The amendments to the Trusts and Trustees Act, which were brought into force by Act XI of 2014 on 25th April 2014, introduced the concept of family trusts in Article 43B of the said Act. Family trusts are trusts created to hold property settled by the settlor for the present and future needs of family members or family dependants who are definite and can be ascertained. Trustee companies which satisfy the requirements set out in Article 43B are not required to obtain authorisation, although they are subject to a registration requirement. The amendments also included an amendment to Article 52, empowering the Authority to issue rules to regulate trustees which are subject to a registration procedure in terms of Article 43B.
On 25th November 2014, in terms of Article 52, the MFSA issued for consultation draft rules applicable to trustees acting for family trusts as defined in Article 43B. On the same date, during a conference entitled 'The 4th Annual Malta Wealth Management Forum – Malta Family Law & Family Wealth' organised by ESAFON, Dr. Michelle Mizzi Buontempo gave a presentation on 'The Legal and Regulatory considerations relating to the Introduction of Family Offices in the Trusts and Trustees Act'. In her presentation, Dr. Mizzi Buontempo provided a brief background relating to the rationale leading up to the introduction of the concept of family trusts and also announced the way forward in relation to the regulatory approach to be adopted for companies acting as trustees for such trusts. In this respect Dr. Mizzi Buontempo referred to some of the matters which have been regulated by means of the draft rules, namely the definition of 'family members' and 'family dependants', the registration procedure and the relevant conditions, the composition of the board of directors, the requirement of a 'qualified director' and the duties incumbent on such director, as well as reporting obligations and co-operation with regulatory authorities.
The consultation period on these draft rules ended on 23 December 2014 and the Authority is currently in the process of reviewing the feedback received. The relative consultation document and draft rules are available for download from the MFSA website.
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