CSSF Circular 14/587 on UCITS depositaries – transition period modified to 18 March 2016 – newsflash – 24.03.2015

The CSSF has extended the transition deadline for CSSF Circular 14/587 applicable to Luxembourg credit institutions acting as depositaries for UCITS (“CSSF Circular 14/587”) by way of its Circular 15/608 published yesterday on 23 March 2015. According to this latest development, Luxembourg credit institutions acting as depositaries for UCITS must align their operational set-ups and network agreements with CSSF Circular 14/587 by 18 March 2016 at the latest. As you may remember, the end of the previous transition period for CSSF Circular 14/587 was set for 31 December 2015 (see our newsflash of 16 July 2014). The CSSF deemed this extension of the transition period necessary in view of the Commission’s delay in publishing the level 2 measures for Directive 2014/91/EU amending Directive 2009/65/EC relating to UCITS as regards depositary functions (commonly referred to as “UCITS V Directive”) thus granting Luxembourg credit institutions acting as depositaries for UCITS the full transition period provided for by UCITS V Directive and the maximum time period available to adapt their operational set-ups and network agreements to the Commission’s level 2 measures. According to current information, the Commission’s level 2 measures for the UCITS V Directive, which were previously expected to be formally adopted in April, will apparently not be ready before the third or even fourth quarter of 2015. While awaiting the outcome, the CSSF has announced that it will be reviewing CSSF Circular 14/587 in due time with a view to adapting certain aspects to Directive UCITS V and the level 2 measures.