Part 5: Part 5: Creation, Validity and Modification of a QFC Trust
Article 16 – Creation of a Trust(1) A
Trustis a legally binding relationship created by a Settlorthrough which Trust Propertyis held in the name of the Trustee(or another Personon behalf of the Trustee) who exercises, in relation to the Property, duties and powers in accordance with the Governing Law of the Trustand the Terms of the Trustfor either or both of the following:(A) the benefit of a Beneficiarywhether or not yet ascertained or in existence;(B) any valid purpose that is not for the sole benefit of the Trustee.(2) Without prejudice to the provisions of Article 16(1) ), a Trustwill have the following characteristics:(A) the Trust Propertyconstitutes a separate fund and is not a part of the Trustee'sown estate;(B) title to the Trust Propertyis held in the name of the Trusteeor is held in the name of another Personon behalf of the Trustee; and(C) the Trusteehas the power and the duty to manage, employ or dispose of the Trust Propertyin accordance with the Terms of the Trustand the duties imposed upon it by any applicable law.(3) A Trustmay be created by:(A) transfer of Propertyto another Personas Trusteeduring the Settlor'slifetime or by will or other disposition taking effect upon the Settlor'sdeath, provided that such disposition is not contrary to applicable Sharia law;(B) the transfer of Propertyfrom one Trustto another;(C) declaration by the owner of Propertythat the owner holds identifiable Propertyas Trustee; or(D) exercise of a power of appointment in favour of a Trustee.(4) A Trustmust come into existence by an instrument in writing including a will or codicil.(5) A Trusteemay sue and be sued in its capacity as Trusteeand may appear before any court or any Personacting in an official capacity. Amended (as from 24th December 2017).
Article 16A – Registration(1) No
Trustis established, valid and binding under these Regulationsunless it is registered with the QFC Authorityand details of which are included in the Register.(2) A Personmust apply for the registration of a Trustby signing and providing the QFC Authoritywith the Prescribed Formtogether with such other documents and pay the Prescribed Feesas may be specified by the QFC Authority.(3) The application must be made by any Personwho will become a Trusteeof the Truston its registration.(4) A Trustmust at all times have at least one (1) Trustee. Details of the Trusteemust be included in the Registerand the Trusteemust ensure that such details are at all times accurate and up to date.(5) A Trusteeof any Pre-Existing Trustmust ensure that it registers such Trustwith the QFC Authorityand brings the Trustinto compliance with these Regulationswithin one hundred and eighty (180) days of the commencement date of these Regulations. A failure to register any such Trustwithin the period stipulated herein will invalidate such Trustand render its terms unenforceable.(6) On registration of a Trust, the QFC Authoritymust:(A) issue a certificate confirming that the Trustis registered as a Trustwith the name specified in the certificate and with effect from the date of the certificate;(B) allocate to the Trusta registration number; and(C) enter in the Register:(1) the name and registered number of the Trust;(2) the objects of the Trust; and(3) the names of the Trustees.(7) A certificate of registration is conclusive evidence of the registration of the Trustwith the name specified in it and that the registration process has been complied with.(8) The QFC Authoritymust maintain a Register of Trusts.(9) The QFC Authoritymust not make available to the public any information in the Register (unless such information is contained in the certificate of registration) except on terms it considers appropriate and pursuant to:(A) a statutory obligation; or(B) a court order. Inserted (as from 24th December 2017).
Article 17 – Requirements for creation(1) A
Trustis created if:(A) the Settlorhas the capacity to create a Trust;(B) the Settlorindicates an intention to create the Trust;(C) the Trusteither:(i) has a definite Beneficiary; or(ii) is a purpose Trust, as provided for in Article 22;(D) the Trusteeholds or has vested in it Propertyfor the benefit of a Beneficiaryor for a purpose;(E) the Trusteehas duties to perform; and(F) the same Personis not the sole Trusteeand sole Beneficiary.(2) A Beneficiaryis definite if the Beneficiarycan be ascertained now or in the future.(3) A Trustmay have at the same time a definite Beneficiaryand a purpose. Amended (as from 24th December 2017).
Article 18 – Trust purposes(1) A
Trustmay only be created to the extent its purposes are sufficiently certain to allow the Trustto be carried out, lawful in the QFCand not contrary to public policy.(2) A Trustand its terms must be for the benefit of its Beneficiaries or in furtherance and support of its purposes. Amended (as from 24th December 2017).
