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The Depositary Dilemma

The AIFM and UCITS Directives assign strict oversight duties to fund depositaries. The reverse burden of proof on depositary controls and the possible restitution liability on assets held in the custody chain put a big strain on operations. Add to this dilemma the very thin margins in this business and the constant time pressure from large transactions, and the headache of a Head of Depositary is complete.

We understand this because we’ve been there ourselves. Having led a depositary business in the past, CEO Bert Boerman launched the company out of frustration that the depositary function was not more efficient.

But just as depositaries need to demonstrate their effectiveness, we also have a duty to make sure that others in the industry feel the same way. So we asked some depositary heads a number of tough questions:

  • How confident are you that the procedures that you designed to fulfil your depositary duties are consistently and accurately executed? (eg. controls on subscriptions & redemptions, cash monitoring, transaction controls)