What is the role of the UK Depositary?
The Depositary has oversight responsibilities for the Manager's activities in a number of key areas such as unit pricing, dealing, portfolio valuation and in the adherence to investment and borrowing power restrictions.
The Depositary is also responsible for the safeguarding of the assets of the authorised fund. This separation of the management of the fund's assets from their ownership is the most fundamental element of investor protection provided by authorised funds.
The Depositary also has a responsibility for protecting the interests of incoming, outgoing and continuing investors in a fund. Whilst not having a direct responsibility for the Manager's activities, the Depositary must take reasonable care to ensure that the Manager is properly discharging its own responsibilities. This is not the case for other mass retail market savings products, such as deposits, savings accounts, insurance products or structured products.
Depositaries are, by market choice, subsidiaries or divisions within large banking groups (although regulation does not require them to be so). In practice they represent a significant resource of professional, well-qualified people, supported by significant IT, processing and specialist resources.