This document summarizes when an alternative investment fund (AIF) needs to appoint a depositary under the Alternative Investment Fund Managers Directive (AIFMD). It explains that from 2013-2015, AIFs conducting private placements were subject to certain AIFMD requirements and national private placement regime rules regarding whether a depositary must be appointed. After 2015, all AIFs are subject to the full AIFMD, under which an EU AIF must appoint a depositary in its home member state, while non-EU AIFs may need to appoint a depositary depending on factors such as where they are marketed.
EUROPEAN UNION REGULATION AND THE USE OF UCITS FUNDS: AN EFFECTIVE MEANS OF INVESTOR PROTECTION OR A FALSE SENSE OF
SECURITY? PHILIPPA-LUCY ROBERTSON AND DOMINIC LAWTON-SMITH OF JP FUND FOUNDATIONS ASSESS THE OPTIONS
All AIFMs managing or marketing an AIF into the European Union will have to file an Annex IV report to the Financial Conduct Authority (FCA) or other National Competent Authority (NCA). A non EEA AIFM will have to make a report to the NCA of each member state in which an AIF is marketed. The Annex IV reporting obligation is live and for some firms this will mean fulfilling that obligation in October 2014, with all firms having to report by 31 January 2015.
EUROPEAN UNION REGULATION AND THE USE OF UCITS FUNDS: AN EFFECTIVE MEANS OF INVESTOR PROTECTION OR A FALSE SENSE OF
SECURITY? PHILIPPA-LUCY ROBERTSON AND DOMINIC LAWTON-SMITH OF JP FUND FOUNDATIONS ASSESS THE OPTIONS
All AIFMs managing or marketing an AIF into the European Union will have to file an Annex IV report to the Financial Conduct Authority (FCA) or other National Competent Authority (NCA). A non EEA AIFM will have to make a report to the NCA of each member state in which an AIF is marketed. The Annex IV reporting obligation is live and for some firms this will mean fulfilling that obligation in October 2014, with all firms having to report by 31 January 2015.
Hedge Funds & AIFMD - what you should be doing to comply - Part 2 GECKO Governance
This is the second of our two part white paper covering AIFMD and what fund managers should be doing to comply. It is available here - http://lnkd.in/A4VeHz
The first part of this white paper (available here http://lnkd.in/ti3S37) examined many of the main areas fund managers should be reviewing to comply with AIFMD. This included identifying the AIFM, leverage calculations, fund manager authorization, depository selection, remuneration policies, and the requirements for non-European managers.
The second part of this white paper will look at the other important areas of the directive and what is required. These include fund domiciliation, manager liability, reporting requirements, managing illiquid investments and opportunities presented by the legislation.
2017 veneziano and partners - european fund distributionAttilio Veneziano
Recent Numbers of Fund Management Industry in Europe
Fund Distribution Acronyms in Europe
UCITS
AIF
MiFID
PRIIPs
Marketing in Europe
The Passport
UCITS/AIFMD
Private Placement AIFMD
MiFID
The landscape of Fund Distribution in Europe is characterised by various acronyms for the applicable European directives on financial services
UCITS
The Undertakings for Collective Investment in Transferable Securities Directive represents the main framework for collective investment schemes offered to retail investors.
AIFMD
The Alternative Investment Fund Managers Directive. Recently introduced framework to regulate managers of alternative investment schemes offered to professional investors.
MIFID
The Market in Financial Instruments Directive governs the provision of investment services in financial instruments by banks and investment firms.
PRIIPs
The Packaged Retail and Insurance Investment Product regulation introduces a key investor information document for collective investment schemes and also other packaged investments.
Why emerging markets are too important to ignorenetwealthInvest
Learn how the emerging middle class may impact infrastructure for decades to come and what investment opportunities this may result in from Sarah Shaw, Global Portfolio Manager and CIO at 4D Infrastructure
The 'Never before examined initiative': Navigating the SEC Examination Process Cordium
On February 20, 2014, the U.S. Securities and Exchange Commission (“SEC”) announced that they will be commencing their “Never-Before-Examined” Initiative. As part of this Initiative, they anticipate examining a “significant percentage” of registered investment advisers (“RIAs”) that have never been examined, focusing on those that have been registered three or more years. In response, This presentation will covers key aspects of this new initiative as well as practical advice for navigating the SEC examination process as applicable to all RIAs
MoneyWare FundWare™ enables organization to rapidly comply with the AIFMD requirements in respect of leverage, liquidity monitoring, risk management and regulatory reporting, without implementation costs or delay. The cost of compliance is significantly reduced through plug-and-play functionality, integrated data availability, automated report production and through availability as a hosted software as a service solution.
