AIMA calls for depositary passport regime in Ucits V
AIMA has called for the establishment of a Ucits depositary passport regime to be included in the Ucits V directive.
In its position paper on Ucits V, AIMA said institutions authorised by one EU member state to act as a Ucits depositary should be granted automatic rights to provide the same services throughout the EU. Currently, Ucits V limits the provision of depositary services to funds located in the same member state as the depositary institution.
A depositary passport would allow for the cross-border provision of depositary services. Furthermore, such a system would be based on a harmonisation of depositary obligations, which presently differ across EU member states.
"Such a passport would bring more competition and more choice for managers and investors and would remove a significant barrier to the single market. Without it, there is a risk of a lack of competition in the depositary space and increased systemic risk as a result,” said Andrew Baker, CEO at AIMA.
The industry body urged for greater clarity on Ucits V depositary liability provisions. AIMA has asked that losses which occur at the sub-custody level be considered an external event beyond the control of the depositary therefore exempting it from liability.
AIMA has also recommended that the list of eligible assets which a Ucits fund can invest in be expanded to commodity derivatives. This may be wishful thinking. Senior policymakers at the European Commission have said they would prefer to limit the eligibility criteria of assets Ucits funds can invest into.