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 role of depositaries as outlined in the directive.
Key Changes Introduced by UCITS V
- Enhanced Depositary Responsibilities: The directive imposes stricter obligations on depositaries, ensuring greater investor protection.
- Liability Framework: Depositaires are now liable for the loss of financial instruments held in custody, which enhances accountability.
- Transparency Requirements: Increased transparency in the relationship between the management company and the depositary is mandated.
Practical Considerations for Fund Managers
Fund managers must navigate several practical considerations under the UCITS V regime:
- Due Diligence: Conduct thorough due diligence when selecting a depositary to ensure compliance with the new requirements.
- Operational Changes: Be prepared to implement operational changes to align with the enhanced responsibilities of depositaries.
- Documentation Updates: Review and update all relevant documentation to reflect the new regulatory landscape.
Conclusion
As the UCITS V framework continues to evolve, it is crucial for fund managers and depositaries to stay informed and adapt to these changes. By understanding the implications of the UCITS V directive, stakeholders can better navigate the complexities of compliance and enhance investor protection.
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