AIFMD II – European Parliament draft report – Depositaries

The provision of services by a CSD acting in the capacity of an investor CSD shall be considered a delegation of the depositary’s custody function, contrary to the case of an issuer CSD.

Some institutions (see above) are allowed by the regulatory authorities of the home member state of an AIF or AIFM to be appointed as a depository, although they are established in another member state. The European Parliament draft report has added the requirement for the regulatory authorities to decide on a case-by-case basis and notify ESMA of the decision taken. The end date of the transitional provisions is deleted as in the Commission proposal.

The European Commission shall, by 24 months after the entry into force of AIFMD II, carry out a comprehensive study on the potential benefits and risks of introducing an EU depositary passport, in particular in terms of reducing cost, and making a greater choice of competitive depositary services from other member states available to managers. The Commission proposal refers to a review, not a comprehensive study, by 60 rather than 24 months after the entry into force of AIFMD II.

Where the regulatory authorities of a member state have reasonable grounds to suspect that acts contrary to this directive are being or have been carried out by an AIFM not subject to the supervision of that regulatory authority, or by an entity appointed as depositary by an AIFM, they should notify ESMA and the regulatory authorities of the home and host member states of the AIFM or of the entity concerned as specifically as possible. The recipient authorities shall take appropriate action and inform ESMA and the notifying regulatory authorities of the outcome of their action and, to the extent possible, of significant interim developments. The threshold for the notification obligation is lowered to reasonable grounds and may relate to a depositary, whereas the Commission proposal limits the notification obligation to acts committed by an AIFM only.

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