Turks and Caicos Islands: Cutting-Edge New Trusts & Trustees Regime In The Turks And Caicos Islands
Last Updated: 16 September 2016

Revised fiduciary legislation breaks fresh ground in established British overseas financial centre

FOR IMMEDIATE RELEASE 14 September 2016:

This month the Turks and Caicos Islands ("TCI") – a highly-regulated white listed British Territory in the West Indies – brings into effect sweeping changes to its legislation governing trusts and trustees. By replacing statutes that were already relatively modern, TCI aims to offer a leading jurisdiction of choice for the establishment and administration of cross-border trusts, and to position itself as the 5 star jurisdiction of choice for trust, and trust companies.

The Trusts Ordinance 2016 contains expertly-drafted provisions for the reservation of powers by settlors (s.11); limitation of interference by foreign courts as in Mubarak v. Mubarak (s.16); the recognition of trusts and exclusion of forced heirship (s.17); the duties of trustees in regard to accounts (s.23); the provision of security to outgoing trustees (s.37); the creation and administration of purpose trusts (ss.45-50); the use of special trusts to hold designated company shares without involvement in the management of the business (ss.71-87); and establishing a simple solvency test to prevent creditors from setting aside validly established trusts (s.91). There are numerous other improvements to particular sections of the statute. The overall applicability of Anglo-Saxon case law is preserved, whilst enabling professional advisers to meet the exact needs of the most demanding family and commercial cases.

The Trust Companies (Licensing and Supervision) Ordinance 2016 revises the oversight regime to keep TCI financial institutions in line with the latest international standards operative in major financial centres. Resulting from extensive consultation between public, regulatory and private sectors, the Licensing and Supervision Ordinance is supported by new Trust Companies Regulations and a Code of Practice. These ensure that unrestricted trust companies are managed and controlled by fit and proper persons; and maintain financially sound condition, adequate resources, adequate internal systems and controls, prescribed share capital and statutory deposits, clear risk management strategy and policies,  proper compliance function, and the prescribed level of professional indemnity insurance. They are also required to observe strict guidelines for the maintenance of customer accounts, financial records and financial statements; as well as undertaking periodic reporting to the Financial Services Commission and annual external audit. A welcome new regime permits unregulated Private Trust Companies if administered by an unrestricted licence holder, and these are expected to be extremely useful in complex family structures. In addition, breaking new ground the Ordinance establishes a statutory Trust Law Advisory Committee to review and make ongoing recommendations for the reform of both substantive and regulatory laws in respect to trusts and trustees.

The Turks and Caicos government, the regulatory authority (www.tcifsc.tc) and Invest TCI have combined with the private sector to create a competitive regulatory regime with the specific goal of attracting new players in the UHNW advisory community to move to the TCI to service the needs of international wealthy families, many of whom have homes in the Islands.

"This legislation, supported by a respected judiciary with ultimate appeal to the UK Privy Council, ushers in an exciting new phase for TCI as a leading forum for international trusts, and aligns very well with TCI's stellar reputation as the leading upmarket Caribbean tourism and residential market" according to David Stewart, managing director of CORIATS in TCI.

CORIATS TRUST COMPANY Limited is a long-respected boutique provider of fiduciary services. It was the first full-service trust company established in the Turks and Caicos Islands, is the holder of Trustee Licence No. 1, and will soon celebrate forty years of helping prominent international families to make the most of their capital. Please refer to www.coriats.com for further information. CORIATS is part of the G&P Group.

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