May 3, 2023
The Securities and Exchange Commission (SEC) has issued guidelines to regulate the licensing and business operations of trustees in the securities industry. The Securities Industry (Note Trustees) Guidelines, 2022 (SEC/GUI/004/02/2023) (the Note Trustee Guidelines) provides for:
- licensing requirements for trustees;
- the application process for obtaining a trustee licence;
- duties of trustees; and
- financial and other reporting obligations of trustees.
Trustees are key players in the securities industry who are typically appointed under unit trust schemes and corporate fixed income structures to protect the interests of investors, ensure that the terms of relevant transaction documents are complied with, and enforce the rights of the investors. Trustees play a key role in facilitating the commercial integrity of the securities market and provide confidence to investors that the terms of key transaction documents underpinning their investments will be respected by issuers.
It is expected that the Note Trustee Guidelines would strengthen the regulatory framework for the supervision of trustees, resulting in the enhanced protection of investor interest, and ultimately, promoting the orderly growth and development of a robust and efficient securities market.
