Tighter trustee requirements – with more to come

Trustees of debt securities, KiwiSaver schemes and unit trusts will have greater powers, and greater obligations, from 1 October 2011 under regulations passed last month.

Issuers and providers will need to amend their trust deeds to reflect the new provisions.

Also in prospect, through the draft Financial Markets Conduct Bill (FMCB), are moves to impose an express standard of care on trustees and to limit trustee indemnities.

Deemed provisions

The Securities Amendment Regulations (No. 2) 2011 (the Regulations) will require each trust deed relating to debt securities to include the following provisions:

• the issuer must provide to the trustee any reports the trustee requires