The new circular on UCITS depositaries has been released

In anticipation of the forthcoming directive of the European Parliament and of the Council amending Directive 2009/65/EC on the co-ordination of laws, regulations and administrative provisions relating to UCITS with respect to depositary functions, the CSSF has released a new circular aimed at clarifying the provisions applicable to Luxembourg credit institutions acting as depositary for UCITS. Departing from a principle-based approach, the CSSF has enacted more prescriptive and detailed rules to govern UCITS depositary functions.

The objective of the circular is to define new organisational requirements to be put in place at the level of the Luxembourg depositaries as well as at the level of the UCITS in terms of their role, duties and obligations concerning UCITS depositary functions. The current non-written requirements imposed by the CSSF in relation to the approval of a depositary have now been clearly stated in the circular with specific rules in terms of heads of business lines, separation of conflicting functions from a hierarchical and functional perspective and adequate human and technical means to be put in place, for example.

Depositaries acting for UCITS will have to make sure that appropriate internal procedures as well as procedures or agreements with external entities they are working with are put in place. An exhaustive list of information set out in Appendix 2 of the Circular is to be communicated to the CSSF on a yearly basis, which will require an annual review thereof…

Click on the link below to read the rest of the Arendt & Medernach briefing and to download Arendt’s solution for UCITS depositaries.

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