TRUSTS AND TRUSTEES ACT

CHAPTER 331

TRUSTS AND TRUSTEES ACT

To make provision with respect to Trusts and to provide for matters

ancillary or incidental thereto.

30th June, 1989

ACT XXXV of 1988, as amended by Acts XIV of 1989, XX of 1994, XIII

of 2004 (see transitory provision at end of Chapter); XII of 2006; Legal

Notice 424 of 2007; Acts XIII of 2007, III, XV of 2009, X, XVI of 2011, XI

of 2014, XXXI of 2017, V and XXXIX of 2020 and XI and XXIX of 2025.

(1)

The short title of this Act is the Trusts and Trustees

Act.

(2) The provisions of this Act, except as otherwise provided in

this Act, shall apply to all trustees, whether such trustees are

authorised, or are not required to obtain authorisation in terms of

article 43 and article 43A.

Amended by

XIV. 1989.13;

(Articles 2 and 5A)

XX. 1994.4.

Substituted by

CONVENTION ON THE LAW APPLICABLE TO

XIII. 2004.34.

TRUSTS AND ON THEIR RECOGNITION

CHAPTER 1- SCOPE

Article 1

This Convention specifies the law applicable to trusts and governs their

recognition.

Article 2

For the purposes of this Convention, the term "trust" refers to the legal

relationship created - inter vivos or on death - by a person, the settlor, when assets

have been placed under the control of a trustee for the benefit of a beneficiary or for

a specified purpose.

A trust has the following characteristics

(a) the assets constitute a separate fund and are not a part of the trustee’s

own estate;

(b) title to the trust assets stands in the name of the trustee or in the name of

another person on behalf of the trustee;

(c) the trustee has the power and the duty, in respect of which he is

accountable, to manage, employ or dispose of the assets in accordance

with the terms of the trust and the special duties imposed upon him by

law. The reservation by the settlor of certain rights and powers, and the

fact that the trustee may himself have rights as a beneficiary, are not

necessarily inconsistent with the existence of a trust.

Article 3

The Convention applies only to trusts created voluntarily and evidenced in

writing.

Article 4

The Convention does not apply to preliminary issues relating to the validity of

wills or of other acts by virtue of which assets are transferred to the trustee.

Article 5

The Convention does not apply to the extent that the law specified by Chapter II

does not provide for trusts or the category of trusts involved.

CHAPTER II - APPLICABLE LAW

Article 6

A trust shall be governed by the law chosen by the settlor. The choice must be

express or be implied in the terms of the instrument creating or the writing

evidencing the trust, interpreted, if necessary, in the light of the circumstances of the

case.

Where the law chosen under the previous paragraph does not provide for trusts or

the category of trust involved, the choice shall not be effective and the law specified

in Article 7 shall apply.

TRUSTS AND TRUSTEES

Article 7

Where no applicable law has been chosen, a trust shall be governed by the law

with which it is most closely connected. In ascertaining the law with which a trust is

most closely connected reference shall be made in particular to

(a) the place of administration of the trust designated by the settlor;

(b) the situs of the assets of the trust;

(c) the place of residence or business of the trustee;

(d) the objects of the trust and the places where they are to be fulfilled.

Article 8

The law specified by Article 6 or 7 shall govern the validity of the trust, its

construction, its effects, and the administration of the trust.

In particular that law shall govern -

(a) the appointment, resignation and removal of trustees, the capacity to act

as a trustee, and the devolution of the office of trustee;

(b) the rights and duties of trustees among themselves;

(c) the right of trustees to delegate in whole or in part the discharge of their

duties or the exercise of their powers;

(d) the power of trustees to administer or to dispose of trust assets, to create

security interests in the trust assets, or to acquire new assets;

(e) the powers of investment of trustees;

(f)

restrictions upon the duration of the trust, and upon the power to

accumulate the income of the trust;

(g) the relationships between the trustees and the beneficiaries including

the personal liability of the trustees to the beneficiaries;

(h) the variation or termination of the trust;

(i)

the distribution of the trust assets;

(j)

the duty of trustees to account for their administration.

Article 9

In applying this Chapter a severable aspect of the trust, particularly matters of

administration, may be governed by a different law.

Article 10

The law applicable to the validity of the trust shall determine whether that law or

the law governing a severable aspect of the trust may be replaced by another law.

CHAPTER III – RECOGNITION

Article 11

A trust created in accordance with the law specified by the preceding Chapter

shall be recognised as a trust. Such recognition shall imply, as a minimum, that the

trust property constitutes a separate fund, that the trustee may sue and be sued in his

capacity as trustee, and that he may appear or act in this capacity before a notary or

any person acting in an official capacity. In so far as the law applicable to the trust

requires or provides, such recognition shall imply, in particular -

(a) that personal creditors of the trustee shall have no recourse against the

trust assets;

(b) that the trust assets shall not form part of the trustee’s estate upon his

insolvency or bankruptcy;

(c) that the trust assets shall not form part of the matrimonial property of

the trustee or his spouse nor part of the trustee’s estate upon his death;

(d) that the trust assets may be recovered when the trustee, in breach of

trust, has mingled trust assets with his own property or has alienated

trust assets. However, the rights and obligations of any third party

holder of the assets shall remain subject to the law determined by the

choice of law rules of the forum.

Article 12

Where the trustee desires to register assets, movable or immovable, or documents

of title to them, he shall be entitled, in so far as this is not prohibited by or

inconsistent with the law of the State where registration is sought, to do so in his

capacity as trustee or in such other way that the existence of the trust is disclosed.

Article 14

The Convention shall not prevent the application of rules of law more favourable

to the recognition of trusts.

CHAPTER IV - GENERAL CLAUSES

Article 15

The Convention does not prevent the application of provisions of the law

designated by the conflicts rules of the forum, in so far as those provisions cannot be

derogated from by voluntary act, relating in particular to the following matters

(a) the protection of minors and incapable parties;

(b) the personal and proprietary effects of marriage;

(c) succession rights, testate and intestate, especially the indefeasible

shares of spouses and relatives;

(d) the transfer of title to property and security interests in property;

(e) the protection of creditors in matters of insolvency;

(f)

the protection, in other respects, of third parties acting in good faith.

If recognition of a trust is prevented by application of the preceding paragraph, the

court shall try to give effect to the objects of the trust by other means.

Article 16

The Convention does not prevent the application of those provisions of the law of

the forum which must be applied even to international situations, irrespective of

rules of conflict of laws.

Article 17

In the Convention the word "law" means the rules of law in force in a State other

than its rules of conflict of laws.

Article 18

The provisions of the Convention may be disregarded when their application

would be manifestly incompatible with public policy (ordre public).

Article 22

The Convention applies to trusts regardless of the date on which they were

created.

(1)

In this Act, unless the context otherwise requires -

"approved jurisdiction" means a jurisdiction which has been

approved by the Authority for the purposes of this Act;

"approved person" means a person of good reputation possessing

experience and qualifications in financial, fiduciary, accounting or

legal services and approved by the Authority as being fit and proper

to carry out the duties of a trustee

Provided that where a person is not in possession of any

qualifications in financial, fiduciary, accounting or legal services,

the Authority may, in exceptional circumstances, consider the

requirement to be satisfied if such person can prove that he has

experience in the relevant fields

Provided further that in the case of a company or body

corporate, the majority of members of the Board of Directors or the

persons entrusted with the management and administration thereof, in

addition to being fit and proper persons, must satisfy both the

experience and qualifications criteria;

"the Authority" means the Malta Financial Services Authority

established in terms of the Malta Financial Services Authority Act;

"beneficiary" means a person entitled to benefit under a trust or

in whose favour a discretion to distribute property held in trust may

be exercised;

"body corporate" means any entity having a legal personality

distinct from that of its members;

"breach of trust" has the meaning assigned to it by article 4;

"charitable purpose" means any charitable, social or

philanthropic purpose, and without prejudice to the generality of

the aforesaid, includes in particular

(a) the advancement of education, including physical

education and sports;

(b) the advancement of religion;

(c) the advancement of health;

(d) social and community advancement;

(e) the advancement of culture, arts and national heritage;

(f)

the advancement of environmental protection and

improvement, including the protection of animals;

(g) the promotion of human rights, conflict resolution,

democracy and reconciliation;

(h) the promotion or protection of the interests of other

social purpose organisations, including federations of

such organisations; or

(i)

any other purpose as may be prescribed by the

Minister by means of regulations made by virtue of

this Act;

but does not include a political purpose. For the purposes of this

definition ''political purpose'' means the promotion of the interests

of a political party or a political candidate, whether at local,

national or international level, or to seek or oppose changes in the

law or governmental policy or decisions except when such law or

government policies or decisions directly concern the achievement

of charitable purposes;

"close links" means a situation in which two or more persons are

linked in any of the following ways

(a) by participation, in the form of direct ownership or by

way of control, of twenty per centum or more of the

voting rights or capital of a body corporate;

(b) by control, through the relationship between a parent

undertaking and a subsidiary undertaking as defined in

article 2(2) of the Companies Act, or a similar

relationship between any natural or legal person and

an undertaking; or

(c) to one and the same third person when

(i)

such person is a member of the individual

trustee’s family, including, but not limited to,

the trustee’s spouse or partner, the trustee’s child

or step-child, the trustee’s parents and other

dependants of the trustee;

(ii) such person is acting in the capacity of trustee of

any trust, the beneficiaries of which include (a)

the trustee, the trustee’s dependants, including,

but not limited to, the trustee’s spouse, children

or step-children; or (b) a body corporate with

which one is associated in terms of (a) and (b)

above;

(iii) such person is acting as business partner of the

trustee or of any person who, by virtue of sub-

paragraphs (i) or (ii) above is connected with the

trustee;

"commercial transaction" means the following transactions and

any transactions connected or ancillary thereto

(a) securities offerings, whether to the public or for

private placement, portfolio management and custody

of investment instruments;

(b) the securitisation of assets;

(c) the grant of real or personal security interests

including hypothecs, mortgages, privileges, pledges

and guarantees;

(d) collective investment schemes;

(e) employee benefit

or

retirement

schemes

or

arrangements;

(f)

syndicated loan agreements and other multi-creditor

banking facilities;

(g) insurance policies and the payment of proceeds

thereunder;

(h) timeshare and multi-property structures;

(i)

settling an asset on trust as security for a loan obtained

for commercial purposes; and

(j)

such other commercial transactions as may be

prescribed in a Notice issued by the Minister;

"company" means a limited liability company duly formed and

registered under any law for the time being in force in Malta, and

includes a similar body corporate incorporated or registered

abroad;

"conflict of interest" means any situation in which the trustee’s

personal interest or the interests which the trustee owes to any other

person, can lead to or can be perceived as leading to a situation where

such interests conflict with the fiduciary duties which the trustee owes

to the beneficiary;

"the Convention” means the Hague Convention on the law

applicable to trusts and on their recognition, which was adopted by

the Hague Conference on Private International Law on the 20

October 1984, and which came into force on the 1 January 1992 set

out in all material parts in the Schedule;

"corporate trustee" means a trustee which is a legal person

wherever incorporated;

"Court" means the Civil Court in its voluntary jurisdiction unless

otherwise indicated or unless the context refers to any court seized

of a matter in which case it is the court where the matter arises;

"foreign trust" means a trust the proper law of which is not the

law of Malta;

" M a l t a ’s i n t e r n a t i o n a l c o m m i t m e n t s " m e a n s M a l t a ’s

commitments, responsibilities and obligations arising out of

m e m b e r s h i p o f , o r a ff i l i a t i o n t o , o r r e l a t i o n s h i p w i t h , a n y

international, global or regional organisations or grouping of

countries or out of any treaty, convention or other international

agreement, however called, whether bilateral or multilateral, to

which Malta is a party;

"Maltese trust" means a trust whose proper law is the law of

Malta;

"Minister" means the Minister responsible for the regulation of

Financial Services;

"Notary keeper" means the person entrusted to be a keeper of

notarial acts in terms of the Notarial Profession and Notarial

Archives Act;

"operating in or from Malta" means the existence of an office,

branch, or other centre of professional or commercial activities of a

regular nature in Malta and does not include one or more unconnected

and sporadic acts;

"person" means an individual or body corporate;

"prescribed" means prescribed by regulations made under this

Act;

"property" means property of any kind or description, whether

movable or immovable, personal or real, and wherever situated,

and in relation to rights and interests whether vested, contingent,

voidable or future;

"qualifying shareholding" means a direct or indirect holding in a

company which represents ten per centum or more of the share capital

or of the voting rights or which makes it possible to exercise a

significant influence on the management of the company in which that

holding subsists, and "qualifying shareholder" shall be construed

accordingly;

"register" includes any kind of record;

"regulated market" shall have the same meaning assigned to it by

the Financial Markets Act;

"remuneration" means any compensation or reward for acting as

a trustee to be paid out of trust property in accordance with the

terms of trust, or otherwise, other than the reimbursement of

expenses of the trustee or the indemnification in favour of the

trustee for expenses, liabilities and other claims;

"resident in Malta" shall mean, in case of an individual, a person

whose habitual residence is in Malta and in the case of a body

corporate, a body corporate having its registered address in Malta;

"securities" includes shares, debentures, interest in investment funds

or any other similar instrument issued by a company or other

commercial partnership;

"settlor" means the person who makes the trust and includes a

person who provides trust property or makes a disposition on trust

or to a trust;

"terms of a trust" means the written or oral terms of a trust,

expressed or implied, and any other terms made applicable by the

proper law;

"trust" has the meaning described in article 3, and includes the

trust property, the rights, powers, duties, interests, relationships

and obligations under a trust;

"trustee", in relation to property, means the person or persons

holding the property or in whom the property is vested on terms of

trust in accordance with the provisions of this Act or, a person that is

otherwise deemed to be a trustee under this Act;

"trust instrument" means the instrument whereby the trust is

created and includes any instrument varying the terms of the trust

and also a unilateral declaration of trust;

"trust property" means the property for the time being held on

trust;

"unilateral declaration of trust" has the meaning assigned to it in

terms of article 7(3);

"unit trust" means any trust established for the purpose of, or

having the effect, or providing, for persons having funds available

for investment, facilities for the participation by them as

beneficiaries under the trust, in any profits or income arising from

the acquisition, holding, management or disposal of any property

whatsoever, being a collective investment scheme as defined in the

Investment Services Act or a retirement scheme or a retirement

fund licensed under the Retirement Pensions Act set up as a unit

trust;

(2) Any reference in this Act to any law, or provision thereof,

shall be construed as a reference to that law or provision as from

time to time in force, and shall include a reference to any enactment

replacing such law or provision, and to any subsidiary legislation

made thereunder.

(3) Words and expressions used in this Act with reference to

any other law shall, so far as necessary to give effect to this Act and

consistently with the provisions thereof, have the same meaning as

they have in the law with reference to which they are used in this

Act.

(4) In this Act and in any regulations made thereunder, if there

is any conflict between the English and Maltese text, the English

text shall prevail.

TRUSTS

(1) A trust exists where a person (called a trustee) holds, as

owner or has vested in him property under an obligation to deal

with that property for the benefit of persons (called the

beneficiaries), whether or not yet ascertained or in existence, which

is not for the benefit only of the trustee, or for a charitable purpose,

or for both such benefit and purpose aforesaid.

(2) The trust property shall constitute a separate fund owned by

the trustee, distinct and separate from the personal property of the

trustee and from other property held by the trustee under any other

trust.

(3) The trust property is held by or in the name or under the

control of the trustee who shall have full power as well as the duty

for which he is accountable, to administer, employ or dispose of the

trust property in accordance with the terms of the trust and any

special duties imposed on the trustee by any law applicable thereto,

to sue and be sued in respect of the trust and otherwise to act in all

matters concerning the trust.

(4) The holding of property under trusts shall have the

following legal effects

(a) that personal creditors of the trustee shall have no

recourse against the trust property;

(b) that the trust property shall not form part of the

trustee’s personal estate upon his insolvency or

bankruptcy; and

(c) that the trust property shall not form part of the

matrimonial property of the trustee or his spouse nor

part of the trustee’s estate upon his death.

(5) A trustee shall be entitled to appear or act in his capacity as

trustee before any court, any notary or any person acting in an

official capacity. Where the trustee desires to register property,

movable or immovable, or documents of title to them, he shall be

entitled to do so in his capacity as trustee or in such other way that

the existence of the trust is disclosed.

(6) Trusts create fiduciary obligations upon the trustee in

favour of the beneficiary of the trusts. The settlor of trusts shall

have no rights in relation to trust property except as provided by

this Act.

