Last Updated on June 3, 2025 by Arnaud Collignon
Understanding UCITS V: Practical Issues and Depositary Aspects
The UCITS V Directive represents a significant evolution in the regulatory framework governing Undertakings for Collective Investment in Transferable Securities (UCITS). This post aims to clarify some practical issues related to the UCITS V regime, particularly focusing on the depositary aspects relevant to Part II of the UCITS.
Key Changes Introduced by UCITS V
- Enhanced Depositary Responsibilities: The directive imposes stricter obligations on depositaries, including the need for a more robust oversight of asset safekeeping.
- Liability Regime: The liability of depositaries has been expanded, making them accountable for the loss of financial instruments held in custody.
- Transparency Requirements: Increased transparency is mandated, ensuring that investors receive clear information regarding the depositary’s role and responsibilities.
Practical Implications for Fund Managers
Fund managers must adapt to the new requirements set forth by UCITS V. Here are some considerations:
- Review and potentially revise existing depositary agreements to align with the new liability and oversight standards.
- Ensure that all operational processes are compliant with the enhanced transparency and reporting obligations.
- Engage in ongoing training and development for staff to understand the implications of the new regulations.
Conclusion
As the UCITS V framework continues to evolve, it is crucial for all stakeholders to stay informed and prepared. The changes not only enhance investor protection but also promote a more stable and transparent investment environment.
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