Regulation 49I - Duties of trustees - Securities and Exchange Board of India (Mutual Funds) Regulations, 1996

1 [ Duties of trustees 49I. (1) The trustees shall ensure that the asset management company has the necessary expertise, internal control systems and risk management mechanism to invest in and manage investments in real estate assets on a continuous basis. (2) The trustees shall monitor whether due diligence is exercised by the asset management company in managing the investments. (3) The trustees shall review the market price of the units during the year and shall recommend proportionate buy back of units from unit holders, if the units are traded at steep discount to the net asset value. (4) The magnitude of discount which shall amount to steep discount referred to in sub-regulation (3) shall be disclosed in the offer document. (5) The trustees shall ensure that only permissible investments are made by the asset management company. (6) The trustees shall ensure that all financial transactions of the real estate mutual fund scheme are made only through banking channels and that systems exist to exclude transactions in cash and unaccounted transactions. (7) The trustees shall lay down the criteria for empanelment of real estate brokers. (8) The trustees shall lay down the broad procedure to be followed by the assert management company while transacting in real estate assets. (9) The trustees shall require the asset management company to set up such systems and submit such reports to trustees, as may be necessary for them to effectively monitor the performance and functioning of the real estate mutual fund schemes. (10) The trustees shall include a confirmation on compliance with sub regulation (9) in their half yearly reports made to the Board. 2 [(11) The trustees shall obtain, wherever required under these regulations, prior in-principle approval from the recognised stock exchange(s) where units are proposed to be listed.] ] ************* NOTES:- 1 Inserted by the SEBI (Mutual Funds) (Amendment) Regulations, 2008, w.e.f. 16-4-2008. 2 Inserted by the SEBI (Mutual Funds) (Amendment) Regulations, 2009, w.e.f. 8-4-2009.