News on the UCITS V Depositary Reform

The UCITS V Depositary Reform is well on its way. At Braxton (,, we are able to give a fresh overview of where we stand and report on the feedback statement from the second EC consultation and detail legislative proposals to clarify and harmonize the UCITS depositary function as well as regulate UCITS Managers’ Remuneration.

The fund compliance environment is going through a complete shake out that is redefining the UCITS fund landscape going forward. Jurisdictions and fund houses are now competing in a new and more transparent environment.

This reform does not come in isolation as the safekeeping of fund assets includes various financial instruments and asset classes that are also concerned by the new regulatory framework of the European financial markets.

For securities, the Securities Law Directive is well on its way to ensure a cross-border legal certainty of securities holdings and transactions. Securities settlements are also part of legislative proposals due June 2011 in order to harmonize practice for Central Securities Depositories.

The working document sets out some preliminary conclusions in each of these areas.  The Commission’s Services are currently working on preparing legislative proposals which are consistent with these and with the commitments made in the Communication.

For derivatives, The European Commission proposal for a regulation on OTC Derivatives, Central Counterparties and Trade Repositories has been adopted on September 15th 2010 and is currently discussed within the European Parliament and by Council as part of the co-decision procedure.

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