HK Passes Trust Law And Exchange Of Information Reforms
February 13th, 2013 The Trust Law (Amendment) Bill 2013, gazetted on February 8, is aimed at modernizing trust law in Hong Kong by enhancing trustees' default powers while providing for appropriate checks and balances, thereby making trusts administration more effective.Secretary for Financial Services & the Treasury, Prof KC Chan, said Hong Kong must modernize its trust laws to enhance its status as an international asset-management center. "The bill, if passed, will bolster the competitiveness of Hong Kong's trust services industry and attract settlors to set up trusts in Hong Kong," he said.At the end of 2011, Hong Kong’s trust industry held assets of an estimated HKD2.6 trillion (USD335bn), and more than 60% of the city’s asset management business originated from funds from non-Hong Kong investors.
In addition, the bill would also allow settlors to reserve to themselves some limited power; abolish outdated rules against perpetuities and excessive accumulations of income; and relax the market capitalization and dividend requirements for investment in the equity market.Respondents were generally in support of the legislative proposals, considering that the reformed regime would provide a more robust legal framework facilitating the effective operation of present-day trusts, which is important for enhancing Hong Kong's status as an international asset management center.The Government has taken into account feedback from the industry and other stakeholders when drawing up the legislative proposals. The bill will be presented to the Legislative Council for first reading on
February 20, 2013.