On 20 July ESMA published its opinion on asset segregation and the application of depositary delegation rules to central securities depositaries (CSDs).
In the opinion, ESMA outlines its view on:
- the optimal approach to asset segregation under the AIFMD and the UCITS Directive frameworks; and
- how the depositary delegation rules should apply to CSDs.
ESMA believes that the optimal approach to asset segregation of financial instruments under the AIFMD and UCITS Directive is one that ensures:
- assets are clearly identifiable as belonging to the AIF/UCITS, consistent with any reuse (where this is permitted by the applicable legislation), and
- investors receive adequately robust protection by avoiding the ownership of the assets being called into question in case of the insolvency of any of the entities in the custody chain.
In light of this, ESMA has concluded that only minimum EU wide segregation requirements should be prescribed, leaving room for stricter requirements or different account structures if national (ownership, insolvency, tax or fiscal) laws in specific Member States make them necessary.