Beverly Chandler, Opalesque London:
The most recent draft of the UCITS directive finds the Council of the European Union agreeing on an amendment that will tighten rules on custody.
The main priorities of UCITS V are remuneration, aligning depositary rules with those under the AIFM Directive and harmonising the implementation of financial sanctions across European Union Member States with the clear intention of further enhancing investor protection.
The 2nd December note states: "In order to ensure the necessary level of harmonisation of the relevant regulatory requirements in different Member States additional rules should be adopted
defining the tasks and duties of depositaries, designating the legal entities that may
be appointed as depositaries and clarifying the liability of depositaries in cases UCITS assets are lost in
custody or in the case of depositaries' improper performance of their
The note finds that it is necessary to clarify that a UCITS should appoint a single depositary having general
oversight over the UCITS's assets. "Requiring that there be a single depositary should ensure
that the depositary has a view over all the assets of the UCITS and both fund managers and
investors have a single point of reference in the event that problems occur in relation to the
safekeeping of the assets or the performance of oversight functions. T......................
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