Commission Delegated Regulation (EU) 2016/438Show full title

Commission Delegated Regulation (EU) 2016/438 of 17 December 2015 supplementing Directive 2009/65/EC of the European Parliament and of the Council with regard to obligations of depositaries (Text with EEA relevance)

Article 13U.K.Safekeeping duties with regard to assets held in custody

1.A depositary shall be deemed to comply with the requirements set out in [F1rule 6.6B.18 of the Collective Investment Schemes sourcebook] with respect to financial instruments to be held in custody where it ensures that:

(a)the financial instruments are properly registered in accordance with [F2rule 6.6B.18(2) of the Collective Investment Schemes sourcebook];

(b)records and segregated accounts are maintained in a way that ensures their accuracy, and in particular record the correspondence with the financial instruments and cash held for [F3UK UCITS];

[F4(c)reconciliations are conducted as frequently as necessary between the depositary's internal accounts and records and those of any third party to whom safekeeping has been delegated in accordance with [F5rules 6.6B.22, 6.6B.25, 6.6B.26 and 6.6B.27 of the Collective Investment Schemes sourcebook];]

(d)due care is exercised in relation to the financial instruments held in custody in order to ensure a high standard of investor protection;

(e)all relevant custody risks throughout the custody chain are assessed and monitored and the management company or the investment company is informed of any material risk identified;

(f)adequate organisational arrangements are introduced to minimise the risk of loss or diminution of the financial instruments, or of rights in connection with those financial instruments as a result of fraud, poor administration, inadequate registering or negligence;

(g)the [F3UK UCITS]'s ownership right or the ownership right of the management company acting on behalf of the [F3UK UCITS] over the assets is verified.

[F6In relation to point (c) of the first subparagraph, the frequency of the reconciliations shall be determined on the basis of the following:

(a)the normal trading activity of the [F3UK UCITS];

(b)any trade occurring outside the normal trading activity;

(c)any trade occurring on behalf of any other client whose assets are held by the third party in the same financial instruments account as the assets of the [F3UK UCITS].]

[F42.Where a depositary has delegated its safekeeping functions, with regard to assets held in custody, to a third party in accordance with [F7rules 6.6B.22, 6.6B.25, 6.6B.26 and 6.6B.27 of the Collective Investment Schemes sourcebook], it shall remain subject to the requirements of points (a) to (e) of paragraph 1. The depositary shall also ensure that the third party complies with the requirements of points (b) to (g) of paragraph 1.]

Textual Amendments