• Part 9: Part 9: Duties and Powers of Trustees

    • Chapter 1: Chapter 1: Duties of Trustees

      • Article 38 - Duty to administer a Trust

        (1) Upon acceptance of a trusteeship, the Trustee must in the execution of its duties and in the exercise of its powers and discretions:
        (A) act with due diligence as would a prudent Person to the best of its ability and skill; and
        (B) observe the utmost good faith;
        in accordance with the terms and purposes of the Trust and these Regulations.
        (2) A Trustee must administer the Trust solely in the interest of the Beneficiaries or in furtherance or support of the purposes of the Trust.
        (3) Subject to such further requirements as may be prescribed by the Rules, a Trustee must be:
        (A) a Licensed Firm that is a DNFBP;
        (B) an Authorised Firm; or
        (C) a Person approved by the QFC Authority that is duly licensed or authorised in a jurisdiction outside of the QFC and is subject to adequate requirements in respect of anti-money laundering and counter terrorism financing, by the laws applicable to the Person.

        [Guidance Note: A Licensed Firm or an Authorised Firm that wishes to carry out the provision of administration of trusts by way of business, must be licensed or authorised to do so.]

        Amended (as from 24th December 2017).

      • Article 39 - Duties of Trustees

        (1) Subject to the Terms of the Trust, a Trustee must so far as is reasonably practical preserve the value of the Trust Property.
        (2) Except with the approval of the QFC Court or as permitted by these Regulations or expressly provided by the Terms of the Trust, a Trustee must not:
        (A) directly or indirectly profit from its trusteeship;
        (B) cause or permit any other Person to profit directly or indirectly from such trusteeship; or
        (C) on its own account enter into any transaction with the Trustees or relating to the Trust Property which may result in such profit.
        (3) Subject to Article 60, a sale, encumbrance, or other transaction involving the investment or management of the Trust Property entered into by the Trustee for the Trustee's own personal account or which is otherwise affected by a conflict between the Trustee's fiduciary and personal interests is voidable by a Beneficiary affected by the transaction unless:
        (A) the transaction was authorised by the Terms of the Trust;
        (B) the transaction was approved by the QFC Court;
        (C) the Beneficiary did not commence judicial proceedings within the time allowed by Article 55; or
        (D) the Beneficiary consented to the Trustee's conduct or ratified the transaction.
        (4) A Trustee must keep accurate accounts and records of its trusteeship. Such accounts and records must be maintained for a period of five (5) years from the date that the Trustee ceases to be trustee.
        (5) A Trustee must keep Trust Property separate from its personal property and separately identifiable from any other property of which it is a Trustee.
        (6) A Trustee must disclose its capacity as a Trustee in all business relationships entered into with a financial institution or a DNFBP.
        (7) A Trustee must maintain current and up-to-date information about the identity of the Settlor, the Trustee, the Beneficiary or class of Beneficiaries, the Protector, and details of any other Person who exercises Control over the Trust, as well as service providers.
        (8) Where any of the parties set out in Article 39(7) is a legal entity, the Trustee must maintain current up-to-date information about the identity of the ultimate Beneficial Owner of such legal entity.
        Amended (as from 24th December 2017).

      • Article 40 - Duties of co-Trustees to act together

        (1) Subject to the Terms of the Trust, where there is more than one Trustee all the Trustees must join in performing the Trust.
        (2) Subject to Article 40(3), where there is more than one Trustee no power or discretion given to the Trustees must be exercised unless all the Trustees agree on its exercise.
        (3) The Terms of the Trust may empower the Trustees to act by a majority but a Trustee who dissents from a decision of the majority of the Trustees may require its dissent to be recorded in writing.
        Amended (as from 24th December 2017).

      • Article 41 - Impartiality of a Trustee

        Subject to the Terms of the Trust, where there is more than one Beneficiary, or more than one purpose, the Trustee must act impartially and must not execute the Trust for the advantage of one at the expense of the other.

