On 30 May 2018, the European Commission published a draft Delegated Regulation amending Delegated Regulation (EU) No 2016/438 as regards safe-keeping duties of depositaries.

The purpose of the draft Delegated Regulation is to modify Delegated Regulation No 2016/438 which supplements the UCITS Directive. Article 16 of the Delegated Regulation has been interpreted by some as requiring separate accounts per depositary and per type of fund to be created at each level of the custody chain. However, the draft Delegated Regulation aims to clarify that UCITS, alternative investment funds and other client assets can be comingled at the level of the first custodian under the condition that they are initially held by the same depositary (or are initially held by the same custodian where the latter further delegates the custody of assets down the custody chain).

The deadline for comments on the draft Delegated Regulation is 26 June 2018.