ESMA issued a consultation paper on draft technical advice to the European Commission under UCITS V. UCITS V (inter alia) upgrades the duties and liabilities of UCITS’ depositaries by clarifying the safekeeping, oversight and cash flow monitoring functions and prescribes the types of entity that may act as a depositary. ESMA’s consultation considers two areas related to the depositary function: 

  • Insolvency protection when delegating safekeeping
  • Independence requirements.

ESMA’s is seeking feedback on its proposed measures regarding insolvency protection and independence of the UCITS depositary function. The consultation closes on 24 October 2014. ESMA will then use the feedback received to finalise its technical advice and submit it to the European Commission by the end of November 2014.