In its UCITS V Position Paper, the Alternative Investment Management Association (AIMA) has called for a depositary passport to be introduced for UCITS depositaries.
As depositaries’ duties and liabilities vary depending on the home Member State of a UCITS, AIMA notes that the current restriction on the freedom to provide depositary services on a cross-border basis might be justified. However, AIMA points out that the Commission’s UCITS V proposals aim to harmonise national laws relating to who can act as a depositary, depositaries’ duties, delegation of depositary functions and depositary liability. Accordingly, now is the best time to consider introducing a UCITS depositary passport since the scope for national divergence as regards depositary requirements is to be removed. The availability of such a passport, AIMA argues, would better reflect the principles of freedom of establishment and freedom to provide services laid down in the Treaty on the Functioning of the EU.
AIMA view is that the argument for the introduction of a depositary passport is strengthened by: (a) the establishment of ESMA; (b) ESMA’s role in ensuring harmonisation in regulatory and supervisory practices across the EU; and (c) ESMA’s ability to intervene in circumstances where there has been a breach of EU law in relation to the UCITS Directive.