ESMA Q&As on AIFMD & UCITS Directive – Clarification of depositary delegation rules

News

ESMA Q&As on AIFMD & UCITS Directive – Clarification of depositary delegation rules

6 June 2019

Regulatory News Alert

On 4 June, the European Securities and Markets Authority (ESMA) published updated question and answer documents (Q&As) on the application of the Alternative Investment Fund Managers Directive (AIFMD) and the Undertakings for the Collective Investment in Transferable Securities (UCITS) Directive with the focus on the delegation of depository function in accordance with the requirements set out in the Directives.

ESMA hereby clarifies as follows:

  • Subject to the delegation requirements set out in Article 22a(2) of the UCITS Directive and Article 21(11) of the AIFMD, depositaries may entrust third parties with the performance of tasks that would give them the ability to transfer assets belonging to funds without requiring the intervention of the depositary
  • All of the delegation requirements must be met when delegating depositary function to another entity within the same group, whereas the group entity should be considered as a “third-party” in this context
  • Supporting tasks, such as administrative or technical functions performed by the depositary as a part of its depositary tasks, might be entrusted to third parties under the following conditions:

- The execution of the tasks does not involve any discretionary judgement or interpretation by the third-party in relation to the depositary functions

- The execution of the tasks does not require specific expertise in regard to the depositary function

- The tasks are standardized and pre-defined

  • A branch acting as depositaries may allocate its depositary functions (e.g. custody) to its head office in another Member State under the condition that the operational infrastructure and internal governance system of such branch remains adequate to carry out depositary functions autonomously from its head office
  • The competent authority of the Member State where the branch is established is responsible for supervising the activities of the branch with regard to depositary functions
PDF - 127kb

Useful links

Access the updated ESMA Q&A.

Contacts

Simon Ramos
Partner – IM Advisory & 
Consulting Leader
Tel : +352 45145 2702
siramos@deloitte.lu

Jean-Philippe Peters
Partner – Risk Advisory
Tel : +352 45145 2276
jppeters@deloitte.lu

Xavier Zaegel
Partner – Financial Industry 
Solutions
Tel : +352 45145 2748
xzaegel@deloitte.lu

Sylvain Crepin
Partner – Finance Industry 
Solutions
Tel : +352 45145 4054
screpin@deloitte.lu

Florence Buron
Director – Financial Industry 
Solutions
Tel : +352 45145 2704
fburon@deloitte.lu

Benoit Sauvage
Senior Manager – RegWatch, 
Strategy & Consulting
Tel : +352 45145 4220
bsauvage@deloitte.lu

Marijana Vuksic
Manager – Regulatory & 
Consulting
Tel : +352 45145 2311
mvuksic@deloitte.lu

 

Did you find this useful?