RIGHTS AND OBLIGATIONS OF THE TRUSTEE :
The trustee have a right to obtain from the CIMC such information as is considered necessary by the trustee and to inspect the books of accounts and other records relating to the scheme. The trustee should ensure that the CIMC has;
(i) the necessary office infrastructure;
(ii) appointed all key personnel including managers for the schemes and submitted their bio-data which shall contain the educational qualifications and past experience in the areas relevant for fulfilling the objectives of the schemes;
(iii) appointed auditors from the list of auditors approved by SEBI to audit the accounts of the scheme;
(iv) appointed a compliance officer to comply with the provisions of the Act and these regulations and to redress investor grievances;
(v) appointed registrars to an issue and share transfer agent.
(vi) prepared a compliance manual and designed internal control mechanisms including internal audit systems;
(vii) taken adequate insurance for the assets of the scheme;
(viii) not given any undue or unfair advantage to any associates of the company or dealt with any of the associates in any manner detrimental to the interest of the unit holders;
(ix) operated the scheme in accordance with the provisions of the trust deed, these regulations and the offer document of the scheme(s);
(x) undertaken the activity of managing schemes only;
(xi) taken adequate steps to ensure that the interest of investors of one scheme are not compromised with the object of promoting the interest of investors of any other scheme;
(xii) minimum networth on a continuous basis and shall inform SEBI immediately of any shortfall;
(xiii) been diligent in empanelling the marketing agents and in monitoring their activities.
The trustee should forthwith take such remedial steps as are necessary and immediately inform SEBI of the action taken where the trustee believes that the conduct of business of the scheme is not in accordance with the regulations. The trustee should be accountable for, and act as the custodian of the funds and property of the respective schemes and should hold the same in trust for the benefit of the unit holders in accordance with these regulations and the provisions of trust deed. The trustee should be responsible for the calculation of any income due to be paid to the scheme and also for any income received in the scheme to the unit holders. The trustee is required to convene a meeting of the unit holders on requisition of SEBI or unit holders holding at least one-tenth of
nominal value of the unit capital of any scheme or when any change in the fundamental attributes of any scheme which affects the interest of the unit holders is proposed to be carried out. However, no such change should be carried out unless the consent of unit holders holding at least three-fourths of nominal value of the unit capital of the scheme is obtained.
The trustee should review on a quarterly basis i.e. by the end of March, June, September, and December every
year :
– all activities carried out by the CIMC;
– periodically all service contracts relating to registrars to an issue and share transfer agents and satisfy itself that such contracts are fair and reasonable in the interest of the unit holders;
– investor complaints received and the redressal of the same.
The trustee should ensure that net worth of CIMC is not deployed in a manner which is detrimental to interest of unit holders and also that the property of each scheme is clearly identifiable as scheme property and held separately from property of the CIMC. Clearances or no objection certificate should be obtained, in respect of transactions relating to property of the scheme from such authority as is competent to grant such clearance or no objection certificate. The trustee should abide by the Code of Conduct as specified in the Third Schedule.The trustee is required to furnish to SEBI on a quarterly basis every year, a report on the activities of the scheme and a certificate stating that the trustee has satisfied himself that affairs of the Collective Investment Management Company and of the various schemes are conducted in accordance with these regulations and investment objective of each scheme.
The trustee should cause:
(a) the profit and loss accounts and balance sheet of the schemes to be audited at the end of each financial year by an auditor empanelled with SEBI.
(b) each scheme to be appraised at the end of each financial year by an appraising agency.
(c) scheme to be rated by a credit rating agency.
A meeting of the trustees to discuss the affairs of the scheme should be held at least twice in every three months.
The trustee should report to SEBI any breach of these regulations that has, or is likely to have, made materially adverse effect on the interests of unit holders, as soon as they become aware of the breach. The trustee should ensure that the fees and expenses of the scheme are within the limits as specified and the accounts of the schemes are drawn up in accordance with the accounting norms as specified and should comply with accounts of the scheme and the format of the balance sheet and the profit and loss account as specified in these regulation.