The role played by depositaries

There has been more focus on depositaries recently as a result of Cayman’s new Private Funds Law and the FCA’s decision to look into decisions taken by the depositary at Woodford Investment Management.

It is usually only when something goes wrong that the role depositaries play in fund governance gets any coverage in the media. That is what happened now that the FCA has launched an enquiry into the role played by the Northern Trust, the depositary for Woodford Investment Management. In particular the FCA is looking at Northern Trust in relation to the events that led to the gating of the Woodford Equity Income fund last June.

Northern Trust was supposed to have been overseeing the work done by Link, Woodford’s ACD. This includes ensuring that are following the rules with regard to pricing, dealing, borrowing restrictions and portfolio valuation.

For more on this story see the August edition of The NED.

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