Hong Kong’s Legislative Council has proposed amendments to the outdated Hong Kong Trustee Ordinance on 17 July 2013, in a bid to boost the competitiveness of the country’s asset management industry.
The amendments will come into effect on 1 December 2013 and the ordinance has been in the works for nine years and is the first update to the HKTO in almost 80 years.
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Among others, they impose statutory duty of care on trustees and confer them with general powers to appoint agents and custodians.
The effort to update the trust laws evolved out of a consultation process that began in 2008.
"Many provisions of the existing laws were outdated, as you would expect from a trust law that was enacted in 1934,"said KC Chan, the Secretary for Financial Services & the Treasury Board.
The reforms passed by the Legislative Council clarify trustees’ duties and powers, better protect beneficiaries’ interests, and modernise the trust law by means of amendments to the Trustee Ordinance (Cap 29) and the Perpetuities and Accumulations Ordinance (Cap 257), which date back, respectively, to 1934 and 1970.
Vivian Chui, a partner at KPMG China, said: "The amendments are important to Hong Kong because under the existing HKTO, there was no clear definition of trustees’ duties and powers.
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By GlobalData"The amended ordinance gives trustees more powers in line with what they are hired to do. Asset managers will now consider more closely where to domicile new funds and weigh the benefits of Hong Kong as a jurisdiction," Chui added.
According to a survey conducted by the Hong Kong Trustee’s Association and KPMG among industry representatives, 63% of respondents expressed confidence the amended law will have a positive impact on Hong Kong’s trust industry.
The survey has revealed that increasing trust assets as well as compliance and regulations rank highest among priorities of respondents.
