The latest issue of the Hedge Fund Journal includes INDOS Financial’s article “Depositary-Lite: Simple as the theory sounds?”. The article highlights the issues which many hedge funds may experience when trying to identify so-called ‘depo-lite’ service providers, particularly in the area of Article 21(9) oversight. At the time of writing the industry urgently awaits clarity from the FSA as to whether they will remove their ‘gold plating’ of the AIFMD and allow one or more firms (as contemplated by the level 1 text, rather than the FSA’s single firm approach) to perform the depo-lite functions. Persisting with the current gold plating would be a big issue for the industry and exacerbate the issues highlighted in the article. Latest thoughts are this will be clarified in an HM Treasury/ FSA publication over the next two weeks.