Private Trust Companies
Updated: Nov 24, 2021
TRUST COMPANIES ACT (CAP. 336) (“TCA”)
Types of trust business activities regulated under the TCA
The TCA is the legislative and regulatory framework for companies that are in the business of providing trust business services in Singapore, whether the trusts are established under Singapore law or other law. The framework sets out, among others, licensing requirements for persons conducting trust business in Singapore, fit and proper requirements for managers, directors and significant shareholders of trust companies, obligations with respect to the prevention of money laundering and countering the financing of terrorism and financial requirements for trust companies. The TCA is administered by MAS.
Under section 3 of the TCA, no person is allowed to carry on trust business in or from within Singapore unless that person is a licensed trust company. Typically, MAS would regard any activity which is conducted with system, repetition and continuity as carrying on a business.
The TCA regulates financial institutions that provide trust services for investment and wealth management purposes, such as succession planning. Trust business activities regulated under the TCA are as follows:
(a) providing services with respect to the creation of an express trust;
(b) acting as trustee in relation to an express trust;
(c) arranging for any person to act as trustee in respect of an express trust; and
(d) providing trust administration services in relation to an express trust.
Exemption from holding a trust business licence
Private trust companies are exempted under the TCA from the requirement to hold a trust business licence in respect of the carrying on of trust business.
A private trust company is a corporation —
(a) the purpose of which is solely to provide trust business services in respect of a specific trust or of specific trusts where —
(i) each settlor of such a trust is a connected person in relation to any other settlor of any other trust to which the corporation provides trust business services; and
(ii) each beneficiary of such a trust is a connected person in relation to the settlor of that trust or a charity; and
(b) that does not solicit trust business from, or provide trust business services to the public.
Regulatory requirements on private trust companies
Private trust companies are required, under regulation 4(2) of the Trust Companies (Exemption) Regulations, to engage a licensed trust company to carry out trust administration services for the purposes of conducting the necessary checks to comply with any written direction issued by MAS on the prevention of money laundering or countering the financing of terrorism.
Reporting requirements for exempt persons under the TCA
Banks, merchant banks and lawyers doing full trust business are required to notify MAS of their commencement of trust business, changes in particulars and cessation of trust business by way of Forms 8, 9 and 10 respectively.
A person who is exempt under regulation 4(1)(b)(iv) shall —
(a) whenever there is any change in his relevant particulars, lodge with the Authority a notice in Form 9 to inform the Authority of the change not later than 14 days after the date of the change; and
A person who is exempt under section 15 (1)(a) or (b) of the Act shall, whenever there is any change in its relevant particulars, lodge with the Authority a notice in Form 9 to inform the Authority of the change not later than 14 days after the date of the change.
(b) upon the cessation of any trust business in respect of which that person has been so exempt, lodge with the Authority a notice in Form 10 to inform the Authority of the cessation not later than 14 days after the cessation has taken place.
In addition, lawyers doing full trust business are required to lodge Form 6 with the Financial Centre Development Department (Asset Management Division) of MAS, within 60 days from the end of each calendar year.
A person who is exempt under regulation 4(1)(b)(iv) shall lodge with the Authority a statement in Form 6, in respect of each calendar year or such other period as the Authority may allow, within 60 days after the end of each calendar year.
Trust business services by Bestar
Bestar is a public accountant registered under the Accountants Act (Cap. 2), and an accounting corporation which is approved under that Act. We provide trust services, such as:
(i) the provision of services in relation to the creation of an express trust;
(ii) the arrangement for any person to act as a trustee in respect of an express trust;
(iii) the provision, in relation to an express trust, of trust administration services (examples, form-filling, carrying out the actual mechanics of making a distribution, obtaining signatures from or forwarding copies of documents relating to a trust to clients) and the drafting of accounting documentation, and
(iv) the giving of professional accountancy advice in connection with an express trust.
If you would like to know more, please contact Bestar.