DE - BaFin publishes revised version of depositaries circular
On 4 November 2020, the German Federal Financial Supervisory Authority (BaFin) published a revised circular (05/2020 (WA)) on the tasks and duties of the depositary containing amendments resulting from the Level 2 Delegated Regulation made under UCITS V. In addition to editorial changes, the circular contains amendments relating to the following topics.
Assets held in custody: The circular stipulates that records and accounts must be kept in such a way as to ensure that they are always accurate .Where the depositary has appointed a sub-custodian for the safekeeping of financial instruments, the depositary must reconcile its accounts and records regularly with those of the sub-custodian.
Sub-custody: The circular contains requirements for the separate custody of assets of the investment fund and assets of the depositary at the level of the first sub-custodian. If assets are held in third-party custody abroad, it must be ensured that the protection afforded to the depositor/investor in Germany, among other things, is guaranteed as far as possible. The respective sub-custodian abroad can issue a declaration to ensure that the protection is guaranteed.
Depositary’s control obligations: The BaFin clarifies in its circular that the depositary's control obligation regarding the management fee requires a review of the actual calculation on a case-by-case basis. An abstract review of the calculation method is not deemed to be sufficient.