Any breach of duty imposed on a trustee by this Act or by

the terms of the trust or by the proper law of the trust, and any act

or neglect on the part of the trustee which is not authorised or

excused by this Act, or the proper law of the trust or the terms of

the trust, shall be and is by this Act defined a breach of trust.

(1) Subject to the provisions of this Act, a trust shall be

gov erned by its proper law and shall be interpreted and be

enforceable accordingly.

(2) The proper law of the trust shall be determined in

accordance with this Act.

(3) The terms of a trust may provide for the proper law of the

trust to be changed to the law of another jurisdiction.

(1) The provisions of articles 1 to 12, 14, 15, 16 (the first

paragraph only), 17, 18 and 22 (the first paragraph only) of the

Convention as set out in the Schedule shall have the force of law in

Malta.

(2) Those provisions shall, so far as applicable, have effect not

only in relation to the trusts described in article 2 and 3 of the

Convention but also in relation to any other trusts of property

arising under the law of another country.

(3) In article 17 of the Convention, the reference to a State

includes a reference to any country or territory (whether or not a

party to the Convention) which has its own system of law.

(4) Article 22 of the Convention shall not be construed as

affecting the law to be applied in relation to anything done or

omitted before the coming into force of the Recognition of Trusts

Act.

(5) Nothing in the Convention shall have any effect on the

interpretation of the laws of Malta relating to fiscal matters.

(1) When the proper law of a trust is the law of Malta as

t h e c h o s e n ap p l i c a b l e l a w o f t he t r u s t o r a s d e t er m i n e d i n

accordance with article 7 of the Convention, notwithstanding the

p r o v i s i o n s o f a n y o t h e r l a w, t h e v a l i d i t y o f t h e t r u s t , i t s

construction, its effects and the administration of the trust shall be

governed by this Act and other provisions of Maltese law on trusts.

(2) When the proper law of a trust is a foreign law as the

chosen applicable law of the trust or as determined in accordance

with article 7 of the Convention, notwithstanding the provisions of

any other law, the validity of the trust, its construction, its effects

and the administration of the trust shall be governed by such

foreign law and shall be recognised and given effect to in Malta in

accordance with the Convention and this Act.

(3) The administration of a trust may be regulated by a law

different from the proper law of the trust.

(4) Trusts created or recognised in accordance with this Act are

not prohibited by articles 331, 757 to 761 and 1776 of the Civil

Code.

(5) Article 586 of the Civil Code shall not affect any term of a

trust because it relates to the inheritance of the settlor or because a

disposition relating to property under trusts is to take effect after

the death of the settlor.

(6) Subject to the provisions of article 11 and article 21(7),

when a commercial transaction includes the appointment of a

trustee to hold property under trusts in relation to such transaction,

the trust shall operate in accordance with the express terms of the

trust instrument.

(1) Subject to the provisions of subarticle (2), in the case

of a trust governed by Maltese law, where the law of Malta contains

provisions with regard to the following matters -

(i) the protection of minors or incapable parties;

(ii) the personal and proprietary effects of marriage;

(iii) succession rights, testate and intestate,

especially the indefeasible shares of spouses,

ascendants and descendants;

(iv) the transfer of title to property and security

interests in property;

(v)

the protection of creditors in matters of

insolvency;

(vi)

the protection, in other respects, of third parties

acting in good faith,

which cannot be derogated from by voluntary act, such laws shall

prevail over the terms of the trust unless otherwise expressly

provided in this Act or in other provisions of applicable law

relating to trusts and related matters.

(2) To the extent that there exist rules of mandatory application

t h e c o u r t s sh al l a p p l y s u c h m a n d a t o r y r u l e s su b j e c t t o t h e

provisions of article 6B.

(3) When a trust is governed by Maltese law and has no

connection to Malta by reason of the domicile of the settlor at the

time of settlement of the property on trust or the situs of the

property, when immovable, the trust shall be governed by the

provisions of this Act except that the provisions of subarticle (1)

shall not apply in any manner. In such cases no regard shall be had

to

(i)

the domicile, habitual residence, registration,

authorisation or place of business in Malta of the

trustee or any protector or any person rendering

administration, accounting or other services to

the trustee, or

(ii) the fact that the proper law of the trust is

Maltese Law; or

(iii) the situs of property in Malta, when movable; or

(iv) the place of execution of the deed of trust, any

documents relating to the trusts or the trust

property or other transaction documents is

Malta.

(4) In the case of a foreign trust, the provisions of subarticle (1)

shall only apply to such trust when the settlor is domiciled in Malta

at the time of creation of the trust, subject always to the rules stated

in article 6B.

(5) In the case of a foreign trust, when the settlor of such a trust

is not domiciled in Malta at the time of the creation of the trust, the

provisions of this Act shall apply only in so far as they regulate the

recognition or otherwise in Malta of the effects of such trust.

(6) To the extent that there exist rules of mandatory application

in the law applicable in the circumstances in terms of Maltese

private international law, the courts of Malta may apply such

mandatory rules subject to the provisions of article 6B.

(7) When a court is requested to recognise a foreign judgement

which enforces any rules of mandatory application as referred to in

subarticle (6), the court may accede to such request subject to the

provisions of article 6B.

In order to ensure that the provisions of applicable law

which cannot be derogated from by voluntary act are applied in a

manner which preserves the trust relationship as far as possible, the

following rules shall apply

(a) the application of the mandatory rules shall not

produce the failure or invalidity of the trust, and where

possible, the trust shall continue under the same terms

in relation to property which is unaffected by such

mandatory laws. Subject to any order of the court, the

affected property shall be held by the trustee in trust

for the settlor absolutely, or if he is dead, for his heirs;

(b) the trustee shall be empowered to -

(i)

vary the terms of the trust in so far as relates to

the nature or the extent of benefit, or

(ii) do such acts as are necessary and legally

permissible,

so that the beneficiary derives the benefits in

accordance with the intentions expressed by the settlor

in the trust instrument in a manner compatible with the

mandatory rules and any property which becomes free

from trusts for any reason shall be held by the trustee

in trust for the settlor absolutely, or if he is dead, for

his heirs;

(c) for the purposes of resolving conflicts between the

trust relationship and any mandatory provisions and to

enable the continuance of the trust as specified in

paragraphs (a) and (b), the terms of the trust, where

silent, shall be deemed to include

(i)

the power, without any obligation to do so, of

the trustee to reduce the trust assets and return

all or part of them to the settlor or the estate of

the settlor so as to achieve compliance with such

provisions of law;

(ii) the power of the trustee to enter into arbitration

and mediation agreements and to reach a

compromise to disputes and claims by third

parties; and

(iii) the power to seek directions from the Court on

such matters;

such powers being exercisable notwithstanding any

contrary provisions of the trust and, provided the

trustee acts honestly, in good faith and reasonably,

such acts shall not constitute a breach of trust.

(d) the property of the settlor which is not settled in trust

should first be utilised, to the extent possible, to meet

the claims of any person seeking to invalidate or

reduce a trust;

(e) notwithstanding any other applicable law, the trustee

may meet a valid claim being made against the trust

property, whether voluntarily or as a result of a court

direction, order or judgement, by a payment of value

in money and shall not be obliged to return property

settled in trust in kind;

(f)

any person who succeeds in reducing the property

under trusts or obtains a court order to invalidate a

trust in part or who enjoys the benefits of an

arrangement with the trustee as provided in paragraph

(c)(i), shall forfeit the benefits under the trusts, unless

the terms of the trust expressly state otherwise or the

trustee considers it unreasonable in the circumstances

and obtains the consent of the Court to maintain in

force trusts in favour of such person subject to such

conditions as the Court may consider appropriate;

(g) in any event and notwithstanding any provision of law,

a trustee shall not be subject to an obligation to pay or

return more than the trust property held by him under

trust, after deducting any fees and costs, and he shall

not be subject to any obligation to account for any

distributions made by him in good faith prior to having

written notice of any claim.

(1) Within the meaning of article 3, a trust may come into

existence in any manner.

(2) Without prejudice to the generality of subarticle (1), a trust

m a y c o m e i n t o e x i s t e n c e u n i l a t er a l l y o r o t h e r w i s e b y o r a l

declaration, or by an instrument in writing including by a will, by

operation of law or by a judicial decision

Provided that where assets are held, acquired or received by

a person for another on the basis of oral arrangements of a fiduciary

nature, express or implied, there shall be presumed to be a mandate

regulated by Title XVIII of Book Second of the Civil Code or a

deposit regulated by Title XIX of Book Second of the Civil Code,

as the case may be, unless there is evidence of an intention to create

an oral trust.

(3) A unilateral declaration of trust is a declaration in writing

made by a trustee stating that it is the trustee of a trust, containing

all the terms of the trust as well as the names or the information

enabling the identification of all the beneficiaries.

(4)

A unit trust shall be created by a written instrument.

(1)

The Courts of Malta shall have jurisdiction where -

(a) the trust is a Maltese trust; or

(b) the trustee is resident in Malta or is a trustee

authorised by the Authority, or is otherwise constituted

in terms of Maltese law; or

(c) any trust property is situated in Malta; or

(d) administration of any trust property is carried on in

Malta.

(2)

Notwithstanding the provisions of the Code of Organization

and Civil Procedure, when the trust instrument contains a provision

granting jurisdiction to the courts of the country the law of which

expressly governs the trust, the Courts in Malta shall, on demand of

any party to the proceedings, provided it is made in limine litis,

stay proceedings which may be instituted in Malta in favour of the

chosen forum

Provided that the court may in any case issue such interim

orders for the protection of any interested party as it considers

appropriate, and provided further that the court shall enjoy a

discretion on whether to stay the proceedings if the trust property

consists of immovable property in Malta or the settlor or the

beneficiaries are domiciled and resident in Malta.

(3) Subject to the above, the provisions of Sub-title III of Title

II of Book Third of the Code of Organization and Civil Procedure

(Of Pleas to the Jurisdiction) shall apply.

(1) A beneficiary has an entitlement, called a beneficial

interest, in or to the trust property, as the case may be. The

beneficiary may enjoy the beneficial interest subject to the terms of

the trust and the provisions of this Act and any other provisions of

law applicable to trusts.

(2) Rights of a beneficiary are personal to him and cannot be

transmitted by inheritance except as provided for in the terms of the

trust. Subject to any applicable laws and only as stated in terms of the

trust, creditors, spouses, heirs or legatees of the beneficiary may have

rights only to the extent of the beneficiary’s entitlements under the

trust and have no other rights in relation to the trust property or the

trustee.

(3) The interest of a beneficiary under a trust shall be deemed

to be movable property, even if the trust property includes

immovable property.

(4) A person shall not be entitled to benefit under a trust unless

he is -

(a) identifiable by name; or

(b) ascertainable by reference to a class or to a

relationship to some person, whether or not living at

the time which under the terms of the trust is the time

by reference to which members of a class are to be

determined;

and if there are no beneficiaries identifiable or ascertainable as

aforesaid the trust shall, unless the purpose of the trust is a

charitable purpose, fail.

(5) Persons who are not yet conceived at the time of the

settlement of property under trusts may be named as beneficiaries

or form part of a class of beneficiaries but their rights arise only

once they are born viable.

(6)

A settlor of a trust may also be a beneficiary under the trust.

(7) The terms of the trust may provide for the addition of a

person as a beneficiary, the exclusion of a beneficiary from benefit,

or the imposition on a beneficiary of an obligation as a condition

for benefit.

(8) When the trustee is granted the power to add a person as a

beneficiary such power shall be valid on condition that such person

is identifiable by name or forms part of a class of persons the

members of which are reasonably individually identifiable, such

identification to be given either in the trust instrument or in any

other written instrument, signed by the settlor, whether binding or

not on the trustee.

(9) A person who may be added as a beneficiary in terms of a

power granted to the trustee shall not enjoy any rights in relation to

the trust property or against the trustee and shall not be considered

a beneficiary in any manner until appointed as a beneficiary by the

trustee.

(10) It shall be lawful for a trustee to be granted the discretion as

to which beneficiaries are to benefit, the quantity of any benefit, at

what time and in what manner beneficiaries are to benefit and such

other powers relating to the appointment, application or

advancement of trust property.

(11) A beneficiary in whose favour a discretion to appoint or

advance property may be exercised shall have no rights in or to

specific trust property until such time as such discretion is

exercised by the appointment, application or advancement of such

trust property in favour of such beneficiary

Provided that nothing in this subarticle shall be construed

as excluding the duty of the trustee to properly and fairly consider

all such beneficiaries in the exercise of his discretion.

(12) A beneficiary may, by instrument in writing, disclaim his

whole interest and such a disclaimer shall be irrevocable, whether or

not he has received any benefit from his interest.

(13) Subject to the terms of the trust, a beneficiary may disclaim

part of his interest, whether or not he has received some benefit

from his interest; in any such case, but subject to the terms of the

trust, a disclaimer may, by the instrument by which the interest is

disclaimed, be made revocable, and shall then be capable of

revocation in the manner and under the circumstances therein

mentioned or referred to.

(14) Subject to the terms of the trust, a beneficiary may, by

instrument in writing, sell, charge, transfer or otherwise deal with

his interest in any manner.

(15) (a) The provisions of this article shall apply to

dispositions in wills in favour of trustees whether

appointed inter vivos or by testamentary disposition

notwithstanding the provisions of articles 688, 693 and

695 and other provisions of the Civil Code.

(b) A disposition in a will in favour of -

(i) a named trust, or

(ii) the trustee of a named trust, or

(iii) a named trustee or in his stead the pro tempore

trustee in relation to a named trust,

whether created inter vivos or by means of a will, shall

be valid whether the trustee is in office or yet to be

appointed in accordance with the terms of a trust.

(c) Any disposition in a will shall be valid even if, at the

time of the opening of succession -

(i)

the named trustee is no longer the trustee of the

trust indicated in the will; or

(ii) there is no trustee in office,

and any such disposition shall be construed as

referring to the trustee pro tempore of the trust

indicated in the will.

(d) Without prejudice to the right of a trustee to accept an

inheritance with the benefit of inventory, a trustee may

not renounce to a benefit under a will pursuant to a

disposition in his favour as trustee or in favour of the

trust except with the consent of all the beneficiaries or

the Court.

(e) The refusal to accept to act as a trustee under a trust or

the resignation of a trustee from office shall not in any

way affect the operation of a testamentary disposition

in favour of a trust and, in such case, the provisions of

articles 19 and 20 shall apply.

(1) Subject to the terms of the trust, a trustee may accept

the settlement of any additional property under the same terms of

the trust.

(2) The trust property shall be such property as is settled in

trust by the settlor, that subsequently added, all fruits therefrom and

property which represents the original or added property.

(1) A trust shall fail -

(a) if it requires, purports or encourages the doing of any

act which is a criminal offence under the laws of Malta

or would be such offence if done in Malta;

(b) if it has income accruing to, or derived by it, which

originates from an operation, transaction or other

activity which is a criminal offence under the laws of

Malta or which, if carried out in Malta, would be such

an offence, or comprises property the receipt,

ownership or control of which is or would be such an

offence as aforesaid.

(2) Trusts shall fail if any court declares that their purpose or

the terms of trust are not possible, or illegal, immoral or contrary to

public policy, or otherwise tainted by error, fraud or violence, or

any other reason which invalidates legal acts according to the laws

of Malta.

(3) The Court may declare the failure of all or of only one or

more purposes or terms of the trust and shall have the power to

direct that the purposes or terms which can be properly separated

from th e fail ed pu rposes or terms cont inue to b e valid and

enforceable subject to any directive it may give.

(4) Where the trustee of a trust is of the opinion that the trust is

or may be wholly or in part invalid he shall seek directives from the

court as to the validity or otherwise of the trust and as to any matter

concerning the property subject to that trust and his obligations in

relation thereto.

(5) Directives as provided in subarticle (4) may also be

requested by the settlor, and by any of the beneficiaries.

(6) Property as to which a trust has wholly or partially failed

shall, subject to any order of any court or a direction issued in

terms of article 38C, be held by the trustee in trust for the settlor

absolutely, or if he is dead, for his heirs.

(1) A trust may continue until the one hundred and twenty-

fifth anniversary of the date on which it came into existence and,

unless sooner terminated, shall then terminate.

(2) Subarticle (1) shall not apply to a trust for a charitable

purpose, to a unit trust or to a retirement scheme licensed in terms

of the Retirement Pensions Act and set up as a trust.