        Amended (as from 24th December 2017).

      • Article 42 - Cost of administration

        In administering a Trust, the Trustee may incur only costs that are reasonable in relation to the Trust Property, the purposes of the Trust and the skills of the Trustee.

        Amended (as from 24th December 2017).

      • Article 43 - Enforcement and defence claims

        A Trustee must take reasonable steps to enforce claims of the Trust and to defend claims against the Trust.

        Amended (as from 24th December 2017).

      • Article 44 - Collecting Trust Property

        A Trustee must take reasonable steps to compel a former Trustee or other Person to deliver the Trust Property to the Trustee, and, subject to the Terms of the Trust, to redress a breach of trust known to the Trustee to have been committed by a former Trustee.

        Amended (as from 24th December 2017).

      • Article 45 - Duty to inform and report

        (1) Subject to the Terms of the Trust and any order of the QFC Court, a Trustee must, on application in writing by a Beneficiary, disclose to the Beneficiary all documents which relate to or form part of the accounts of the Trust.
        (2) A Trustee is not required to disclose to any Person, any document which:
        (A) discloses its deliberations as to the manner in which it has exercised a power or discretion or performed a duty conferred upon it;
        (B) discloses the reason for any particular exercise of such power or discretion or performance of duty or the material upon which such reason was or might have been based; or
        (C) relates to the exercise or proposed exercise of such power or discretion or the performance or proposed performance of such duty.
        (3) Notwithstanding the Terms of the Trust:
        (A) the QFC Court may on application made to it declare that in the particular circumstances of the Trust, its terms do not render the Trustees sufficiently or appropriately accountable to one or more Beneficiaries; and
        (B) the QFC Court may pursuant to such declaration extend or restrict the rights of all or any Beneficiaries to information regarding the Trust or may make such other order as it thinks fit.
        Amended (as from 24th December 2017).

    • Chapter 2: Chapter 2: General Powers of Trustees

      • Article 46 - Powers of Trustee

        (1) Subject to the Terms of the Trust and duties under these Regulations, a Trustee will in relation to the Trust Property have:
        (A) all the same powers as a natural Person;
        (B) any other powers appropriate to achieve the proper investment, management, and distribution of Trust Property; and
        (C) any other powers conferred by these Regulations.
        (2) A Trustee must exercise its powers only in the interest of the Beneficiaries and in furtherance and support of the purposes of the Trust and in accordance with the Terms of the Trust.
        (3)
        (A) Any Trustee may apply to the QFC Court for an opinion, advice or direction on any question regarding the management or administration of the Trust Property, such application to be served upon, or the hearing to be attended by, all Persons interested in such application, or such of them as the QFC Court thinks expedient.
        (B) If the Trustee acts upon the opinion, advice or direction given by the QFC Court, it is taken to have discharged its duty as a Trustee with regards to the subject matter of such application. However, these Regulations do not apply if the Trustee acted fraudulently or made any misrepresentations in obtaining such opinion, advice or direction.
        (C) The costs of such application will be subject to the discretion of the QFC Court.
        Amended (as from 24th December 2017).

      • Article 47 - Specific powers of Trustees

        Without limiting the generality of Article 46, and subject to the Terms of the Trust, a Trustee may:

