“UCITS are a European branding and investment success story and banks play a key role via the safekeeping service that they provide”, said EBF Chief Executive, Guido Ravoet. “The EBF believes that the regulation presents an opportunity to reinforce the success of the UCITS brand while guaranteeing a high level of investor protection which is its hallmark.”
Many European credit institutions provide UCITS’ depositary services to their clients. They safekeep the assets invested in by an asset manager with clients’ monies; this is a key depositary function which underpins the success of UCITS and its strong investor protection framework. These valuable safekeeping services should not be penalised by introducing a punitive liability regime for depositaries. This could also potentially increase systemic risk as it would concentrate the business in the hands of a few extremely large players. Banks are therefore extremely concerned that in the draft UCITS proposal, depositaries cannot discharge their liability when the custody is delegated to a third party. This is not the case in the Directive on Alternative Investment Funds Manager (AIFM), for instance.
“UCITS have performed well during the financial crisis”, added Ravoet, “and they should continue to do so if the legislative environment is balanced appropriately. Depositaries are vital to this ongoing success. The onus is now on the co-legislator to craft high quality regulation around depositary functions for UCITS investments”.
© EBF
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D1260-2012- UCITS V .pdf
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