On October 30, the European Union’s Delegated Regulation 2018/1618, amending Delegated Regulation (EU) 231/2013 as regards safekeeping duties of depositaries (Delegated Regulation), was published in the Official Journal of the European Union (OJ).
The Delegated Regulation supplements the Alternative Investment Fund Managers Directive (AIFMD). Fund depositaries’ duties regarding the safekeeping of alternative investment fund clients’ assets are set out in the AIFMD, but are now further detailed in the amended Delegated Regulation. Additionally, the AIFMD requires that where a depositary delegates safekeeping functions to third parties, namely custodians, the assets also need to be segregated at the level of the delegate. The manner in which this requirement is fulfilled is now detailed in the amended Delegated Regulation.
The Delegated Regulation goes into effect on November 19 and will apply from April 1, 2020.