Depositaries, custody and prime brokerage

Depositaries

The main role of a depositary is to safekeep (act as a custodian of) an investment fund’s assets. This function can be delegated to a prime broker or custodian as set out below. Other depositary functions include cash flow monitoring and ensuring fund subscriptions, redemptions, distributions and cancellation of units and valuations are carried out in accordance with the rules of the fund and national law.

The key depositary obligations are set out in Article 21 of Directive 2011/61/EU (the Alternative Investment Fund Managers (AIFM) Directive) (AIFMD) (as implemented in the UK through the Financial Conduct Authority (FCA) Handbook, Investment Funds sourcebook (FUND) (FUND 3.11 R)) and Articles 22–26 of Directive 2009/65/EU (the Undertakings for Collective Investment in Transferable Securities (UCITS) Directive) (as implemented in the UK, among others, through the FCA Handbook, Collective Investment Schemes sourcebook (COLL) (COLL 11.4 R)). These requirements are supplemented by AIFMD and the UCITS Commission Delegated Regulations (‘Level 2 regulations’). For further information, see Practice Notes:

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Key provisions of UCITS—depositaries: This Practice Note considers the role of depositories of

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