EU Update on Obligations of Depositaries Under the UCITS Directive

On October 30, the European Union’s Delegated Regulation 2018/1619, amending Delegated Regulation (EU) 2016/438 regarding safe-keeping duties of depositaries (Delegated Regulation), was published in the Official Journal of the European Union.

The Delegated Regulation supplements the Undertakings for the Collective Investment in Transferable Securities Directive (UCITS Directive). Fund depositaries’ duties regarding the safekeeping of clients’ assets are set out in the UCITS Directive, but are further detailed in the amended Delegated Regulation. Additionally, the UCITS Directive requires that where a depositary delegates safekeeping functions to third parties, namely custodians, the assets also need to be segregated at the level of the delegate. The manner in which this requirement is fulfilled is now detailed in the amended Delegated Regulation.

The Delegated Regulation becomes effective on November 19 and will apply beginning April 1, 2020.

Delegated Regulation 2018/1619, amending the Delegated Regulation, is available here, and the Delegated Regulation is available here.

EU Update on Obligations of Depositaries Under AIFMD

On October 30, the European Union’s Delegated Regulation 2018/1618, amending Delegated Regulation (EU) 231/2013 as regards safekeeping duties of depositaries (Delegated Regulation), was published in the Official Journal of the European Union (OJ).

The Delegated Regulation supplements the Alternative Investment Fund Managers Directive (AIFMD). Fund depositaries’ duties regarding the safekeeping of alternative investment fund clients’ assets are set out in the AIFMD, but are now further detailed in the amended Delegated Regulation. Additionally, the AIFMD requires that where a depositary delegates safekeeping functions to third parties, namely custodians, the assets also need to be segregated at the level of the delegate. The manner in which this requirement is fulfilled is now detailed in the amended Delegated Regulation.

The Delegated Regulation goes into effect on November 19 and will apply from April 1, 2020.

Delegated Regulation 2018/1618, amending the Delegated Regulation, is available here, and the Delegated Regulation is available here.