Conflicts of interest

(1) The depositary must act, in performing its duties, honestly, fairly, professionally, independently, and solely in the interest of the domestic UCITS and its investors.
(2) The depositary may not perform any tasks in relation to the domestic UCITS, or the UCITS management company acting for the account of the domestic UCITS, that could create conflicts of interest between the domestic UCITS, the investors of the domestic UCITS, the UCITS management company, and itself. This does not apply where a functional and hierarchical separation of the performance of its tasks as depositary from its potentially conflicting tasks has been carried out, and the potential conflicts of interest are properly identified, managed, monitored, and disclosed to the investors of the domestic UCITS. The depositary must ensure, through organisational and procedural rules, that conflicts of interest between the depositary and the UCITS management company are avoided in the performance of its tasks. Compliance with these rules must be monitored by a body independent up to management level.
(3) In order to avoid conflicts of interest between the depositary, the UCITS capital management company, or the domestic UCITS or its investors, a UCITS capital management company may not perform the tasks of a depositary, and a depositary may not perform the tasks of a UCITS capital management company.
(4) For further details on the requirements for depositaries to fulfil their duty, within the meaning of subsection (1), to act independently of the UCITS capital management company in performing their tasks, reference is made to Article 21, letters a to c and e, Article 22(5), and Articles 23 and 24 of Delegated Regulation (EU) 2016/438.
(5) Assets held in custody by the depositary may be reused only where the depositary ensures that 1. the reuse of the assets takes place for the account of the domestic UCITS, 2. the depositary follows the instructions of the UCITS management company acting in the name of the domestic UCITS, 3. the reuse benefits the domestic UCITS and is in the interest of the investors, and 4. the transaction is covered by high-quality liquid collateral, a) that the domestic UCITS has received under a title-transfer collateral arrangement, and b) whose market value is at all times at least as high as the market value of the reused assets plus a premium. Reuse means any transaction of assets held in custody, including transfer, pledging, sale, and lending; with regard to the reuse of financial instruments received as collateral, reference is made to Article 15 of Regulation (EU) 2015/2365.