Questions over prime broker/depository discharge

Prime broker/depository agreements discharging liability for restoring assets under AIFMD are likely to face scrutiny


"Even if it's not your fault, it's your responsibility."
Terry Pratchett, A Hat Full of Sky

Strict legal liability was imposed on depositories for restitution of lost assets in the wake of systemic failures such as Lehman and major frauds like Madoff. When the proposal first surfaced in the alternative investment fund managers directive (AIFMD), depositories initially asserted that assets held by prime brokers should be incorporated into their sub-custody networks. 

If they were expected to pick

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