ESMA calls for industry views on asset seg and custody

The consultation aims to address ambiguities concerning asset segregation rules.
By Paul Walsh
The European Securities and Markets Authority (ESMA) has launched a consultation on asset segregation and custody services under AIFMD and UCITS regulation.

The consultation is launched with the aim of broaden understanding of asset segregation rules under the UCITS directive as well as to address the uncertainty on how depositary rules will apply to Central Securities Depositories (CSDs).

It also identifies the areas where further input is required including the mapping of asset segregation models, the issues linked to collateral management, prime brokerage and the T2S initiative.

Speaking in a webinar at the end of June, head of government affairs at Euroclear Paul Symons suggested that different asset segregation rules outlined in different aspects of legislation may cause confusion for market participants.

“CSDR gives participants the right to decide how they wish to segregate their assets. And requires them to offer choice to their clients too.”

“That right might however, be inconsistent with other aspects of legislation particularly AIFMD and UCITS V which may adopt, when ESMA concludes its guidance, a different approach to segregation for investment funds and UCITS funds,” said Symons.

ESMA will consider all responses to the consultation received before September 23 with the aim of finalising its work on asset segregation before the end of 2016.

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