ALFI, the Association of the Luxembourg Fund Industry, and the Luxembourg Bankers' Association, otherwise known as the ABBL, have issued a revised version of their guidelines and recommendations for depositaries.

This second release of voluntary rules covers Undertakings for Collective Investment in Transferable Securities or UCITS, also aiming to improve certain sections of the first set of guidelines (which date from July 2013) which covered oversight duties and cash monitoring for alternative investement funds (AIFs).

The two bodies have stated: "The analysis behind the new guidelines has been performed according to the following axis: fiduciary oversight obligations (subscription/redemptions, valuation, investment restrictions, timely settlement of transactions, dividend/income distribution as well as cash flow monitoring), stakeholders (ManCo, AIFM, Fund (UCITS/AIF), Depositary, Delegates), and types of controls (due diligence, assessment of policies and procedures) together with associated frequencies."

In 2015 financial firms other than banks began to provide depositary services in Luxembourg for the first time. Since then, the market has evolved.

Depositaries provide three types of service: asset and ownership verification, cash monitoring and generally keeping an eye on things. Trust companies have realised that asset and ownership verification requires a great deal of document checking and can rely heavily on whatever has been done on the fund administration side of the business.