S.L. 370.32 Art. 51Functions and duties of the depositary.

(1) The scheme or the fund manager on behalf of the scheme shall appoint a depositary. The scheme or the fund manager on behalf of the scheme shall entrust the assets of the scheme to the depositary for safekeeping in the interests of the scheme and in the interests of the unit-holders thereof.

(2) The depositary shall carry out such functions and duties as shall be required in accordance with these regulations, the terms of the depositary agreement entered into with the scheme, the conditions of the depositary’s investment services licence and such other requirements as may be laid down by the competent authority. The terms of the depositary agreement shall distinguish between financial instruments that can be held in custody and other assets.

(3) The depositary shall maintain proper and adequate records and accounts of the assets of all the schemes with which it has entered into a custody agreement. The records and accounts shall identify the schemes to which such assets belong and shall clearly indicate that the assets of every scheme are separate and distinct from the assets belonging to the depositary and from the assets of other schemes with which the depositary has entered into a custody agreement.

(4) The records and accounts shall, upon due notice being given by the depositary, indicate the instances where any pledge or other right over assets has been given by the respective schemes to any third parties and where any order by any Court has been made in connection with such assets.

(5) The depositary entrusted with the safekeeping of the assets belonging to a scheme shall, to every extent reasonably possible, segregate in a proper manner the assets of each scheme from the assets belonging to the depositary and from the assets of other schemes: Provided that the depositary may, with the written consent of the scheme and in accordance with the terms and conditions of the depositary agreement entered into with the scheme, the conditions of any investment services licence and such other requirements as may be prescribed by the competent authority and without prejudice to the scheme’s right of ownership over the assets held under control, place and keep such assets in a common pool of identical assets or otherwise deposit them in a clients’ or common account.

(6) The depositary shall make appropriate arrangements for the protection of assets held and shall ensure that such assets are placed under adequate systems to safeguard them from damage, misappropriation or other loss and which permit the delivery of such assets only in accordance with the terms and conditions of the depositary agreement entered into with the scheme.

(7) Where it is not reasonably possible for the depositary to carry out any of the duties specified in these regulations due to the nature of the assets and of the custody agreement, the said duties may be varied with the written consent of the scheme and in accordance with the terms and conditions of the depositary agreement entered into with the scheme, the conditions of the investment services licence and such other requirements as may be prescribed by the competent authority.

(8) The depositary shall carry out monitoring, oversight, administrative and such other functions where applicable in accordance with the terms and conditions of the custody agreement.