The Dutch funds industry is locked in negotiations over new contractual obligations for depositaries in the run-up to the implementation of Ucits V in March. Contrary to the rest of the European Union, Dutch listed Ucits funds were previously exempted from having a depositary bank to keep their assets safe.
Robert Sims, a lawyer at Clifford Chance, says that in the Netherlands a separate entity or title holder would “hold and ringfence” the assets of a Dutch Ucits fund. “However, that is changing with Ucits V,” says Mr Sims. “Custodians were not held to assume depositary liability, but now they will.”
Kees Groffen, partner at law firm De Brauw Blackstone Westbroek, adds: “There has always been an exception in the Netherlands in that listed Ucits did not have to appoint a depositary. “That exception has been deleted in the Ucits V directive.” Although the Netherlands is a relatively small market for Ucits funds, experts expect more Ucits V preparatory work to be carried out in this country than in others. Mr Groffen says: “There is a lot of activity to finalising depositary agreements before the March 18 deadline.”
Arnaud Claudon, global head of depositary and fiduciary services at BNP Paribas Securities Services, adds that there is “a rush” to negotiate contracts in the Netherlands. “That’s what we are doing with clients who have appointed us in the Netherlands,” says Mr Claudon, who believes, however, that efforts to meet the March deadline will be successful.
Custody experts suggest that contracts put in place under the Alternative Investment Fund Managers Directive are being tweaked to act as templates for Ucits V contracts. AIFMD, which came into force in 2014, introduced similar rules for the safekeeping of assets.
Article by Anna Devine for Ignites Europe, a Financial Times service.
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