HKTA launches best practice guide for trustees

It comes with 9 guiding principles.

 The Hong Kong Trustees' Association (the ”HKTA”), an independent body representing the trust and fiduciary services industry in Hong Kong, has
recently announced the inaugural launch of the Best Practice Guides (the ”Guide”).

The Guide covers four areas of practice: Corporate Trusts, Pension Schemes, Private Trusts and Charitable Trusts, and aims to promote best practices and raise industry standards of trust practitioners in Hong Kong.

“The launch of the Best Practice Guides coincide perfectly with and are highly relevant to the recent new initiatives currently taking place in Hong Kong: the Introduction of the Employee Choice Arrangement (“ECA”) of the MPF system; Amendment Bill to the Trustee Ordinance and the wide discussions within the community of the need for greater monitoring of charitable organizations,” said Ms Ka Shi Lau, Chairman of The Hong Kong Trustees' Association.

Upon the implementation of ECA, effective from 1 November 2012, employees can enjoy more autonomy in managing their MPF assets with greater control over the choice of MPF schemes, leading to a greater awareness of the significance of the role and services of trustees. The Guide further highlights the importance of a proper corporate trust structure and the professional expertise required of corporate trustees.

Reforming Hong Kong’s trust law which has been in effect since 1934 would bring the city’s regulatory regime in line with other common law jurisdictions such as the UK and Singapore.

This will provide a more clearly defined framework that governs the respective rights and duties of parties to a trust. The aim of the Trust Law (Amendment) Bill is also to enhance protection of beneficiaries' interests and better cater for the need of modern-day trusts.

The Amendment Bill is to be presented by the Government to the Legislative Council in the 2012/13 session.

The consultation paper published by the Law Reform Commission points out that it has become a matter of major public interest that a system should be put in place to both regulate charities and enhance their transparency. It has been recommended that charity trustees of a registered charity should be subject to certain duties, such as the duty to declare any conflicts of interest and personal interests and to keep proper accounting records of the charity which
are sufficient to explain all the charity’s transactions.

The nine guiding principles of the Guide serve as minimum standards and general guidance on how the roles and responsibilities of a trustee can be discharged.

It would be of particular use for private individuals who are not professional trustees and those who might be appointed as executors to administer estates or as directors of trustee boards of pension schemes and charitable trusts.

“Combined with the efforts of the trust industry in upholding best practices, it will strengthen the competitiveness and attractiveness of Hong Kong as a modern-day trust jurisdiction and further consolidate our status as a leading international asset management centre,” Ms Lau concluded.