Ipes will launch an AIF depositary service at the end of Q1 2013 to support clients in meeting a new requirement for funds captured under the AIFMD to appoint an independent depositary.
Whilst like many in the industry we supported the case against depositaries, we also recognised the need to be ready for their introduction. In conjunction with a big 4 consulting firm and a City law firm we have completed all the necessary groundwork and are now in the implementation phase to be operational from March, with our offering in place subject to regulatory approval.
In particular we have prepared a detailed operating manual and supporting process maps for the service and undertaken a controls audit to ensure AAF 01/06 compliance, in keeping with our existing offering. We are also planning to obtain a licence in each of our current jurisdictions.
Ipes will offer a full range of depositary functions for both custody and non-custody asset types as defined under the Directive including:
- safekeeping of assets;
- asset verification for both financial instruments and other assets;
- cash flow monitoring whereby we will effectively act as a hub for all cashflows; and
- operational oversight to ensure that transactions and valuations are in accordance with applicable laws, fund documents (i.e. the LPA or M&A) and the AIFMD.
Much of the concern regarding the new depositary requirement centred around unnecessary duplication of work and higher costs and this is where working with an administrator can be advantageous.
We anticipate that through providing a depositary service to our clients, we will be able to eliminate duplicate work and reduce the associated costs, by up to 50% or more, as we are already undertaking tasks such as such as recording and executing cash payments and signing off on investment transactions which tie into the cash monitoring and asset verification requirements.
Additionally as we operate using our bespoke technology, we have responded quickly in line with the requirements of both AIFMD and existing depositary practice at no additional cost to our clients.
When choosing a depositary, fund managers should undertake a detailed review of the type of assets held and then look at all the options in the market for service provision. It is an important decision and we are having discussions with our clients regarding their fund structures and depositary requirements.
Should you have any questions or wish to discuss your requirements please contact us.