Aifm Depositary Agreement

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What is an AIFM depositary agreement?

The AIFM depositary agreement is a legally binding contract between the alternative investment fund manager (AIFM) and the depositary. A depositary is an entity responsible for the safekeeping, verification, and oversight of an alternative investment fund`s assets. The AIFM depositary agreement outlines the responsibilities and obligations of both parties, ensuring that the depositary is fulfilling its duties in accordance with the Alternative Investment Fund Managers Directive (AIFMD).

Why is an AIFM depositary agreement important?

The AIFM depositary agreement is a crucial aspect of the AIFMD regulations. It ensures investor protection and transparency in the alternative investment fund industry. The depositary is responsible for ensuring that the assets of the fund are accounted for accurately, and any discrepancies are investigated and reported to the AIFM. The agreement also outlines the depositary`s liability in case of any losses caused by the depositary`s negligence or mismanagement.

What are the obligations of the AIFM?

The AIFM is responsible for selecting a depositary, ensuring that it meets the regulatory requirements set out in the AIFMD. The AIFM must also provide the depositary with all necessary information about the alternative investment fund, including its investment strategy, risk management procedures, and assets. The AIFM is also required to monitor and report any conflicts of interest or issues with the depositary regarding the safekeeping of the assets.

What are the obligations of the depositary?

The depositary is responsible for verifying the ownership of the assets, ensuring their safekeeping, and carrying out regular checks to prevent fraud or mismanagement. They are also required to report any discrepancies between the assets recorded and the actual assets held to the AIFM. The depositary must also ensure that the AIFM is aware of any changes in the fund`s assets, including the valuation of the assets and any income received.

In conclusion, the AIFM depositary agreement is a crucial aspect of the AIFMD regulations, ensuring investor protection and transparency in the alternative investment fund industry. The agreement outlines the responsibilities and obligations of both the AIFM and the depositary, ensuring that the assets of the fund are accounted for accurately, and any discrepancies are investigated and reported. It is essential for AIFMs to select a reliable and competent depositary and to ensure that the agreement`s terms are reviewed regularly to comply with the AIFMD regulations.