Regulation 22 - Termination of trusteeship - Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999

Termination of trusteeship 22. (1) The trusteeship of a trustee shall come to an end- (a) if the trustee ceases to be trustee under the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993; or (b) if the trustee is in the course of being wound up; or (c) if unit holders holding at least three-fourths of the nominal value of the unit capital of the 1 [collective investment scheme] pass a resolution for removing the trustee and the Board approves such resolution; or (d) if in the interest of the unit holders, the Board, for reasons to be recorded in writing decides to remove the trustee for any violation of the Act or these regulations committed by them; or Provided that the trustee shall be afforded reasonable opportunity of hearing before action is taken under this clause; (e) if the trustee serves on the Collective Investment Management Company a notice of not less than three months expressing its intention not to continue as trustee. (2) On termination of the trusteeship under sub-regulation (1), another trustee, eligible to be appointed under regulation 18, shall be appointed by the Collective Investment Management Company. (3) The appointment of the new trustee under sub-regulation (2), shall be completed within three months from the date the previous trusteeship came to an end. (4) The Board may notwithstanding anything contained in regulation 18 appoint any person as a trustee if the Collective Investment Management Company fails to appoint a trustee under sub-regulations (2) and (3). (5) The trustee appointed under sub-regulations (3) and (4) shall stand substituted as a trustee in all the documents to which the trustee so removed was a party. (6) The person appointed by the Board shall apply to the Court for an order directing the Collective Investment Management Company to wind up the 2 [collective investment scheme]. (7) A trust deed in the form as specified under regulation 16 shall be executed by the Collective Investment Management Company in favour of the trustee so appointed and from the date of such appointment, trustees shall be subject to all the rights and duties as specified in the regulations. (8) The trustee so removed shall from such date be discharged from complying with the obligations under the trust deed but shall remain liable for any action taken by them before such removal. ************* NOTES:- 1 ibid. 2 ibid.