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National regulators from ESMA's 28 member states will meet on July 9 to hammer out a common position to be applied across the European Union ahead of AIFMD's implementation deadline of July 22. ESMA will then craft a convergence tool to ensure that there is a level playing field in Europe. However, a spokesman for ESMA said staff at the regulator may not have enough time to prepare the agenda item for presentation to the board next month. If that is the case it will more likely be considered by ESMA's board on September 25.
Article 21 of the directive states that client assets entrusted to third parties by depositories must be segregated from the third party's own assets and from the assets of the depository in such a way that they can at any time be clearly identified as belonging to clients of a particular depository. The segregation obligation under Article 99 of the delegated act states that where safekeeping functions have been delegated wholly or partly to a third party, depositories must verify that the third party keeps records enabling it – at any time and without delay – to distinguish assets of the depository's alternative investment fund (AIF) clients from its own assets, the assets of its other clients, assets held by the depository for its own account and assets held for clients of the depository that are not AIFs.
It is believed that some regulators, including the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg, and the UK's Financial Conduct Authority (FCA), have agreed to allow a compromise in which AIF and non-AIF assets would continue to be held in omnibus accounts, but with increased levels of reporting to the depository. If national regulators apply different rules, however, the Central Bank of Ireland sees scope for the creation of an unlevel playing field.
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