French Monetary and Financial Code
In forceI. - The AIF's custodian is liable to the AIF or to the unitholders or shareholders for the loss by the custodian, or by a third party to whom custody has been delegated, of financial instruments held in custody in accordance with II of article L. 214-24-8.
In the event of the loss of financial instruments held in safekeeping, the custodian shall return to the AIF financial instruments, including money market instruments, of the same type or their equivalent in monetary value without unnecessary delay. The custodian shall not be liable if it proves that the loss resulted from an external event and that all the conditions of Article 101 of Commission Delegated Regulation (EU) No 231/2013 of 19 December 2012 are met.
The depositary shall be liable to the AIF or to the unit-holders or shareholders of the AIF for any other loss resulting from the negligence or wilful misconduct of its obligations.
II. - The delegation to a third party of the custody of the assets of the AIF referred to in II of article L. 214-24-8 does not exonerate the custodian from its liability.
III. - By way of derogation from II, the custodian is exonerated from its liability if it is able to prove that :
1° All the obligations relating to the delegation of its custodian duties referred to in Article L. 214-24-9 have been fulfilled ;
2° A written agreement between the custodian and the third party expressly transfers the custodian's liability to the third party and allows the AIF or its management company to file a claim against the third party for the loss of financial instruments or for the custodian to file a claim on their behalf;
3° A written agreement between the depositary and the AIF or its management company expressly authorises a discharge of the depositary's liability and establishes the objective reason justifying such a discharge.
IV. - By way of derogation from II, where the legislation of a third country requires certain financial instruments to be held by a local entity and no local entity meets the requirements relating to delegation as defined in the second paragraph of Article L. 214-24-9, the General Regulation of the Autorité des marchés financiers shall stipulate the conditions under which the depositary may discharge its responsibility.
