CESR maps the following areas: general criteria on the depositary, liability of the depositary when delegating custody functions, legal framework (administrative/civil), and due diligence requirements on depositaries when delegating.
Since late 2008, CESR has been working on a number of issues related to UCITS depositaries. At the outset, the focus was on assessing the impact of the Madoff fraud on the fund industry; this work was then widened to include consideration of the duties and responsibilities of UCITS depositaries. In this context, a mapping exercise was carried out among CESR Members to establish how the various rules on depositary obligations have been implemented in Member States. A high-level summary of that mapping exercise was included as an annex to CESR’s response to the Commission’s consultation on the UCITS depositary function (Ref. CESR/09-781 published on 28 September 2009).
However, since the mapping work began early last year, there have been a number of requests from external stakeholders to have access to the detailed, country-level information that had been collected.
The Table presented by CESR contains information on the requirements in place in each CESR Member in the following areas.
· General criteria on the depositary. This covers eligibility requirements; prudential requirements; requirements in relation to the experience and skills of the key personnel; organisational requirements; and any other requirements.
· Liability of the depositary where delegation of custody functions. This relates to the extent to which and under what conditions the depositary would be held liable toward investors when assets are not safe-kept; and the extent to which and under what conditions the depositary would be required to restore assets in the case of sub-custody arrangements.
· Obligation of means/obligation of result. “Obligation of means‟ should be understood as an obligation on the depositary to devote appropriate resources and carry out appropriate due diligence so as to ensure safe-keeping of assets. „Obligation of result‟ should be understood as an obligation on the depositary to safe-keep assets and to restitute them in case of loss.
· Legal framework (administrative/civil).This covers the issue of the domestic legislative framework applicable to depositary liability.
· Requirements on depositaries when delegating (due diligence). This column covers the due diligence requirements depositaries must satisfy when selecting a sub-custodian.
© CESR - Committee of European Securities Regulators
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