(1) The terms of a trust may make the interest of a

beneficiary -

(a) liable to termination; or

(b) subject to restriction on alienation or dealing; or

(c) subject to diminution or termination in the event of the

beneficiary becoming bankrupt, or insolvent, or any of

his property becoming liable to seizure for the benefit

of his creditors; or

(d) not liable to attachment under a garnishee order issued

against the trustee or to termination without the prior

consent of the Court, when the interest is expressed to

be for the maintenance of the beneficiary or as a

pension.

(2) In the case of a testamentary trust and where the benefit to

the beneficiary consists in an annuity or pension or the use and

enjoyment of property and the enjoyment of fruits therefrom, the

terms of the trust may make the interests of the beneficiary -

(a) subject to restriction on alienation or dealing;

(b) not liable to attachment under a garnishee order served

on the trustee as garnishee; or

(c) not liable to termination without the prior consent of

the Court.

Where the terms of a trust provide for the variation of its

terms such power to vary shall be without prejudice to the power

vested by this Act in the court for the variations of the terms of a

trust.

(1) The reservation or grant by the settlor of any

beneficial interest in the trust property or of any of the following

powers shall not affect the validity of the trust, nor delay the trust

taking effect

(a) any powers to appoint, add or remove any trustees,

protectors or beneficiaries;

(b) any powers to appoint an investment adviser or

investment manager

Provided that the reservation of powers referred to in

paragraphs (a) and (b) shall be without prejudice to other powers

that can be reserved by the settlor in terms of the other provisions

of the Act.

(2) Where a power mentioned in sub-article (1) has been

reserved or granted by the settlor, a trustee who acts in accordance

with the exercise of the power shall not be considered to be acting

in breach of trust.

(1) Where a trust or a power exercisable under a trust is by

the terms thereof, expressed to be -

(a) revocable, whether wholly or in part; or

(b) capable of variation,

no such revocation or variation shall prejudice anything lawfully

done by a trustee in relation to a trust before he receives notice of

such revocation or variation.

(2) Subject to the terms of the trust, if a trust is revoked the

tr us tee sh al l ho ld t h e t r ust p r op er ty i n t ru st f or th e set tl or

absolutely.

(3) Where a trust is partly revoked subarticle (2) shall apply to

the property affected by the revocation.

(4) Where trusts have been settled by more than one settlor and

are expressed to be revocable, such trusts may only be revoked with

the express consent of all settlors.

(5) Unless the terms of a trust expressly provide that the trust is

revocable or capable of variation, the settlor may not revoke or

amend the trust instrument.

(1) Subject to the terms of a trust and to any order of the

court, where a trust terminates due to -

(a) a lapse of an interest under a trust; or

(b) there being no beneficiary and no person who can

become a beneficiary in accordance with the terms of

the trust,

the interest of the property affected by such lapse, or lack of

beneficiary, shall be held by the trustee in trust for the settlor

absolutely or, if he is deceased, for his heirs.

(2) Where an interest or property is held by a trustee for a

charitable purpose which has ceased to exist or is no longer

applicable, that interest or property shall be held for such charitable

purposes as the court may declare to be consistent with the original

intention of the settlor, or as the court may otherwise determine.

(3) In this article "settlor" means the particular person who

p r o v i d e d t h e i n t e r e s t o r p r o p e r t y a ff e c t e d a s m e n t i o n e d i n

subarticle (1).

(4) An application to the court under this article may be made

by any of the persons mentioned in article 37(3).

(1) On the termination of a trust, the trust property shall

be distributed by the trustee within a reasonable time in accordance

with the terms of the trust to the persons entitled thereto.

(2) Notwithstanding the provisions of subarticle (1), the trustee

may require to be provided with reasonable security for liabilities

whether existing, future, contingent or otherwise before

distributing trust property.

(3) Subject to the provisions of this article and notwith-

standing the terms of the trust, where all the beneficiaries are in

existence and have been ascertained and none of them is interdicted

or a minor, they may require the trustee to terminate the trust and

distribute the trust property among them

Provided that this sub-article shall not apply where the

terms of the trust provide that the interest of a beneficiary is

(a) liable to termination; or

(b) subject to a restriction on alienation or dealing; or

(c) subject to diminution or termination in the event of the

beneficiary becoming bankrupt, or insolvent, or any of

his property becoming liable to seizure for the benefit

of his creditors; or

(d) not liable to attachment under a garnishee order issued

against the trustee or to termination without the prior

consent of the Court, when the interest is expressed to be

for the maintenance of the beneficiary or as a pension.

(4) The court may, on the termination of a trust, or at any other

time -

(a) require the trustee to distribute trust property; or

(b) direct the trustee not to distribute trust property; or

(c) make such other order as it thinks fit.

(5)

In this article "liabilities" includes contingent liabilities.

(6) An application to the court under this article may be made

by any of the persons mentioned in article 37(3).

TRUSTEES

(1) Trustees are appointed by, or as provided in, the trust

instrument, and in such number as may be so provided.

The fact that there may not be a trustee in office at any time

shall not operate as a cause of invalidity or termination of any

trusts and in such cases the matter shall be determined by the terms

of the trust and the provisions of this article.

(2) A trustee may be a natural person provided he is of full age

and legal capacity and not under any legal impediment to so act. A

trustee may also be a juridical person the objects of which include

acting as a trustee.

(3) Where there is no trustee or there is a vacancy among the

trustees which cannot otherwise be filled, the last former trustee or

any trustee, or any beneficiary or the Attorney General may apply

to the court for the appointment of a new trustee.

(4)

The court -

(a) upon being satisfied that an application made by

beneficiary has been served on the last former trustee

or on at least one of the other trustees, if any; and

(b) having heard the representations made by the said

trustee or trustees, or by any beneficiary; and

(c) having ascertained that the trustee indicated for the

purpose in the application or otherwise intended for

appointment as the new trustee is willing to act,

may make an order appointing a new trustee.

(5) Subject to the terms of the trust, a trustee appointed as a

ne w tr u s t e e u n d e r t hi s a r t i c l e sh a l l h a ve th e s a m e p ow e r s ,

discretions and duties as if he had originally been appointed

trustee.

(6) On the appointment of a new trustee anything requisite for

vesting the trust property in or under the control of the trustee for

the time being shall be, and may be required by the trustee or any

beneficiary to be, done.

(7) In the case of death of a trustee, his heirs or testamentary

executor shall be bound to immediately transfer all trust property to a

successor trustee appointed in terms of the trust instrument or by the

Court.

(8) In the case of the insolvency, dissolution or winding up of a

trustee set up as a company, any person having authority to bind the

trustee being a director, liquidator, provisional administrator or

similar functionary shall be bound to immediately transfer all trust

property to a successor trustee, and this irrespective of any

proceedings or formalities applicable upon such events.

(9) Without prejudice to the generality of sub-articles (7) and

(8), until such time as such obligation is performed, all persons in

control of trust property shall be obliged to preserve the trust assets

and shall be bound by fiduciary obligations towards the

beneficiaries.

(1) No one is obliged to accept an appointment as trustee,

but if any person who is so appointed does any act or thing in

relation to the trust property consistent with the status of a trustee

of that property, such person shall be deemed to have accepted the

appointment as trustee.

(2) A trustee who has not accepted and is not deemed to have

accepted appointment as trustee may disclaim such appointment

within a reasonable period of time after becoming aware of it by

notice in writing to the testamentary executor, protector, settlor or to

the co-trustees.

(3) If the settlor is dead or cannot be found and there are no

other trustees, the testamentary executor, protector, or the trustee to

which subarticle (2) applies may apply to the court for relief from

the appointment and the court may make such order as it thinks fit.

(4) In the case of a trust created in a will, when the trustee does

not act either in terms of subarticle (2) or in terms of subarticle (3)

within three months of the date of the death of the settlor, the

testamentary executor, the protector or the heirs may, and the notary

who published the will, or the Notary keeper of his deeds shall,

apply to the Court for the appointment of a trustee in accordance

with the terms of the trust and this Act

Provided that the notary who published the will or the notary

keeper of his deeds shall not be held liable for breach of duty under

this sub-article if he proves that he was not aware of the death of the

settlor.

(5) Until such time as the appointment of a trustee is accepted,

all persons in control of trust property shall be obliged to preserve

the trust assets and shall be bound by fiduciary obligations towards

the beneficiaries.

(6) Without prejudice to the forgoing sub-articles, the

obligations of the trustee under this Act shall be deemed to

commence once the trustee obtains control of the trust assets.

(1) Subject to the provisions of subarticle (2), a trustee

may resign as trustee by notice in writing to his co-trustee or co-

trustees and in the case of there being no other trustee, to the

beneficiaries or, if impracticable, to at least one beneficiary, or if

there are none to whom notice can be given, to the settlor or to the

trustee’s duly appointed successor and the resignation shall take

effect on delivery of the aforesaid notice.

(2)

A resignation -

(a) given in order to facilitate a breach of trust; or

(b) which would result in there being no trustee,

shall have no effect

Provided that a trustee may resign office notwithstanding the

provisions of paragraph (b), if, before the resignation takes effect,

application is made to the court for the appointment of a new

trustee and a new trustee has been so appointed.

(3)

A trustee shall cease to be a trustee immediately upon -

(a) the removal of the trustee by the court; or

(b) the coming into effect of a provision in the terms of a

trust under which the trustee is removed from office or

otherwise ceases to hold office; or

(c) steps are taken for the winding up of, or declaration of

bankruptcy, of the person acting as trustee.

(4) A trustee ceasing to be a trustee shall concur in executing

all documents necessary for the vesting of the trust property in or

under the control of the new trustee and such obligation of the

person ceasing to be a trustee shall be capable of forced execution

by the court.

(1) Trustees shall in the execution of their duties and the

exercise of their powers and discretions act with the prudence,

diligence and attention of a bonus paterfamilias, act in utmost good

faith and avoid any conflict of interest.

(2)

(a) Subject to the provisions of this Act, trustees shall

carry out and administer the trust according to its

terms; and, subject as aforesaid, the trustees shall

ensure that the trust property is vested in them or is

under their control and shall, so far as reasonable and

subject to the terms of the trust, safeguard the trust

property from loss or damage

Provided that the granting of security by assignment or

pledge as authorised by the terms of the trust is

permitted

Provided further that the transfer by the trustee of trust

property to a legal entity wholly owned or controlled,

directly or indirectly, by the trustee or to another trust

of which he is the sole trustee or to another trustee

under trusts for the sole benefit of the trustee, shall be

permitted and in such case the duties and liabilities of

the trustee under this Act or the deed of trust shall not

be diminished or otherwise affected in any manner

whatsoever.

(b) Trustees shall, when accepting their appointment, draw

up in writing an inventory and shall declare that the

inventory includes all the trust property and of which the

incoming trustee is aware.

(3) Except as permitted by this Act or as expressly provided by

the terms of the trust, a trustee shall not, without the authority of

the court -

(a) directly or indirectly profit from the trusteeship; or

(b) cause or permit any other person to profit directly or

indirectly from the trusteeship; or

(c) enter into any transaction related to trust property on

his own account; or

(d) enter into any transaction related to trust property with

TRUSTS AND TRUSTEES

a person related to him by affinity or consanguinity in

the direct line or up to the third degree in the collateral

line or with a partner in any partnership; or

(e) generally enter into any transaction related to trust

property that may give rise to a conflict of interest.

(4) (a) Trustees shall keep accurate accounts and records of

their trusteeship and shall, upon a request by any

beneficiary, disclose such accounts and records to such

beneficiary and shall, subject to the terms of the trust,

provide a copy of such accounts within a reasonable

time of a request

Provided that it shall be lawful for a beneficiary to

suspend such rights in favour of an independent third

party in cases where the beneficiary is required to do

so by any agreement or by law as a result of any

existing or potential conflict of interest, and this for

such time as the said conflict of interest subsists and

under such conditions as may be agreed or are

otherwise applicable.

(b) Trustees shall be obliged to keep such accounts and

records for a period of not less than ten years from the

date of the termination of the trust or the trusteeship,

whichever event occurs earlier.

(5) Trustees shall keep trust property distinct and separate from

their own property as well as from any other property held by them

under any other trust or title, and separately identifiable therefrom

Provided that trustees may, if expressly permitted by the

terms of the trust, or in any case where the trust property consists of

fungible things, place and keep trust property in a common pool of

identical assets or in a clients’ or common account.

(6) Trustees shall not enjoy any benefits under any trust of

which they are the sole trustee without the prior authority of -

(a) the Authority, in case of a trustee authorised in terms

of article 43 or not required to be authorised in terms

of article 43(6); or

(b) the Court, in any other case

Provided that in case of an express fixed trust in favour of

the trustee, only prior notification in writing to the Authority shall

be required

Provided further that a transfer of property by the trustee to

another trust of which he is the sole trustee or sole beneficiary,

shall not be deemed to be a benefit under this subarticle

Provided further that remuneration for acting as a trustee or

indemnification for expenses, liabilities and other claims shall not

be treated as a benefit under a trust

Provided further that this subarticle shall not apply to a

trustee holding property in relation to a commercial transaction.

(7)

Notwithstanding the provisions of this Act and other

provisions which cannot be derogated from by voluntary act, when

a commercial transaction includes the appointment of a trustee to

hold property in relation to such transaction, the duties and liabilities

of trustees as stated in this Act shall be regulated by the provisions of

this Act or any applicable legislation unless varied by the terms of the

trust

Provided that nothing in this subarticle shall permit a

trustee to be exonerated from the effects of, or be indemnified for,

his own fraud, wilful misconduct or gross negligence.

(8) In the case where one of the beneficiaries of a trust is subject

to tutorship or curatorship, the trustee shall, as the case may be, seek

directions from the Court in the execution of his duties and shall be

obliged to comply with any directions so given by the Court.

(1) Where the trustees are more than one they shall,

subject to the terms of the trust and except as otherwise provided

therein -

(a) act jointly in the performance of their duties and the

exercise of their powers, unless in urgent cases it is not

possible for any one or more of them so to act;

(b) not exercise any power or discretion unless all the

trustees are in agreement;

and where the terms of the trust empower the trustees to act by a

majority, a trustee who dissents from a decision of the majority,

shall cause his dissent to be recorded in writing.

(2) Trust property shall at all times vest in the co-trustees in

possession between them pro indiviso.

Where the trust provides for more than one beneficiary, or

more than one charitable purpose or for at least one beneficiary and

at least one charitable purpose, trustees shall be impartial and shall

not execute the trust for the advantage of one and to the detriment

or at the expense of another, except to the extent that they are so

authorised or required by the terms of the trust.

(1) Subject to the terms of the trust and to the provision of

this Act, a trustee shall, in relation to the trust property, have all the

powers of a natural person having the absolute title to such

property.

(2) A trustee shall exercise his powers in the interest of the

beneficiaries and in accordance with the terms of the trust.

(1) The terms of a trust may provide for the office of

protector of the trust.

(2) Subject to the terms of the trust, the protector shall have the

following powers

(a) to appoint a new or additional trustee;

(b) to remove a trustee;

(c) to require the trustee to obtain his consent before

exercising a discretion.

(3) In the exercise of his office the protector shall not be

deemed to be a trustee.

(1) The terms of a trust set up for a charitable purpose

may provide

(a) for the appointment of an enforcer in relation to the

trust; and

(b) for the appointment of a new enforcer any time when

the current enforcer in office has terminated his

appointment.

(2) The duty of the enforcer shall be that of ensuring that the

trustee administers the trust in accordance with the terms of the

trust and to promote the purposes of the trust

Provided that where the enforcer becomes aware that the

charitable purposes prescribed in the terms of the trust are not

being observed, the enforcer shall take action against the trustee for

breach of trust.

(3) The enforcer of a trust is prohibited from also acting as

trustee of the trust.

(4)

Except -

(a) with the approval of the Court; or

(b) when permitted by this Act or when expressly

provided by the terms of the trust,

an enforcer shall not -

(i) directly or indirectly profit from his office;

(ii) cause or permit any other person to profit

directly or indirectly from his office; or

(iii) on his own account, enter into any transaction

with the trustee or relating to the trust property

which may result in such profit.

(5) Unless authorised by the terms of the trust or by any order

of the Court, an enforcer shall not be entitled to remuneration for

services rendered.

(1) Subject to sub-article (2), an enforcer may resign

from his office by notice in writing delivered to the trustee and

such resignation shall be effective as from the date of delivery of

the notice to the trustee

Provided that a resignation given in order to facilitate a

breach of trust shall be of no effect.

