HK Passes Trust
Law And Exchange Of Information Reforms
Law And Exchange Of Information Reforms
February 13th, 2013 The Trust Law (Amendment) Bill
2013, gazetted on February 8, is aimed at modernizing trust law in Hong Kong by
enhancing trustees’ default powers while providing for appropriate checks and
balances, thereby making trusts administration more effective.Secretary for
Financial Services & the Treasury, Prof KC Chan, said Hong Kong must
modernize its trust laws to enhance its status as an international
asset-management center. “The bill, if passed, will bolster the competitiveness
of Hong Kong’s trust services industry and attract settlors to set up trusts in
Hong Kong,” he said.At the end of 2011, Hong Kong’s trust industry held
assets of an estimated HKD2.6 trillion (USD335bn), and more than 60% of the
city’s asset management business originated from funds from non-Hong Kong
investors.
2013, gazetted on February 8, is aimed at modernizing trust law in Hong Kong by
enhancing trustees’ default powers while providing for appropriate checks and
balances, thereby making trusts administration more effective.Secretary for
Financial Services & the Treasury, Prof KC Chan, said Hong Kong must
modernize its trust laws to enhance its status as an international
asset-management center. “The bill, if passed, will bolster the competitiveness
of Hong Kong’s trust services industry and attract settlors to set up trusts in
Hong Kong,” he said.At the end of 2011, Hong Kong’s trust industry held
assets of an estimated HKD2.6 trillion (USD335bn), and more than 60% of the
city’s asset management business originated from funds from non-Hong Kong
investors.
on common law, supplemented by the Trustee Ordinance and the Perpetuities &
Accumulations Ordinance, which have not been substantially reviewed or modified
since they were enacted in 1934 and 1970. Some of their provisions are outdated
and cannot meet present-day trusts’ needs.Following a review of the Trustee
Ordinance and the Perpetuities and Accumulations Ordinance, and in response to
the various modernization proposals put forward by the trust industry and
recent trust law reform in the United Kingdom and Singapore, the Government
conducted public consultations in 2009 and 2012, respectively, on the reform
proposals.The reform package seeks to clarify trustees’ duties and powers and
better protect beneficiaries’ interests. The major proposals would therefore
introduce a statutory duty of care on trustees; provide trustees with general
powers to appoint agents, nominees and custodians, as well as to insure trust
property against risks of loss; allow professional trustees to receive
remuneration; provide for a court-free process for the retirement of trustees
on beneficiaries’ directions; and impose statutory control on exemption clauses
that seek to relieve professional trustees from liabilities.
In addition, the bill would also allow settlors to reserve to
themselves some limited power; abolish outdated rules against perpetuities and
excessive accumulations of income; and relax the market capitalization and
dividend requirements for investment in the equity market.Respondents were
generally in support of the legislative proposals, considering that the
reformed regime would provide a more robust legal framework facilitating the
effective operation of present-day trusts, which is important for enhancing
Hong Kong’s status as an international asset management center.The Government
has taken into account feedback from the industry and other stakeholders when
drawing up the legislative proposals. The bill will be presented to the
Legislative Council for first reading onFebruary 20, 2013 .
themselves some limited power; abolish outdated rules against perpetuities and
excessive accumulations of income; and relax the market capitalization and
dividend requirements for investment in the equity market.Respondents were
generally in support of the legislative proposals, considering that the
reformed regime would provide a more robust legal framework facilitating the
effective operation of present-day trusts, which is important for enhancing
Hong Kong’s status as an international asset management center.The Government
has taken into account feedback from the industry and other stakeholders when
drawing up the legislative proposals. The bill will be presented to the
Legislative Council for first reading on
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