Depositary Services

Close

Following implementation of the AIFMD in July 2013, alternative investment managers have been subject to a new regulatory regime. The objective of the regulation is to enhance investor protection.

If your fund operates under the Alternative Investment Fund Managers Directive (AIFMD), you need an independent depositary to oversee your fund’s activities.

As Vistra is a leading service provider in terms of assets under administration (AUA) , you know your fund is in safe, experienced hands. And with a dedicated team of senior lawyers and accounting officers, we ensure your fund is fully compliant with its depositary duties under the AIFMD.

Our depositary services operate in three jurisdictions: the Netherlands, Luxembourg and the UK. As depositary we monitor your assets according to local laws and integrate the depositary function with the rest of your global fund administration.

 

Depositary Model

We have developed a unique operating model to give you an insight of how we operate as a fund depositary under the AIFMD. In five activities we take care of all steps necessary to be AIFMD compliant.

 

Onboarding

The initial set-up process for new mandates will be handled by the Vistra depositary team.

  • The depositary team initiates the  ‘know your client’ process.
  • The fund manager provides fund documents to the depositary team for review and feedback.
  • The fund manager and depositary team finalise the service agreement.
  • Vistra completes internal compliance and its ‘new business’ sign-off. 

We will then:

    • Conduct a risk assessment
    • Identify the assets
    • Understand the fund/holding structure
    • Develop work programmes

 

Monitoring Cash Flows

The depositary ensures the fund’s cash flows are properly monitored, that all payments made by investors have been received and that all the fund’s cash has been booked in suitable cash accounts. To do this, the depositary maintains records of all cash transactions processed by the fund.

Our monitoring procedure reviews the fund’s accounts plus the accounts of any legal entities that sit between the fund and its underlying assets. 

We will apply a materiality test to identify and review ‘significant’ cash flow movements, detecting any that are inconsistent with the usual operations of the fund.

 

Ownership Verification and Record Keeping 

We also conduct safe keeping duties, ensuring the AIFM implements appropriate procedures to verify that the assets acquired by the fund it manages are appropriately registered in the name of the fund or in the name of the AIFM acting on behalf of the fund. 

Under the AIFMD, the depositary has to verify the ownership of assets of any financial or legal structure established for the purpose of investing in assets which are controlled directly or indirectly by the fund or the fund manager acting on behalf of the fund on a ‘look through’ basis. 

We distinguish two approaches: one at commencement and one during our continuous monitoring of the fund.

 

Oversight Duties

In line with AIFMD requirements, Vistra’s monitoring duties will focus on the following functions:

  • Valuing the fund’s shares, units or equivalent compliant with national laws and the fund’s constitutive documents
  • Recording whether the fund’s commitment capital, contribution and distribution of capital are accurate
  • Ensuring transactions involving the assets of the fund are settled within the usual time limits
  • Checking distributions of income to investors comply with the fund’s governance documents
  • Confirming instructions from the fund manager or management company (e.g. investment restrictions and leverage limits) comply with fund documentation and local law

 

Key Control Principles

Vistra has based its depositary procedures on the following key control principles:

  • Accuracy
  • Completeness
  • Timely delivery

 All our depositary procedures have been included in the ISAE 3402 since 2014. 

 

To discuss how we could assit you, please contact one of our specialists or complete the enquiry form.

 

Make an enquiry

 

Key Contacts

We form strong, trusted connections with our clients, based on a deep understanding of their professional worlds, drawn from our extensive experience of working in those same worlds - across finance, structuring, law, and accounting.

Please click on an individual profile to find out about our people and how they can help you.