Chapter 1: Chapter 1: Duties of Trustees
Article 38 - Duty to administer a Trust(1) Upon acceptance of a trusteeship, the
Trusteemust in the execution of its duties and in the exercise of its powers and discretions:(A) act with due diligence as would a prudent Personto the best of its ability and skill; and(B) observe the utmost good faith;in accordance with the terms and purposes of the Trustand these Regulations.(2) A Trusteemust administer the Trustsolely in the interest of the Beneficiariesor in furtherance or support of the purposes of the Trust.(3) Subject to such further requirements as may be prescribed by the Rules, a Trusteemust be:(A) a Licensed Firmthat is a DNFBP;(B) an Authorised Firm; or(C) a Personapproved by the QFC Authoritythat is duly licensed or authorised in a jurisdiction outside of the QFCand 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 Trusteemust so far as is reasonably practical preserve the value of the Trust Property.(2) Except with the approval of the QFC Courtor as permitted by these Regulationsor expressly provided by the Terms of the Trust, a Trusteemust not:(A) directly or indirectly profit from its trusteeship;(B) cause or permit any other Personto profit directly or indirectly from such trusteeship; or(C) on its own account enter into any transaction with the Trusteesor relating to the Trust Propertywhich may result in such profit.(3) Subject to Article 60, a sale, encumbrance, or other transaction involving the investment or management of the Trust Propertyentered into by the Trusteefor the Trustee'sown personal account or which is otherwise affected by a conflict between the Trustee'sfiduciary and personal interests is voidable by a Beneficiaryaffected 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 Beneficiarydid not commence judicial proceedings within the time allowed by Article 55; or(D) the Beneficiaryconsented to the Trustee'sconduct or ratified the transaction.(4) A Trusteemust 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 Trusteeceases to be trustee.(5) A Trusteemust keep Trust Propertyseparate from its personal property and separately identifiable from any other property of which it is a Trustee.(6) A Trusteemust disclose its capacity as a Trusteein all business relationships entered into with a financial institution or a DNFBP.(7) A Trusteemust maintain current and up-to-date information about the identity of the Settlor, the Trustee, the Beneficiaryor class of Beneficiaries, the Protector, and details of any other Personwho 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 Trusteemust maintain current up-to-date information about the identity of the ultimate Beneficial Ownerof 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 Trusteeall the Trusteesmust join in performing the Trust.(2) Subject to Article 40(3), where there is more than one Trusteeno power or discretion given to the Trusteesmust be exercised unless all the Trusteesagree on its exercise.(3) The Terms of the Trustmay empower the Trusteesto act by a majority but a Trusteewho dissents from a decision of the majority of the Trusteesmay 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 Trusteemust act impartially and must not execute the Trustfor 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 Trusteemay incur only costs that are reasonable in relation to the Trust Property, the purposes of the Trustand the skills of the Trustee. Amended (as from 24th December 2017).
Article 43 - Enforcement and defence claims
Trusteemust take reasonable steps to enforce claims of the Trustand to defend claims against the Trust. Amended (as from 24th December 2017).
Article 44 - Collecting Trust Property
Trusteemust take reasonable steps to compel a former Trusteeor other Personto deliver the Trust Propertyto the Trustee, and, subject to the Terms of the Trust, to redress a breach of trust known to the Trusteeto 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 Trustand any order of the QFC Court, a Trusteemust, on application in writing by a Beneficiary, disclose to the Beneficiaryall documents which relate to or form part of the accounts of the Trust.(2) A Trusteeis 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 Courtmay on application made to it declare that in the particular circumstances of the Trust, its terms do not render the Trusteessufficiently or appropriately accountable to one or more Beneficiaries; and(B) the QFC Courtmay pursuant to such declaration extend or restrict the rights of all or any Beneficiariesto information regarding the Trustor may make such other order as it thinks fit. Amended (as from 24th December 2017).