ADVOKS GLOBAL · KENYA
The Capital Markets (Real Estate Investment Trusts) (Collective Investment Schemes) Regulations
52. Removal and replacement of a trustee
Edition: 2023-10-06 · In force
52. Removal and replacement of a trustee
(1)The scheme documents shall provide for the removal and replacement of the trustee in accordance with the Act and these Regulations.(2)The Authority shall, except where the Court makes an order for the removal of a trustee, approve the removal and replacement of the trustee.(3)The REIT securities holders may, by way of a special resolution, approve the removal and replacement of the trustee where the removal and replacement of the trustee is not pursuant to an order of the Court or approval of the Authority.(4)The REIT manager shall convene a meeting of the REIT securities holders within one month of—(a)a court of competent jurisdiction making an order for the liquidation of the trustee, except a voluntary liquidation for the purpose of reconstruction or amalgamation under a scheme approved by the Authority;(b)a manager or a receiver being appointed over any of the assets of the trustee; or(c)the trustee ceasing to be eligible for appointment under regulation 44.(5)A meeting convened under paragraph (4) shall consider a recommendation by the REIT manager for the appointment of a replacement trustee or for the making of an application by the REIT manager to the Court for the appointment of a replacement trustee.(6)The REIT manager shall, in convening a meeting under paragraph (4), issue a notice to the REIT securities holders notifying them of the meeting.(7)A notice issued under paragraph (6) shall include—(a)where a recommendation is for the appointment of a replacement trustee—(i)the consent in writing of the proposed trustee to accept the appointment and execute the supplemental trust deed;(ii)the terms of the appointment including fees;(iii)the approval of the Authority to the appointment of a new trustee; and(iv)the supplemental trust deed; or(b)an alternative recommendation, in the event that a replacement cannot be found or is not approved by a special resolution at the meeting of REITsecurity holders and an application is made by the REIT manager to the Court for the appointment of the proposed replacement or temporary trustee.(8)Where the REIT securities holders fail to approve a recommendation under paragraph (5), the REIT manager shall—(a)inform the Authority of the decision of the REIT securities holders; and(b)as soon as possible, make an application to the Court for the appointment of a person eligible for appointment under regulation 44 as a replacement or temporary trustee.(9)A REIT manager may, with the approval of the Authority remove a trustee where—(a)the trustee fails or neglects after reasonable notice from the REIT manager or the Authority to carry out its duties under the scheme documents or these Regulations; or(b)the trustee repeatedly breaches the provisions of the Act, these Regulations or the scheme documents; and(c)the REIT securities holders, by ordinary resolution resolve—(i)a notice be issued to the trustee for his removal; and(ii)approve the appointment of a replacement trustee; or(iii)approve the making of an application to the Court for the appointment of a replacement trustee or temporary trustee; or(d)in any other circumstances if the REIT securities holders, by special resolution resolve that such notice be given.(10)A REIT manager shall not remove a trustee under paragraph (9) unless he has issued to the trustee, a three months notice in writing of the intention to remove the trustee.(11)Where the trustee is removed and replaced under this regulation the REIT manager shall be entitled to recover any costs or expenses of or related to the appointment of the replacement trustee including the costs of convening any meetings and of any application to the Court from assets of the trust and the replacement trustee shall be entitled to make a claim against the replaced trustee for recovery of such costs and expenses.(12)The appointment of a replacement trustee shall take effect—(a)in the case of a trustee appointed by the REIT securities holders from the date of execution by the new trustee of a supplemental trust deed and date of the completion of the transfer or vesting in the new trustee of all of the assets of the trust; or(b)in the case of a trustee appointed pursuant to an order by the Court, from the date specified by the Court.(13)Where a trustee ceases to be a trustee under this regulation and the appointment of a replacement trustee takes effect, it shall—(a)make available to the replacement trustee, all books, records, reports, information and data including access to software and source code which is within the possession or control of the trustee relating to the activities of the scheme or the assets of the trusts; and(b)execute such notices to tenants, assignments and novations of contracts as may be required.