An authorised credit institution established in a Member State may be allowed by the competent authority of another Member State to be appointed as depositary of an AIF in this other Member State, following a case-by-case assessment, provided that:

• the competent authorities have received a motivated request by the AIFM for the appointment of a depositary in another Member State demonstrating the lack of the relevant depositary services able to meet the needs of the AIF having regard to its operational strategy; and
• the national depositary market of the home Member State of the AIF fulfils at least one of the following conditions:

1. that market consists of fewer than seven depositaries providing depositary services to AIFs which are authorised or registered in a Member State under the applicable national law, and managed by an authorised EU AIFMs, and none of those depositaries has assets safekept (financial instruments that can be held in custody and other assets) exceeding EUR 1 billion or the equivalent in any other currency. Assets held by a depositary for non-EU AIF managed by an EU AIFM and the own assets of a depositary shall be excluded from the computation;
2. the aggregate amount in that market of assets safekept (financial instruments that can be held in custody and other assets) on behalf of AIFs which are authorised or registered in a Member State under the applicable national law, and managed by an authorised EU AIFM does not exceed the amount of EUR 60 billion or the equivalent in any other currency. Assets safekept by depositaries for non-EU AIFs managed by EU AIFMs and the own assets of depositaries shall be excluded from the computation.

The depositary of a third-country AIF may be established in this third country provided that the third country is not listed as a high-risk country by the Commission at the time of the AIFM’s application for authorisation. The reference to the time of the AIFM applicant for authorisation is neither in the EU Parliament draft report nor in the Commission proposed directive. Also, the depositary shall not be situated in a third country mentioned in Annex I to the relevant last updated version of the Council conclusions on the revised EU list on non-cooperative jurisdictions for tax purposes. The reference to the last updated version of the Council conclusions was an expected change as the Council conclusions on such EU list may be amended from time to time. Also, the EU Parliament final report adds that if a third country where the non-EU AIF is established is added to Annex I after the time of the AIFM’s application for authorisation, closed-ended funds shall continue to be considered to meet that criterion for two years. Moreover, a third country that has been continuously mentioned in the grey list of the Council conclusions for over three years shall be considered to be mentioned in Annex I to those conclusions.

Access the European Parliament Final Report of 2 February 2023 here..