First came FATCA, now comes the Automatic Exchange of Information: is it just...sgarazi
Management of Regulatory Projects:
First came FATCA, now comes the OECD's Automatic Exchange of Information: is it just "copy & paste"? Which challenges exist?
Organisations or companies holding a license (AFSL) are able to legally provide the full range of financial services, including providing advice on investments and financial products such as savings plans, pensions, RSA products and insurance or selling products directly to clients.
The SEC's Risk Alert and a Guide to Third Party Due Diligence Best PracticeCordium
The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (OCIE) recently issued a Risk Alert describing current industry trends and practices in investment advisers’ due diligence on alternative investment vehicles, as well as certain deficiencies observed in several of the advisory firms examined.
In response, Cordium is hosting a Webinar which will cover the SEC observations as related to third party due diligence background checks and best practice for advisers that are fiduciaries acting in the best interest of their clients with an open Question and Answer session to follow.
Please join the team at Cordium as they discuss some suggested best practice guidelines regarding third party due diligence background checks and the observations highlighted by the SEC in their recently issued Risk Alert.
Topics for discussion will include:
- Conducting comprehensive background checks of managers, key personnel and entities
- Verifying critical service provider relationships
- Performing regulatory history checks
- Review of offering document materials, information and data directly from the managers of alternative investments
- Validating information provided by managers of alternative investments
- Formalizing due diligence policies and procedures
- Annual reviews
This presentation serves as study notes for the e-learning material titled: "South African Hedge funds and International Developments"
These notes focus on UCITS IV and its Impact on the Industry.
http://www.hedgefund-sa.co.za/ucits
"Hedge Funds & AIFMD - what you should be doing to comply" - Global Perspect...GECKO Governance
The AIFMD regulation comes into force in the 27 countries of the European Union in July 2013. The main tenets of this wide ranging legislation are now well known throughout the industry.
Put simply, AIFMD will change the alternative investment industry forever.
This is the first in a 2 part "Global Perspectives" white paper examining what fund managers should be doing right now to ensure they are ready for AIFMD. We will publish Part 2 of this white paper next month (June 2013).
Email shane@globalperspective.co.uk to receive this free white paper.
Currently fund managers should be completing a detailed impact assessment to ensure they are ready for AIFMD.
Global Perspectives (www.globalperspective.co.uk) can assist in completing your AIFMD impact assessment and implementing its requirements.
Sign up for all free monthly Global Perspectives White Papers here:-
http://www.globalperspective.co.uk/aifmd#!whitepapers/c1a4e
or email:- shane@globalperspective.co.uk
Bovill briefing will minor complaints become a major issueBovill
Bovill's October London briefing covered the new rules on complaint handling - which may have a greater impact on your firm than you think. It’s no longer credible to report few or no complaints and your team will need training and support.
Hedge Funds & AIFMD - what you should be doing to comply - Part 2 GECKO Governance
This is the second of our two part white paper covering AIFMD and what fund managers should be doing to comply. It is available here - http://lnkd.in/A4VeHz
The first part of this white paper (available here http://lnkd.in/ti3S37) examined many of the main areas fund managers should be reviewing to comply with AIFMD. This included identifying the AIFM, leverage calculations, fund manager authorization, depository selection, remuneration policies, and the requirements for non-European managers.
The second part of this white paper will look at the other important areas of the directive and what is required. These include fund domiciliation, manager liability, reporting requirements, managing illiquid investments and opportunities presented by the legislation.
2017 veneziano and partners - european fund distributionAttilio Veneziano
Recent Numbers of Fund Management Industry in Europe
Fund Distribution Acronyms in Europe
UCITS
AIF
MiFID
PRIIPs
Marketing in Europe
The Passport
UCITS/AIFMD
Private Placement AIFMD
MiFID
The landscape of Fund Distribution in Europe is characterised by various acronyms for the applicable European directives on financial services
UCITS
The Undertakings for Collective Investment in Transferable Securities Directive represents the main framework for collective investment schemes offered to retail investors.
