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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)
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- Revised 01/04/20200.28 MB
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Commission Delegated Regulation (EU) 2016/438, Article 18 is up to date with all changes known to be in force on or before 24 January 2026. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
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Changes and effects yet to be applied to Article 18:
- Regulation revoked by 2023 c. 29 Sch. 1 Pt. 3
Article 18U.K.Loss of a financial instrument held in custody
1.The loss of a financial instrument held in custody within the meaning of [F1regulation 15C of the Undertakings for Collective Investment in Transferable Securities Regulations 2011] shall be deemed to have taken place where, in relation to a financial instrument held in custody by the depositary or by a third party to whom the safekeeping of financial instruments has been delegated in accordance with [F2rules 6.6B.22, 6.6B.25, 6.6B.26 and 6.6B.27 of the Collective Investment Schemes sourcebook], any of the following conditions is met:
(a)a stated right of ownership of the [F3UK UCITS] is demonstrated not to be valid because it either ceased to exist or never existed;
(b)the [F3UK UCITS] has been definitively deprived of its right of ownership over the financial instrument;
(c)the [F3UK UCITS] is definitively unable to directly or indirectly dispose of the financial instrument.
2.The ascertainment by the management or the investment company of the loss of a financial instrument shall follow a documented process readily available to the competent [F4authority]. Once a loss is ascertained, it shall be notified immediately to investors in a durable medium.
3.A financial instrument held in custody shall not be deemed to be lost within the meaning of [F5regulation 15C of the Undertakings for Collective Investment in Transferable Securities Regulations 2011] where an [F3UK UCITS] is definitively deprived of its right of ownership in respect of a particular instrument, as long as that instrument is substituted by or converted into another financial instrument or instruments.
4.In the event of insolvency of the third party to whom the safekeeping of financial instruments has been delegated in accordance with [F6rules 6.6B.22, 6.6B.25, 6.6B.26 and 6.6B.27 of the Collective Investment Schemes sourcebook], the loss of a financial instrument held in custody shall be ascertained by the management company or the investment company as soon as one of the conditions listed in paragraph 1 is met with certainty.
There shall be certainty as to whether any of the conditions set out in paragraph 1 is fulfilled at the latest at the end of the insolvency proceedings. The management company or the investment company and the depositary shall monitor closely the insolvency proceedings to determine whether all or some of the financial instruments entrusted to the third party to whom the safekeeping of financial instruments has been delegated in accordance with [F6rules 6.6B.22, 6.6B.25, 6.6B.26 and 6.6B.27 of the Collective Investment Schemes sourcebook] are effectively lost.
5.A loss of a financial instrument held in custody shall be ascertained irrespective of whether the conditions set out in paragraph 1 are the result of fraud, negligence or other intentional or non-intentional behaviour.
Textual Amendments
F1Words in Art. 18(1) substituted (31.12.2020) by The Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/325), regs. 1(2), 60(23)(a)(i) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)
F2Words in Art. 18(1) substituted (31.12.2020) by The Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/325), regs. 1(2), 60(23)(a)(ii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)
F3Word in Regulation substituted (31.12.2020) by The Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/325), regs. 1(2), 60(2) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)
F4Word in Art. 18(2) substituted (31.12.2020) by The Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/325), regs. 1(2), 60(23)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)
F5Words in Art. 18(3) substituted (31.12.2020) by The Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/325), regs. 1(2), 60(23)(c) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)
F6Words in Art. 18(4) substituted (31.12.2020) by The Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/325), regs. 1(2), 60(23)(d) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)
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