Singapore Establishes Itself As A Trust Centre

Vanessa Doctor

22 October 2009

Singapore has the potential to build itself as a trust jurisdiction, given its solid regulatory and supervisory structure, high standards of probity, professionalism, and good business conduct, Law Minister K Shanmugam said in a speech at the 3rd Society of Trust and Estate Practitioners' Asia Conference in Singapore.

"As a financial centre, we have come through the crisis, with our reputation and standing enhanced. Our banks have avoided investing heavily in risky products. Our regulatory framework, and equally important, the regulatory environment, were such that prudence was emphasized. Throughout the crisis, no one questioned the stability or strength of our financial system or banks," Mr Shanmugan said.

His comments come at the height of a global war against questionable money that is often stashed away in so-called tax havens. Controversies like the Madoff scandal have, thus, prompted financial institutions worldwide to call for a greater exchange of information among banks. Recently, Swiss banking major UBS had set an example by signing an agreement with United States authorities to disclose information on certain clients with dubious accounts.

Singapore is also currently doing its share and slowly inching itself out of the OECD 'grey list' by amending domestic laws to increase transparency. Mr Shanmugan says that this level of stability that the city-state enjoys and implements makes itself a worthy candidate to become a trust jurisdiction.

"The crisis has highlighted the need for greater asset protection and structured wealth transfer among HNWIs. The rise in trust activity here will mean that we will also have to ensure disputes can be dealt with properly. Whilst litigation is well managed in the Singapore Courts, Singapore is also an attractive venue for arbitrating trusts quickly and privately," he said.

At present, there are around 40 licensed trust companies operating in the city-state. Mr Shanmugan noted that trust disputes may be settled within and beyond the Singapore International Arbitration Centre, as there exists a large pool of arbitration counsel to service clients.

"These core attributes, coupled with the growth of the region, puts in good stead to further strengthen our position as a respectable, competitive international financial centre," he concluded.