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Ch. 9
Depositary Liability by Asset Type & Fund Regime
Strict liability vs negligence standard, sub-custody delegation rules, and force majeure by fund type
| Criterion | UCITS | AIFMD AIF (full regime) | SIF / RAIF (AIFMD-managed) | PDAOFI (AIFs) |
|---|---|---|---|---|
| Liability for loss of financial instruments | Strict — must replace lost instruments | Strict — must replace lost instruments | Strict — must replace lost instruments | N/A — PDAOFI cannot hold financial instruments |
| Force majeure exception | No — strict liability is absolute | Yes — if external event + unavoidable consequences | Yes — AIFMD standard applies | N/A |
| Liability for sub-custodian failure | Depositary remains fully liable | Depositary remains fully liable (unless liability discharged by transfer) | Depositary remains fully liable | N/A |
| Liability discharge to sub-custodian | Not permitted | Permitted if investor notified + sub-custodian accepts | Permitted | N/A |
| Duty for non-financial assets (PE/RE/loans) | Ownership verification — negligence standard | Ownership verification — negligence standard | Ownership verification — negligence standard | Core duty — ownership verification + record-keeping |
| Cash flow monitoring obligation | Mandatory | Mandatory | Mandatory | Mandatory (limited scope) |
| Oversight duties (9+) | Mandatory — all 9+ duties | Mandatory — all 9+ duties | Mandatory — all 9+ duties | Limited oversight — no full UCITS/AIFMD oversight duties |
| ManCo/AIFM can act as depositary | No — structural independence required | No | No | No |
| CSSF approval required for appointment | Yes | Yes | Yes (except RAIF) | Yes |
| Written depositary contract required | Yes — mandatory | Yes | Yes | Yes |
| Fund can issue/redeem without depositary | No — prohibited since July 2023 | No | No | No |
| Sub-custodian annual review required | Yes | Yes | Yes | Yes (for any appointed agents) |
📌 Data sourced from Lux Investment Funds 2025, Chapters 9. Verify current requirements with CSSF at cssf.lu.