(2) An enforcer shall relinquish his appointment as enforcer of

the trust set up for a charitable purpose immediately upon -

(a) the enforcer’s removal from office by the court;

(b) the enforcer’s resignation becoming effective;

(c) the coming into effect of a provision in the terms of a

trust under which the enforcer is removed from office

or otherwise ceases to hold office; or

(d) the enforcer’s appointment as a trustee of the trust.

(1) A trustee may not delegate his powers unless permitted

to do so by this Act, or by the terms of the trust, or by the court.

(2) Except where the terms of the trust specifically provide to

the contrary, a trustee -

(a) may delegate management of trust property to and

employ investment managers whom the trustee

reasonably considers competent and qualified to

manage the investment of trust property;

(b) may employ accountants, advocates, attorneys,

bankers, brokers, custodians, investment advisers,

nominees, property agents, solicitors and other

professional agents or persons to act in relation to any

of the affairs of the trust or to hold any of the trust

property.

(3) A trustee who in good faith and without neglect makes a

delegation or an appointment in accordance with the provisions of

this article, shall not be liable for any loss arising to the trust in

consequence thereof.

(4) A trustee may authorise a person referred to in subarticle

(2) to retain any commission or other payment usually payable in

relation to any transaction.

(1) Where the terms of the trust direct or authorise the

accumulation for a period of all or part of the income of the trust,

the trustee shall distribute the income of the trust which is not

accumulated as required or authorised by the terms of the trust.

(2) Subject to the terms of the trust, and subject to any prior

interest or charges affecting the trust property, where a beneficiary

is a minor and whether or not his interest is a vested interest or an

interest which will become vested on attaining the age of majority

or a later age or upon the happening of any event, the trustee may -

(a) accumulate the income attributable to the interest of

such beneficiary pending the attainment of the age of

majority or such later age or the happening of such an

event; or

(b) apply such income or part of it to or for the

maintenance, education or other benefit of such

beneficiary; or

(c) advance or appropriate to or for the benefit of any such

beneficiary such interest or part of such interest.

(3) The receipt given by a parent or the lawful guardian of a

beneficiary who is a minor shall be sufficient discharge to the

trustee for a payment made under subarticle (2).

(4) Subject to the terms of the trust, and subject to any prior

interest or charges affecting the trust property, the trustee may

advance to, or apply for the benefit of, a beneficiary part of the

trust property prior to the date of the happening of the event upon

the happening of which the beneficiary becomes entitled absolutely

thereto.

(5) Subject to the terms of the trust, a trustee may appropriate

trust property in or towards the satisfaction of the interest of a

beneficiary in such manner and in accordance with such valuation

as the trustee may think fit.

(6) Any part of the trust property advanced, applied or

a p p r o p r i a t ed a s af o r e s a i d s h a l l b e b r o u g h t i n t o a c c o u n t i n

determining from time to time the share of the beneficiary in the

trust property.

(7) No part of the trust property advanced, applied or

appropriated as provided in this article shall exceed the

presumptive, contingent or vested share of the beneficiary in the

trust property.

Where the terms of the trust confer on the trustee or on any

other person power to appoint or assign all or any part of the trust

property or any interest in the trust property to, or to trustees for

the benefit of, any person, such power shall, subject to the terms of

the trust, have effect whether or not such person was a beneficiary

of the trust immediately prior to such appointment or assignment.

(1) Unless authorised by the terms of the trust, or by the

consent in writing of all the beneficiaries or by any order of the

court, a trustee shall not be entitled to remuneration for services

rendered.

(2) A trustee may reimburse himself or pay out of the trust all

expenses properly incurred by him in connection with the trust.

(1) A trustee shall, so far as is reasonable and within a

reasonable time of receiving a request in writing to that effect,

provide full and accurate information as to the state and amount of

the trust property, including the accounts of the trust, and subject to

subarticle (2), the conduct of the trust administration to

(a) the Court;

(b) subject to the terms of the trust, the settlor;

(c) the protector of the trust;

(d) without prejudice to sub-article (4) and sub-article (5),

any beneficiary of the trust who is of full age and

capacity, or if a minor, to his lawful guardian or

representative;

(e) subject to the terms of the trust, any charity referred to

by name for the benefit of which the trust was

established; and

(f)

in case of a trust established for a charitable purpose,

the Attorney General, the enforcer or the relevant

authority under applicable law.

(2) Subject to the terms of the trust and to any order of the

court given for special reasons, a trustee or any other person shall

n ot b e re qu ir e d t o di s c l ose to a ny p e r s on a n y d oc u m e nt o r

information which -

(a) discloses the trustee’s deliberations as to the manner in

which a power or discretion was exercised, or a duty

conferred or imposed by law or by the terms of the

trust was performed;

(b) discloses the reason for any particular exercise of such

power or discretion or performance of duty or the

material upon which such reason will be or might have

been based;

(c) relates to the exercise or proposed exercise of such

power or discretion or the performance or proposed

performance of such duty.

(3) Unless the terms of the trusts expressly determine the time

when and the method how beneficiaries are to be informed of their

entitlement under a trust, the trustee shall be obliged to inform any

beneficiary of his entitlement, in writing, within a reasonable time

of his accepting to act.

(4) When the terms of the trust grant a discretion in terms of

article 9(10), the terms of the trust may suspend until such time as a

discretion is exercised in their favour the duty of the trustee to

inform such beneficiaries that they may benefit under the trust or

that they form part of a class of beneficiaries which may so benefit.

The terms of the trust may also indicate the time when and the

method of how such beneficiaries are to be informed.

(5) If the trust instrument expressly prohibits notification of

information to beneficiaries or to those persons that form part of a

class from among which beneficiaries may be appointed, without

reference to any point in time, ascertained or ascertainable, such

term shall be construed as implying a duty of the trustee to inform

such beneficiaries within a reasonable time after the death of the

settlor.

(6) Should the trustee consider providing information as

required by the preceding subarticles to be prejudicial to the

beneficiaries of the trust or any of them, the trustee may apply to

the Court and the Court may release the trustee from the obligation

to inform under such conditions as it may consider appropriate.

(7) The duty to inform as above provided shall not arise if the

trustee is in possession of information which reasonably

demonstrates that those entitled to such information have already

been informed or are already aware of such information.

(8) In the case of a trust established for charitable purposes, the

duty to inform either unnamed beneficiaries forming part of a class

or persons forming part of a class of persons who may be appointed

as beneficiaries in terms of a power of the trustee, shall not arise

notwithstanding the terms of the trust unless, in case of the

unnamed beneficiaries the trustee establishes that there exist less

than ten beneficiaries appertaining to such class of beneficiaries.

Furthermore, in the absence of any indication to the contrary, the

unnamed beneficiaries or persons who may be added as

beneficiaries in terms of a power shall be assumed to be persons

who carry on relevant charitable activities principally in Malta.

(9) The trustee shall carry out the duty to inform to the best of

his abilities and at the expense of the trust and in the event it

appears to the trustee that such exercise will be too costly or

burdensome, the trustee may apply to the Court for directions and

the Court shall be empowered to release the trustee from such duty

under such conditions as it considers appropriate.

(10) The suspension of the duty of a trustee to inform

beneficiaries as provided in this article shall not reduce the rights

of beneficiaries or the duties and liability of the trustee towards

such beneficiaries in terms of this Act.

(11) Persons who may be added as beneficiaries in terms of a

power referred to in article 9(7) shall have no right of information

until such time as they are appointed beneficiaries by the trustee

pursuant to such power.

(12) In the case of a trust to hold property in relation to a

commercial transaction, the duties of the trustee relating to the

provision of information and the rights of beneficiaries to such

information may be determined by the terms of trust, in which case

the preceding subarticles of this article shall not apply.

(1) A trustee committing or concurring in a breach of trust

shall without prejudice to any other liability be liable for -

(a) the loss of depreciation in value of the trust property

resulting from the breach;

(b) the profit, if any, which would have accrued to the

trust if there had been no such breach.

(2) A trustee may not set off a gain from a breach of trust

against a loss from the same or some other breach of trust.

(3) A trustee shall not be liable for a breach of trust committed

prior to his appointment, if such breach of trust was committed by

some other person. It shall, however, be the duty of the trustee on

becoming aware of it to take all reasonable steps to have such

breach remedied.

(4) A trustee shall not be liable for breach of trust committed

by a co-trustee unless -

(a) he becomes aware or ought to have become aware of

the commission of such breach or the intention of the

co-trustee to commit a breach of trust; and

(b) he actively conceals such breach or such intention or

fails within a reasonable time to take proper steps to

protect or restore the trust property or prevent such

breach.

(5) Nothing in the terms of a trust shall relieve, release or

exonerate a trustee from liability for breach of trust arising from his

own fraud, wilful misconduct or gross negligence.

(6) Where two or more trustees are liable in respect of a breach

of trust, their liability shall be joint and several.

(7) A beneficiary may, in respect of a liability to him for a

breach of trust already committed, relieve a trustee of, or indemnify

him against, such liability, but only if the beneficiary -

(a) has legal capacity; and

(b) has full knowledge of all material facts; and

(c) has not been improperly induced by the trustee to give

the relief or indemnity.

(8) The court may relieve the trustee either wholly or in part

from liability for a breach of trust where it is satisfied that the

trustee has acted honestly and reasonably and ought in fairness to

be excused in the circumstances.

(1) A trustee acting for the purposes of more than one trust

shall not, in the absence of fraud, be affected by notice of any

instrument, matter, fact or thing in relation to any particular trust if

the trustee has obtained notice of it by reason of acting or having

acted for the purposes of another trust.

(2) A trustee of a trust shall disclose to any co-trustee any

interest which he has as trustee of another trust if any transaction in

relation to the first mentioned trust is to be entered into with the

trustee of such other trust.

(1) Where in any transaction or matter affecting a trust a

trustee informs a third party that he is acting as trustee, a claim by

such third party in relation thereto shall extend only to the trust

property.

(2) Where in any such transaction or matter a trustee fails to

inform a third party that he is acting as trustee, and that party is

otherwise unaware of it, the trustee -

(a) shall be personally liable to such third party in respect

thereof; and

(b) shall have a right of recourse to the trust property by

way of indemnity against such liability, unless the

trustee acted in breach of trust.

(3) In this article "third party" means any person not being a

settlor, a trustee or a beneficiary of the trust.

(1) Subject to the provisions of subarticle (2), where a

person (in this article referred to as a "constructive trustee") makes

or receives any profit, gain or advantage from breach of trust he

shall be deemed to be a trustee of that profit, gain or advantage; and

the beneficiary of such trust shall be deemed to be the trust, or the

beneficiary, or other person, to the detriment of whom or at the

expense of whom the profit, gain or advantage was made.

(2) Subarticle (1) shall not apply to a person acquiring property

under an onerous title in good faith.

(3) A person who is or becomes a constructive trustee shall

deliver up the property to or in favour of the beneficiaries thereof.

(1) A trustee who resigns or is removed or otherwise

ceases to be a trustee shall duly surrender trust property in his

possession or control.

(2) A trustee who resigns or is removed or otherwise ceases to

be a trustee and has complied with the requirements of subarticle

(1) shall be released from liability to any beneficiary, trustee or

person interested under the trust for any act or omission in relation

to the trust property or his duty as a trustee, except in respect of

actions arising from breach of trust to which such trustee was a

party or to which he was privy.

(3) A trustee who resigns or is removed or otherwise ceases to

be a trustee shall continue to be liable to any beneficiary, trustee or

person interested under the trust for the recovery from such trustee

of trust property or the proceeds of trust property in the possession

o f t h e t r u s t e e o r c o n v e r t e d t o t h e t r u s t e e ’s o w n u s e o r n o t

surrendered as required by subarticle (1).

(4) The new trustee shall be entitled to be indemnified out of the

trust property in respect of any claims against the outgoing trustee,

except in respect of actions arising from breach of trust.

MISCELLANEOUS PROVISIONS REGARDING TRUSTS

(1) Subject to the terms of the trust, the following rules

shall apply where a trust, or an interest under a trust, is in favour of

a class of persons

(a) a class closes when it is no longer possible for any

other person to become a member of a class;

(b) a woman who is over the age of fifty-five years shall

be deemed to be no longer capable of bearing a child;

(c) where any class interest relates to income and for any

period there is no member of the class in existence, the

income shall be accumulated and, subject to article 12,

shall be retained until there is a member of the class in

existence or the class closes.

(2) In this article "class interest" means a trust or an interest

under a trust which is in favour of a class of persons.

(1) Subject to the provisions of subarticle (2), the court

may, if it thinks fit, by order approve on behalf of -

(a) any person incapacitated at law having directly or

indirectly, an interest, whether vested or contingent,

under the trust; or

(b) any person, whether ascertained or not, who may

become entitled, directly or indirectly, to an interest

under the trust as being at a future date or on the

happening of a future event a person of any specified

description or a member of any specified class of

persons; or

(c) any person unborn; or

(d) any person in respect of any interest of his that may

arise to him by reason of any discretionary power

given to any one on the failure or determination of any

existing interest that has not failed or determined,

any arrangement, by whomsoever proposed and whether or not

there is any other person beneficially interested who is capable of

assenting thereto, varying or revoking all or any of the terms of the

trust or enlarging the powers of the trustees of managing or

administering any of the trust property.

(2) The court shall not approve an arrangement on behalf of

any person coming within subarticle (1)(a), (b) or (c), unless it is

satisfied that the carrying out of such arrangement appears to be for

the benefit of that person.

(3) Where in the management or administration of a trust, any

sale, lease, pledge, charge, surrender, release or other disposition,

or any purchase, investment, acquisition, expenditure or other

transaction is in the opinion of the court expedient but the same

cannot be effected by reason of the absence of any power for that

purpose vested in the trustee by the terms of the trust or by law, the

court may confer on the trustee, either generally or in any particular

circumstance, a power for that purpose on such terms and subject to

such provisions and conditions, if any, as it thinks fit, and may

direct in what manner and from what property any money

authorised to be expended, and the costs of any transaction, are to

be borne.

(4) Where trust property is set up for a charitable purpose and

any of the circumstances mentioned hereunder apply, the Court

may, on application of the trustee or the enforcer, declare that the

property or the remainder of the property, as the case may be, shall

be held for such other charitable purpose, as the case may be, as the

Court considers to be consistent with the original intention of the

settlor. The circumstances are that

(a) the purpose of the trust has ceased for whatever reason

to be charitable; or

(b) the charitable purpose has ceased in any other way to

provide a suitable and effective method of using the

property, regard being had to the spirit of the gift.

(5) An application to the court under sub-article (1) may be

made by the trustee or by any beneficiary.

(1) A trustee may apply to the court for directives

concerning the manner in which he may or should act in connection

with any matter concerning the trust; and the court may make such

order, if any, as it thinks fit.

(2)

The court may also, if it thinks fit -

(a) make an order concerning -

(i)

the execution or the administration of any trust;

or

(ii) the trustee of any trust, including an order

relating to the exercise of any power, discretion

or duty of the trustee, the appointment or

removal of a trustee, the remuneration of a

trustee, the submission of accounts, the conduct

of the trustee and any payments into court; or

(iii) any beneficiary or any person having any

connection with the trust;

(b) make any declaration as to the validity or enforcement

of a trust, the existence of any resulting or constructive

trust, breach of trust or failure of a trust;

(c) rescind or vary any order or declaration made under

this Act, or make any new or further order or

declaration.

(3) An application to the court for an order or declaration under

subarticle (2) may be made by the trustee or by any beneficiary or

by the Attorney General or by any other person having a lawful

interest

Provided that in cases where the duty to inform a

beneficiary of his interest in a trust has been suspended in terms of

article 29 and until such suspension is in force, and in the absence

of a protector of a trust, the settlor of a trust may also make an

application to the Court in terms of this subarticle. Whilst dealing

with such application the Court may determine whether the

suspension of rights to information as aforesaid be maintained in

force in full or in part for all or some of the beneficiaries.

(4) Where the court makes an order for the appointment of a

trustee it may impose such conditions as it thinks fit, including

conditions as to the vesting of trust property.

(5) Subject to any order of the court, a trustee appointed by the

court under this article shall have the same powers, discretions and

duties as if he had been originally appointed a trustee.

(1) Where any court makes an order on the demand of a

beneficiary who has been prejudiced as a result of bad faith on the

part of the trustee in the operation of a trust relationship or in

relation to trust property, the court shall have the power to restore

the position to what it was had the action complained of not been

taken or otherwise to protect his interests.

