(1) The trustee shall have a right:—
(a) to obtain from the Collective Investment ManagementCompany such information as is considered necessary by thetrustee.
(b) to inspect the books of account and other records relating tothe 42 [collective investment scheme].
(2) The trustee shall ensure that the Collective Investment ManagementCompany has:—
(a) the necessary office infrastructure;
(b) appointed all key personnel including managers for the 43 [collective investment scheme] and submitted their bio-data which shall contain theeducational qualifications and past experience in the areas relevant for fulfilling the objectives of the 44 [collective investment scheme]s;
(c) appointed auditors to audit the accounts of the 45 [collective investment scheme] fromthe list of auditors approved by the Board;
(d) appointed a compliance officer to comply with the provisions ofthe Act and these regulations and to redress investor grievances;
(e) appointed registrars to an issue and share transfer agent;
(f) prepared a compliance manual and designed internal controlmechanisms including internal audit systems;
(g) taken adequate insurance for the assets of the 46 [collective investment scheme];
(h) not given any undue or unfair advantage to any associates ofthe company or dealt with any of the associates in any mannerdetrimental to the interest of the unit holders;
(i) operated the 47 [collective investment scheme] in accordance with the provisions of thetrust deed, these regulations and the offer document of the 48 [collective investment scheme](s);
(j) undertaken the activity of managing 49 [collective investment scheme]s only;
(k) taken adequate steps to ensure that the interest of investors ofone 50 [collective investment scheme] are not compromised with the object of promoting theinterest of investors of any other 51 [collective investment scheme];
40 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014.
41ibid.
42ibid.
43ibid.
44ibid.
45ibid.
46ibid.
47ibid.
48ibid.
49ibid.
(l) minimum networth on a continuous basis and shall inform theBoard immediately of any shortfall;
(m) been diligent in empanelling the marketing agents and inmonitoring their activities.
(3) Where the trustee has reason to believe that the conduct of business ofthe 52 [collective investment scheme] is not in accordance with these regulations, trust deed and theoffer document of the 53 [collective investment scheme], the trustee shall forthwith take such remedialsteps as are necessary and shall immediately inform the Board of the actiontaken.
(4) The trustee shall be accountable for, and be the custodian of, the fundsand property of the respective 54 [collective investment scheme]s and shall hold the same in trust forthe benefit of the unit holders in accordance with these regulations and theprovisions of trust deed.
(5) The trustee shall be responsible for the calculation of any income due tobe paid to the 55 [collective investment scheme] and also for any income received in the 56 [collective investment scheme] to theunit holders.
(6) The trustee shall convene a meeting of the unit holders—
(a) whenever required to do so by the Board in the interest of theunit holders; or
(b) whenever required to do so on the requisition made by unitholders holding at least one-tenth of nominal value of the unit capitalof any 57 [collective investment scheme]; or
(c) when any change in the fundamental attributes of any 58 [collective investment scheme]Provided that no such change shall be carried out unless theconsent of unit holders holding at least three-fourths of nominalvalue of the unit capital of the 59 [collective investment scheme] is obtained.
Explanation :- For the purposes of this clause ―fundamentalattributes‖ means the investment objective and terms of a 60 [collective investment scheme].
(7) The trustee shall review :
(a) on a quarterly basis (i.e., by the end of March, June,September and December) every year all activities carried out bythe Collective Investment Management Company;
(b) periodically all service contracts relating to registrars to anissue and share transfer agents and satisfy itself that such contractsare fair and reasonable in the interest of the unit holders;
(c) investor complaints received and the redressal of the same bythe Collective Investment Management Company.
(8) (i) The trustee shall ensure that:—
(a) net worth of Collective Investment Management Company isnot deployed in a manner which is detrimental to interest of unitholders;
50 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014.
51ibid.
52ibid.
53ibid.
54ibid..
55ibid.
56ibid..
57ibid.
58ibid.
59ibid.
60ibid.
(b) property of each 61 [collective investment scheme] is clearly identifiable as 62 [collective investment scheme]property and held separately from property of the CollectiveInvestment Management Company and property of any other 63 [collective investment scheme];
(c) clearances or no objection certificate is obtained, in respect oftransactions relating to property of the 64 [collective investment scheme] from such authorityas is competent to grant such clearance or no objection certificate.
(ii) The trustee shall abide by the Code of Conduct as specified in the ThirdSchedule.
(9) The trustee shall furnish to the Board on a quarterly basis (i.e., by end ofMarch, June, September and December), every year—
(a) a report on the activities of the 65 [collective investment scheme];
(b) a certificate stating that the trustee has satisfied himself thataffairs of the Collective Investment Management Company and ofthe various 66 [collective investment scheme]s are conducted in accordance with theseregulations and investment objective of each 67 [collective investment scheme].
(10) The trustee shall cause:—
(a) the profit and loss accounts and balance sheet of the 68 [collective investment scheme]sto be audited at the end of each financial year by an auditorempanelled with the Board.
(b) each 69 [collective investment scheme] to be appraised at the end of each financial yearby an appraising agency.
(c) 70 [collective investment scheme] rated by a credit rating agency.
(11) A meeting of the trustees to discuss the affairs of the 71 [collective investment scheme] shall beheld at least twice in every three months in a financial year.
(12) The trustee shall report to the Board any breach of these regulations andhas had, or is likely to have, a materially adverse effect on the interests of unitholders as soon as they become aware of the breach.
(13) The trustee shall ensure that—
(a) the fees and expenses of the 72 [collective investment scheme] are within the limits asspecified in Part I of the Ninth Schedule;
(b) accounts of the 73 [collective investment scheme]s are drawn up in accordance with theaccounting norms as specified in Part II of the Ninth Schedule.
61 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014.
62ibid.
63ibid.
64ibid.
65ibid.
66ibid.
67ibid.
68ibid.
69ibid.
70ibid.
71ibid.
72ibid.
73ibid.
(c) accounts of the 74 [collective investment scheme] comply with the format of the balancesheet and the profit and loss account as specified in Part III of theNinth Schedule.
Termination of trusteeship