SS&C GlobeOp confident of gaining authorisation for depo-lite before AIFMD deadline
SS&C GlobeOp is confident it will have approval from the UK’s Financial Conduct Authority (FCA) to operate as an fully authorised depositary-lite by the July 22, 2014 implementation deadline of the Alternative Investment Fund Managers Directive (AIFMD).
At present, the FCA has only approved INDOS Financial, an independent depositary-lite, Northern Trust and Thompson Taraz, a private equity fund administrator. Industry sources have said approximately 25 firms are seeking FCA authorisation as AIFMD depositaries with around half of these, including SS&C GlobeOp, making use of the transitional provisions which expire on July 22.
Most of these entrants seeking authorisation are understood to be focused on private equity although a small number work with hedge funds including SS&C GlobeOp and HedgeServ. Fund managers must identify their depositary or depositary-lite provider when they submit their Variation Of Permission (VOP) applications and they need to have on-boarded depositaries by July 22 in order to market their funds inside Europe.
“We have been in extensive talks with the FCA and we are very confident they will approve our VOP application to operate as a depositary-lite prior to the deadline.” said Alan Davies, Director of Depositary Services at SS&C GlobeOp, speaking at a Cordium breakfast seminar on AIFMD in London.
If the FCA has not approved their depositary by this date, managers may have to cease marketing until the depositary is authorised or potentially appoint another provider, in what would be a time-consuming and burdensome task. One possibility could see the FCA offering depositaries and depositary-lites an extension to their original transitional period. “I do not expect there will be any issues for our clients and I doubt any extension to the transitional phase will be required” commented Davies.
A number of fund administrators offering depository-lite have been criticised for submitting their VOPs with the FCA so late leaving the regulator precious little time to authorise them.