AIFMD
The Alternative Investment Fund Managers Directive. Recently introduced framework to regulate managers of alternative investment schemes offered to professional investors.
MIFID
The Market in Financial Instruments Directive governs the provision of investment services in financial instruments by banks and investment firms.
PRIIPs
The Packaged Retail and Insurance Investment Product regulation introduces a key investor information document for collective investment schemes and also other packaged investments.
Why emerging markets are too important to ignorenetwealthInvest
Learn how the emerging middle class may impact infrastructure for decades to come and what investment opportunities this may result in from Sarah Shaw, Global Portfolio Manager and CIO at 4D Infrastructure
The 'Never before examined initiative': Navigating the SEC Examination Process Cordium
On February 20, 2014, the U.S. Securities and Exchange Commission (“SEC”) announced that they will be commencing their “Never-Before-Examined” Initiative. As part of this Initiative, they anticipate examining a “significant percentage” of registered investment advisers (“RIAs”) that have never been examined, focusing on those that have been registered three or more years. In response, This presentation will covers key aspects of this new initiative as well as practical advice for navigating the SEC examination process as applicable to all RIAs
MoneyWare FundWare™ enables organization to rapidly comply with the AIFMD requirements in respect of leverage, liquidity monitoring, risk management and regulatory reporting, without implementation costs or delay. The cost of compliance is significantly reduced through plug-and-play functionality, integrated data availability, automated report production and through availability as a hosted software as a service solution.
First came FATCA, now comes the Automatic Exchange of Information: is it just...sgarazi
Management of Regulatory Projects:
First came FATCA, now comes the OECD's Automatic Exchange of Information: is it just "copy & paste"? Which challenges exist?
Organisations or companies holding a license (AFSL) are able to legally provide the full range of financial services, including providing advice on investments and financial products such as savings plans, pensions, RSA products and insurance or selling products directly to clients.
The SEC's Risk Alert and a Guide to Third Party Due Diligence Best PracticeCordium
The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (OCIE) recently issued a Risk Alert describing current industry trends and practices in investment advisers’ due diligence on alternative investment vehicles, as well as certain deficiencies observed in several of the advisory firms examined.
In response, Cordium is hosting a Webinar which will cover the SEC observations as related to third party due diligence background checks and best practice for advisers that are fiduciaries acting in the best interest of their clients with an open Question and Answer session to follow.
Please join the team at Cordium as they discuss some suggested best practice guidelines regarding third party due diligence background checks and the observations highlighted by the SEC in their recently issued Risk Alert.
Topics for discussion will include:
- Conducting comprehensive background checks of managers, key personnel and entities
- Verifying critical service provider relationships
- Performing regulatory history checks
- Review of offering document materials, information and data directly from the managers of alternative investments
- Validating information provided by managers of alternative investments
- Formalizing due diligence policies and procedures
- Annual reviews
This presentation serves as study notes for the e-learning material titled: "South African Hedge funds and International Developments"
These notes focus on UCITS IV and its Impact on the Industry.
http://www.hedgefund-sa.co.za/ucits
"Hedge Funds & AIFMD - what you should be doing to comply" - Global Perspect...GECKO Governance
The AIFMD regulation comes into force in the 27 countries of the European Union in July 2013. The main tenets of this wide ranging legislation are now well known throughout the industry.
Put simply, AIFMD will change the alternative investment industry forever.
This is the first in a 2 part "Global Perspectives" white paper examining what fund managers should be doing right now to ensure they are ready for AIFMD. We will publish Part 2 of this white paper next month (June 2013).
Email shane@globalperspective.co.uk to receive this free white paper.
Currently fund managers should be completing a detailed impact assessment to ensure they are ready for AIFMD.
Global Perspectives (www.globalperspective.co.uk) can assist in completing your AIFMD impact assessment and implementing its requirements.
Sign up for all free monthly Global Perspectives White Papers here:-
http://www.globalperspective.co.uk/aifmd#!whitepapers/c1a4e
or email:- shane@globalperspective.co.uk
Bovill briefing will minor complaints become a major issueBovill
Bovill's October London briefing covered the new rules on complaint handling - which may have a greater impact on your firm than you think. It’s no longer credible to report few or no complaints and your team will need training and support.
As regulatory trends echo across the globe, we looked to the east for June’s regulatory update.
