law of 20 December 2002 - Alfi

CHAPTER ERULES CONCERNING THE DEPOSITARY OF A LUXEMBOURG UCII. Conditions of admission to the activity of depositary.The admission to the activity of depositary of a UCITS subject to Part I of the law of 30 March1988 is exclusively limited to banks incorporated under Luxembourg law or Luxembourgbranches of banks established in an EU Member State.This also applies to the depositary of a UCI subject to Part II of the law of 30 March 1988save that such depositary may also be a Luxembourg branch of a bank established in a nonmemberState of the EU.Pursuant to Article 71(2) of the law of 30 March 1988, a UCI may only be authorised if thesupervisory authority approves the choice of the depositary. This approval is only given if theproposed depositary can justify that it possesses the necessary infrastructure to perform thetotality of the tasks relating to its duties, namely sufficient human and technical resources.II. General mission of the depositary.Pursuant to the law of 30 March 1988, the custody of the assets of each Luxembourg UCImust be entrusted to a depositary. This requirement is of a general application insofar as itindistinctively refers to all UCIs whatever their status or legal form.Pursuant to the commentary of the Articles of the law of 30 March 1988, the concept of custodyused to describe the general mission of the depositary should be understood not in thesense of “safekeeping”, but in the sense of “supervision” which implies that the depositarymust have knowledge at any time of how the assets of the UCI have been invested and whereand how these assets are available.In accordance with the meaning thus attributed to the concept of custody, the physical depositof all or part of the assets may be made either with the depositary itself (which represents themost prudent solution) or with any professional designated by the UCI in agreement with thedepositary.This interpretation of the custody mission of a depositary in no way prevents the recourse to afiduciary agreement to be entered into between the depositary and the UCI for the deposit ofthe latter’s assets; this solution presents some considerable advantages since the depositarythus receives significant authority for the exercise of its duties.In the context of its custody duties over the assets of the UCI, the depositary may communicatewith foreign correspondents by using electronic means of communication developed oroperated by third parties and possibly computer equipment located abroad, provided howeverthat these means are used for the direct communication with the foreign correspondentswithout the intervention of a third party.105