INTERNATIONAL: AIMA Calls for Depositary Passport in UCITS V Position Paper

Tuesday October 23 2012

The Alternative Investment Management Association (AIMA), the global hedge fund association, has called for the establishment of a UCITS (Undertakings for Collective Investment in Transferable Securities) depositary “passport” regime in its Position Paper on the proposal for a UCITS V Directive.

AIMA said that institutions authorised by one European Union country to act as a UCITS depositary should be granted automatic rights to provide the same services throughout the EU. Currently, the Directive limits the provision of depositary services to funds located in the same Member State as the depositary institution.

Such a UCITS depositary “passport” would allow for cross border provision of depositary services, based on harmonisation of depositary obligations which at present often differ from EU member state to member state, AIMA said.
The AIMA paper makes a number of recommendations, including several relating to the obligations and liabilities of UCITS depositary institutions.

In the paper, AIMA also called on the European institutions to align UCITS depositary regimes and remuneration requirements with those of the Alternative Investment Fund Managers Directive (AIFMD), which will be implemented in July 2013. AIMA also said the UCITS V Directive should allow depositaries to discharge their liabilities in certain circumstances. Another of AIMA’s recommendations was that the list of eligible assets in which a UCITS fund can invest should be expanded to include commodity derivatives.

The European Commission published its proposal for a UCITS V Directive in July. The final text may be adopted during 2013 although there is no formal timetable at present.

For a full copy of the Position Paper, please refer to the above link.