When it comes to financial regulation, Asia is traditionally thought to lag behind Europe and, in turn the US. But with FATF currently focusing on Singapore, and the region seen as a hub for Fintech innovation, are there trends which may hit the UK coming from the other direction?
Bovill briefing: Making AIFMD business as usual - Annex IV reporting - Octobe...Bovill
Bovill - the UK financial services regulatory consultancy - runs regular briefings. These are the slides from the October 2014 briefing On AIFMD. For more information visit www.bovill.com.
Further information on the event is below:
Making AIFMD business as usual
When AIFMD came fully into force in July it felt like the end of a long journey. The end of the transitional period, however, was just the beginning. Firms now need to make sure their AIFMD policies and procedures are properly embedded and working effectively.
The Annex IV reporting regime presents a particular challenge for affected firms in remaining compliant with the Directive.
Relevant for anyone involved in meeting AIFMD requirements, Bovill’s briefing covers:
• a recap of what AIFMD is all about
• how to effectively monitor compliance under the Directive
• the practicalities of Annex IV reporting and how Bovill can help.
Fca Business Plan and Outlook 2015/16 - Bovill BriefingBovill
Bovill - the UK financial services regulatory consultancy - runs regular briefings. These are the slides from the April 2015 briefing on the FCA's Business Plan and Outlook for 2015/16. For more information visit www.bovill.com.
Further information on the event is below:
The FCA’s year ahead
This year’s combined Business Plan and Risk Outlook has reiterated many of the FCA’s current concerns, including technology and data issues, and added financial crime to its list of key risks.
As well as the usual thematic work there’ll be an emphasis on market studies – including looking into the post MMR world and the ways in which asset managers charge for their products.
Not surprisingly there’ll be a lot on pensions, and various thematic projects on things like non-advised sales, inducements and other conflicts of interest. Also under the microscope will be incentive structures and debt collection practices among consumer credit firms.
And the regulator is restructuring again …
Our briefing will walked through the highlights of the document, and looking at what you might need to be doing differently in the year ahead.
Pensions: nirvana or nightmare? - Bovill briefingBovill
Bovill - the UK financial services regulatory consultancy - runs regular briefings. These are the slides from the May 2015 briefing on the FCA's Business Plan and Outlook for 2015/16. For more information visit www.bovill.com.
Further information on the event is below:
Our May briefing looks at the impact of the latest pension reforms.
New freedom and choice has made pensions a more attractive investment, and the greater complexity means there’s greater need for advice. But is the opportunity for advisers worth the risk? As it becomes harder to divorce pension planning from investment advice, will wealth managers who choose not to offer pensions advice lose business? And what is the knock on effect for the industry as a whole? Our London briefing look at the new pensions regime. We consider:
•what’s changed
•how it affects advisers and the suitability considerations they face
•how to address the compliance challenges that it brings
Another year has gone by and the FCA’s combined Business Plan and Risk Outlook has been released… So what’s new and what does it mean for your firm?
Our briefing walked through the key messages of the document and took a look back at 2015’s release. We also explored what you might need to be doing differently in the year ahead.
Bovill social media regulation workshop UKCFA Dec 14Bovill
The UK Crowdfunding Association invited Bovill - the specialised regulatory consultants - to present at their workshop on FCA Social Media Regulation.
We looked at the draft guidance from FCA as well as some recent examples of where it’s gone wrong . Here are a few of the slides used. The final guidance on social media should be released by the FCA in early 2015. We’ll be keeping a close eye on it.
Malaysia lets you live the fun side of life with blissful adventurous activities. Come, explore, discover! Visit https://www.penangmyhome.com for more details.
The European Banking Authority are proposing to change fundamentally the prudential landscape for investment firms. In this briefing we looked at these proposals for strategic context around the update to your 2016 ICAAP.
Holding management to account: where is it all heading?Bovill
From March next year, the way in which regulators hold managers to account will be split squarely between bankers and non-bankers. In our September London briefing, we distinguished between the ‘senior managers regime’ and the ‘approved persons’ regime, between those that can do ‘significant harm’ and those with ‘significant influence’.
Unraveling EU regulation for US Managers - Bovill New York BriefingBovill
Bovill - the UK financial services regulatory consultancy - held a breakfast seminar in New York for US investment managers and regulatory experts to 'unravel' EU regulation. For more information visit www.bovill.com.
