Supervision and Regulation

The Regulation of Trusts Act or the Business Act of 1999 (as amended) (“the Act”) was put into law and was signed on December 30, 2000. The Act prohibits the carrying on of trust business in or from within Hong Kong unless the trustee is licensed or exempt.

The said Act has also replaced the Trust Companies Act of 1998, and confers new regulatory and information gathering powers on the Hong Kong Financial Trading Authority.  Accordingly, “Trust Business” is defined in section 7(5) of the Act as “the provision of the services of a trustee as a business, trade, profession or vocation.”

All undertakings under Trust must provide financial audited statements together with Certificate of Compliance to the Hong Kong Financial Trading Authority on or within four months of their year. These are discussed with the undertaking, along with changes to strategy, staffing as part of the Hong Kong Financial Trading Authority's off-site supervision.

Routine on-site review visits are undertaken by the staff (including anti-money laundering compliance testing) and the Hong Kong Financial Trading Authority also has the power to commission reports from reporting accountants on key aspects of systems and controls.