Regulation 34 - Rights of investors in securities issued by special purpose distinct entity - Securities and Exchange Board of India (Issue and Listing of Securitized Debt Instruments and Security Receipts) Regulations, 2008

Rights of investors in securities issued by special purpose distinct entity. 34. (1) The trust deed or other instrument comprising the terms of issue of the securitised debt instruments issued by a special purpose distinct entity shall provide that investors holding such securitised debt instruments have such beneficial interest in the underlying debt or receivables as may have been conferred by the scheme. (2) In the event of failure of the special purpose distinct entity to redeem any securitised debt instruments offered through an offer document or listed, within the time and in accordance with the conditions stated in the offer document or other terms of issue, the investors holding not less than ten per cent in nominal value of such securitised debt instruments shall be entitled to call a meeting of all such investors. (3) In such meeting, the investors may move a motion to (a) call upon the trustee and the special purpose distinct entity to wind up the scheme and distribute the realisations; (b) remove the trustee; (c) appoint a new trustee in place of the one removed under clause (b): Provided that any such decision shall be taken by means of a special resolution of the investors of the scheme and sections 179 and 189 of the Companies Act, 1956 (1 of 1956) shall mutatis mutandis apply to such special resolution: Provided further that the new trustee appointed under clause (c) is registered with the Board under these regulations or is exempted from such registration. (4) The trustee and the special purpose distinct entity shall take all reasonable steps to carry out the resolutions passed by the investors under sub-regulation (3). (5) Any reasonable expenses incurred in calling and holding a meeting under sub-regulation (3) and any reasonable expenses incurred by the trustee or the new trustee, as the case may be, in winding up the scheme and incidental activities shall be met from or reimbursed out of realisations from the asset pool. (6) The terms of issue of securitised debt instruments shall not be adversely varied without the consent of the investors. (7) For purposes of sub-regulation (6), investors shall be deemed to have given their consent to variation if and only if twenty one days notice is given to them of the proposed variation and it is approved by a special resolution passed by them through postal ballot. (8) Sections 189 and 192A of the Companies Act, 1956 (1 of 1956) and the rules framed thereunder shall mutatis mutandis apply to the special resolution referred to in sub-regulation (7).