Bondoc & Asociatii’s lawyers Simona Petrisor and Florin Sandu are the authors of an article in the Butterworth JIBFL – “Don’t Trust the Trust”

Our colleagues, Simona Petrisor and Florin Sandu, members of the Bondoc si Asociatii SCA Banking & Finance practice, co-authored an article published in the Butterworth Journal of International Banking & Finance Law (JIBFL).

The article addresses the topic of custodianship of securities owned by collective investment undertakings such as UCITS and AIFs and whether the fiducia law provides sufficient protection to clients’ assets against the custodian’s creditors. In brief, the article explains why under Romanian law the custodianship of assets held by collective investment undertakings in Romania does not amount to a fiducia, the Romanian legal concept closest to a trust. This is mainly so because such custodianship fails to satisfy the conditions set for a fiducia by the Romanian law.  While the legal framework is still far from ideal and the insolvency regimes are not fully correlated in this regard, the article also discusses alternative safeguarding tools available under Romanian law designed to protect the assets belonging to collective investment undertakings from the creditors of the depositary and custodians/sub-custodians, including in the case of the latter’s insolvency.