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that it sets forth the minimum content of Depositar- ies application files and of the depositary agreement. However, the Depositaries organisation rules are at the core of the Circular and are more extensively described in the high level mapping below. Readers should in particular focus on the topics below, which have been raised as the key elements of the Circular by the CSSF. 1.) SEGREGATION OF UCITS’ FINANCIAL ASSETS As under the AIFMD, particular attention shall be paid to the compliance with the principle of segre- gation of financial assets throughout the custody chain. Such principle will apply to Depositaries with specific provisions for the sub-custodian slightly de- viating from what is already in place under AIFMD. However, the Depositary shall be provided annually with confirmation regarding the compliance with the Circular’s segregation rules by any appointed sub-custodians. The Circular defines the conditions for the delegation of the Depositaries' safe-keeping duties to a third party. In line with the AIFMD, delegation and sub-del- egation should be (i) justified by an objective reason (this is a recommendation of the Circular, only) and (ii) subject to strict requirements in relation to the suitability of the sub-custodians. This process shall be documented in a dedicated procedure. In addi- tion, a contingency plan shall foresee any relevant measures to be taken in case of sub-custodian in- solvency. Sub-Custodians must annually confirm to the Depositary that they apply in turn equivalent due diligence measures when delegating any safe-keep- ing functions. It must be noted that the Circular provides a detailed approach and criteria for the due diligence proce- dures to be implemented. Finally, transfer agents are subject to specific rules and, in general, are not to be considered as "sub-custodians". As a rule, Depositaries must act in an independent manner and may not provide any service to a UCITS where this could give rise to conflicts of interest. It derives therefrom that neither the portfolio nor the risk management functions may be delegated to the Depositary or any sub-custodian. However, subject to CSSF prior approval, Depositaries may provide risk management support services to the UCITS or its management company. 4.) CASH FLOW MONITORING The Depositary will be responsible for the proper monitoring of the UCITS' cash in- and out-flows, 2.) INITIAL AND ONGOING DUE DILIGENCE OVER SUB-CUSTODIANS 3.) IDENTIFICATION, MANAGEMENT, PREVENTION OF CONFLICTS OF INTEREST

and in particular, for ensuring that any cash of the UCITS is correctly booked.The CSSF expects Depos- itaries to establish appropriate procedures so as to reconciliate every cash movement and detect those inconsistent with the UCITS’ operations. 5.) COLLATERAL MANAGEMENT Since the Circular clarifies that assets provided or received by the UCITS as collateral are in scope of the Depositary’s custody duties, the latter must be able to assess whether or not such assets are the property of the UCITS. For this, the Depositary must take into account the regulatory and contractual fea- tures of the transaction. UCITS must ensure that the Depositary is provided with all information neces- sary for this assessment. If the UCITS lends its secu- rities, the Depositary shall ensure that the collateral is received/restituted in a timely manner and that it adequately covers the transaction. Moreover, the Depositary shall ensure that any collateral received by the UCITS does not conflict with the provisions of CSSF Circular 13/559. No collateral agent or manag- er can be used for collateral transactions unless an agreement is entered into between the UCITS, the Depositary and such collateral agent/manager. What’s next? Depositaries, UCITS and/or their management com- panies must be fully ready on 31 December 2015 at the latest, subject to a longer transition period, which would run under the UCITS V Directive. At this date, the provisions of chapter E of IML circular 91/75 will not apply anymore to Depositaries (however, they will still apply to depositaries of SIFs, SICARs and Part II funds which are not subject to the law of 12 July 2013 on AIFMs).

Such policy shall also give the opportunity to the complainant to raise the complaint up to the level of the management of the professional and provide the contact details of such person. Internal delegation is only authorised where the CSSF has been notified of any arrangement to that effect. Finally, the Regulation sets forth the rules regarding the communication of information to the complain- ant and to the CSSF. What’s next? The complaint handling policy should be at least published on the website of the professional. CSSF provides extensive guidance on the depositary role Background The purpose of CSSF Circular 14/587 (the “Circular”) is to update the rules applicable to depositaries of Luxembourg UCITS (the “Depositaries”) on the basis of the existing rules under the Law of 17 December 2010 relating to undertakings for collective invest- ment (the "2010 Law") as well as the provisions set- out by the UCITS V directive (“UCITS V”). The new rules are to a large extent inspired by the alternative investment fund manager directive (“AIFMD”), the new European benchmark in this regard. Within the wider context of anticipating future European devel- opments, the Circular also seeks to anticipate the changes deriving from UCITS V. As is currently the case under AIFMD, the Circular places Depositaries as the central figure of UCITS structures, but also de- fines more distinct roles and responsibilities for the Management Company. What’s in there? The Circular provides extensive guidance on the sa- lient features of the Depositary role. A true novelty is THE REGULATION IS AVAILABLE HERE.

CSSF CIRCULAR 14/587 IS AVAILABLE HERE.

CSSF circular laying down its administrative

practice regarding material changes to open-ended UCIs Background UCI investors must receive all necessary information to be able to make an informed judgment of the proposed investments (cf. Art. 151 of the law of 2010). Under an established CSSF supervisory practice, in-

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