A security trustee is a person or corporate entity which holds security for the benefit of others. The security involved may consist of a responsibility over property, a debenture over the assets and undertakings of a company, or a combination of other types of security for the performance of certain obligations.
So, what does that mean?
An Atmosphere of Trust
Having a security trustee as part of your structure reinforces to all parties that if something goes wrong or needs to be enforced, the security trustee would act impartially in taking the necessary steps to enforce the security and deliver the proceeds of enforcement to those that are truly entitled to it.
In the case of digital gold like SafeGold, having a security trustee like IDBI Trustees ensures that each customer has the peace of mind of knowing that their interests are being protected at all times. The security trustee represents the interests of the investors and protects the rights of the investors as set out in the trust deed and agreements.
Protecting Investor Rights
It is essential that the security trustee is both an experienced professional and an independent party, having the right to access appropriate and relevant information. This allows them to successfully execute their role in reducing complications, as well as adding value and comfort to the participants.
The security trustee defends investor rights and also enforces security upon default.
Peace of Mind
Customers care about the quality of gold they buy and their peace of mind when it comes to savings. The presence of security trustees gives customers confidence that the gold they buy, sell and gift, is real and sourced from approved sources as well as ensuring that internal audits for purity and weight are thorough and effective.
What regulates the regulators?
Security Trustees are generally a regulated entity registered with SEBI and SEBI dictates requirements to ensure appropriate governance standards, monitoring of the underlying assets, certications and timely disclosures. An added benefit to the company (e.g. SafeGold) is that the appointment of a security trustee reduces compliance requirements thanks to the important and far reaching role the Security Trustee plays already!
SEBI’s role is ever present!
Investors are essential to the smooth functioning of any financial, securities and gold market. They put the money in gold, funds, stocks, etc. and this determines the level of activity in the market and serves to grow the economy. Clearly, protecting investor interests is critical!
Securities and Exchange Board of India’s (SEBI) form of investor protection involves various measures established to protect the interests of investors from malpractices. SEBI is responsible for regulations of the instruments and products being sold in the market and safeguarding the interests of the investors.
This ties things up in a neat little bow to ensure that investors/buyers are being protected and can continue to plan their investments, safe in the knowledge that there is good governance and checkpoints at every level!
- Since a Security Trustee has no financial relations with other corporate entities (like many banks and financial institutions), it has no conflict of interest in discharging its role as Security Trustee.
- In financial transactions, the Security Trustee coordinates with lenders, borrowers and all other agencies involved in the chain, but works independently.
- Protecting customers’ interests in respect of securities held under their charge including verification of the ownership of a purchase.
- The limitations on pledge of shares prescribed under various regulations, can be addressed by engaging a Security Trustee.
- Enforcement of the security when required by the lenders and disbursement of the sale proceeds without prejudice.
So, where does that leave us?
Investors need to know that their investments are safe and secure, and that there is a larger structure that has been designed to ensure this. This logically means that all investors should put more faith in service providers for their investments who are partnered with SEBI-registered security trustees.
When we’re really young, we’re taught not to take money from strangers and vice versa. As you grow up, you realize that the point was really highlighting the importance of trust in those who have your best interests at heart.
You don’t give or take money unless there’s trust.
Why would you change that when you’re buying gold?
SafeGold works with partners such as Brink’s India, to ensure that your gold is stored securely in their world-class vaults, and SEBI-registered IDBI Security Trustees, whose role it is to protect investor interests at all times.
SafeGold keeps your gold safe! That’s how trust works.