Hong Kong’s Trust Law amendment due for first reading on 20 Feb

The Trustee Ordinance and the Perpetuities & Accumulations Ordinance are under the spotlight.

The Trust Law (Amendment) Bill 2013, aimed at modernising trust law in Hong Kong, was gazetted today.

According to a release, the bill would amend the Trustee Ordinance and the Perpetuities & Accumulations Ordinance, enhancing trustees' default powers while providing for appropriate checks and balances - making trusts administration more effective.

Secretary for Financial Services & the Treasury Prof KC Chan said Hong Kong must modernise its trust laws to enhance its status as an international asset-management centre.

"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.

Hong Kong trust law is based mainly on common law, supplemented by the Trustee Ordinance and the Perpetuities & Accumulations Ordinance, which have not been substantially reviewed or modified since they were enacted in 1934 and 1970. Some of their provisions are outdated and cannot meet present-day trusts' needs.

Prof Chan has given notice to present the bill to the Legislative Council for first reading on February 20.