TERMINATION OF TRUSTEESHIP :

The trusteeship of a trustee should come to an end –

(a) If the trustee ceases to be trustee under SEBI (Debentures Trustees) Regulations, 1993; or

(b) if the trustee is in the course of being wound up; or

(c) if unit holders holding at least three-fourths of the nominal value of the unit capital of the scheme pass a resolution for removing the trustee and SEBI approves such resolution; or

(d) if in the interest of the unit holders, SEBI, for reasons to be recorded in writing decides to remove the trustee for any violation of the Act or these regulations committed by them or the trustee should be afforded reasonable opportunity of being heard before action is taken under this clause;

(e) if the trustee serves on the Collective Investment Management Company, a notice of not less than three months expressing intention of not to continue as trustee.

In such cases, another trustee should be appointed by the CIMC on the termination of the trusteeship. The appointment of the new trustee should be completed within three months from the date of termination of the previous trusteeship. If CIMC in unable to appoint trustee in requisite time period of three months, then SEBI can appoint any person as a trustee from its empanelled list. The new trustee appointed should stand substituted as trustee in all the documents, to which the trustee so removed was a party. A trust deed in the prescribed form as specified in these regulation shall be executed by the CIMC in favour of the trustee so appointed and from the
date of such appointment trustees shall be subject to all the rights and duties as specified in these regulations. The trustees so removed shall from such date be discharged from complying with the obligations under the trustdeed but shall remain liable for any action taken by them before such removal. The person appointed by SEBI should apply to the Court for an order directing the CIMC to wind up the scheme.