Should the fund appoint a Prime Broker, a Custodian, and a Depositary?

The appointment of a prime broker, custodian or a depositary will vary depending on the strategy in question as well as the regulatory requirements to which the fund is subject. A fund may have all three (and for all three to be separate providers) or none, although investors should not forget that cash should be custodied through a traditional banking relationship.

Any service provider relationship should be governed by an agreement between the fund and the third party and the agreement should be made available to investors for their review.