Hong Kong to Update Trust Law

Stephen Harris

13 March 2008

Hong Kong’s Financial Secretary John Tsang has confirmed in his budget speech that the government will review the Trustee Ordinance, which was modelled on the English Trustee Act of 1925, and hardly changed since. The announcement follows many years of concerted lobbying by STEP Hong Kong Branch, and a detailed review of the existing Ordinance that was submitted to the Government by STEP Hong Kong and the Hong Kong Trustees’ Association 18 months ago. Mark Lea, of Hong Kong law firm Lea & White, who helped draft Singapore’s updated trust law, has been advising STEP and HKTA and helped write the submission presented to the Government 18 months ago. It includes provisions for purpose trusts which, although Mr Lea had suggested be included in Singapore’s new trust law, the City State eventually left out as not being conservative enough. Mr Tsang also announced that the securities industry will be reviewed to increase competitiveness. This is likely in part a reaction to fund managers moving to Singapore because of faster approval of, in particular, exempt fund managers. The focus on attracting Islamic financial markets to Hong Kong will continue, said Mr Tsang, as will efforts to improve cooperation between Hong Kong and mainland financial markets, including access to investments in and through Hong Kong by mainland funds.