March 2, 2021

Volume XI, Number 61

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March 02, 2021

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March 01, 2021

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EU Update on Obligations of Depositaries Under the UCITS Directive; EU Update on Obligations of Depositaries Under AIFMD

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.

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©2020 Katten Muchin Rosenman LLPNational Law Review, Volume VIII, Number 306
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About this Author

John Ahern, Financial Attorney, London, Katten Law Firm
Partner

John Ahern, partner at Katten Muchin Rosenman UK LLP and head of the London Financial Services group, focuses his practice on banking, financial services, UK and European financial markets, and related regulations. His background in private practice and as in-house counsel at a global investment bank provides him with perspective on the unique regulatory issues facing the wholesale and private banking sectors. John advises multilateral trading facilities, broker-dealers and banks on trading, clearing and settlement as well as custody of securities—both physical and...

+44 (0) 20 7770 5253
Carolyn H. Jackson, International Attorney, Katten Muchin law firm
Partner

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws...

+44 0 20 7776 7625
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London
Partner

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

44-0-20-7776-7666
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