Trust Indenture Act (TIA)

Definition:

US Trust Indenture Act of 1939 supplements the Securities Act and governs the issue of debt securities including exemptions for Rule 144A debt. The TIA prohibits bond issues valued at over US$5 million from being offered for sale without a formal written agreement (an Indenture). The TIA requires that the SEC approve the Indenture and that the Indenture includes certain protective clauses and excludes certain exculpatory clauses, and requires Trustees under the Indenture to be independent of the issuer.

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