In addition, it provides that the responsibility of a custodian is not affected by the delegation of its functions.50 However, where a delegate is responsible for the loss of a financial instrument, the custodian can avoid liability if he has set up the delegation in accordance with the applicable requirements; The terms of the custodian`s designation provide for the potential of the custodian`s ability to meet his or her responsibility in such a scenario; and if the terms of the delegation agreement expressly provide for the transfer of responsibility to the delegate, while the FIA or the manager or custodian himself is able to make a claim against the delegate in both cases on their behalf51. The requirement for the appointment of a custodian imposed by the manager depends on a number of factors: under the directive, the custodian may delegate his duties as custodian provided that the functions are not delegated to circumvent the directive, that the custodian has an objective reason for delegation and that he exercises the necessary expertise, diligence and diligence in the selection , the appointment and ongoing control of the sub-conservative. In addition, the sub-custodian (i) must have structures and expertise appropriate and proportionate to the nature, scope and complexity of the assets of the AIF (or the manager acting on behalf of the AIF) and in proportion to the assets of the AIF (or manager); (ii) with regard to the retention of financial instruments, they are subject to effective prudential regulation and supervision within its local jurisdiction and regular external audits; (iii) separate the assets of hedge funds from their own assets (in practice, the feasibility of this condition) and the assets of the custodian; and (iv) not to make use of FIA assets without the explicit agreement of the FIA (or the manager acting on behalf of the FIA). The sub-custodian must, in the performance of his duties, act honestly, fairly, independently and in the interests of the FIA and FIA investors and fulfil certain general obligations under the directive. The manager himself defines the range of institutions that can serve as custodians for aAIF18 and provides that managers are excluded from this capacity for the AAFs that manage them19.