Who Guards the Guardians? The Depositary in UK UCITS Funds

In our earlier article on UCITS in the UK, we looked at what makes these funds tick. Today we turn to one of the most important – and least glamorous – characters: the depositary.

If UCITS were a theatre production, the fund manager would be the star on stage, the investors the audience, and the regulator the stern critic in the stalls. And the depositary? Well, that’s the backstage safety officer – unseen by most, but ensuring nobody trips over the cables, the cash box isn’t pilfered, and the lights don’t go out mid-performance.

In practice, the depositary is a legally mandated guardian whose role is central to protecting investors from mishaps, mismanagement, and occasional creative accounting.  It’s not just there for window-dressing in a prospectus; it carries real duties, real liability, and very real consequences if it gets things wrong.