(2) When a person domiciled in Malta is obliged to pay

maintenance in terms of the Civil Code and is a beneficiary under a

discretionary trust, the court shall have such powers as are

necessary to review the exercise of discretion by the trustee and

give due consideration to the rights of persons entitled to claim

maintenance.

(1) There shall be no appeal from any decree, order,

declaratio n o r directio n o f t he C ivi l Co urt in it s vo lun tary

jurisdiction given under the provisions of this Act.

(2) Such decrees, orders, declarations or directions shall

remain in force until they are substituted or varied by the Civil

Court in either its voluntary or contentious jurisdiction.

(3) During the hearing of an application before the Court the

trustee or applicant shall at the earliest opportunity disclose to the

Court all material facts known to him which may be relevant to the

application including the existence of any res judicata or pending

judicial action given or commenced in Malta or before a foreign

court.

(4) All applications to the Court shall be notified to the trustee

and the applicant shall furthermore notify all persons who he

considers having an interest in the subject matter of the application.

The Court shall have the power to order notification to all other

persons who it considers may have an interest as it deems fit.

(5) The Court shall hear the trustee and any interested parties

as it considers appropriate.

(6) Without prejudice to any other power given to the court by

virtue of the foregoing provisions of this article or of any other law,

where a trustee neglects or refuses to perform any duty or to

comply with any order of the court, the court may, on such terms

and conditions it may deem appropriate, order that the required

action be executed, made or done by such person as the court may

appoint for the purpose, at the cost of the trustee in default, or

otherwise as the court may direct; and anything so executed, made

or done shall operate and have effect for all purposes as if it had

been executed, made or done by the trustee.

(1) All proceedings under these articles shall be held in

camera and only the parties to the proceedings, the trustees, the

beneficiaries, if they prove they have an interest in the proceedings

to the satisfaction of the Court, and their respective advocates and

legal procurators shall be allowed in court during the hearings.

(2) Any decree or judgement of the Court shall preserve the

confidentiality of the proceedings and shall only reveal such facts

as may be necessary to make the same intelligible and enforceable

by the parties and the trustees.

(3) All applications, responses, affidavits, opinions, statements

and other documents or evidence shall be kept by the Registrar of

the Court in a confidential manner and no access shall be given

thereto except with the written consent of the Court.

(4) The Court may order the notification of any order to the

depository notary as is referred to in article 43A if it considers it

appropriate in the circumstances.

The Board established under article 29 of the Code of

Organization and Civil Procedure may make Rules of Court

concerning applications made under or in terms of this Act.

Without prejudice to any other obligations arising under

any other law, a trustee may apply to the Authority for directions

concerning the manner in which he may or should act in connection

with any matter concerning the trust or its property when such

matter relates to the fulfilment of his obligations relating to the

prevention of money laundering. Any bona fide communication or

disclosure made in terms of this article shall not be treated as a

breach of the duty of professional secrecy or any other restriction,

whether imposed by statute or otherwise, upon the disclosure of

information and any information disclosed in terms of this article

shall be used only in connection with investigations of money

laundering.

The costs and expenses of and incidental to an application

to the court under this Act shall be paid out of the trust property or

be borne and paid in such other manner or by such other person as

the court may order.

(1) A person acquiring trust property from a trustee in

good faith and under an onerous title acquires a good title thereto as

if he had acquired it from the person having the absolute title

thereto and shall not be affected by the trusts on which the said

property is held.

(2) No person paying or advancing money to a trustee shall be

concerned to see that such money is required for the purposes of the

trust, or that no more than is required is raised, or otherwise as to

the propriety of the transaction or the application of the money.

(3) A person dealing with a trustee in relation to trust property

need not -

(a) enquire into the terms of the trust; or

(b) obtain the consent of the beneficiaries or any other

person,

and shall, subject to being in good faith, be entitled to rely on

declarations made by the trustee with regard to any matters therein

stated.

(4) The trustee may furnish to any person a certificate

containing the following information without being in breach of

any confidentiality obligations

(a) that the trust exists and the date the trust instrument

was executed;

(b) the identity and address of the current trustee;

(c) that the trustee is duly authorised and empowered to

carry out the relevant transaction and has obtained all

necessary consents, if any;

(d) the revocability or irrevocability of the trust and, if

revocable, that the trust has not been revoked.

(5) When there is more than one trustee, a certificate may be

signed and authenticated by any trustee.

(6) Any trustee who issues any certificate containing any

statement which he knows or ought to know is false shall be guilty

of an offence and shall on conviction be liable to the punishment of

imprisonment for a term not exceeding two years or to a fine

(multa).

(1) Without prejudice to the personal liability of a trustee,

trust property which has been alienated or dealt with in breach of

trust, or the property into which it has been converted, may be

followed and recovered unless it is in the hands of a bona fide

purchaser for value without notice of the breach of trust

Provided that an alienation of immovable property by the

trustee as provided by article 958A of the Civil Code shall not give

rise to the rights provided in this article in favour of any person

claiming a right of legitim.

(2) Where a trustee becomes bankrupt, or insolvent, or upon his

property becoming liable to seizure or similar process of law, his

creditors shall have no right or claim against the trust property

except to the extent that the trustee himself has a claim against the

trust.

(3) The court may make an order or directive as it deems fit in

the circumstances of the case upon an application made under this

article by any beneficiary or creditor as the case may be.

(1) An action brought against a trustee -

(a) in respect of any fraud to which the trustee was a party

or to which he was privy; or

(b) for the recovery from the trustee of trust property in

his possession or control or previously received by the

trustee and converted to his use,

shall not be barred by prescription.

(2) Without prejudice to the provisions of subarticle (1), no

action may be brought against a trustee by a beneficiary for breach

of trust after the lapse of three years -

(a) commencing from the date of the delivery of the final

accounts of the trust to the beneficiary; or

(b) commencing from the date on which the beneficiary

first had knowledge of the occurrence of the breach of

trust,

whichever is the earlier date.

(3) Where the beneficiary is a minor the periods referred to in

this article shall not begin to run until the day on which the

beneficiary ceases to be a minor.

(4) The periods mentioned in this article shall be interrupted if

a judicial act or demand is filed in the competent court and served

on the trustee before the expiration of the said period.

REGULATION OF TRUSTEES

Persons may carry on the activities as trustees either in a

professional or in a private capacity and, as the case may be, shall

be subject to the provisions of articles 43, 43A and 43B.

(1) Except as provided in terms of subarticles (6) and (7),

any person operating in or from Malta, who receives property upon

trusts or accepts to act as a trustee or co-trustee of a trust and who -

(a) receives or is entitled to remuneration for so acting, or

(b) does so on a regular and habitual basis, or (c) holds

himself out to be a trustee,

shall require authorisation by the Authority in terms of this Act

irrespective of the proper law of the trusts they hold and whether or

not all or part of the trust property is in Malta

Provided that in the event of reasonable doubt as to what

constitutes acting as a trustee on a regular and habitual basis, the

matter shall be conclusively determined by the Authority.

(2) The Authority may issue rules to establish when trustees are

considered as receiving remuneration, when activity is done on a

regular or habitual basis and when a person holds himself out as a

trustee.

(3) Any person may apply in writing to the Authority to be

authorised as a trustee and the Authority may grant authorisation

upon being satisfied that the conditions laid down in this article

have been met and such authorisation may be general or may be

restricted to particular specified activities.

(4) The conditions referred to in sub-article (3) shall consist of the

following and shall be satisfied on an ongoing basis

(i)

in the case an applicant is a body corporate

(a) its objects are limited to: acting as trustee and

carrying on activities ancillary or incidental

thereto, and does not include objects which are

not compatible with the services of a trustee;

and

(b) its actual activities are compatible and

connected with the services of a trustee; and

(c) the directors of the company or, in the case of a

body corporate other than a company, any other

persons entrusted with the management and

administration thereof, are not less than three in

number and are individuals who are approved

persons; and

(d) the body corporate must have a minimum capital

of fifteen thousand euro (€15,000), which it

shall maintain throughout its duration; and

(e) the body corporate shall maintain insurance cover

at all times which cover shall be proportionate to

the nature and size of the trustee’s business

operations; and

(f) the body corporate has established adequate

systems for maintaining proper records of the

identity and residence of beneficiaries, the

dealings and the assets in connection with trusts

and compliance with applicable law; and

(g) any person who has a direct or indirect interest in

the body corporate which represents ten percent

(10%) or more of the capital or, in the case of a

company, every person who has a qualifying

shareholding, is approved by the Authority as

being fit and proper; and

(h) the name of the body corporate is not

inconsistent with its trustee activity; and

(i) where the body corporate is not registered in

Malta, it must be constituted or incorporated in

an approved jurisdiction

Provided that, notwithstanding the provisions of

paragraphs (a) and (b), persons authorised in terms

of sub-article (1) may act as company service

providers as defined in the Company Service

Providers Act, subject to any rules or regulations

which may be applicable under this Act;

(ii) in the case of an applicant who is an individual that

such individual -

(a) operates in or from Malta;

(b) is an approved person; and

(c) has

established

adequate

systems

for

maintaining proper records of the identity and

residence of beneficiaries, and of the dealings

and the assets of trusts and compliance with

applicable law; and

(d) has a minimum capital of fifteen thousand euro

(€15,000) which the individual shall maintain

for as long as he is authorised; and

(e) shall maintain insurance cover at all times which

cover shall be proportionate to the nature and size

of the trustee’s business operations.

(5) A trustee shall notify the Authority of any change or

circumstance which would have a bearing upon his status as an

authorised person and in the case of a body corporate, of any change

in its charter, statute, memorandum or articles of association or

other instrument constituting the body corporate, directors or

members, and in the case of commercial partnerships in Malta such

changes shall not be registered unless and until they are so notified

to and approved by the Authority.

(6)

(a) The following persons shall not be required to obtain

TRUSTS AND TRUSTEES

authorisation in terms of this Act to act as a trustee in

the course of carrying on the activities for which they

are licensed, provided that the provision of trustee

services is incidental and ancillary to the main activities

for which they are licensed

(i)

a person who is in possession of a valid licence

issued in terms of the Banking Act; or

(ii) a person who is licenced in terms of the

Investment Services Act to hold clients’ monies

or assets; or

(iii) a person who is authorised in terms of the

Insurance Business Act or enrolled in the

Brokers List under the Insurance Distribution

Act to hold clients’ monies or assets; or

(iv) a person with an equivalent licence to (i) to (iii)

issued by the relevant regulatory authority in an

approved jurisdiction; or

(v)

a person who is in possession of an authorisation to

operate a central securities depository in terms of

the Financial Markets Act.

(b) A person approved by the Authority for Transport in

Malta to act as a trustee of a shipping trust or a

shipping foundation as defined in article 84Z of the

Merchant Shipping Act shall not require any further

authorisation in terms of this Act;

(c) A person licensed in terms of the Retirement Pensions

Act to act as a Retirement Scheme Administrator

acting as a trustee to retirement schemes shall not

require further authorisation in terms of this Act

provided that such trustee services are limited to

retirement schemes

Provided that where a person, who is in possession of a licence

in terms of paragraphs (a), (b) or (c), intends providing trustee services

as one of its main activities, it shall require authorisation in terms of

this Act.

(7) Without prejudice to the obligation of any person to obtain

authorisation in terms of any other law which may be applicable, and

to the provisions of article 43A(11), the provisions of this article,

article 43A and article 43B shall not apply -

(a) to a person when acting as a trustee under trusts

created for the purpose of holding security in the form

of hypothecs, pledges, assignments, mandates or

otherwise, granted in relation to any financial

transaction for the benefit of lenders or other creditors

in such transaction;

(b) to a person when acting as trustee of any movable

property held as security and for the benefit of persons

whose entitlement is conditional or determinable in

terms of the trust or the contract in relation to which

the holding was created;

(c) to a liquidator, curator in bankruptcy or court

appointed administrator acting in the course of the

liquidation, bankruptcy or administration;

(d) to a person in possession of a warrant to carry out the

profession of an advocate, notary public, legal

procurator or certified public accountant but only if

acting as a trustee is limited to what is necessary and

incidental in the course of carrying out his profession

and does not otherwise hold himself out as a trustee to

the public; provided he shall be obliged to maintain

proper records of clients’ assets for a period of not less

than ten years from the date of termination of the trust or

the trusteeship, whichever event occurs earlier, or such

longer period as established by any other law

governing his profession;

(e) to persons when acting as trustees of a unit trust which

is a collective investment scheme which is recognised

in terms of the Investment Services Act or which is

exempt from licensing in terms of the said Act and the

establishment of which is notified to the Authority;

(f)

to an individual acting as a trustee under charitable

trusts provided he is not remunerated and does not

hold himself out as providing such services;

(g) any person acting as a co-trustee when another trustee

or, if more than one, the majority of the trustees are

authorised in terms of this article;

(h) to companies or other legal entities, established in an

approved jurisdiction, the directors of which must be

approved persons, and which are wholly owned,

including as trustees, and controlled by authorised

trustees in terms of this article and which are

established solely for the purpose of holding trust

property and ancillary acts, the details of which are

notified in writing to the Authority by an authorised

trustee;

(i)

to a party to a contract who agrees to receive or hold

property as trustee in the context of or ancillary to the

performance of a contract provided that the trustee

does not otherwise hold himself out as a trustee to the

public and is not remunerated therefor;

(j)

to a person holding one or more shares in a company

registered in Malta when such shares do not have any

special voting rights and their aggregate nominal value

does not exceed five euro or its equivalent in any other

currency.

(8) A person herein referred to may apply to the Authority and

the Authority shall authorise in terms of this article

(i)

a person with a licence or authorisation

equivalent to subarticle (6)(a)(i) to (iii) issued

by the Authority or the relevant regulatory

authority in an approved jurisdiction and who

will be acting as trustee not in the course of its

ordinary business for which they are licensed;

(ii) a person having a licence or authorisation to act

as a trustee issued by the relevant regulatory

authority in an approved jurisdiction; or

(iii) a person registered under the Retirement

Pensions Act as a retirement scheme

administrator

Provided such person whether Maltese or foreign notifies

the Authority, in writing, of its intention to act as a trustee in Malta

at least forty-five days prior to commencing activities in Malta, and

who receives a confirmation from the Authority that it does not

object thereto.

A notification under this subarticle shall outline the

proposed activities and shall be accompanied by such information

as may be required by the Authority from time to time.

To the extent that the Authority lays down any restrictions

or conditions for such activities, on initial response to a notification

or at any other time, such restrictions and conditions shall come

into effect as stated in the response or by subsequent notice of the

Authority.

(9)

(a) The holding upon trust of

(i)

securities or interests in or issued by a

commercial partnership registered in Malta,

other than securities which are listed or traded

on a regulated market or on a multilateral system

established in Malta or in a recognised

jurisdiction, or

(ii) immovable property in Malta,

(either of which is hereinafter referred to as "relevant

property") by trustees who are not authorised in terms

of this Act shall be permitted only if a person

authorised in terms of sub-articles (3), (8), (12)(a) or

notaries authorised to act as qualified persons in terms

of any regulations issued pursuant to this Act,

(hereinafter referred to as a "qualified person") is

engaged in writing by the trustee to carry out the

compliance functions referred to in paragraph (b) on

an indefinite basis with specific reference to such

relevant property, and such agreement is notified to the

Authority prior to any acquisition of such relevant

property taking place and shall be accompanied by

such information as may be required by the Authority

from time to time;

For the purposes of this sub-article

(i)

"recognised jurisdiction" shall mean

(a) an EEA State, an EU Member State, or

Switzerland;

(b)

any country that is a member of the

Organisation for Economic Co-operation

and Development (OECD);

(c)

a country that is a signatory of the IOSCO

Multilateral

Memorandum

of

Understanding; or

(d)

any other jurisidiction with whom the

Authority has a Memorandum of

Understanding covering securities;

(ii) "regulated market" and "multilateral system" shall

have the same meaning assigned to them by the

Financial Markets Act.

(b) The qualified person shall ensure due compliance with

all fiscal, prevention of money laundering and other

legal obligations in connection with relevant property

and shall notify the Authority in the event that he

resigns, has his engagement terminated or is otherwise

hindered in performing his duties hereunder.

(c) Paragraphs (a) and (b) shall also apply to the holding

of relevant property by a mandatory for another

person.

(d) If at any time there is no qualified person to carry out

the functions as required by this subarticle, the Court

may appoint a qualified person on the application of

the Authority or any interested person.

(e) The Authority may issue rules from time to time

prescribing the form and conditions of such

notification and functions of qualified persons.

