Article 17
Insolvency protection of UCITS assets when delegating custody functions
1.
A depositary shall ensure that a third party located in a third country, to whom custody functions are to be or have been delegated in accordance with Article 22a of Directive 2009/65/EC takes all necessary steps in order to ensure that in the event of an insolvency of the third party, assets of a UCITS held by the third party in custody are unavailable for distribution among, or realisation for the benefit of, creditors of that third party.
2.
A depository shall ensure that the third party takes the following steps:
(a)
receives legal advice from an independent natural or legal person confirming that the applicable insolvency law recognises the segregation of the assets of the depositary's clients from the third party's own assets, from the assets of the third party's other clients and from the assets held by the third party for the depositary's own account and that the assets of the depositary's UCITS clients do not form part of the third party's estate in case of insolvency and are unavailable for distribution among, or realisation for the benefit of, creditors of the third party to whom safekeeping functions have been delegated in accordance with Article 22a of Directive 2009/65/EC;
(b)
ensures that the conditions laid down in the applicable insolvency laws and case law of that third country recognise that the assets of the depositary's UCITS clients are segregated and unavailable for distribution among, or realisation for the benefit of creditors, as referred to in point (a), are met when concluding the delegation agreement with the depositary as well as on an ongoing basis for the entire duration of the delegation;
(c)
immediately informs the depositary where any of the conditions referred to in point (b) is no longer met;
(f)
informs the depositary about the changes of applicable insolvency law and of its effective application.
4.
The depositary shall ensure that duties laid down in paragraphs 1 and 2 shall apply mutatis mutandis when the third party, to whom safekeeping functions are delegated pursuant to Article 22a of Directive 2009/65/EC, has decided to sub-delegate all or part of its safekeeping functions to another third party pursuant to the third subparagraph of Article 22a(3) of Directive 2009/65/EC.