French regulator clarifies authorisation process under UCITS V

The French financial regulator, the Autorité des Marchés Financiers (AMF), has published instructions with regard to the UCITS 5 Directive transposition. The instructions outline the authorisation process for UCITS and AIF depositaries.

The UCITS 5 Directive alters the functions of UCITS depositaries with respect to their remit and responsibilities. Thus, the AMF has created a new process to authorise UCITS depositaries. The Autorité des Marchés Financiers (AMF) is releasing new instructions for the authorisation of UCITS depositaries with the status of investment firm and for the AMF’s examination of performance specifications for other UCITS and AIF depositaries (DOC-2016-01).

The UCITS 5 Directive states that entities other than national central banks and credit institutions that want to perform the role of UCITS depositary must be authorised. Thus, the AMF has created a new authorisation process. It is based on the format the French Prudential Supervisory Authority (ACPR) uses to authorise investment firms and credit institutions wishing to provide investment services.

  • The AMF will approve the aspects of the programme of activity that fall under its sphere of competence;
  • The ACPR will issue the authorisation.

Instruction DOC-2016-01 describes the authorisation process for investment firms acting as UCITS depositaries and the content of their programme of activity.

UCITS depositaries with the status of French credit institution or French branch of a European credit institution must submit their performance specifications to the AMF for authorisation. The performance specifications must describe the conditions under which it operates, including resources, organisation and procedures.

Instruction DOC-2016-01 spells out the content of the performance specifications for credit institutions and branches of credit institutions acting as UCITS depositaries, how they must be submitted to the AMF, and the AMF authorisation process for the performance specifications.

Some participants are depositaries of both UCITS and AIFs. So to standardise the process, AIF depositaries must send their performance specifications to the ACPR, which will forward them to the AMF. Instruction DOC-2016-01 spells out the content of the performance specifications for AIF depositaries with the status of credit institution, branch of a credit institution, investment firm or branch of an investment firm, and the submission process.

UCITS V became effective on 18th March 2016 and related information to the Directive as well as what you should know can be found here.

Lavanya Rathnam

Lavanya Rathnam is an experienced technology, finance, and compliance writer. She combines her keen understanding of regulatory frameworks and industry best practices with exemplary writing skills to communicate complex concepts of Governance, Risk, and Compliance (GRC) in clear and accessible language. Lavanya specializes in creating informative and engaging content that educates and empowers readers to make informed decisions. She also works with different companies in the Web 3.0, blockchain, fintech, and EV industries to assess their products’ compliance with evolving regulations and standards.

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