The Council of the European Union has published the third Presidency compromise proposal (dated 8 November 2013) for UCITS V.

The compromise proposal sets out proposed changes to the text of the draft UCITS V Directive.

Included among the proposed changes are:

• Amendments to provide that a UCITS’ assets that are held in custody by a depositary may be re-used, but only where (i) the re-use of the assets is executed for the account of the UCITS, (ii) the depositary is carrying out the instructions of the management company on behalf of the UCITS and (ii) the re-use is for the benefit of the UCITS
• Amendments pursuant to which the capital adequacy and initial own funds requirements applicable to non-credit institutions that are eligible to act as UCITS depositaries will now be determined by reference to CRD IV (i.e. Regulation (EU) No.575/2013), which is due to replace the current EU rules on capital requirements for credit institutions and investment firms with effect from 1 January 2014

A number of amendments, recognising such matters as the need to ensure protection of personal data and respect for fundamental rights, have also been proposed to those provisions of the proposed Directive dealing with sanctions.

Contributed by James Phelan