Under the AIFMD a depositary shall be:
- A credit institution
- A MiFID investment firm also providing safekeeping and administration of financial instruments (where these satisfy minimum capital requirements) services as ancillary services
- Another category of institutions subject to prudential regulation and on-going supervision coming within the scope of eligible depositaries under the UCITS directive.
The issue of depositary bank liability under the AIFMD has been an area of much discussion. The AIFM Directive imposes a significant increase in workload for depositary banks, forcing them to implement an expert structure around these requirements.
The Directive has also imposed a need for the separation of the function of the safekeeping of assets and the management functions.
How can Deloitte help?
Our services look to assist the depositary bank to meet the various requirements some of which appear rather onerous. We can guide you through this minefield of depositary liability, offering a review of your operating systems.
Our depositary bank specialists will leverage on their experience and knowledge to work alongside our compliance specialists to assess the level of liability imposed through the depositary’s existing structure and what impacts the AIFM Directive requirements will have on it.
- As a general rule, the liability of the depositary remains, even when it has delegated the safekeeping of assets function. This liability can only be expressly discharged by means of a legal agreement. We will assist our client to ensure that the correct wording is included in such agreement to enable the AIF or AIFM can make a claim directly against the delegate, thus discharging the depositary of this liability
- We will look at the inversion of the burden of proof and its implications for our client’s business
- Based on the AIFMD requirements and our client’s business purpose and long term objectives produce a tailored operating model