UCITS V Level 2 Implementing Measures Published

The European Commission ("Commission") has published the long-awaited implementing measures under the EU directive amending the UCITS Directive (known as "UCITS V"), providing further detail on the rules applicable to UCITS' depositaries.

The implementing measures, which take the form of a regulation (the "Regulation"), set out detailed rules relating to the contractual provisions to be included in depositary agreements; depositaries' duties with regard to oversight, monitoring of cash flows and safekeeping of custody assets; potential discharge of liability; initial and ongoing due diligence requirements regarding the selection of sub-depositaries and segregation of assets; insolvency protection of UCITS assets when delegating custody functions; and requirements in relation to the independence of management companies from the depositaries of their UCITS under management.