Further information on the event is below:
Unraveling EU regulation for US Managers
Any financial services firm doing business in Europe needs a firm grasp of EU regulation.
Whether you are establishing an office in one country, marketing into several, or simply investing in a firm regulated in the UK, you will need to understand how EU-wide directives are translated into local rules.
Bovill – the London-based regulatory compliance experts – hosted a seminar in New York to give US firms an overview and update on European regulation.
The breakfast event covered:
The structure of the EU regulatory landscape – how EU directives are implemented by member states
The parallels and crossovers between EU and US regulation
The practical steps to consider, including a brief introduction to
- Alternative Investment Fund Manager Directive (AIFMD)
- European Markets Infrastructure Regulation (EMIR)
- Markets in Financial Instruments Directives (MiFID I & II)
Table overview of essential facts and requirements for setting up investor funds / hedge funds in the low tax EU jurisdiction of Malta.
* Collective Investment Schemes | Hedge Fund | Mutual Fund | AIFMD | PIFs | Alternative Investment Schemes
On January 20, 2015, the London Stock Exchange Group and Capital 33, in association with our partners, held a seminar discussing the benefits of listing on AIM, London's alternative investment market, for growth-oriented American companies.
The presentations include an overview of AIM, including why companies should consider a listing, the benefits of listing on AIM, a profile of AIM-listed companies, the steps to consider when preparing for an AIM IPO, a review of the legal issues involved, the role of accountants in an AIM IPO, and much more.
For more information, please visit www.Capital33.com
Synergy FX Financial Markets
Australia welcomes you as a Significant Investor.
This is your invitation to access superior investment potential in Australia with leading broker Synergy FX Financial Markets, and gain Australian residential status.
A government initiative revised in July 2015, this visa program seeks to attract prominent overseas business people who have demonstrated experience and success in business or investment.
Synergy Financial Markets is perfectly positioned to assist you take advantage of this exciting opportunity.
Loss leader strategies have been adopted across all sectors, services and products so far.
One of the most typical examples is razor blades, where producers literally give away razor units because once consumers acquire the unit they will need to buy blades.
Console games are usually sold at a loss to lure customer into purchasing higher margin games and subscriptions.
Loss leader used less for financial services or products and even less in the fund management system.
For the first time in August 2018 a Boston based fund power-house employed a loss leader strategy with the launch of two zero fees funds.
Fees charged by fund managers in the context of relationship with investors are not exclusively linked to the active management of the portfolio.
Fees typically cover costs associated to management of these investments and costs related to third parties involved in the investments.
Actively managed funds are more expensive because they allow for continuous deliver of alpha and outperformance of a benchmark index;
Passively managed funds are a much cheaper option because they replicate composition of a benchmark index to define their portfolios.
Not all fund houses – be them managing funds actively or passively – can afford to have an exclusive range of free funds.
Fund management comes at a cost.
According to FCA spokesman, fees charged by fund managers should remain and greater emphasis should be posed on transparency of fees for investors.
Recent regulatory changes impacting financial services regulation have mixed effect on the blossoming of a no fee fund ecosystem in Europe:
Retail Distribution Review (RDR) initiative and ensuing prohibition for fund managers to pay commission to distributors might push distributors to cost efficient solutions for their clients.
MiFID II, instead, calls for greater transparency on fees and amounts charged by fund managers to investors, both in advance of the investment and on an ongoing manner.
No fee funds might come with transparency conflicts and might not be a fit within the current climate for financial services in Europe.
This is a white paper authored in 2013 on behalf of Confluence Technologies, Inc. of Pittsburgh. It addresses the dynamic behind a new regulatory reporting requirement for alternative asset managers (hedge funds, etc.). Since it was produced under contract, the article byline was set to that of a Confluence employee.
One Firm Worldwide - Smart Cities Summit 2018 - Algiers
Depositary_Technical Briefing
1. WHICH REGIME WILL APPLY ?
IN WHICH CASES SHOULD A DEPOSITARY BE APPOINTED ?
Depending on
private placement rules
One or more entities
to be appointed
to execute
depositary functions
No depositary required
Depending on
private placement rules
Depositary
required
from 2015
2015:
Home member
state of the AIF
Home member
state of the AIF
✓
Depositary Depositary
location
Home member
state of the AIF
✓
Out of scope
EU
AIF
EU
AIFM
EU
Investor
Requirements applicable to AIFM and AIF
✓ NO ✓
From 2013, provisions on transparency,
major holdings and control (if applicable)
become subject to specific national private
placement regimes' rules.
