From the outset of this third-party monitoring programme in 2012, Thomas Murray rapidly found itself accumulating what is possibly the world’s most detailed and best data and qualitative information set on one of the world’s least well-known cogs in the workings of the global financial system, transfer agents. Like any machine, when a single cog breaks down, so does a large part of the mechanism.

Transfer agents fall below the bar of what the global authorities consider to be a market infrastructure institution like a national payment system or central securities depository, and are for the most part outside the perimeter of national regulatory authorities as well. And yet, as is true for most of them, their critical functions involve receiving and making payments for public funds, and maintaining share ownership registries for those funds. These are not small matters.

On Thursday 12 February 2015, Dominic Hobson and Roger Fishwick were delighted to be joined by Ian Headon of Northern Trust, Bill Prew of INDOS Financial, Mark Sweeney of Citco and Shane Ralph Ralph of State Street to discuss their experiences, from a depositary perspective, of AIFMD (the Alternative Investment Fund Managers Directive).

The introduction of the EU’s Alternative Investment Fund Managers Directive (AIFMD) brings with it numerous challenges for fund managers – be it the presently undetermined concept of reverse solicitation, Annex IV reporting and a clamp-down on their remuneration procedures.

We spoke to Martin Cornish, a partner at the law firm MJ Hudson, about how long the depopsitary lite model under AIFMD will last and where a second iteration of that Directive could improve upon the first.

The EU’s Alternative Investment Fund Managers Directive (AIFMD) imposes a number of requirements on depositary banks. Most significantly, it obligates depositary banks to provide safekeeping of assets, cash-flow monitoring and oversight of assets controlled by alternative investment fund managers (AIFMs), and subjects them to strict liability for loss of assets in custody either through fraud or negligence at either the global custodian or sub-custodian level.