On the 5^th January 2016, the MFSA issued a Circular to the financial services industry confirming that the European Commission has adopted the first draft of the UCITS V Delegated Regulation as of the 17^th December 2015.

The Delegated Regulation fleshes out the UCITS V requirements concerning depositaries, setting out further detailed requirements in respect of:

• The various obligations incumbent upon the depositary relative to oversight, due diligence, segregation and insolvency protection;
• Minimum requirements for the contract between the management company or the investment company and the depositary;
• Independence requirements for management companies, investment companies, depositaries and third parties to whom the safekeeping function has been delegated; and
• The conditions and circumstances in which financial instruments held in custody are considered to be ‘lost’.

The UCITS V Delegated Regulation will implement UCITS V which is expected to enter into force on the 18^th March 2016.