After 2015, full Directive; Member state of
reference authorisation to manage EU AIFs
or market AIFs in EU.
NO ✓ ✓
From 2013 full Directive, except provisions
on depositary, but an entity needs to be
appointed to execute depositary functions,
subject to specific national private
placement regimes rules.
After 2015 full Directive.
NO ✓ NO
Full directive except provisions on
depositary and annual report.
NO NO ✓
From 2013 provisions on transparency,
and major holdings and control
(if applicable), subject to specific national
private placement regimes' rules.
After 2015, full Directive; Member State of
reference authorisation to market non-EU
AIFs in EU.
✓ NO NO
Full Directive Member State of reference
authorisation to manage EU AIFs.
Full Directive✓ ✓ ✓
✓ ✓ NO Full Directive
NO NO NO None
Alter Domus now offers depositary services in Luxembourg, UK and Malta
and has over 8 bn USD assets under depositary.
DEPOSITARY TECHNICAL BRIEFING
SERVICES
In the context of the implementation of the Alternative Investment Fund Managers Directive (AIFMD), structures falling
under its scope must appoint a depositary in order to be compliant with the Directive.
In this document, we provide you with
concrete and specific answers to technical
concerns you may have regarding the
scope of the Directive, the Depositary
function and its liabilities, as well as our
specific approach to efficiently carry out
these functions and duties.
Over the past twelve months, we have been preparing and tailoring our
processes so that, when authorised, we can provide best-in-class depositary
services. We have also met with professionals, organised seminars
and listened to your queries and concerns.
We are very pleased to provide answers to frequently asked questions
in this document and we hope you will find them useful.
2. The depositary has processes
in place to ensure it is provided
with proof of ownership of each
asset in a timely manner.
This includes a register of investors,
shareholder’s agreements
and other legal documents,
as appropriate, evidencing
the existence and ownership
of the assets.
The Depositary uses a client portal,
Alter Domus Connect, to ease
the documentation flow
between the various parties
involved in asset transactions
to ensure no interference takes
place in the day to day operations
of the AIF.
The depositary has to verify
and document the details of
assets owned by the AIF.
In order to perform this task,
the depositary has to look
through the chain of ownership
of each target asset which
the investors have invested in.
The identification of the target
asset takes into account several
factors, including:
• Type of fund (Private Equity
Infrastructure, Real Estate
or Debt)
• Investment policy of the fund
• Corporate objective of the
companies in the structure
• Level of control over entities
lower down the chain
SAFEKEEPING OF ASSETS
HOW DOES IT WORK IN PRACTICE ?
CASH MONITORING
HOW DOES IT WORK IN PRACTICE ?
Cash monitoring is performed post transaction at the fund level. In addition, the depositary monitors significant cash
flows such as investments, divestments, drawdowns and distributions, right through the structure to the target asset.
The Directive requires depositaries to understand all cash movements and follow up on any unusual, inconsistent
and important transactions. The depositary should also ensure that any significant reconciling items have been
followed up and resolved.
The depositary has “read only” access to the bank statements of the AIF. All the required supporting documentation
explaining the key items on the bank statements are uploaded on Alter Domus Connect, our client portal. The depositary
uses this information to ensure that the cash movements are in line with the AIF’s laws and the investment policy.
OVERSIGHT DUTIES
• Timely settlement of transactions
• Income distribution
• Subscriptions and redemptions
• Valuation of assets and shares/units
• Investment compliance
CASH MONITORING
• Overview of all movements
of the AIF
• Identification of significant
cash flows
• Monitoring of discrepancies
and related corrective measures
SAFEKEEPING OF ASSETS
• Record keeping
• Ownership verification
• Due diligence and monitoring
of all third parties appointed
by the AIF or the AIFM
WHAT IS THE ROLE OF A DEPOSITARY ?
WHO CAN BE A DEPOSITARY ?
A new category of depositaries has been introduced by the AIFMD. Member States may permit non-credit institutions
and non-MiFID investment firms like Alter Domus to act as a depositary for Alternative Investment Funds (AIFs) that have
no redemption rights during five years of the initial investment and that generally do not invest in financial instruments
that must be held in custody, or invest in issuers or non-listed companies to potentially acquire control. In this case the
entity must be able to provide sufficient financial and professional guarantees to perform the functions of a depositary
and must be regulated by its local Financial Regulator.