        (1) collect the Trust Property and accept or reject additions to the Trust Property from a Settlor or any other Person;
        (2) subject to the Terms of the Trust, without the consent of any Beneficiary, appropriate the Trust Property in or towards satisfaction of the interest of a Beneficiary in such manner and in accordance with such valuation as it thinks fit;
        (3) acquire or sell property, for cash or on credit, at public or private sale;
        (4) exchange, partition, or otherwise change the character of the Trust Property;
        (5) deposit Trust money in an account in a regulated financial services institution;
        (6) borrow money, with or without security, and mortgage or pledge the Trust Property for a period within or extending beyond the duration of the Trust;
        (7) where the Terms of the Trust so permit, exercise a discretion in relation to the manner in which and to whom the Trust Property is distributed;
        (8) with respect to an interest in a partnership, limited liability company, business Trust, corporation, or other form of business or enterprise, continue the business or other enterprise and take any action that may be taken by shareholders, members, or Property owners, including merging, dissolving, or otherwise changing the form of business organisation or contributing additional capital;
        (9) with respect to stocks or other securities, exercise the rights of an absolute owner, including the right to:
        (A) vote, or give proxies to vote, with or without power of substitution, or enter into or continue a voting Trust agreement;
        (B) hold a security in the name of a nominee or in other form without disclosure of the Trust so that title may pass by delivery;
        (C) pay calls, assessments, and other sums chargeable or accruing against the securities, and sell or exercise stock subscription or conversion rights; and
        (D) deposit the securities with a depositary or other regulated financial services institution;
        (10) with respect to an interest in immovable property, construct, or make ordinary or extraordinary repairs to, alterations to, or improvements in, buildings or other structures, demolish improvements, raze existing or erect new party walls or buildings, subdivide or develop land, dedicate land to public use or grant public or private easements, and make or vacate plots and adjust boundaries;
        (11) enter into a lease for any purpose as lessor or lessee, including a lease or other arrangement for exploration and removal of natural resources, with or without the option to purchase or renew, for a period within or extending beyond the duration of the Trust;
        (12) grant an option involving a sale, lease, or other disposition of the Trust Property or acquire an option for the acquisition of property, including an option exercisable beyond the duration of the Trust, and exercise an option so acquired;
        (13) insure the property of the Trust against damage or loss and insure the Trustee, the Trustee's agents, and Beneficiaries against liability arising from the administration of the Trust and the insurance proceeds must belong to the Trust;
        (14) abandon or decline to administer property of no value or of insufficient value to justify its collection or continued administration;
        (15) pay or contest any claim, settle a claim by or against the Trust, and release, in whole or in part, a claim belonging to the Trust;
        (16) pay remuneration of the Trustee, Protector or Enforcer and of employees and agents of the Trust, and other expenses incurred in the administration of the Trust;
        (17) indemnify outgoing Trustees;
        (18) select a mode of payment under any employee benefit or retirement plan, annuity, or life insurance payable to the Trustee, exercise rights thereunder, including exercise of the right to indemnification for expenses and against liabilities, and take appropriate action to collect the proceeds;
        (19) make loans out of the Trust Property, including loans to a Beneficiary on terms and conditions the Trustee considers to be fair and reasonable under the circumstances, and the Trustee has a lien on future distributions for repayment of those loans;
        (20) pledge the Trust Property to guarantee loans made by others to the Beneficiary;
        (21) appoint a Trustee to act in another jurisdiction with respect to the Trust Property located in the other jurisdiction, confer upon the appointed Trustee all of the powers and duties of the appointing Trustee, require that the appointed Trustee furnish security, and remove any Trustee so appointed;
        (22) pay an amount distributable to a Beneficiary who is under a legal disability or who the Trustee reasonably believes is incapacitated, by paying it directly to the Beneficiary or applying it for the Beneficiary's benefit, or by:
        (A) paying it to the Beneficiary's guardian and the receipt by such guardian must constitute a full discharge of the Trustee's obligation;
        (B) if the Trustee does not know of a guardian, or custodial Trustee, paying it to an adult relative or other Person having legal or physical care or custody of the Beneficiary, to be expended on the Beneficiary's behalf and the receipt by such Person must constitute a full discharge of the Trustee; or
        (C) managing it as a separate fund on the Beneficiary's behalf, subject to the Beneficiary's continuing right to withdraw the distribution;
        (23) on distribution of Trust Property or the division or termination of a Trust, make distributions in divided or undivided interests, allocate particular assets in proportionate or disproportionate shares, value the Trust Property for those purposes, and adjust for resulting differences in valuation;
        (24) resolve a dispute concerning the interpretation of the Trust or its administration by mediation, arbitration, or other procedure for alternative dispute resolution;
        (25) prosecute or defend an action, claim, or judicial proceeding in any jurisdiction to protect the Trust Property and the Trustee in the performance of the Trustee's duties;
        (26) sign and deliver contracts and other instruments that are useful to achieve or facilitate the exercise of the Trustee's powers;
        (27) on termination of the Trust, exercise the powers appropriate to wind up the administration of the Trust and distribute the Trust Property to the Persons entitled to it; or
        (28) consult accountants, lawyers, bankers, investment bankers, and other specialists and professional advisers in relation to the affairs of the Trust, at the expense of the Trust.
        Amended (as from 24th December 2017).

