Schedule - 03 - Contents of the trust deed - Securities and Exchange Board of India (Mutual Funds) Regulations, 1996

THIRD SCHEDULE Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 [Regulation 15(1)] CONTENTS OF THE TRUST DEED The Trust Deed shall contain the following clauses namely :- 1. (i) A trustee in carrying out his responsibilities as a member of the board of trustees or of trustee company, shall maintain arms length relationship with other companies, or institutions or financial intermediaries or any body corporate with which he may be associated. (ii) No trustee shall participate in the meetings of the board of trustees or trustee company when any decisions for investments in which he may be interested are taken. (iii) All the trustees shall furnish to the board of trustees or trustee company particulars of interest which he may have in any other company, or institution or financial intermediary or any corporate body by virtue of his position as director, partner or with which he may be associated in any other capacity. 2. Minimum number of trustees must be mentioned in the Trust Deed. 3. The Trust Deed must provide that the trustees shall take into their custody, or under their control all the property of the schemes of the mutual fund and hold it in trust for the unitholders. 4. The Trust Deed must specifically provide that unitholders would have beneficial interest in the trust property to the extent of individual holding in respective schemes only. 5. The Trust Deed shall provide that it would be the duty of the trustees to act in the interest of the unitholders. 6. The Trust Deed shall provide that it is the duty of trustees to provide or cause to provide information to unitholders and board as may be specified by the board. 7. The Trust Deed shall provide that the trustees shall appoint an asset management company approved by the board, to float schemes for the mutual fund after approval by the trustees and Board, and manage the funds mobilised under various schemes, in accordance with the provisions of the Trust Deed and Regulations. The trustees shall enter into an Investment Management Agreement with the asset management company for this purpose, and shall enclose the same with the Trust Deed. 8. The Trust Deed shall provide for the duty of the trustee to take reasonable care to ensure that the funds under the schemes floated by and managed by the asset management company are in accordance with the Trust Deed and Regulations. 9. The Trust Deed must provide for the power of the trustees to dismiss the asset management company under the specific events only with the approval of Board in accordance with the Regulations. 10. The Trust Deed shall provide that the trustees shall appoint a custodian and shall be responsible for the supervision of its activities in relation to the mutual fund and shall enter into a custodian Agreement with the custodian for this purpose. 11. The Trust Deed shall provide that the auditor for the mutual fund shall be different from the Auditor of the asset management company. 12. The Trust Deed shall provide for the responsibility of the trustees to supervise the collection of any income due to be paid to the scheme and for claiming any repayment of tax and holding any income received in trust for the holders in accordance with the Trust Deed, Regulations. 13. Broad policies regarding allocation of payments to capital or income must be indicated in the Trust Deed. 14. The Trust Deed shall also explicitly forbid the acquisition of any asset out of the trust property which involves the assumption of any liability which is unlimited or shall not result in encumbrance of the trust property in any way. 15. The Trust Deed shall forbid the mutual fund 1 [***], to make or guarantee loans or take up any activity 4 [ which is ] in contravention of the Regulations. 16. Trusteeship fee, if any, payable to trustees shall be provided in the Trust Deed. 17. The Trust Deed shall provide that no amendment to the Trust Deed shall be carried out without the prior approval of the board and unitholders is obtained : Provided 5 [ **** ] that in case a Board of trustees is converted into a trustee company subsequently such conversion shall not require the approval of unitholders 6 [ : ] 7 [ Provided further that the provisions of this clause shall not be applicable in case of change in trust deed consequential to change in control of asset management company as per Regulation 22 (e). ] 18. The removal of the trustee in all cases would require the prior approval of the Board. 19. The Trust Deed shall lay down the procedure for seeking approval of the unitholders under such circumstances as are specified in the Regulations. 2 [ 3 [20. The Trust Deed shall state that a meeting of the trustees shall be held at least once in every two calendar months and at least six such meetings shall be held in every year.] 21. The trust deed shall specify the quorum for a meeting of the trustees : Provided that the quorum for a meeting of the trustees shall not be constituted unless one independent trustee or director is present at the meeting. 22. The trust deed shall state that the minimum number of trustees shall be four.] ************* NOTES:- 1 Words and the asset management company omitted by the SEBI (Mutual Funds) (Amendment) Regulations, 1998 w.e.f. 12-1-1998. 2 Clause 20 to 22 inserted by the SEBI (Mutual Funds) (Amendment) Regulations, 1999 w.e.f. 8-12-1999. 3 Substituted by the SEBI (Mutual Funds) (Third Amendment) Regulations, 2002 w.e.f. 30-7-2002. Prior to its substitution clause (20) read as under; 20. The trust deed shall state that a meeting of the trustees shall be held at least once in every three months and at least four such meetings shall be held in every year. 4. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 before it was read as not 5. Omitted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 before it was read as however 6. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 before it was read as . 7. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021