ESMA Guidelines and Recommendations

ESMA publishes opinion on asset segregation and applying depositary delegation rules to CSDs

ESMA Guidelines and Recommendations

Date: 26 July 2017

On 20 July 2017, the European Securities and Markets Authority (ESMA) published an opinion to the European Commission, the Council and the Parliament (EU institutions) under Article 34 of the ESMA Regulation.

The opinion sets out suggestions to the EU institutions for possible clarifications of the legislative provisions under both Directive 2011/61/EU (AIFMD) and Directive 2009/65/EC (UCITS) relating to:

  1. the asset segregation requirements in case of delegation of safe-keeping duties by the appointed depositary of a fund (UCITS or AIF); and
  2. the application of depositary delegation rules to CSDs.

The purpose of the opinion is twofold:

  1. to provide an EU framework with strong client asset protection, especially in insolvency, for the safe-keeping of assets which are, in accordance with both AIFMD and UCITS Directive, required to be held in custody, and
  2. to provide clarification in the AIFMD and UCITS Directive regarding the application of the relevant depositary rules in the case of CSDs, ensuring a consistent approach across the EU.

The opinion is the final step of the work on these topics which began with the consultation paper (ESMA/2014/1326) published on 1 December 2014 and was followed by the Call for Evidence (ESMA/2016/1137) published on 15 July 2016.