ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has issued powers, functions and duties of debt securities trustees for issuance of debt securities both under the applicable private placement or public offering framework.
The SECP has issued SRO 15(I)/2017 to notify Structuring of Debt Securities Regulations, 2020, Monday.
The Debt Securities Trustees Regulations, 2012 have been repealed by the SECP.
Under the new regulations, the "debt securities trustee" means a person licensed by the Commission and appointed as debt securities trustee by an issuer through execution of trust deed.
The debt securities trustee shall enter into an agreement with the issuer for issuance of secured debt securities through execution of Trust Deed, which inter- alia contain that the debt securities trustee has agreed to act as a trustee under the Trust Deed for securing the interest of the debt securities holders.
The debt securities trustee would also ensure that the NOC is obtained by the issuer from the Commission before the creation of trust relating to debt securities and the said trust is registered with relevant provisional authorities.
The debt securities trustee would regularly monitor payment of profits to the debt security holders and redemption of the debt security and report the same to the Commission and the securities exchange on semi-annual basis, highlighting default, if any.
The trustee would maintain proper record of the complaints received and ascertain that the debt securities have been converted, where required, in accordance with the provisions and conditions under which they were issued and call a general meeting of all debt securities holders, within such time period as provided in the Trust Deed.
Every debt securities trustee shall designate any senior management officer as a compliance officer, the SECP said.
The debt securities trustee shall take all reasonable steps to ensure that no conflict of interest arises while undertaking any transaction and performing its duties.
The debt securities trustee shall also properly maintain the records including all contracts relating to the issue to which it is acting as a debt securities trustee including but not limited to the Trust Deed, letter of hypothecation, letter of lien, memorandum of deposit of title deed and the charge registration certificate, where applicable etc; statements relating to profit payment and principal redemption; minutes of the general meeting of the debt security holders and special resolution passed therein and other specified documents.
The debt securities trustee shall ensure that the record referred to in sub-regulation (1) is maintained and preserved in good order for a period of at least 10 years from the date of complete redemption of the issue.
The SECP has also issued the functions and duties of investment agent.
An investment agent shall enter into an agreement with the issuer for issuance of secured and unsecured debt securities through execution of issuance agreement, which inter-alia contain that it has agreed to act an investment agent under the issuance agreement for securing the interest of debt securities holders.
Copyright Business Recorder, 2021
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