) is thus not an “external event beyond the reasonable control” of the [[depositary]]. Treat this exemption as being limited to genuine [[force majeure]] events — [[acts of God]], war, insurrection, malign operation of the trade winds, etc. | The “[[omission]] of a sub-custodian to meet its obligations” — albeit through its [[insolvency]] (and associated failures in internal segregation etc) is thus not an “external event beyond the reasonable control” of the [[depositary]]. Treat this exemption as being limited to genuine [[force majeure]] events — [[acts of God]], war, insurrection, malign operation of the trade winds, etc — or peculiarities in the [[insolvency]] law in the [[sub-custodian]]’s jurisdiction which mean the assets are unavoidably tangled up in the insolvency estate. | ||
Here’s para 28 of the selfsame opinion: | |||
:''28. [...] where the financial instruments are ‘lost’ following the liquidation of a [[sub-custodian]] despite appropriate [[segregation]] of assets, because the law of the country where the [[financial instrument]]s were held in [[custody]] does not recognise the effects of segregation, [[ESMA]] believes that the loss of those financial instruments should be considered due to be an external event, i.e. the local legal/regulatory framework. [...]'' | |||
These sutuations aside, the [[depositary]] remains liable for the insolvency of [[sub-custodian]]s. Even un[[affiliate]]d ones. <br> | |||