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What Is an ‘ACD’?

The model used to deliver regulated investment funds to investors in the UK can sometimes seem complex. It’s actually designed to ensure clearly delineated roles, with checks and balances to maintain a focus on investor protection.

At the heart of the model sit two key players:

  • The Authorised Corporate Director (ACD), which is there to run the fund on a day-to-day basis; and 
  • The Depositary, which provides oversight of the ACD’s activities and therefore must be independent of it. 


The ACD is legally responsible for the day-to-day management of a fund and must ensure that it’s managed within the detailed regulations applying to it.

It’s usual for the day-to-day investment management of a fund to be delegated by an ACD to a regulated investment manager (often referred to as an investment adviser). The investment manager may be part of the same group as the ACD, or the ACD may appoint a firm which has no other legal relationship with them.  Either way, the ACD must ensure that the investment manager invests the fund’s assets in line with the objectives, strategy and investment principles of the fund and with the regulations.  It’s important to note that, even if the ACD delegates investment management, the Financial Conduct Authority (FCA – the UK regulator) still regards the ACD, rather than the investment manager, as being responsible for how the fund is managed.  That’s why it’s so vital for the ACD and the investment manager to work closely together and to be able to see ‘eye to eye’ about how the fund should be run.

The Depositary

The Depositary must be independent from the ACD. It has an important role to play in terms of investor protection. It’s responsible for the safekeeping of a fund’s assets, making sure they’re held separately from those of the ACD.  In practice, most UK Depositaries delegate the safekeeping of assets to a custodian, which is often a specialist part of a large bank, although it is an independent entity, with its business separated from the rest of the bank. 

The Depositary must oversee the custodian and ensure that it holds the assets correctly and in line with the rules. The Depositary also has an important oversight function in respect of the ACD’s operations - ensuring a fund’s investments are of a type permitted by the rules and by the fund’s own investment objective. It must also make sure that the fund is valued correctly and that the ACD has proper procedures to process correctly the buying and selling of shares or units in a fund by investors.  Finally, the Depositary also monitors the fund’s cash flows.

The regulatory requirement in the UK for the Depositary to be structurally independent of the ACD, given its important oversight role, is a higher standard than applies in much of the EU.


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