CACEIS NEWS 35

2 caceis news - No. 35 - October 2013 products and services CACEIS extends its European depositary network with two new branches in Belgium and the Netherlands

By opening two new depositary branches in Europe, CACEIS helps fund managers comply with and take full advantage of the AIFM Directive.

A s part of CACEIS’s ongoing efforts to expand the service offering for its global clientele, the group has opened two new depositary bank branches in Belgium and in the Netherlands. CACEIS is an experienced provider of depositary services in the global marketplace and its depositary network covers a broad range of countries in the European Union. By open- ing these new depositary branches, CACEIS is extending its solid expertise in providing depositary and custody services to clients operating in the Belgian and in the Dutch market, in addition to the fund administra- tion services CACEIS in Belgium and in the Netherlands currently provides. Joe Saliba , Deputy CEO of CACEIS commented, “Clients have long relied upon CACEIS’s Belgian and Dutch fund administration offer, now we are bolstering that offer by bringing the group’s depositary banking and custody expertise to the Belgian and the Dutch markets. By doing so, our clients can benefit from a full-fledged asset servicing solution. For CACEIS, our clients and their investors, the safety of invested assets is fundamental, and CACEIS in Belgium and in the Netherlands will play a key part in ensuring the highest level of security for those assets.”

Challenges and Opportunities for AIFMs With the implementation of the Alternative Investment Fund Managers Directive (AIFMD) on 22nd July 2013, the launch of CACEIS Brussels and Amsterdam based de- positary banks comes at a critical moment for most asset managers and institutional cli- ents. Fund managers with products that fall within the scope of AIFMD have to comply with the directive’s requirements. Thanks to the AIFM passport, they may expand distri- bution of domestic funds outside their home country. Fund managers with products domiciled in several countries may restructure their fund ranges as well as their company structure. Non-EU fund managers will probably benefit from the AIFM passport from 2015 and will be able to manage EU AIFs and/or market EU and non-EU AIFs to European investors under some conditions. As an experienced partner in the AIF market, CACEIS can allow fund managers to benefit from a comprehensive package of services, save both time and money, increase efficiency and ensure they are fully compliant with the new regulatory environment. Engaging an expert partner able to support AIFMs will be a key benefit when setting up new funds and servicing structures. The cross-border registration and distribution of AIFs will inevitably require a broad expertise and a more technical ap- proach. The assistance of a service provider sufficiently experienced in the cross-border environment will be a key success factor in

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helping AIFMs seize new business develop- ment opportunities beyond their domestic borders. CACEIS will also be able to offer all services required by clients promoting investments under the UCITS regime. Furthermore, having received approval from the National

Bank of Belgium (NBB), the Belgian finan- cial institution supervisory body and from De Nederlandsche Bank (DNB), the Dutch financial supervision body, CACEIS is now able to offer a wide range of additional asset services to clients active in the Belgian and the Dutch market ■

Cash flowmonitoring under the AIFMDirective

CACEIS adapts its cash flow monitoring for private equity and real estate funds.

particularly problematic, the monitoring of accounts opened with a third party does re- quire a few operational adjustments. One should keep in mind that depositaries are not liable for the monitoring of cash accounts opened in the name of companies owned by AIFs. Cash flow management and accounting services meeting the new requirements of AIFMD AIFMD stipulates that fund managers must provide the depositary with all elements that could enable it to check the conformity of the flows recorded in the cash accounts of their AIFs. It is therefore the responsibility of the manager to inform the depositary about the opening of any accounts with a third party and to ensure that all relevant elements helping the depositary to fulfil its duties are duly transmit- ted (bank statements, general ledgers, etc.). This constraint makes it all the more attractive for AIFMs to outsource administrative and ac- counting tasks linked with the cash flow man- agement of AIFs to one single intermediary offering depositary and fund administration services. Underpinned by PERES (Private Equity & Real Estate Servicing), its dedicated business

line, CACEIS manages local teams following up the whole life-cycle of funds. By support- ing AIFMs in their fund structuring and in- vestment activities, CACEIS can acquire very precise knowledge of the funds’ incoming and outgoing flows. The proximity of operational teams facilitates the sharing of information within CACEIS and the checking process by the depositary. CACEIS also offers accounting services dedi- cated to the property accounts of French funds. Book-entries recorded by property managers are thus checked by an independent expert before being automatically integrated into the funds’ accounting. More than sim- ply ensuring reliable accounting services, this process enables depositaries to reconcile the flows of property managers’ accounts opened in the name of funds with banking movements in real time. It also allows depositaries to ob- tain, if need be, corresponding proofs. This non-exhaustive list of new initiatives re- flects CACEIS’s ability to adapt to this new regulatory framework and to provide AIFMs with innovative solutions that help them en- hance their efficiency and comply with the new requirements set out in the AIFM Directive ■

framework. Some provisions of AIFMD, like the cash flow monitoring of AIFs by a deposi- tary, are already applicable. As a leading AIF depositary holding more than €300bn in assets, with €50bn in unlisted hold- ings, CACEIS already monitors cash move- ments of AIF’s accounts (whether opened in its books or not). CACEIS also provides its clients with innovative solutions to help them best take advantage of this new environment. Broadening of the cash flow monitoring scope of depositaries Cash flow monitoring of accounts opened in the name of AIFs is one of the new duties assigned to depositaries by AIFMD. Because AIFs have the opportunity to open accounts in books other than those of the depositary, the monitoring process becomes more complex. This can happen with real estate funds using a leverage effect to finance some acquisitions or with accounts of property managers be- ing sometimes opened on behalf of the AIF. Although monitoring cash flows of accounts opened in the books of the depositary is not

S ince July 2013, alternative investment fund managers have been sending in their AIFM application forms, gradu- ally seeking to comply with the new regulatory gilles de foucault, Product Manager, CACEIS