Regulation 11 - Obligations of trustees - Securities and Exchange Board of India (Issue and Listing of Securitized Debt Instruments and Security Receipts) Regulations, 2008

Obligations of trustees 11. (1) A trustee shall carry out his duties and perform his functions under these regulations, the trust deed or other document, with due care and diligence. (2) The trustees shall ensure that the covenants in the trust deed and any other transaction document are complied with by the concerned parties. 1 [(3) A trustee shall,- (a) supervise the implementation of the covenants regarding creation of security for the securitised debt instruments; (b) do such acts as are necessary in the event the security becomes enforceable and supervise the enforcement of the security in the interest of the investors; (c) carry out such acts as are necessary for resolving the grievances of the investors and for the protection of interest of the investors; ensure on a continuous basis that the trust property of a particular scheme/tranche is available at all times to pay the securitised debt instruments holders of that particular scheme/tranche; (e) exercise due diligence to ensure compliance by the originators, with the listing agreements (if applicable), the trust deed or any other transaction document and if the originator is a banking company or non-banking financial company as defined in the Reserve Bank of India Act, 1934, trustee shall ensure that it has complied with the guidelines prescribed for securitisation by Reserve Bank of India; (f) take appropriate measures for protecting the interest of the investors including informing the board about any action, legal proceeding, etc., initiated against it in respect of any material breach or noncompliance by it, of any law, rules, regulations, directions of the Board or of any other regulatory body; (g) ensure that the securitised debt instruments have been repaid or redeemed in accordance with the provisions and conditions under which they were offered to the investors; (h) call for periodic reports from the originator regarding the performance of the underlying asset pool, atleast on quarterly basis; (i) communicate to the investors regarding the compliance by the servicer with its obligations and the actions taken thereof, atleast on quarterly basis; (j) obtain a certificate from the auditor(s) of originator regarding the disclosures of underlying asset pool assigned to the securitization trust, as made by the originator, on quarterly basis; (k) share such reports and auditors certificate as received from the originator or the auditor(s) of originator, with the credit rating agency which is rating the securitised debt instrument; (l) call a meeting of all the investors on a requisition, in writing signed by at least one-tenth of investors in value for the time being outstanding or at the occurrence of an event, which constitutes a servicer default or which in the opinion of the trustees affects the interest of the investors; (m) maintain the net worth as per the requirements specified in these regulations on a continuous basis and inform the Board immediately in respect of any shortfall in the net worth and take necessary corrective action to restore the net worth within a period of six months; (n) ensure that any change in registration status or any administrative, civil or penal action taken by Board or any material change in financial position which may adversely affect the interests of investors is promptly informed to the investors; (o) not relinquish responsibility as trustee in respect of the issue, unless and until another trustee is appointed in its place; (p) have necessary infrastructure to discharge its duties including the following: (i) collecting information and reports from servicers/originator; (ii) generating cash flow reports, payment reports and meet all reporting requirements required under the Board's or Reserve Bank of India's guidelines/circulars; (iii) recording investor information; (iv) entering and maintaining data for the special purpose distinct entity, including cash flows, audited financials, taxation aspects etc.; (v) issuing cheques/demand drafts or generating RTGS/NEFT requests etc., for interest and principal payments; (vi) sufficient access controls to ensure confidentiality of data; (vii) sufficient systems for backup and disaster recovery. (q) appoint a compliance officer for performing duties including: (i) monitoring the compliance of the acts, rules and regulations, notifications, guidelines, instructions, etc., issued by the Board, Central Government and State Government(s); (ii) redressal of investors grievances. ] 2 [ (r) redress investor grievances promptly but not later than twenty-one calendar days from the date of receipt of the grievance and in such manner as may be specified by the Board. ] ************* NOTES:- 1. Inserted vide Notification No. SEBI-NRO/OIAE/GN/2015-16/001 dated 09-04-2015 2. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/146 dated 16-08-2023