Paragraph 2: Custodian

I. - Only the following may act as UCITS depositories:

1° The Banque de France ;

2° The Caisse des dépôts et consignations ;

3° Credit institutions having their registered office in France;

4° Credit institutions having their registered office in a Member State of the European Union or party to the Agreement on the European Economic Area other than France, through their branches established on French territory carrying out their depositary business under the same conditions as the credit institutions mentioned in 3° ;

5° Investment firms with their registered office in France, whose own funds are not less than the requirements calculated on the basis of the approach chosen in accordance with Article 315 or Article 317 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013.

In order to carry out the activity of UCITS custodian, the entities mentioned in 3° to 5° must be authorised to carry out the activity of custody account keeper for financial instruments pursuant to Article L. 542-1.

II. - In order to carry out the activity of UCITS custodian, the entities referred to in 3° and 4° of I must draw up a set of specifications specifying the conditions under which they intend to perform their duties in compliance with their obligations under paragraphs 1 and 2 of this sub-section and indicating their organisational structure.

The Autorité des marchés financiers shall approve the specifications and subsequent amendments in accordance with the procedure set out in the second paragraph of Article L. 532-1.

III. - To carry out the activity of UCITS custodian, the investment firms referred to in 5° of I must:

1° Draw up a UCITS depositary programme of operations approved by the Autorité des marchés financiers. In order to approve a programme of operations, the AMF shall verify that the investment firm concerned meets the following conditions:

a) It has in place adequate policies and procedures sufficient to ensure compliance by the entity, including its directors and employees, with the obligations incumbent on UCITS depositaries ;

b) It has sound administrative and accounting procedures, internal control mechanisms, effective risk-assessment procedures and effective control and safeguard arrangements for its information-processing systems for the performance of the UCITS depositary business;

c) It maintains and applies effective organisational and administrative arrangements in order to take all reasonable steps to prevent conflicts of interest in the performance of the UCITS depositary business;

d) It shall ensure that a record is kept of any service it provides, any activity it undertakes and any transaction it enters into, to enable the Autorité des marchés financiers to carry out its supervisory duties and its activities in controlling the activities of UCITS depositaries;

e) It takes reasonable steps to ensure the continuity and regularity of the performance of its depositary functions by using appropriate and proportionate systems, resources and procedures, including for the performance of its UCITS depositary activities;

f) All members of its management body and senior management have sufficient knowledge, skills and experience;

g) Its management body collectively possesses the appropriate knowledge, skills and experience necessary to understand the depositary's business, including the principal risks involved;

2° Obtain authorisation from the Autorité de contrôle prudentiel et de résolution. When granting authorisation, the Autorité ensures that the investment firm has a programme of operations approved by the Autorité des marchés financiers in accordance with 1° and complies with the conditions set out in the last two paragraphs of I. This authorisation and subsequent amendments thereto are issued in accordance with the same procedures as those set out in articles L. 532-1 to L. 532-5 for applications relating to the investment services mentioned in 4 or 5 of article L. 321-1.

IV. - UCITS depositaries must at all times meet the conditions for access to the activity of depositary provided for in this article.