Depositaries feedback on delegated acts
On 28 November 2014, ESMA published its final advice to the European Commission on the content for two of the delegated acts required by UCITS V. These relate to the insolvency protection of UCITS assets when delegating safekeeping, and to the depositary’s obligation to be independent of the UCITS and its management company.
UCITS V requires the third party to whom the custody functions are delegated to take all necessary steps to ensure that any UCITS assets it holds in custody are unavailable to its creditors on its insolvency. UCITS V states that “In carrying out their respective functions, the UCITS management company the depositary shall act independently and solely in the interest of the UCITS and the investors of the UCITS”.
ESMA will work closely with the European Commission to transpose the technical advice into formal delegated acts.