Regulation 85 - Rights and obligations of the trustees - Securities and Exchange Board of India (Mutual Funds) Regulations, 1996

1 [Rights and obligations of the trustees. 85 . (1) The trustees and the MF Lite asset management company shall enter into an investment management agreement. (2) The investment management agreement shall contain such clauses as may be specified by the Board and such other clauses as are necessary for the purpose of making investments. (3) The trustees shall be accountable for, and be the custodian of, the funds and property of the respective mutual fund lite schemes and shall hold the same in trust for the benefit of the unitholders in accordance with this chapter and the provisions of trust deed. (4) The trustee shall have satisfactory wherewithal with respect to infrastructure, personnel, systems etc. as may be required for the proper discharge of its duties under these regulations. (5) The trustee shall oversee activities of the mutual fund lite asset management company in the interest of the unitholders and obtain periodic reports on its activities and status of compliance with applicable regulations in the manner as may be specified by the Board. (6) The trustees shall have the right to seek information from the mutual fund lite asset management companies in accordance with the trust deed. (7) Where the trustees have reason to believe that the conduct of the business of the mutual fund lite is not in accordance with these regulations or detrimental to the interest of the unitholders, they shall forthwith take such remedial steps, as are necessary and shall immediately inform the Board of such conduct and the action taken by them. (8) The trustees shall periodically review the status of unit holders complaints and the redressal of the same by the mutual fund lite asset management company. (9) The trustee shall provide consent in case of change in control of the mutual fund lite asset management company. (10) The trustees shall ensure that mutual fund lite asset management company has not given any undue or unfair advantage to any associates or dealt with any of the associates of the mutual fund lite asset management company in any manner detrimental to interest of the unitholders. (11) Each trustee shall file the details of his transactions of dealing in securities with the Mutual Fund Lite within the time and manner as may be specified by the Board from time to time. (12) The trustees shall take steps to ensure that the transactions of the mutual fund lite are in accordance with the provisions of the trust deed. (13) The trustees shall obtain the consent of the unitholders (a) whenever required to do so by the Board in the interest of the unitholders; or (b) whenever required to do so on the requisition made by three-fourths of the unitholders of any mutual fund lite scheme; or (c) when the majority of the trustees decide to wind up a scheme in terms of clause (a) of sub regulation (2) of regulation 39 or prematurely redeem the units of a close ended scheme. (14) The trustees shall call for the details of transactions in securities by the key personnel of the mutual fund lite asset management company in his own name or on behalf of the mutual fund lite asset management company and shall report to the Board, as and when required. (15) The trustees shall quarterly review all transactions carried out between the mutual fund lite, mutual fund lite asset management company and its associates. (16) The trustees shall ensure that there is no conflict of interest between the manner of deployment of its networth by the mutual fund lite asset management company and the interest of the unit- holders. (17) The trustees shall abide by the Code of Conduct as specified in PART-A of the Fifth Schedule. (18) The trustees shall give their comments on the report received from the mutual fund lite asset management company regarding the investments by the mutual fund lite in the securities of group companies of the sponsor. (19) The trustee shall ensure that the trust property is properly protected, held and administered by proper persons and by a proper number of such persons. (20) The trustees shall also exercise due diligence on such matters as may be specified by the Board from time to time. (21) Notwithstanding anything contained in sub-regulations (1) to (20), the trustees shall not be held liable for acts done in good faith if they have exercised adequate due diligence and acted as per the terms of the trust deed. ] ************** NOTES:- 1. Inserted vide Notification No.SEBI/LAD-NRO/GN/2024/221 dated 16-12-2024 w.e.f. ninetieth day from the date of their publication in the Official Gazette