UK answers depositary queries

The UK’s Financial Conduct Authority (FCA) provided some guidance on how to complete the depositary section of its Alternative Investment Fund Managers Directive (AIFMD) application form, an area that has caused the industry some consternation.

In response to GPs’ enquiries, the FCA’s website said a GP does not need to provide complete information on their depositary arrangements for their AIFMD application to be accepted, but that the depositary segment (section 9) cannot be left blank.

Where depositary arrangements have not been finalized, GPs should complete Section 9 with the name of their intended depositary, and details of when they expect to be able to finalize the contractual arrangements, the FCA advised.

GPs should also include a brief description of the due diligence that they have, or will, undertake on the depositary.

If a depositary has not yet been selected, GPs should state that depositary arrangements are to follow.

But the FCA “strongly encourages” firms to have its depositary provisions nearly complete before applying for authorization. If not, GPs would be restricted from managing their funds past the July 22, 2014 AIFMD deadline, even if they were granted prior authorization.

The FCA regards information no longer missing when: the GP names the depositary (e.g. there is no longer a short list), the depositary agrees to act for the GP (although the contract and agreement do not necessarily need to have started) and the GP gives the FCA permission to contact the depositary to enquire about its provision of depositary services to that particular GP.

GPs in the UK have until July 22, 2014 to submit their AIFMD applications, an extra six months from the originally feared deadline. Last summer the FCA said applications should be submitted by January 22 to allow for enough time to process submissions, but reversed its thinking at the end of last year after industry criticism.