      • Article 48 - Power of accumulation and advancement

        (1) Where the Terms of the Trust so authorise, a Trustee may accumulate for a period, part or all of the Income of the Trust.
        (2) Subject to Article 48(3), Income of the Trust which is not accumulated under Article 48(1) must be distributed.
        (3) Subject to the Terms of the Trust and subject to any prior interests or charges affecting the Trust Property, where a Beneficiary is a Minor and whether or not the Beneficiary's interest:
        (A) is a vested interest; or
        (B) is an interest which will become vested:
        (i) on attaining the age of majority;
        (ii) at any later age; or
        (iii) upon the occurrence of any event;
        the Trustee may:
        (C) accumulate the Income attributable to the interest of such Beneficiary pending the attainment of the age of majority or such later age or the occurrence of such event;
        (D) apply such Income or part of it to or for the maintenance, education or other benefit of such Beneficiary; or
        (E) advance or appropriate to for the benefit of any such Beneficiary such interest or part of such interest.
        (4) The receipt by a parent or the lawful guardian of a Beneficiary who is a Minor must be a sufficient discharge of the Trustee's obligations for a payment made under Article 48(3).
        Amended (as from 24th December 2017).

      • Article 49 - Delegation by a Trustee

        (1) A Trustee must not delegate its powers unless permitted to do so by these Regulations or by the Terms of the Trust.
        (2) Subject to Article 49(1), a Trustee may delegate duties and powers that a prudent Trustee of comparable skills could properly delegate under the circumstances. The Trustee must exercise reasonable care, skill, and caution in:
        (A) selecting a competent and qualified agent;
        (B) establishing the scope and terms of the delegation, consistent with the purposes and Terms of the Trust; and
        (C) periodically reviewing the agent's actions in order to monitor the agent's performance and compliance with the terms of the delegation.
        (3) In performing a delegated function, an agent owes a duty to the Trust to exercise reasonable care to comply with the terms of the delegation.
        (4) A Trustee who complies with Article 49(1) and otherwise acts in good faith is not liable to the Beneficiaries or to the Trust for an action, omission or negligence of the agent to whom the function was delegated.
        (5) For the purposes of this Article, an “agent” may include investment managers, accountants, lawyers, bankers, brokers, custodians, investment advisers, nominees, property agents and other professional advisers or Persons to act in relation to any of the affairs of the Trust or to hold any of the Trust Property.
        (6) A Trustee may authorise a Person referred to in Article 49(5) to retain any commission or other payment usually payable in relation to any transaction.
        Amended (as from 24th December 2017).

      • Article 50 - Combination and division of Trusts

        (1) Subject to the Terms of the Trust, a Trustee may combine two or more Trusts into a single Trust or divide a Trust into two or more separate Trusts, if the result does not impair rights of any Beneficiaries or adversely affect achievement of the purposes of the Trusts.
        (2) Subject to the tTrms of the Trust, where a Trustee divides a Trust into two or more separate Trusts, it must have the power to appoint Trustees for such Trusts.
        Amended (as from 24th December 2017).