Commentary by Katarzyna Majer-Gębska in an article for Parkiet.pl

Is the Draft Amendment to the Investment Funds Act (UDER10) a Step in the Right Direction?

The draft amendment to the Investment Funds Act (UDER10), which provides for the removal of the unlimited liability of the depositary for ensuring that a fund’s (or alternative investment company’s) activities comply with the law, raises an important question: is this a step in the right direction?

Katarzyna Majer-Gębska – Managing Counsel and Attorney-at-law in the Capital Markets Law Department – shared her insights on this issue with the financial portal Parkiet.pl.

According to our expert:
The current wording of Article 72(1)(10) and Article 81c(1)(10) of the Act is a classic example of overregulation (so-called gold-plating), not only exceeding the requirements of EU law but also disproportionately expanding the liability of the depositary. Such a structure discourages the provision of depositary services, limiting market competition – especially for smaller or independent investment fund companies (TFIs) – or even making it impossible for some entities to manage open-ended investment funds, for which only banks can act as depositaries.

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