ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has decided to strictly monitor the debt securities trustees (DSTs) to note their compliance while undertaking any transaction.

The SECP officials told the Business Recorder that the procedure of Monitoring and Supervision of the Trust Structure by Commission was notified through the Structuring of Debt Securities Regulations.

The SECP will share the NOC in relation to creation of "Trust", operated by the debt securities trustees, with the relevant provisional authorities.

Under the regulations, the Commission shall share the NOC in relation to creation of Trust with the relevant provisional authorities.

The SECP shall assess the compliance of the Debt Securities Trustee with the provisions of the Trust Deed, the Act and these Regulations on annual basis and submit the same to relevant provisional authorities.

The SECP shall share the audited annual account of the trustee with relevant provisional authorities on annual basis. On request of relevant provisional authorities, obtain requisite information from the Debt Securities Trustee for onward submission, the SECP added.

A 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: Provided that agreement must be entered before the subscription period; ensure that 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 SECP stated.

A debt securities trustee shall ensure that issuer submits the following information to the Commission in relation to obtaining NOC for creation/registration of trust- (a) Author of the Trust; (b) Name of Trustee; (c) Purpose of the Trust; (d) Issue size; (e) Trust Assets; (f) Main features of the Issue; (g) Beneficiary of the Trust; and (h) Any other information required by the Commission; (iv) ensure that the Trust Deed contains all terms and conditions specified in Schedule-I and as required under the Trust Act.

The trustee would also ensure that none of the provisions of the Trust Deed is contradictory to the provisions of the Trust Act; ensure compliance with the provisions of the Trust Deed and participate in each general meeting of the debt security holders.

Copyright Business Recorder, 2021