Regulation 23 - Termination of the Agreement with the Collective Investment Management Company - Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999

Termination of the Agreement with the Collective Investment Management Company 23. (1) The agreement referred to in regulation 20 entered into by the trustee with the Collective Investment Management Company may be terminated- (a) if the Collective Investment Management Company is in the course of being wound up as per the provisions of the Companies Act, 1956; or (b) 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 terminating the agreement with the Collective Investment Management Company and the prior approval of the Board has been obtained; or (c) if in the interest of the unit holders the Board or the trustee, after obtaining prior approval of the Board, and after giving an opportunity of being heard to the Collective Investment Management Company, decide to terminate the agreement with the Collective Investment Management Company. (2) Upon termination of agreement under sub-regulation (1), another Collective Investment Management Company, registered with the Board, shall be appointed by the trustee within three months from the date of such termination. (3) The Collective Investment Management Company so removed shall continue to act as such at the discretion of trustee or the trustee itself may act as Collective Investment Management Company till such time as new Collective Investment Management Company is appointed. (4) The Collective Investment Management Company appointed under sub-regulation (2) shall stand substituted as a party in all the documents to which the Collective Investment Management Company so removed was a party. (5) The Collective Investment Management Company so removed shall continue to be liable for all acts of omission and commissions notwithstanding such termination. (6) If, none of the Collective Investment Management Company, registered under these regulations, consent to be appointed as Collective Investment Management Company within a further period of three months, then the trustee may wind up the 2 [collective investment scheme]. (7) An agreement for managing 3 [collective investment scheme] property shall be executed in favour of the new Collective Investment Management Company subject to all the rights and duties as specified in the regulations. ************** NOTES:- 1 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014, w.e.f. 9-1-2014. 2 ibid. 3 ibid.