Alter Domus is a Professional Depositary regulated in Luxembourg, the United Kingdom and Malta.
3. IS ALTER DOMUS EXTERNALLY CERTIFIED ?
Alter Domus has obtained the ISAE 3402 Level 2 certification, which covers depositary functions.
The existing procedures are currently being reviewed by one of the Big 4 firms.
WHAT TECHNOLOGY DOES ALTER DOMUS
USE FOR DEPOSITARY SERVICES ?
Our specialised eFront software, which covers fund administration and depositary services, is fully integrated with
Alter Domus Connect, our client portal, reducing manual intervention and ensuring efficiency. Many of our competitors
are still heavily reliant on spreadsheets to keep records, monitor transactions and produce reports. In contrast,
Alter Domus has developed systems that talk to one another ensuring uninterrupted data flow.
Alter Domus Connect, used for sharing documents, is a highly secure tool available 24/7 that allows full access to
electronic versions of corporate documents. The portal has a user friendly interface and is available on iPads and tablets.
Strict liability
The depositary is required to return
the identical financial instrument or
the corresponding financial amount to
the AIF (or the AIFM) without undue
delay, unless the depositary can prove
that the loss has arisen as a result of
an external event beyond
its reasonable control.
Fault based liability for all losses
other than loss of financial
instruments held in custody
The depositary is liable to the AIF
or AIF investors for all losses
suffered by them as a result of
its negligent or intentional failure
to perform its obligations.
Depositaries are subject to
an onerous liability regime
under AIFMD.
In short:
The depositary is directly liable to
the AIF or its investors for certain
losses.
WHAT IS THE DEPOSITARY LIABILITY ?
onnect
CorporateServicesFundServices
DEPOSITARYFUNCTION
CASH
MONITORING
AND
SAFEKEEPING
OVERSIGHT
DUTIES
Trade Registers
Shareholders Registers
Ensure that subscription
money is received in
the cash account of AIF
Collection of subscription
agreements and other
relevant documents
Documentation
Management
Target asset
Cash is invested
Investors pay
cash to AIF
Capital call
Closings
Subscription
Cash
Flows
Assets
Special Purpose
Vehicles
Holding
Companies
AIF
Investors
Fund
Structure
4. NO
OUT OF
THE
SCOPE
• Obligation to register
and to provide
information to
competent authorities
• No passport but
possibility to opt-in
and full regime then
applies
LIMITED
SCOPE
YES
FULL
SCOPE
NO
No leverage
+ 5 years lock in period
+ AuM ≤ € 500,000,000
Leverage
+ AuM ≤ € 100,000,000
AIFM size
test
YES
IN SCOPE
YES
AIF is not:
• a public body
• an employee
participation scheme
• a securitisation entity
• a holding company
• a joint venture
• a familiy office
• an entity whose only
investor is the AIFM
and affiliates
Exception
test
YES
AIF located
in Europe ?
or
AIF actively marketed
in the EU ?
or
AIF managed from
the EU ?
( location of the target is
irrelevant )
Location
test
YES
Does the investment
structure include
an AIF ?
• Entity which raises
capital from a number
of investors
• Entity which has
a defined investment
policy
• Entity which is not
a UCITS
Product
test
WHICH ENTITIES ARE WITHIN THE SCOPE
OF THE AIFM DIRECTIVE ?
IN HOUSE SERVICES VS. OUTSOURCING ?
Alter Domus does not outsource or subcontract any of the services it provides to its clients. Moreover, Alter Domus
in general has a culture of “doing” rather than “delegating”. As such, we have a “best in class” IT department
and we develop the majority of our infrastructure with our own IT capacity.
All services will be provided by the Alter Domus group.
WHO WITHIN ALTER DOMUS MANAGES
CLIENTS' QUESTIONS AND TRANSACTIONS ?
An Engagement Leader is appointed for each client. This Engagement Leader will be your central point of contact
and will assess your satisfaction on a regular basis in order to follow up on any issues or questions you might raise.
We will regularly meet with you to seek your feedback.
In addition, each client is assigned to an Engagement Manager, acting as backup for the Engagement Leader
and as project manager for the entire assignment.