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The scope of a family trust (the “Trust” is to provide for a vehicle and medium through which property may be settled by settlors (the “Settlors”), and administered by a trustee (the “Family Trustee”) to the benefit of family members or family dependents (the “Beneficiaries”).
Set up of the Family Trustee
A Family Trustee must be a company duly registered at the Malta Business Registry, which, at all times, has:
- A minimum of three directors (individuals, not legal persons).
- One of the directors must possess knowledge and experience in the administration of trusts.
The objects of the company duly registered as a Family Trustee must be limited to acting as trustee in relation to a specific settlor or settlors, in any case for not more than five settlors at a time, and only with respect to family trusts.
One of the executive directors OR another senior officer of the company, as incorporated, must be registered as the Money Laundering Reporting Officer with the Financial Intelligence Analysis Unit (the “FIAU”).
A request for registration must be made to the Malta Financial Services Authority (the “MFSA”). For effective registration, documents which need to be submitted to the MFSA include, inter alia:
- Copy of draft memorandum and articles of association.
- Copies of the different management agreements which the Family Trustee is to use with different settlors.
- Copy of the trust deed of the first trust/s which the Family Trust shall be administering upon successful registration.
Ongoing obligations with respect to the Family Trustee include:
- The maintenance of an ongoing account of each Trust’s dealings
- Obtaining consent from the MFSA with respect to ongoing changes in the company’s board of directors and shareholders.
- The submission of a certificate of compliance, declarations as may be required by the MFSA to confirm the Trustee’s corporate and organizational structure.
The Trust is set up via the promulgation of a trust deed.
A Family Trustee is considered to be carrying out ‘relevant activity’ as it is considered to be a ‘trust service provider’ (in terms of Regulation 2(1) of the Prevention of Money Laundering and the Funding of Terrorism Regulations (the “PMLFTR”)), and accordingly, is considered to be a ‘subject person’ for AML purposes. This is the reason as to why an MLRO needs to be appointed.
The MLRO shall be responsible for all AML/CFT related obligations and is answerable to the FIAU.
Criteria in order to set up a family trust and family trustee
In order to set up the respective trust, a trust deed needs to be entered into between the settlor and the respective family trustee entity. For a family trustee entity to be set up and be duly registered with the MFSA, promoters of such an entity would need to set up a limited liability company with three natural persons as directors. At lease one of the directors must demonstrate sufficient knowledge in the operation and management of trusts, and all directors must be considered to be fit and proper to hold such a position. Additionally, a family trustee must appoint an MLRO for the proper adherence of all applicable AML and CFT laws and regulations. Since family trustees must be duly registered with the MFSA, promoters of such are required to submit the relevant application form, due diligence documentation and draft trust deed to be availed of with the respective family trusts under trusteeship.
Surrendering, suspending and/or cancelling a family trustee registration
Registration to act as a family trustee may be voluntarily surrendered by the family trustee entity through notification of such an intention to the MFSA, the latter of which may impose specific conditions relevant to such surrender. Such conditions may include, for example, the imposition of a delay prior to proceeding with surrender. For a request of surrender to be successful, the family trustee must confirm to the MFSA that, inter alia, it has informed its clients of such surrender, it has ceased to promote itself, in any manner, as a family trustee and that the company has no pending lawsuits and litigation. The MFSA may cancel or suspend registration of the family trustee if the respective family trustee entity is found to have breached applicable requirements in terms of law or regulation or if the respective family trustee hasn’t engaged in the management of family trusts within 12 months from the date upon which such family trustee has been successfully registered as such by the MFSA.
We have been using the services of CSB Group in their remit as security trustees for our recent bond issue. We have found CSB to be highly efficient and effective in their work. We will not hesitate to use their services in the future and would recommend them to any of our clients and partners seeking similar services.
Back in 2015 CSB Trustees & Fiduciaries Limited has been entrusted with the project to set up a security trust for us. Their knowledge and experience within the sector made this project easier for us all. The team is meticulous, attentive and always available whenever assistance is required from our end. We would definitely recommend them for their stellar service.
Malta Properties Company Plc
We have appointed CSB Trustees & Fiduciaries Limited to be the Security Trustee for a bond issued by our company; Stivala Group Finance p.l.c. The team that we worked closely with, was efficient, reliable, and knowledgeable and we couldn’t be more satisfied with the service provided. The team always made itself available even when provided with a short notice. We are glad we have engaged their services and we would definitely recommend them.
Stivala Group Finance p.l.c.
Tum Finance plc engaged CSB Trustees & Fiduciaries Limited to be the Security Trustee for a bond we recently issued. We have closely worked with a team of professionals and are pleased to give our testimonial in this regard. For sure we will request their services in the future. We definitely recommend CSB Trustees & Fiduciaries Limited to be the team that will be always there when you need them for the best advice and satisfaction. You made it so simple Thank you!
Tum Finance plc
We at MIDI plc have engaged the services of CSB Group on a trusteeship basis to serve a fundamental role in our secured bond issue. Their team has always been accommodating, well-prepared and have always ensured that our requirements are met in a most timely and efficient fashion. Their services have indeed exceeded our expectations. CSB Group were identified due to their knowledge and expertise in fiduciary obligations, amongst other qualities.