(10) No transactions in relation to relevant property, including

assignments of beneficial interests in a trust, shall take place

without the prior written consent of a qualified person

Provided that nothing in this article shall imply that a

qualified person is himself a trustee or that he is jointly and

severally liable for the performance of obligations of the trustee in

relation to relevant property or related transactions.

(11) The requirement for a qualified person shall not apply -

(a) to the holding of one or more shares in a company

when they do not have any special voting rights and

their aggregate nominal value does not exceed five euro

or its equivalent in any other foreign currency; or

(b) to the holding by trustees named and appointed by a

will creating the trust in respect of the initial period of

six months from the date of acceptance by the trustee

in respect of the estate of the testator unless it is

necessary to enter into any transaction in relation to

relevant property, other than the initial transfers or

declarations by the trustee to assume ownership and

control of the trust property, in which case a qualified

person shall be appointed prior thereto.

(12) Without prejudice to the nature of the legal relationship in

any particular case, for the purposes of this article, any person

resident or operating in or from Malta, who -

(a) acts as a mandatory in the holding of securities and, or

immovable property for another person; or

(b) acts as an administrator, a trustee, director or similar

functionary, exercising control over the assets, by

whatever name he may be called, of a private interest

foundation,

shall, not being a person referred to in subarticle (6), require

authorisation in terms of this article, irrespective of the extent of

his activities, whether remuneration is payable therefor or whether

he holds himself out as providing such services or not.

For the purposes of this subarticle a "private interest

foundation" is a foundation established or operating in Malta for the

benefit of a private interest or purpose which is not charitable.

(13) Any person which intends to act as a mandatory in terms of

sub -articl e ( 12) shal l ap ply in writi ng to the Aut hority f or

authorisation and the Authority may grant authorisation upon being

satisfied that the conditions prescribed hereunder have been met,

and which conditions shall be satisfied on an ongoing basis

(i)

in the case an applicant is a body corporate

(a) its objects are limited to acting as a mandatory

and carrying on activities ancillary or incidental

thereto, and does not include objects which are

not compatible with the services of a mandatory;

and

(b) its actual activities are compatible and

connected with the services of a mandatory; and

(c) the directors of the company or any other person

entrusted

with

the

management

and

administration of the body corporate are not less

than three in number and are individuals who are

approved persons; and

(d) the body corporate must have a minimum capital

of fifteen thousand euro (€15,000) which it shall

maintain throughout its duration; and

(e) the body corporate shall maintain insurance

cover at all times which cover shall be

proportionate to the nature and size of the

trustee’s business operations; and

(f) the body corporate has established adequate

systems for maintaining proper records of the

identity and residence of the ultimate beneficial

owners, of any transactions relating to the

securities and, or immovable property subject to

the mandate and of compliance with the

applicable law; and

(g) any person who has a direct interest in the body

corporate which exceeds ten percent (10%) or

more of the capital or, in the case of a company,

every person who has a qualifying shareholding,

is approved by the Authority as being fit and

proper; and

(h) the name of the body corporate is not

inconsistent with its activity of mandatory; and

(i) where the body corporate is not registered in

Malta, it must be constituted or incorporated in

an approved jurisdiction;

Provided that notwithstanding the provisions of

paragraphs (a) and (b), persons authorised in terms

of sub-article (1) may act as company service

providers as defined in the Company Service

Providers Act subject to any rules or regulations

which may be applicable under this Act;

(ii) in the case of an applicant who is an individual, that

such individual

(a) operates in or from Malta; and

(b) is an approved person; and

(c) has a minimum capital of fifteen thousand euro

(€15,000) which the individual shall maintain

for as long as he is authorised; and

(d) shall maintain insurance cover at all times which

cover shall be proportionate to the nature and

size of his business operations; and

(e) has

established

adequate

systems

for

maintaining proper records of the identity and

residence of the ultimate beneficial owners, of

any transactions relating to the securities and, or

immovable property subject to the mandate and

of compliance with the applicable law.

(14) Any person authorised in terms of sub-article (12)(a) shall

notify the Authority of any change or circumstance which would

have a bearing upon his status as an authorised person and in the

case of a body corporate, of any change in its charter, statute,

memorandum or articles of association or other instrument

constituting it, directors or members. In the case of commercial

part ne rsh ip s re gi ste re d in Mal ta su ch ch an ge s sh al l no t b e

registered unless and until they are so notified to and approved by

the Authority.

(15) Any person who intends to act as an administrator, trustee,

director or similar functionary by whatever name he may be called,

exercising control over the assets of a private foundation shall

apply in writin g t o th e Aut hority fo r au thorisati on an d th e

Authority may grant authorisation upon being satisfied that the

conditions prescribed hereunder have been met

(i)

in the case where an applicant is a body corporate

TRUSTS AND TRUSTEES

(a) its objects are limited to acting as administrator,

trustee, director or similar functionary by

whatever name he may be called, exercising

control over the assets of a private foundation

and carrying on activities ancillary or incidental

thereto, and does not include objects which are

not compatible with such an activity; and

(b) its actual activities are compatible and

connected with the services of an administrator,

trustee, director or similar functionary by

whatever name he may be called exercising

control over the assets of a private foundation;

and

(c) the directors of the company or any other person

entrusted

with

the

management

and

administration of the body corporate are not less

than three in number and are individuals who are

approved persons; and

(d) the body corporate has established adequate

systems for maintaining proper records of the

identity and residence of beneficiaries, of any

transactions relating to the assets of the

foundations and of compliance with the

applicable law; and

(e) any person who has a direct interest in the body

corporate which exceeds ten percent (10%) or

more of the capital or in the case of a company,

every person who has a qualifying shareholding,

is approved by the Authority as being fit and

proper; and

(f) the name of the body corporate is not

inconsistent with its activity of administrator,

trustee, director or similar functionary, by

whatever name he may be called, exercising

control over the assets of a private foundation;

and

(g) where the body corporate is not registered in

Malta, it shall be constituted or incorporated in

an approved jurisdiction

Provided that notwithstanding the provisions of

paragraphs (a) and (b), persons authorised in terms

of sub-article (1) may act as company service

providers as defined in the Company Service

Providers Act, subject to any rules or regulations

which may be applicable under this Act.

(ii) in the case of an applicant who is an individual, that

such individual -

(a) operates in or from Malta; and

(b) is an approved person; and

(c) has

established

adequate

systems

for

maintaining proper records of the identity and

residence of beneficiaries, of any transactions

relating to the assets of the foundations and of

compliance with the applicable law.

(16) Any person authorised in terms of sub-article (12)(b) shall

notify the Authority of any change or circumstance which would have

a bearing upon his status as an authorised person, and in the case of a

company, of any change in its charter, statute, memorandum or articles

of association or other instrument constituting the company, directors

or members, and in the case of commercial partnerships registered in

Malta such changes shall not be registered unless and until they are so

notified to and approved by the Authority.

(17) Nothing in this article shall imply that a person held to be a

trustee under a constructive or resulting trust or as a result of any

statutory provision or judicial declaration has acted in breach of

this Act during any period prior to his becoming aware of such

trusts and in such a case it shall be a defence against prosecution

under this Act to prove that the said person was unaware of his

duties hereunder.

(1) In this article the term "Notarial Law" means the

Notarial Profession and Notarial Archives Act.

(2)

An individual who agrees to act as a trustee because -

(a) he is related to the settlor, by consanguinity or affinity

in the direct line up to any degree or in the collateral

line up to the fourth degree inclusively, or

(b) he has known the settlor for at least ten years,

a nd , i n t h e c a s e s m e nt i on e d i n p a r a gr a ph s (a ) a n d (b ), t h e

individual

(i)

is not remunerated, even indirectly, except as

permitted by any rules issued by the Authority;

(ii) does not hold himself out as a trustee to the

public, and

(iii) does not act habitually as trustee, in any case in

relation to more than five settlors at any time,

(hereafter referred to as a "private trustee") may act as a trustee

without the need for authorisation in terms of the preceding article,

subject to the conditions stated in subarticle (3).

(3) A private trustee shall be permitted to act as trustee under

the following conditions which shall apply as the case may be

(i)

in the case of a testamentary trust, that within six

months of accepting to act as trustee, he shall

draw up an inventory by notarial deed in terms

of Part IIIA of the Notarial Law and shall

declare in the deed that the inventory includes

all the property under the trust and an extract of

the will containing all the terms of the said trust

shall be annexed to the said notarial deed;

(ii) in the case of an inter vivos trust, the trust must

be created by a notarial trust deed;

(iii) where property, other than immovable property,

is added to the trust by a settlor or any other

person, in terms of article 10 or by declaration of

the trustee, such addition shall be recorded by a

notarial trust deed on delivery of the additional

property to the trustee, if practicable, but in any

case not later than fourteen working days of

receipt of such property by the trustee. In the

case of immovable property the addition of

property shall be carried out by a notarial act, an

authenticated copy of which shall be delivered to

the depository notary for safekeeping and

registration with the trust documents within such

time;

(iv) records of meetings with beneficiaries, advisors

or protectors, the exercise of discretion by the

trustee in appointing or removing a beneficiary,

in reducing, distributing or advancing trust

property, in the termination of the trust for any

reason, or other material events shall be

rendered in writing and shall, together with any

annual accounts and Court decrees, orders,

declarations or directions which may be issued

in relation to trust property, be delivered to the

depositary notary;

(v) in all cases, the trustee shall declare the facts

applicable to himself to show that he does not

require authorisation to act as a trustee in terms

of this Act and is not disqualified in terms of

article 53, after the notary has warned him as to

the importance of the truthfulness of such

declarations;

(vi) in the case of a trust relating to relevant property

for the purposes of article 43(9), the depositary

notary shall ascertain that the provisions of

article 43 are observed by the trustee.

(4) Where the trustee is a private trustee, the notary public who

publishes a will containing a testamentary trust or receives a

notarial trust deed inter vivos shall be the sole depository of all acts

referred to in the preceding subarticle and such notary shall be

known as the depository notary

Provided that if such notary public is appointed as a trustee

in the deed creating the trust and accepts to so act, such notary shall

ensure that the deed of trust names another notary public to carry

out the functions of the depositary notary.

(5) Notwithstanding any other law relating to the profession of

notaries public, a notary who receives a will containing a trust, or a

notarial trust deed shall not be precluded from being appointed as the

trustee in such will or deed but if a notary is a trustee he may not act

as the depository notary, the notary keeper or qualified person, as

applicable

Provided that should the depositary notary be appointed

trustee subsequent to the creation of a trust, his acceptance to act

shall be conditional on such notary delivering all trust documents

to another depositary notary to the satisfaction of the Authority and

as provided in sub-article (9), and also to appoint a new qualified

person where applicable.

(6) It shall be the duty of the trustee to submit to the depository

notary all documents relative to the trust within fifteen days of coming

into existence or of coming into existence or of coming into possession

of the trustee or of the date of relevant event to which the document

refers, as the case may be. On receipt of any such document the

notary shall declare in writing on the document the date, time, and

place of receipt. Such declaration shall, until the contrary is proved,

be evidence of its content. All such documents shall be held for

safekeeping and registration in the manner as may be laid down by

the Authority from time to time

Provided that the depository notary shall not be held

responsible for the failure of the trustee to deliver the documents

relative to the trust as laid down in this sub-article.

(7) The trust deed and all documents relative to a trust filed

with a depository notary shall be confidential. The depository

notary shall not be obliged to provide information on the trust deed

or any other document relative thereto except as provided by this Act

or article 68A of the Notarial Profession and Notarial Archives Act

and with the written consent of the trustee or upon an order of the

Court.

(8) Where in terms of Notarial Law a notary keeper has been

appointed instead of the depository notary, the notary keeper shall

be the depository notary relative to the trust and a reference to the

depository notary in this or any other law shall be construed

accordingly.

(9) The trustee may, by notice in writing to the notary and to

the Authority, substitute the depositary notary or the notary keeper

in his capacity as the depositary notary and the latter shall deliver

to the substitute depositary notary all documents in his possession

in the preceding subarticles and, in case of public deeds,

authenticated copies thereof and this within thirty days from the

date of the receipt of such notice, unless otherwise ordered not to

do so by the Authority. The substituted notary may request a

written receipt and keep copies of the documents delivered to the

appointed depository notary but shall keep such copies secure and

in strict confidence and shall not provide access to any person other

than the serving depository notary, the trustee or the Authority. A

publishing notary who is not also the depository notary may also

request a written receipt and keep copies of the documents delivered to

the appointed depositary notary, in which case the publishing notary

shall also be subject to the same duties of confidentiality as set out

above, with respect to such documents.

(10) A notary who fails to observe the provisions of this article

shall be guilty of an offence and shall on conviction be liable to a

fine (ammenda) of not less than one hundred and sixteen euro and

forty-seven cents (116.47) and not more than two hundred and

thirty-two euro and ninety-four cents (232.94)

Provided that no proceedings shall be instituted where the

notary, upon a notice in writing by the Authority admits liability to

pay such fine at its maximum amount.

(11) When a trust is created in accordance with the provisions of

this article, the trustee shall remain subject to the requirements set

out in relation to the depository notary until the termination of the

trust even if the trustee becomes authorised or is substituted by a

trustee authorised or not required to be authorised in terms of

article 43.

(12) When a trust is not created in accordance with the

provisions of this article and a private trustee is subsequently

appointed to office, it shall be a condition to his acceptance to act

that a notarial deed of acceptance be executed in such manner that

the provisions of this article are observed as far as possible at that

stage, reference being made to the settlor for the purposes of the

note of enrollment and a full inventory, of the trust property being

transferred to the trustee, being attached.

(13) If any person wishes to create a trust and appoints a trustee

other than a private trustee and also wishes that the provisions of

this article apply, such person may choose to do so by notifying the

notary public that it is his wish that the provisions of this article

apply and that the notary act as depository notary under the

provisions of this article. In such case the notary shall request the

trustee to declare, in lieu of the declaration in subarticle (3)(v), that

he is authorised, or not required to be authorised, in terms of article

43 and is aware of his obligations under this article. In such cases

the requirement of article 50 of the Notarial Law to the effect that

the Notary registers a note of enrollment relating to the creation of

the trust shall not apply if the settlor expressly exempts him from

such duty.

(14) In all cases the Court may exercise the power to appoint,

remove, substitute and give directions to a depositary notary on the

application of the depositary notary, any interested person or the

Authority.

Notwithstanding the provisions of article 43A, a trustee set

up as a company -

(a) whose object and activities are limited to acting as

trustee in relation to a specific settlor or settlors and

providing administrative services in respect of a

specific family trust or trusts; and

(b) which does not otherwise hold itself out as a trustee to

the public; and

(c) which does not act habitually as a trustee, in any case

in relation to more than five settlors at a time,

shall not require authorisation in terms of this Act but shall be

required to apply for registration by the Authority under this

article, and no company shall act as a trustee for a family trust

unless it is so registered. The registration process shall be

established by rules issued by the Authority under article 52(3) and

trustees shall comply with any registration requirements and

conditions imposed by the Authority

Provided that for the purposes of this sub-article, a "family

trust" shall mean a trust created to hold property settled by the

settlor or settlors for the present and future needs of family

members or family dependants who are definite and can be

ascertained

Provided further that for the purposes of this article, rules

issued by the Authority in terms of article 52 of this Act may

further define the meaning of the terms "family members" and

"family dependants".

DUTY OF AUDITORS

(1) An auditor of a trustee authorised in terms of the Act,

shall have the duty to report immediately to the Authority any fact

or decision of which he becomes aware in his capacity as auditor of

such trustee which

(a) is likely to lead to a serious qualification or refusal of

the auditor’s report on the accounts of such trustee; or

(b) constitutes or is likely to constitute a material breach

of the legal or regulatory requirements applicable to

trustees under this Act; or

(c) gravely impairs the trustee’s ability to continue as a

going concern; or

(d) relates to any other matter which may be prescribed

Provided that the matters prescribed in this paragraph

may include matters related to any interested person

other than the trustee.

(2) The auditor of a corporate trustee shall report to the

Authority any facts or decision, as specified in sub-article (1),

regarding any person having close links with such trustee of which

he becomes aware in his capacity as auditor of the trustee or of the

person having such close links.

(3) No duty (including the duty of professional secrecy) to

which an auditor of the trustee may be subject, shall be regarded as

contravened by reason of his communicating in good faith to the

Authority, whether or not in response to a request from it, any

information or opinion on a matter of which the auditor has become

aware in his capacity as auditor of that trustee and which is relevant

to any function of the Authority under the provisions of the Act or

is required to be communicated by virtue of sub-article (1).

