Custodians could soon be on the hook for clients’ losses across the European Union, unless they can convince the European Commission to drop proposals that would reinforce a pair of decisions by the French courts this year.

Charlie McCreevy, the European Commissioner for the Internal Market and Services, said this month that the reaction to the fraud perpetrated by US conman Bernard Madoff had revealed that EU countries had interpreted in different ways the Ucits directive - legislation intended to protect retail investors.