Custody

(1) The depositary must hold in custody the assets of the domestic UCITS, or of the UCITS management company acting for the account of the domestic UCITS, as follows:
1. for financial instruments within the meaning of Annex I, Section C, of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directives 2002/92/EC and 2011/61/EU (OJ L 173, 12.6.2014, p. 349), that can be held in custody:
a) the depositary holds in custody all financial instruments that can be registered in a financial instruments account in its books, and all financial instruments that can be physically delivered to the depositary;
b) the depositary ensures that all financial instruments that can be registered in a financial instruments account in its books are registered, in accordance with the principles set out in Article 16 of Commission Directive 2006/73/EC of 10 August 2006 implementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive (OJ L 241, 2.9.2006, p. 26), in the books of the depositary on segregated accounts opened in the name of the domestic UCITS or of the UCITS management company acting for it, so that the financial instruments can at all times be clearly identified as belonging to the domestic UCITS under applicable law;
2. for other assets:
a) the depositary verifies the ownership of the domestic UCITS, or of the UCITS management company acting for the account of the domestic UCITS, of such assets and maintains records of those assets in respect of which it has satisfied itself that the domestic UCITS, or the UCITS management company acting for the account of the domestic UCITS, has ownership;
b) the assessment as to whether the domestic UCITS, or the UCITS management company acting for the account of the domestic UCITS, is the owner is based on information or documents provided by the domestic UCITS or the UCITS management company and, where available, on external evidence;
c) the depositary keeps its records up to date;
3. the depositary regularly provides the UCITS management company with a comprehensive statement of all the assets of the domestic UCITS.
(2) The cash balances belonging to the domestic UCITS under section 195 must be held in custody in blocked accounts. The depositary is entitled and obliged, on the instructions of the UCITS management company, to transfer cash balances under section 195 held in the blocked accounts
1. to other blocked accounts at credit institutions with their seat in a Member State of the European Union or another contracting state of the Agreement on the European Economic Area, or
2. to other blocked accounts at credit institutions with their seat in third countries whose supervisory provisions are, in the opinion of the Federal Institute, equivalent to those of European Union law.
(3) For further details on the custody duties under subsection (1), reference is made to Articles 12 to 14 of Delegated Regulation (EU) 2016/438.