Home / CY AIFM Law of 2013 / PART ΙΙΙ – OPERATING CONDITIONS FOR AIFMs / CHAPTER 4 - AIF Depositary /  Section 24 - Duties of AIF depositary

Duties of AIF depositary

24.-(1) The AIF depositary shall in general ensure that the AIF’s cash flows are properly monitored and shall, in particular ensure that -

(a) all payments made by or on behalf of investors upon the subscription of units of an AIF have been received; and

(b) all cash of the AIF has been booked in cash accounts opened in the name of the AIF or on the name of the AIFM acting on behalf of the AIF or in the name of the depositary acting on behalf of the AIF at an entity referred to in sub-paragraphs (a), (b), (c) or (d) of paragraph 20 of the Directive for the Authorisation and Operating Conditions of CIFs, DI144-2007-01 of 2012, or another entity of the same nature, in the relevant market where cash accounts are required, provided that such entity is subject to effective prudential regulation and supervision which have the same effect as Union law and are effectively enforced and in accordance with the principles set out in paragraph 18 of the Directive for the Authorisation and Operating Conditions of CIFs, DI144-2007-01, of 2012. (i)

(2) Where the cash accounts are opened in the name of the depositary acting on behalf of the AIF, no cash of the entity referred to in paragraph (b) of subsection (1) and none of the depositary’s own cash shall be booked on such accounts.

(3) The asset of the AIF or the AIFM acting on behalf of the AIF shall be entrusted to the depositary for safe-keeping, as follows:

(a) for financial instruments that can be held in custody -

• the depositary shall hold in custody all financial instruments that can be registered in a financial instruments account opened in the depositary’s books and all financial instruments that can be physically delivered to the depositary;

• for that purpose, the depositary shall ensure that all those financial instruments that can be registered in a financial instruments account opened in the depositary’s books are registered in the depositary’s books within segregated accounts in accordance with the principles set out in paragraph 18 of the Directive for the Authorisation and Operating Conditions of CIFs, DI144-2007-01, of 2012, opened in the name of the AIF or the AIFM acting on behalf of the AIF, so that they can be clearly identified as belonging to the AIF in accordance with the applicable law at all times;

(b) for other assets -

• the depositary shall verify the ownership of the AIF or the AIFM acting on behalf of the AIF of such assets and shall maintain a record of those assets for which it is satisfied that the AIF or the AIFM acting on behalf of the AIF holds the ownership of such assets;

• the assessment whether the AIF or the AIFM acting on behalf of the AIF holds the ownership shall be based on information or documents provided by the AIF or the AIFM and, where available, on external evidence;

• the depositary shall keep the record referred to in point (i) up-to-date.

(4) In addition to the tasks referred to in subsections (1) to (3) of this section, the depositary shall:

(a) ensure that the sale, issue, re-purchase, redemption and cancellation of units of the AIF are carried out in accordance with the applicable national law and the AIF rules or instruments of incorporation; and

(b) ensure that the value of the units or shares of the AIF is calculated in accordance with the applicable national law, the AIF rules or instruments of incorporation and the procedures laid down in section 19; and

(c) carry out the instructions of the AIFM, unless they conflict with the applicable national law or the AIF rules or instruments of incorporation; and

(d) ensure that in transactions involving the AIF’s assets any consideration is remitted to the AIF within the usual time limits; and

(e) ensure that the AIF’s income is applied in accordance with the applicable national law and the AIF rules or instruments of incorporation.

(i) Official Gazette of the Republic ANNEX Three (Ι): 26.11.2012 (Κ.Δ.Π. 473/2012).