All assets of a UCITS fund are held on behalf of the fund investors by which entity?

• A. A depository
• B. the investment manager
• C. the alternative investment fund manager
• D. a bank

Answer: (A)

In UCITS funds, safekeeping and oversight of the fund’s assets are provided by a depository. This depository is typically a bank or credit institution appointed to hold the securities and cash, ensure assets are properly segregated, verify ownership, and monitor transactions and cash flows. This separation protects investors by ensuring assets aren’t misused and that there’s independent custody, separate from the fund’s managers. The investment manager makes the investment decisions, while an AIFM applies to non-UCITS funds, so they don’t hold the assets on behalf of investors. While a bank can fulfill the depository role, the formal entity described by the requirement is the depository.