Friday, March 8, 2013
The Isle of Man's Financial Supervision Commission has issued new draft guidance on the expected practice of Trust Service Providers (TSPs) to strengthen existing guidelines in place since October 2010.
The guidance reminds licenseholders of their obligations in respect of their conduct when acting as trustees, trust administrators and protectors of trusts; and discusses enforcement tools at the Commission's disposal.
The Commission explained that it intends to strengthen the guidance as trust deeds often contain wide powers for the trustees and wide indemnities. Furthermore potential beneficiaries of discretionary trusts have limited rights to obtain information. It is possible that a trustee could engage in a course of conduct which is not a breach of the terms of the trust deed and is covered by an indemnity in the trust deed, but which nonetheless falls short of the General Licensing Policy and Rule Book requirements for competence and integrity.
This, the Commission pointed out, emphasizes the need for: High standards of professionalism in the industry; Rigorous internal checks and scrutiny within TSPs; and protectors of trusts to be independent of the trustee and unconflicted.
The latest guidance in particular seeks to strengthen the following provisions:
The draft document is to be discussed by the Government and representatives from the Isle of Man Branch of the Society of Trust and Estate Practitioners (STEP) and the Association of Corporate Services Providers (ACSP) at a meeting at the end of March.