Collateral Trust Agreement Template for Malaysia

The Collateral Trust Agreement is a critical document used in Malaysian financial transactions where security interests need to be held and managed by a trustee for the benefit of multiple secured parties. It is particularly relevant in syndicated lending, bond issuances, and structured finance transactions where multiple creditors share security interests in the same collateral. The agreement must comply with Malaysian legislation, including the Trustees Act 1949, Securities Commission Act 1993, and Financial Services Act 2013, while potentially accommodating Islamic finance principles under the Islamic Financial Services Act 2013. The document details the trust structure, collateral management procedures, enforcement mechanisms, and the respective rights and obligations of the trustee, security providers, and beneficiaries. It is essential for transactions requiring centralized collateral management and standardized enforcement procedures across multiple secured parties.

1. Parties: Identification of the settlor/grantor, trustee, and beneficiaries (secured parties)

2. Background: Context of the trust arrangement, underlying obligations, and purpose of the collateral trust

3. Definitions and Interpretation: Definitions of key terms, interpretation rules, and construction principles

4. Appointment of Trustee: Formal appointment of the trustee and acceptance of the trust

5. Declaration of Trust: Creation of the trust and specification of trust property

6. Collateral: Description of collateral, perfection requirements, and maintenance obligations

7. Security: Nature of security interests, ranking, and priority arrangements

8. Trustee Powers and Duties: Detailed powers and responsibilities of the trustee in managing the collateral

9. Rights and Obligations of the Grantor: Ongoing obligations of the grantor regarding the collateral and trust arrangement

10. Beneficiary Rights: Rights of the beneficiaries (secured parties) under the trust

11. Events of Default: Specified events triggering enforcement actions

12. Enforcement: Procedures and powers for enforcing security interests upon default

13. Payments and Distribution: Rules for distributing proceeds and payments among beneficiaries

14. Expenses and Indemnification: Provisions for trustee compensation and indemnification

15. Term and Termination: Duration of the trust and termination events/procedures

16. General Provisions: Standard clauses including notices, amendments, governing law, and jurisdiction