Article 19 – Duration of a Trust(1) A
Trustmay continue indefinitely or terminate in accordance with these Regulationsor in accordance with the Terms of the Trust.(2) No rule against perpetuities or excessive accumulations shall apply to a Trustor to any advancement, appointment, payment or application of assets from a Trust.(3) Except where the terms of a Trustprovide to the contrary, any advancement, appointment, payment or application of assets from that Trustto another Trust shall be valid even if that other Trustmay continue after the date by which the first Trustmust terminate. Amended (as from 24th December 2017).
Article 20 – Validity and invalidity of a Trust(1) Subject to Article 20(2) and 20(3), a
Trustis valid and enforceable in accordance with its terms.(2) A Trustis invalid to the extent that:(A) it purports to do anything which is contrary to the laws of the QFC;(B)it is created for the predominant purpose of avoiding obligations under any other law or regulations;(C) it is created for a purpose in relation to which there is no Beneficiaryunless it complies with Article 22;(D) its creation was induced by fraud, duress, mistake, undue influence or misrepresentation;(E) the Trustis immoral or contrary to public policy; or(F) the Terms of the Trustare so uncertain that its performance is rendered impossible.(3) Where a Trustis created for two or more purposes of which some are lawful and others are unlawful:(A) if those purposes cannot be separated the Trustis invalid; or(B) where those purposes can be separated the QFC Courtmay declare that the Trustis valid as to the purposes which are lawful; or the Propertyas to which a Trustis wholly or partially invalid will revert to the Personwho provided the Property(or its heirs and successors). Amended (as from 24th December 2017).
Article 21 – [INTENTIONALLY OMITTED]
Deleted (as from 24th December 2017).
Article 22 – Purpose Trusts(1) A
Trustwill not be invalid by reason of Article 20(2)(C) if the Terms of the Trustprovide for the appointment of an Enforcerin relation to its purposes and for the appointment of a new Enforcerat any time when there is none.(2) Subject to Article 22(1), a Trustmay be declared by Trust Instrumentfor a non-charitable purpose, including the purpose of holding or investing in shares in any Personor any other assets constituting the Trust Property, if:(A) the purpose is possible and sufficiently certain to allow the Trustto be carried out;(B) the purpose is not contrary to public policy or unlawful under the laws of the QFC; or(C) the Trust Instrumentspecifies the event upon the happening of which the Trustterminates and provides for the disposition of surplus assets of the Trustupon its termination.(3) It is the duty of an Enforcerto take reasonable steps to ensure that the Trustis enforced in relation to its purposes.(4) The appointment of a Personas Enforcerof a Trustin relation to its purposes will not have effect if it is also a Trusteeof the Trustor has a conflict of interest.(5) Except as permitted by these Regulationsor expressly provided by the Terms of the Trust, or with the approval of the QFC Courtan Enforcermust not:(A) directly or indirectly profit from its appointment;(B) cause or permit any other Personto profit directly or indirectly from such appointment; or(C) on its own account, enter into any transaction with the Trusteesor relating to the Trust Propertywhich may result in profit to it or the Trustee.(6) Subject to Article 22(7), an Enforcermay resign its office by notice in writing delivered to the Trustee. Such resignation will take effect upon delivery of notice.(7) A resignation given in order to facilitate a breach of trust will be of no effect.(8) An Enforcerwill cease to be an Enforcerof the Trustin relation to its purposes immediately upon:(A) the Enforcer'sremoval from office by the QFC Court;(B) the Enforcer'sresignation becoming effective;(C) the coming into effect of a provision in the Terms of the Trustunder which the Enforceris removed from office or otherwise ceases to hold office; or(D) the Enforcer'sappointment as a Trusteeof the Trust.(9) Where required, a Trusteemust at any time when there is no Enforcer, take such steps as may be necessary to secure the appointment of a new Enforcer.(10) Where the Trusteehas reason to believe that the Enforcerin relation to such purposes is unwilling or refuses to act, or is unfit to act or incapable of acting, the Trustee must apply to the QFC Courtfor the removal of the Enforcerand the appointment of a replacement.(11) The Trusteemust apply to the QFC Courtfor the appointment of a new Enforcerwhere such an appointment is not possible under the Trust Instrument or the Enforceris unwilling or refuses to act within 30 days of becoming aware there is no Personwilling and able to act as the Enforcer.(12) If the Trusteedoes not make an application in accordance with Article 22(11), the Trusteewill contravene a relevant requirement. Amended (as from 24th December 2017).
