After the publication of the new CSSF Circular 14/587 on UCITS depositaries last week, it is now the European legislator’s turn to adopt new rules on UCITS depositaries. Indeed, the Council of the European Union has formally approved today the proposal for a directive of the European Parliament and of the Council amending Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to UCITS as regards depositary functions, remuneration policies and sanctions (the UCITS V Directive). The UCITS V Directive reflects lessons learned from a number of failures in the UCITS market which led to losses of assets by UCITS investors and aims at re-establishing investor confidence. As the AIFM Directive already aims at mitigating the negative consequences of such failures for investors of alternative investment funds, it became necessary to align both regimes and apply such protective rules to retail investors as quickly as possible. The new framework aims at strengthening the protection of UCITS investors vis-à-vis the depositaries and the managers of the funds, through new sets of rules relating to the depositary functions, the remuneration policies as well as the administrative sanctions applying to UCITS managers when failing to comply with their obligations under the UCITS V Directive. To read the full document and/or the final text, please click on the links below.