TRUSTS AND TRUSTEES

APPLICATION, GRANT, REVOCATION, ETC., OF AUTHORISATION

(1) An application for authorisation in terms of article 43

shall be made in the form and manner required by the Authority and

shall furthermore

(a) contain or be accompanied by such information and

particulars, in addition to those required by this article,

as the Authority may require or as may be prescribed;

(b) be verified in the manner and to the extent required by

the Authority, or as may be prescribed;

(c) contain the address in Malta for service on the

applicant of any notice or other document required or

authorised to be served on him by or under this Act;

(d) be accompanied by a programme of operations setting

out such matters as may be prescribed by the Authority

from time to time;

(e) be accompanied by such fee as may be prescribed in

respect of the authorisation applied for.

(2) Where close links exist between an applicant and any other

person, the Authority shall

(a) only grant a licence if it considers that such close links

do not prevent it from exercising its supervisory

functions; and

(b) refuse to grant such a licence if it considers that the laws,

regulations or administrative provisions of any country

outside Malta governing one or more persons with whom

the applicant has close links, or their enforcement prevent

the effective exercise of its supervisory functions.

(1) The Authority may grant

or

refuse

to

grant

authorisation applied for under this Act.

(2) In granting authorisation the Authority may subject it to

such conditions as it may deem appropriate, and having granted

authorisation it may, from time to time, vary or revoke any

condition so imposed or impose new conditions.

(3) When considering whether to grant or refuse authorisation

the Authority shall, in particular, have regard to

(a) the protection of settlors and beneficiaries; and

(b) the protection of the reputation of Malta taking into

account Malta’s international commitments; and

(c) the promotion of competition and choice.

(4) Without prejudice to the provisions of article 43(8), the

Authority shall notify any applicant of its decision whether to grant

or refuse to grant the authorisation applied for within three months

from the receipt of a complete application made in compliance with

the applicable provisions of this Act.

(5)

Any requirement in this Act that a person be an approved

p e r s o n t o ca r r y o u t ce r t a i n ac t i v i t i e s o r f u n c t io n s sh a l l b e

interpreted as a requirement that, in the case of a legal entity, any

director or officer of such person, and, in the case of a trust, each

one of its trustees, be an approved person to carry out such

activities or functions.

(6) The provisions of this article shall also apply, mutatis

mutandis, with respect to registration applied for in accordance with

article 43B.

The Authority may at any time cancel or suspend an

authorisation in accordance with the provisions of this Act

(a) if it considers that the holder thereof is not or is no

longer an approved person to act as a trustee; or

(b) if it considers that the holder thereof does not fulfil the

requirements of, or has contravened, any of the

provisions of this Act or of any rules or regulations

made thereunder, or has failed to satisfy or comply

with any obligation or condition to which he or the

authorisation is subject by virtue of or under this Act;

or

(c) if the Authority has been furnished by or on behalf of

the authorised trustee with information which is false,

inaccurate or misleading; or

(d) if the authorised trustee does not commence activities

pursuant to its authorisation within twelve months of its

issue or within such other period as may be specified in

the authorisation or has ceased to provide such service;

or

(e) if it considers it desirable to cancel or suspend the

authorisation for the protection of the general public or

the reputation of Malta taking into account Malta’s

international commitments; or

(f)

at the request of the authorised trustee; or

(g) in any other circumstances under which the Authority

would have been precluded from issuing an

authorisation under this Act or where it would have

been entitled to refuse the grant of such authorisation

Provided that the provisions of this article shall also

apply, mutatis mutandis, with respect to a registration

applied for in accordance with article 43B and granted in

accordance with article 45.

(1) Where the Authority proposes -

(a) to vary any condition to which the authorisation is

subject or to impose a condition thereon; or

(b) to refuse an application for an authorisation or to

cancel or suspend an authorisation,

it shall give the applicant or, as the case may be, the authorised

trustee notice in writing of its intention to do so, setting out the

reasons for the decision it proposes to take.

(2) Every notice given under subarticle (1) shall state that the

recipient of the notice may, within such reasonable period after the

service thereof as may be stated in the notice, being a period of not

less than forty-eight hours and not longer than thirty days, make

representations in writing to the Authority giving reasons why the

proposed decision should not be taken, and the Authority shall

consider any representation so made before arriving at a final

decision.

(3) The Authority shall as soon as practicable notify its final

decision in writing to the applicant or the authorised trustee, as the

case may be.

(4) The provisions of this article shall also apply, mutatis

mutandis, with respect to a registration applied for in accordance with

article 43B or a registration granted in accordance with article 45, as

applicable.

(1) Without prejudice to the powers conferred to the

competent authority under article 46, the competent authority may,

where it is satisfied that sufficient circumstances exist, proceed to

take any one or more of the following measures

(a) require the trustee to take forthwith such steps as the

competent authority may consider necessary to rectify

or remedy the matter;

(b) appoint a person to advise the trustee in the proper

conduct of its business;

(c) appoint a person to take charge of the assets of the

trustee, or any portion thereof, for the purposes of

safeguarding the interests of the shareholders or any

creditors of the trustee as well as any other interested

person;

(d) appoint a person to assume control of the business of

the trustee either to carry on that business or to carry

out such function or functions in respect of such

business or part thereof, as the competent authority

may direct;

(e) fix the remuneration to be paid by the trustee to any

person appointed under this article;

(f)

require the trustee to submit a financial recovery plan

as may be determined in any rules issued by the

Authority, if it considers that the interests of the

creditors or other interested persons are likely to be

prejudiced owing to a deterioration in the financial

position of the trustee;

(g) do such other act or require the doing of such other act

as it may deem appropriate in the circumstances;

and having proceeded in any one or more of the manners aforesaid,

the competent authority may further proceed in any one or more

such manners, whether in addition thereto or in substitution

therefor.

(2)

Where a person is appointed by the competent authority -

(a) under sub-article (1)(b), it shall be the duty of the

trustee to act in accordance with the advice given by

such person unless and until the competent authority,

on representation made to it, directs otherwise;

(b) under sub-article (1)(c), the trustee shall deliver to

such person all the assets of which he is placed in

charge, and all the powers, functions and duties of the

trustee in respect of those assets, whether exercisable

by the trustee or otherwise, shall be exercisable by and

vest in the person appointed under the said paragraph

to the exclusion of any other person;

(c) under sub-article (1)(d), the trustee shall submit its

business to the control of such person and shall

provide him with such facilities as he may require the

trustee to provide him to carry on that business or to

carry out the functions assigned to him under the said

paragraph; and all the powers, functions and duties of

the trustee, shall be exercisable by and vest in him to

the exclusion of any other person.

(3) The competent authority may, where it feels is in the best

interest of the public so to do, make or issue public statements or

notices giving warnings or information about any action taken in

terms of article 46, article 46A and this article.

(4) The competent authority may require the trustee concerned

to pay all the expenses of, and incidental to, the publication or issue

of public statements or notices pursuant to this article or such part

thereof as it may deem appropriate; and any sum so due shall be

recoverable by the competent authority in the same manner as an

administrative penalty imposed under this Act.

REGULATORY AND INVESTIGATORY POWERS

(1) Notwithstanding any other provision of this Act, the

Authority may, by notice in writing, require any person who is or

was acting, or who appears to be or to have been acting as trustee,

or who was providing services which require authorisation or

registration according to this Act, and any other person who appears

to be in possession of relevant information to do all or any of the

following

(a) to furnish to the Authority, at such time and place and

in such form as it may specify, such information and

documentation as it may require with respect to any

such activities as aforesaid;

(b) to furnish to the Authority any information or

documentation aforesaid verified in such manner as it

may specify;

(c) to attend before the Authority, or before a person

appointed by it, at such time and place as it may

specify, to answer questions and provide information

and documentation with respect to any such activities

as aforesaid.

(2) The Authority may take copies of any documents furnished

or provided under this article.

(3) Where the person required to provide information or

documentation under this article does not have the relevant

information or documentation, he shall disclose to the Authority

where, to the best of his knowledge, that information or

documentation is, and the Authority may require any person,

whether indicated as aforesaid or not, who appears to it to be in

possession of that information or documentation, to provide it.

(4) A statement made and documentation provided in

pursuance of any requirement under this article may be used in

evidence against the person making the statement or providing the

documentation as well as against any person to whom they relate.

(5) Except as provided for in article 642(1) of the Criminal

Code and of article 588(1) of the Code of Organization and Civil

P r o c e d u r e , t h e p r o v i s i o n s o f t h i s a r t i c l e sh a l l a p p l y t o a l l

information or documentation notwithstanding the provisions of the

Professional Secrecy Act.

(6) The power to require the production of documentation

under the provisions of this article shall be without prejudice to any

lien or charge claimed by any person in relation to such

documentation.

(7) Where the Authority has appointed a person under

subarticle (1)(c), such person shall, for the purposes of carrying out

his functions under his appointment, have all the powers conferred

on the Authority by this article and a requirement made by him

shall be deemed to be and have the same force and effect as a

requirement of the Authority.

(1) Without prejudice to any of the powers conferred on it

by this Act, the Authority may, whenever it deems it necessary,

g i v e , b y n o t i c e i n w r i t i n g , su c h d i r e c t i v e s a s i t m a y d e e m

appropriate in the circumstances; and any person to whom or to

which the notice is given shall obey, comply with and otherwise

give effect to any such directive within the time and in the manner

stated in the directive.

(2) Without prejudice to the generality of the foregoing

provisions of this article, a directive under this article may -

(a) require anything to be done or be omitted to be done,

or impose any prohibition, restriction or limitation, or

any other requirement, and confer powers, with respect

to any transaction or other act, or to any assets, or to

any other thing whatsoever;

(b) require that any person having functions of a trustee be

removed or replaced by another person acceptable to

the Authority;

(c) require a trustee to cease operations and to wind up its

affairs, in accordance with such procedures and

directions as may be specified in the directive, which

may provide for the appointment of a person to take

possession and control of all documents, records,

assets and property belonging to or in the possession

or control of the trustee.

(3) The power to give directives under this article shall include

the power to vary, alter, add to or withdraw any directive, as well as

the power to issue new or further directives.

(4) Where the Authority is satisfied that the circumstances so

warrant, it may at any time make public any directive it has given

under any of the provisions of this article.

(1) In relation to trustees, the provisions of article 17 of

the Malta Financial Services Authority Act shall apply mutatis

mutandis.

(2) The Authority may exercise the powers granted to it by

virtue of this Act at the request of or for the purposes of assisting

an overseas regulatory authority

(a) where the assistance is required by the overseas

regulatory authority for the purposes of the exercise of

one or more of its regulatory functions; or

(b) where so required within the terms of Malta’s

international commitments; or

(c) where so required within the terms of undertakings

assumed in bilateral or multilateral agreements for the

exchange of information and other forms of

collaboration with overseas regulatory authorities

including a request under a memorandum of

understanding concluded with the Authority.

(1) Any officer, employee or agent of the Authority, on

producing, if required, evidence of his authority, may enter

premises occupied by a person on whom a notice has been served

under this Act for the purpose of obtaining the information or

documents required by that notice, or otherwise for the purpose of

the investigation, and of exercising any of the powers conferred

upon it.

(2) Where any officer, employee or agent of the Authority has

reasonable cause to believe that if such notice as is referred to in

subarticle (1) were served it would not be complied with or that any

documents to which it could relate would be removed, tampered

with or destroyed, such person may, on producing, if required,

evidence of his authority, enter any premises referred to in

s u b a r t i c l e ( 1 ) f o r t h e p u r p o s e o f o b t a i n i n g f r o m t h er e a n y

in formation or docum en ts sp ecified in the auth orit y, being

information or documents that could have been required under such

notice as is referred to in subarticle (1).

(3) For the purposes of any action taken under the provisions of

this article, the Authority may request the assistance of the

Commissioner of Police, who may for such purpose exercise such

powers as are vested in him for the prevention of offences and the

enforcement of law and order.

SANCTIONS

(1) Any person who contravenes or fails to comply with

any of the provisions of this Act, or contravenes or fails to comply

w i t h a n y authorisation, registration, condition, obligation,

requirement, directive or order made or given under any of the

provisions of this Act, shall be guilty of an offence.

(2) Any person who for the purposes of, or pursuant to, any of

the provisions of this Act or of any rules or regulations made

thereunder, or any condition, obligation, requirement, directive or

order made or given as aforesaid, furnishes information or makes a

statement or declaration which he knows to be inaccurate, false or

m isleading in any material respect, or recklessl y furnishes

information or makes a statement which is inaccurate, false or

misleading in any material respect, shall be guilty of an offence.

(3) Any person who with intent to avoid detection of the

commission of an offence under this Act, removes, destroys,

conceals or fraudulently alters any book, document or other paper,

shall be guilty of an offence.

(4)

Any person who intentionally obstructs a person exercising

rights conferred by this Act shall be guilty of an offence.

(5) Any person who acts or purports to act as a trustee in Malta

without being authorised or registered to do so by the Authority,

when so required in terms of this Act, shall be guilty of an offence.

(6) Any person who is guilty of an offence under subarticles

(1), (2), (3), (4) and (5) and, saving any higher punishment which

may be provided under any other law, shall be liable, on conviction,

to a fine (multa) not exceeding four hundred and sixty-six thousand

euro (€466,000) or to a term of imprisonment not exceeding four

years, or to both such fine and imprisonment.

(7) (a) Without prejudice to any other powers assigned to the

Authority in terms of this Act, where a trustee, or a director of a

trustee company or any other person entrusted with the

management and administration thereof, or any other person having

obligations with respect to the trustee, contravenes or fails to

comply with any of the conditions imposed in an authorisation

issued under article 43, or the conditions imposed in article 43A, or

the conditions imposed by the Authority upon registration in

accordance with article 43B, and, or where the Authority is

satisfied that the trustee’s or the person’s conduct amounts to a

breach of any provisions of the Act, regulations or rules issued

thereunder, or of any directive, obligations or other requirement

made or given by the Authority, including failure to cooperate in an

investigation, the Authority may by notice in writing and without

recourse to a court hearing, impose an administrative penalty which

may not exceed one hundred and fifty thousand euro (€150,000) for

each infringement or failure to comply, as the case may be.

(b) Administrative penalties or other measures that may be

imposed by the Authority on a trustee or any of the

persons referred to in paragraph (a) as may be

specified, may be imposed in the form of a fixed

penalty, a daily penalty, or both.

(c) The imposition by the Authority of an administrative

penalty in terms of this sub-article shall be without

prejudice to any other consequence of the act or

omission of the offender under civil or criminal law

Provided that in all cases where the Authority imposes

an administrative penalty in respect of anything done

or omitted to be done by any person and such act or

omission also constitutes a criminal offence, no

proceedings may be taken or continued against the said

person in respect of such criminal offence.

(d) The provisions of article 16(8) of the Malta Financial

Services Authority Ac shall apply mutatis mutandis to

any administrative or disciplinary sanction or measure, of

whatever type, including administrative penalties,

reprimands or warnings, imposed or decided by the

Authority under this Act, and any regulations or rules

made thereunder.

(8)

A breach or non-observance by any person of any provision

of this Act relating to the authorisation of such person to act as a

trustee or otherwise shall not in any manner prejudice the validity

or enforceability of a trust or affect the duties and responsibilities

of such person in terms of this Act.

RULES

(1) The Authority may issue rules governing trustees,

whether authorised or not required to obtain authorisation in terms

of this Act, the operat ions of trustees in Mal ta, and on the

qualifications to act as trustees. The rules shall be binding on the

trustees and other persons as may be specified therein. The rules

may lay down additional requirements and conditions in relation to

the activities of trustees, their responsibilities to the Authority, a

code of conduct, and any other matters as the Authority may

consider appropriate, including the form and content of accounting

records to be kept by trustees.

(2) The Authority may also issue rules to establish which

activities constitute administrative services in relation to trusts and

to establish the criteria for the conduct of these activities.

(3) The Authority may also issue rules to regulate trustees which

are subject to a registration procedure in terms of article 43B. The

rules may lay down additional requirements and conditions in relation

to the activities of such trustees, their responsibilities to the Authority,

adherence to a code of conduct and any other matter as the Authority

may consider appropriate.

(1) The court, upon the application of the Authority, may

make a disqualification order against any person who is found

guilty of an offence under this Act or any other law, other than an

offence punishable only with a fine, or who has infringed any

requirement of this Act.

