Indos Financial, a UK-baed independent depositary focused on alternative investments, has received Financial Conduct Authority approval to extend its licence to become a so-called full depositary.
It is the first time the FCA has issued such an authorisation for a non-bank financial services provider in the UK since the AIFMD regime came into force in 2014.
Indos’ existing authorisation has seen it build up its business as a depositary-lite provider, servicing non-EU funds and UK private equity, property and debt funds. In the past three years it has grown its client base to some 70 funds from 56 managers, representing some $14bn of assets.
With the additional authorisation from the FCA, it will now be able to service a broader range of authorised alternative investment funds, including the UK’s £164bn investment trust (closed ended funds) market. It will also be able to service funds outside the restrictions applicable to private equity and property depositaries.
Indos said that its growth in the past three years reflected ongoing demand for independent depositary services providers, and that it was therefore a “natural extension” to apply for additional authorisation.
“We have now responded to a clear gap in the alternative funds market for an independent depositary that has a full suite of regulatory permissions and the flexibility to act for a diverse range of funds,” Indos said in a statement.
“We have already won our first full depositary mandate in the UK and expect several more to follow over the coming months. The timing of the authorisation also positions us to capitalise from depositary provider changes we expect to occur due to the AIFMD depositary derogation, whereby UK funds using non-UK depositaries will need to appoint a UK depositary, coming to an end in July 2017.”