On 2 October 2018, the Council of the EU indicated that it had no objection to the amending delegated regulations adopted by the European Commission in July 2018 which supplement AIFMD and the UCITS Directive. The draft delegated regulations follow up on ESMA's 20 July 2017 opinion to the Commission on asset segregation.
The Commission acknowledged that securities and insolvency laws are not harmonised at EU level. However, it is imperative to have common rules to ensure protection of assets safe-kept by depositaries or sub-custodians for their clients. This should lead to the clear identification of assets belonging to a particular fund and to the protection of such assets in the case of insolvency of the fund's depositary or sub-custodian. The proposed amendments aim to clarify these rules in order to facilitate their uniform interpretation amongst EU member states.
The next step is for the European Parliament to consider the amending delegated regulations. If the Parliament does not object, the amending delegated regulations will be published in the Official Journal of the EU (OJ). They will enter into force 20 days after their publication in the OJ and apply 18 months from that date.