Under the Alternative Investment Managers Directive (AIFMD), marketing and passporting to professional investors is permitted for both EU and non-EU Alternative Investment Fund Managers (AIFMs)  in respect of EU and non-EU Alternative Investment Funds (AIFs), provided that certain conditions are met. In certain cases, one of the conditions specified in the AIFMD is the requirement for an AIFM to appoint a depositary. The AIFMD depositary requirements are driven by a combination of the domicile of both the AIFM and the AIF, as well as the approach adopted for marketing by the AIF. In summary, only EU AIFMs managing EU AIFs which are marketed under an EU-wide marketing passport are subject to the full requirements set out in Article 21 of the AIFMD and therefore need to appoint a single depositary for each AIF. In such cases, the depositary must be located in the home Member State of the AIF.
An EU AIFM marketing non-EU AIFs to professional investors will not be subject to the full depositary requirements under Article 21 and may be subject to a lighter depositary regime under Article 36 of the AIFMD where the AIF is marketed to EU investors through national private placement.
In the case of a non-EU AIFM marketing either EU AIFs or non-EU AIFs to professional investors by way of private placement, the non-EU AIFM will not be subject to any of the AIFMD depositary requirements unless a Member State imposes stricter rules than those imposed by the AIFMD, in its jurisdiction.  For example, Denmark and Germany have already introduced a "depositary-lite" requirement for Non-EU AIFs marketed to investors in their countries.
From 2015, it is anticipated that non-EU AIFMs may be premitted to elect to apply for an EU-wide marketing passport, as a consequence of which, full depositary requirements will apply.

The position can be summarised in the following diagram:

Depositary-lite requirements are less onerous than the full depositary requirements of Article 21 and are limited to the requirement that one or more firms be appointed to perform the three core duties of the depositary - cashflow monitoring, safekeeping of assets, and ongoing oversight responsibility - without being subject to the liability provisions. The AIFM also has greater flexibility in relation to where the depositary can be located.

Depositary-lite has emerged as a popular option for AIFMs marketing or planning to market non-EU/EEA AIFs to European investors as it is the least disruptive and least costly option, whilst at the same time enabling access to EU investment capital.  

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.