(2) The court, upon the application of the Authority or any

interested person, may also make a disqualification order against

any person if it is satisfied that his conduct as a trustee of a trust,

either taken alone or taken together with his conduct as a trustee of

any other trust or trusts, makes him unfit to be a trustee.

(3) A disqualification order made under this article may be for

a minimum period of one year and a maximum period of fifteen

years.

(4) For the purposes of this article, a disqualification order is

an order whereby a person shall not, without leave of the court -

(a) be a trustee of a trust or a private foundation; or

(b) be delegated any functions, duties or powers of a

trustee; or

(c) perform or exercise any functions or otherwise act in a

fiduciary capacity in relation to a mandate, trust or a

private foundation.

(5) A notice of a disqualification order made under this article

shall -

(a) be delivered by the Registrar of Courts to the

Authority;

(b) be furthermore recorded in a register to be kept for this

purpose by the Authority and which shall be open for

public inspection.

(6) Any person who, while being subject to a disqualification

order, acts in contravention thereof, shall be guilty of an offence

and liable on conviction to a fine (multa) of not more than forty-

seven thousand euro (€47,000) or imprisonment for a term not

exceeding three years or to both such fine and imprisonment.

(7) The provisions of this article shall be without prejudice to

any other offences or remedies which may exist under any other

law.

A person shall not be qualified for appointment or to hold

office as trustee if -

(a) he is interdicted or incapacitated or is an undischarged

bankrupt;

(b) he has been convicted of any of the crimes affecting

public trust or of theft or of fraud or of knowingly

receiving property obtained by theft or fraud;

(c) he is a minor; or

(d) he is subject to a disqualification order under article

53. APPEALS

(1) In this article, the "Financial Services Tribunal" means

the Tribunal established in terms of article 21 of the Malta

Financial Services Authority Act, and the term "Tribunal" shall be

construed accordingly; and the provisions of the said article 21

shall, except in so far as any of them is incompatible with the

provisions of this article, apply to appeals made to the Financial

Services Tribunal under this Act.

(2) Any person who is aggrieved by a decision of the

Authority -

(a) to refuse the issue of an authorisation or registration;

(b) to impose or vary any condition of an authorisation or

registration;

(c) to impose or vary any restriction;

(d) to revoke an authorisation;

(e) to issue a directive under this Act;

(f)

to impose an administrative penalty in terms of article

51(7),

may appeal against the decision to the Financial Services Tribunal

within such period and under such conditions as are established

under the Malta Financial Services Authority Act.

(3) An appeal against a decision of the Authority shall not

suspend the operation of that decision.

For the purpose of articles 44 till 55 the term "trustee" shall

be construed as including those persons referred to in article

43(12).

GENERAL PROVISIONS

(1) The Minister may, on the advice of the Authority make

regulations or rules for the better carrying out of any of the

provisions of this Act, and may, in particular, but without prejudice

to the generality of the foregoing, by any such regulations or rules -

(a) provide for the returns, statements, and notices to be

made or given for any of the purposes of this Act, and

the form and contents thereof;

(b) regulate the conduct, duties and other obligations of

trustees, including the returns, statements and other

information they are to submit to the Authority, and

establish

the

maximum

amount

which,

notwithstanding any provision of this Act, may be

charged as fees by such trustees;

(c) alter any fees established by any provision of this Act,

and amend any such provision accordingly to reflect

changes in the cost of living or in the value of

currencies, and establish such other fees as may be

deemed appropriate in respect of any matter for which

a fee is not provided by this Act;

(d) make rules of court for any purpose of this Act and of

proceedings thereunder, providing by such rules for

any matter referred to in article 29 of the Code of

Organization and Civil Procedure;

(e) to further regulate the activities of trustees as well as

the services provided and activities carried on or in

conjunction therewith or in relation thereto, providing

for any matter he may deem expedient including the

creation and exercise of rights by or for the benefit of

the beneficiaries or settlors and the imposition of

duties and obligations on persons authorised to act as

trustees;

(f)

to establish the requirements relating to the books of

account to be maintained by trustees, the form and

content of accounts which trustees are obliged to

prepare, which accounts have to give a true and fair

view of the assets under trusts, the requirements of

review or audit on such accounts, the duties of auditors

who may be engaged and related matters;

(g) to exempt any activities or classes of persons from the

requirements of articles 43 and 43A and to impose

conditions he may deem fit for eligibility for

exemption;

(h) without prejudice to any rules which may apply in

terms of the Investment Services Act, or the

Retirement Pensions Act, to establish rules applicable

to the responsibilities of trustees of unit trusts under

this Act, the issue of units, the rights and

responsibilities of unit holders and any other matters

which may need to be regulated relating to unit trusts;

(i)

to regulate any matters in connection with the use of

trusts in commercial transactions, to establish

conditions for such use including the prohibition of

such use, and to amend the definition of commercial

transaction in this Act;

(j)

to regulate any matter in relation to security trustees

and security trusts, including the definition of what

constitutes fair and reasonable actions in relation to

enforcement of security trustees;

(k) to regulate trusts which provide for maintenance of

persons or for the provision of annuities or pensions;

(l)

to regulate the accumulation of income and

distribution of income and capital by trustees and

ancillary matters;

(m) to regulate the duties of private trustees and the duties

and functions of depository notaries, procedures to be

adopted for the safekeeping and registration of all

documents filed with such notary in relation to a trust

and all ancillary matters;

(n) to regulate matters in relation to trusts created by

holders of public office and such other persons as may

be prescribed, including the qualifications of the

trustees, the powers of appointment of such trustees,

the powers and duties of such trustees, the rights of

beneficiaries and third parties in such cases and all

ancillary matters;

(o) regulate the authorisation and regulation of sub-trusts

to be used in connection with collective investment

schemes and retirement schemes;

(p) regulate the registration, conservation and access of

notarial trust deeds as referred to in article 43A;

(q) regulate the matters in relation to the registration by

the Authority of notaries acting as qualified persons,

including the powers and duties of such qualified

persons and any information which they may be

required to submit to the Authority, and to establish

any fees payable to the Authority in respect of the

registration and the supervision thereof;

(r) exempt any activities or classes of persons from the

requirements in article 43(12) and to impose

conditions it may deem fit for eligibility for

exemption;

(s) regulate any matters in connection with the use of

trusts for persons with disability, including the

conduct, duties and other obligations of persons acting

as trustees of such trusts;

(sA) regulate the conduct, duties and other obligations of

administrators,

trustees,

directors

or

similar

functionaries exercising control over the assets of a

private foundation, as defined in article 43(12),

including the returns, statements and other information

they are to submit to the Authority, and establish the

maximum amount which, notwithstanding any

provision of this Act, may be charged as fees by such

functionaries;

(sB) regulate the conduct, duties and other obligations of

persons acting as administrators of private foundations

for persons with disability;

(t)

transpose, implement and give effect to the provisions

and requirements of Directives, Regulations and any

other legislative measures of the European Union

requiring transposition and, or implementation, as they

may be amended from time to time, including any

implementing measures that have been or may be issued

thereunder and relating to licence holders and others as

may be specified therein or to any other matter falling

within the terms of this Act, and for this purpose to

provide that any provision in any other law shall not

apply to matters falling under the regulations; and

(u) prescribe any matter that may or is to be prescribed.

(2) Regulations made under any of the provisions of this Act

may be made in the English language only.

(3) Regulations made under this article may be made subject to

such exemptions or conditions as may be specified therein, may

make different provision for different cases, circumstances or

purposes and may give to the Authority such powers of adaptation

of the regulations as may also be so specified.

(4) Where regulations have been made in terms of this article,

the Authority may issue Rules within the meaning of article 52 for

the better carrying out and to better implement the provisions of the

regulations.

(5) Regulations made under this article may impose punishments

or other penalties in respect of any contravention or failure of

compliance not exceeding a fine (multa) of one hundred and fifty

thousand euro (€150,000) or imprisonment for a term not exceeding

one year, or both such fine and imprisonment.

TRANSITORY PROVISIONS

(1) Subject to the provisions of the Trusts and Trustees

(Amendment) Act, 2014, trustees and providers of other fiduciary

services in possession of an authorisation before the date of coming

into force of the amendments contained in the Act above-

mentioned shall take all necessary measures to comply with the

provisions of articles 43(4)(i)(e), 43(4)(ii)(e), 43(13)(i)(e),

43(13)(ii)(d) and article 43C within six months from the said date.

(2) Trustees in possession of an authorisation prior to the

coming into force of the amendments contained in the Act above-

mentioned shall comply with the provisions of articles 43(4)(i)(d),

43(4)(ii)(d) within two years from the said date.

(3) Mandatories in possession of an authorisation prior to the

coming into force of the amendments contained in the Act above-

mentioned shall comply with the provisions of article 43(13)(i)(d)

and article 43(13)(ii)(c), within two years from said date.

Transitory provisions - Act XIII of 2004

35. (1) The following provisions in this Part shall apply in

relation to registered trusts, trustees of unregistered trusts, licensed

nominees and nominee companies as referred to in the principal

Act (Cap. 331) as in force immediately before the coming into

force of this Part and the Malta Financial Services Centre Act as

retained in force by Act XVII of 2002 (hereinafter referred to as

"the applicable law").

(2) Upon the coming into force of this Part no further trusts

shall be registered in terms of the principal Act as in force

immediately before the coming into force of this Part.

(3) All trusts registered prior to the coming into force of this

Part shall continue to be regulated by the principal Act as in force

immediately before the coming into force of this Part for a

maximum period of ten years from the date of their registration and

they shall continue to enjoy the rights and exemptions and other

privileges due as provided by the principal Act as in force

immediately before the coming into force of this Part.

(4) A trustee of a registered trust in relation to which the period

of ten years has expired prior to the coming into force of this Part

shall amend the trust deed in consultation with the settlor, any

protector or other interested parties so as to achieve compliance

with the principal Act as amended by this Part within a maximum

period of two years from the coming into force of this Part.

(5) A trustee of a registered trust in relation to which the said

period of ten years is due to expire on or after the coming into force

of this Part shall amend the trust deed in consultation with the

settlor, any protector or other interested party so as to achieve

compliance with the principal Act as amended by this Part within a

maximum period of two years from the expiry of the said period of

ten years.

(6) Notwithstanding the provisions of subarticles (4) and (5), a

trustee of a registered trust may at any time prior to the lapse of

said period of ten years amend the trust deed as aforesaid to

achieve compliance with the principal Act as amended by this Part

and such am endment shall im ply a waiver of all rights and

exemptions and other privileges contemplated by the provisions of

the principal Act as in force immediately before the coming into

force of this Part.

(7) The trustee of any trust, other than a registered trust, which

is in existence on the date of the coming into force of this Part, and

to which the provisions of article 43(1) of the principal Act as

amended by this Part applies, shall, within two years of such date,

do all such acts as may be necessary to comply with the provisions

of the principal Act including

(a) applying for and obtaining authorisation as a trustee in

terms of article 43 of the principal Act as amended by

this Part; or

(b) making the relevant declarations and preparing such

inventory of trust assets as required by article 43A of

the principal Act as amended by this Part; or

(c) notifying the Authority of his activities to the extent

necessary; or

(d) cease to act as a trustee in Malta unless he obtains

authorisation as required by the principal Act as

amended by this Part.

(8) Nothing validly done in relation to a trust prior to the

coming into effect of this Part shall be affected hereby and no

action carried out prior to the coming into force of this Part and,

without prejudice to any trust regulated by a foreign law and the

provisions of the Recognition of Trusts Act, no relationship in

existence prior to the coming into force of this Part shall be treated

as a trust relationship unless it unambiguously appears from the

relationship that it was intended to create a trust relationship.

(9) On the coming into force of this Part, no further licences to

act as a licensed nominee shall be issued in terms of the applicable

law and all existing valid licences issued up to such date shall

expire upon the lapse of two years from the coming into force of

this Part.

(10) (a) Upon the lapse of six months from the coming into

force of this Part and until the expiry date referred to in

subarticle (9), no licensed nominee shall undertake any

new nominee activities and licensed nominees shall

only continue to service existing arrangements.

(b) A licensed nominee shall, prior to the lapse of two

years from the coming into force of this Part -

(i)

either apply for authorisation under article 43 of

the principal Act as amended by this Part;

(ii) or cease its business activities

Provided that if such licensed nominee does not obtain

authorisation to act as a trustee under article 43, such

licensed nominee shall be obliged to ensure that all

rights of property held under trusts or other

arrangements are transferred in the form required by

law to a person who is duly authorised to act as trustee

in terms of article 43 or that the provisions of article

43A are fully complied with, as the case may be.

(11) Notwithstanding any limitation in any memorandum and

articles of association of any licensed nominee company in terms of

the applicable law, any such company may at any time apply for

and may be granted authorisation to act as a trustee in terms of the

principal Act as amended by this Part.

(12) Upon the issue, in terms of article 43 of the principal Act as

amended by this Part, of authorisation to any such company to act

as a trustee in terms of article 43 of the said Act, any licence issued

pursuant to the applicable law shall expire and be cancelled and

shall be surrendered to the Authority.

(13) Upon the coming into force of this Part no further warrants

to act as a nominee company shall be issued in terms of the

applicable law.

(14) (a) Where upon the coming into force of this Part, a

nominee company is solely performing the functions of

liquidator of offshore companies, it shall immediately

submit its warrant to the Authority for modification

and such warrant shall continue to be renewed only in

relation to the functions of liquidator and until such

time as the nominee company completes the winding

u p o f s u c h o ff s h o r e c o m p a n i e s , w h e r e u p o n t h e

nominee company shall immediately surrender its

modified warrant to the Authority for cancellation.

(b) A nominee company solely performing the functions of

liquidator as aforesaid shall not act as trustee in any

manner and shall not be entitled to apply for

authorisation to act as trustee in terms of the principal

Act as amended by this Part.

(15) (a) Where upon the coming into force of this Part, a

nominee company is solely performing the functions of

t r u s t e e o f r e g i st e r e d t r u s t s, t h e w a r r a n t o f s u c h

nominee company shall be renewable for a maximum

period of two years from the coming into force of this

Part and such nominee company shall, during the said

period, continue to be regulated by the principal Act as

in force prior to the coming into force of this Part and

by the relevant provisions of the applicable law.

(b) A nominee company solely performing the functions of

trustee as aforesaid shall, prior to the lapse of the

period of two years from the coming into force of this

Part

(i)

either apply for authorisation to act as trustee

under article 43 of the principal Act as amended

by this Part,

(ii) or cease to act as trustee

Provided that where such nominee company does not

obtain authorisation to act as trustee under article 43, it

shall be bound to ensure that all the rights of property

under trusts and all other arrangements are transferred

in the form required by law to a person authorised to

act as trustee in terms of article 43 or that the

provisions of article 43A are fully complied with, as

the case may be.

(16) Where upon the coming into force of this Part, a nominee

company is performing both the functions of liquidator of offshore

companies and also the functions of trustee of registered trusts, the

provisions of subarticle (12) shall mutatis mutandis apply to such

nominee company in respect of its functions of trustee and the

provisions of subarticle (11)(a) shall mutatis mutandis apply to

such nominee company in respect of its functions of liquidator, and

the modification of its warrant as provided for in subarticle (11)(a)

shall be required only in respect of any period following the lapse

of two years from the coming into force of this Part, during which

the nominee company continues to act as liquidator of offshore

companies.

(17) The Authority shall have the power to require such changes

to the memorandum and articles of association of any licensed

nominee or any nominee company applying for authorisation,

including a change in name to the extent considered necessary, so

as to more suitably reflect its status, provided that any such

changes shall not affect the authorisation of the company to act as a

trustee in terms of the principal Act as amended by this Part or the

functions as liquidator of a nominee company under the applicable

law.

Nota bene: in furtherance of the above transitory provision, note

is to be taken of regulation 1(2) and regulation 3 of the Trusts Act

(Amendment of article 43(7)) Regulations, 2008 - Legal Notice 355

of 2008 - which state

"1.(2) These regulations shall come into force on the 1st

December, 2009 and shall apply to fees falling due on or after the

said date. Nothing in these regulations shall be deemed to affect the

liability in respect of any fees due under the Trusts Act prior to the

coming into force of these regulations."; and

"3. In article 43(7) of the Act (the reference is to the Trusts Act

before its amendment by Act XIII of 2004), for the words "on the

payment of a fee of Lm15", there shall be substituted the words "on

the payment of a fee of €34.94 until 30th November 2009 and on

the payment of a fee of €120 as from the 1st December, 2009".".