Article 23 – Variation and revocation of a Trust(1) A
Trustmay expressly provide that:(A) its terms are capable of variation; or(B) the Trustitself or a power exercisable under the Trustis revocable either in whole or in part.(2) Where a Trustprovides that the Terms of the Trustmay be varied, such power to vary is without prejudice to the power vested in the QFC Courtby these Regulationsfor the variation of the Terms of the Trust.(3) No variation of the Terms of the Trustor revocation of a Trustor a power exercisable under a Trustwill prejudice anything lawfully done by a Trusteein relation to a Trustprior to it receiving a notice of such variation or revocation.(4) A Trust may only be revoked by an order of the QFC Court. Where a Trustis revoked, either in whole or in part, the Trusteemust hold and deal with the Trust Propertyaffected by the revocation in accordance with the direction of the QFC Court. The Trusteemust provide details of the order of the QFC Courtto the QFC Authority.(5) For the purposes of this Article, the “ Settlor” is the particular Personwho provided the Propertywhich is the subject of revocation.(6) The QFC Courtmay vary the Terms of the Trust:(A) even if unambiguous, to conform the terms to the Settlor'sintention if it is provided by clear and convincing evidence that both the Settlor'sintent and the Terms of the Trustwere affected by a mistake of fact or law, whether in expression or inducement;(B) if, because of circumstances not anticipated by the Settlor, modification will further the purpose of the Trust; or(C) if continuation of the Truston its existing terms would be impractical or wasteful or impair the Trust'sadministration.(7) An application under this Article may be made by a Settlor, a Trustee, a Beneficiary, or an Interested Person. Amended (as from 24th December 2017).
Article 24 – Failure or lapse of interest(1) Subject to the Terms of the
Trustand to any order of the QFC Court, the Trust Propertyor interest under the Trustmust be held by the Trusteefor the Settlorabsolutely or if the Settloris dead, for the Settlor'spersonal representatives or estate where:(A) the interest in question lapses;(B) the Trust Propertyis vested in a Personotherwise than for its sole benefit but the Trustsupon which it is to hold the Propertyare not declared or communicated to it; or(C) the Trustterminates otherwise than in accordance with Article 25(1)(D).(2) For the purposes of this Article, the “ Settlor” is the particular Personwho provided the Propertyaffected by the failure or lapse. Amended (as from 24th December 2017).
Article 25 – Termination of a Trust(1) Without prejudice to the powers of the
QFC Courtunder these Regulations, a Trustterminates:(A) if the Trustis revoked pursuant to an order of the QFC Courtor expires pursuant to its terms;(B) if there is no Beneficiaryor Personwho can become a Beneficiaryin accordance with the Terms of the Trustor if no purpose of the Trustremains to be achieved;(C) if the purposes of the Trusthave become unlawful, or impossible to achieve; or(D) notwithstanding the Terms of the Trust, upon consent of all the Beneficiaries in existence who have been ascertained and none of whom is a Minoror a Personunder a legal disability.(2) The QFC Courtmay terminate a Trust:(A) because of circumstances not anticipated by the Settlor, if termination will further the purposes of the Trust; or(B) if the value of the Trust Propertyis insufficient to justify the cost of administration.(3) An application to the QFC Courtunder this Article may be made by a Settlor, a Trustee, a Beneficiary, or any Interested Person, as the case may be. Amended (as from 24th December 2017).
Article 26 – Distribution of Property(1) Without prejudice to the powers of the
QFC Courtunder Article 26(3), on the termination of the Trust, the Trusteemust distribute the Trust Propertyto the Personsentitled to such Propertywithin a reasonable time and in accordance with the Terms of the Trust.(2) The Trusteemay retain sufficient assets or obtain satisfactory security to make reasonable provision for liabilities, whether existing, future, contingent or otherwise, before distributing the Trust Propertyunder Article 26(1).(3) The QFC Courtmay, on the termination of a Trustor at any time thereafter, upon an application made by a Trustee, any Beneficiaryor any Interested Person:(A) require the Trusteeto distribute the Trust Property;(B) direct the Trusteenot to distribute the Trust Property; or(C) make such other order as it thinks fit. Amended (as from 24th December 2017).