55. Duty to administer a Trust

(1) Upon acceptance of a trusteeship, the Trustee shall in the execution of his duties and in the exercise of his powers and discretions:

• (a) act with due diligence as would a prudent person to the best of his ability and skill; and
• (b) observe the utmost good faith; in accordance with the terms and purposes of the Trust and these Regulations.

(2) A Trustee shall administer the Trust solely in the interest of the Beneficiaries or in furtherance or support of the purposes of the Trust.

56. Duties of Trustees

(1) Subject to the terms of the Trust, a Trustee shall so far as is reasonably practical preserve the value of the Trust Property.

(2) Except with the approval of the Court or as permitted by these Regulations or expressly provided by the terms of the Trust, a Trustee shall not:

1. (a) directly or indirectly profit from his trusteeship;
2. (b) cause or permit any other person to profit directly or indirectly from such trusteeship;
3. (c) on his own account enter into any transaction with the Trustees or relating to the Trust Property which may result in such profit; or
4. (d) dispose of the Trust Property, or any part of it, in such a manner as to frustrate or adversely affect the purpose of the Trust or the interests of the Beneficiaries.

(3) Subject to section 75 (Beneficiary’s consent, release or ratification), a sale, encumbrance, or other transaction involving the investment or management of Trust Property entered into by the Trustee for the Trustee’s own personal account or which is otherwise affected by a conflict between the Trustee’s fiduciary and personal interests is voidable by a Beneficiary affected by the transaction unless:

1. (a) the transaction was authorised by the terms of the Trust;
2. (b) the transaction was approved by the Court;
3. (c) the Beneficiary did not commence judicial proceedings within the time allowed by section 72 (Limitation of action against Trustee); or
4. (d) the Beneficiary consented to the Trustee’s conduct or ratified the transaction.

(4) A Trustee shall keep accurate accounts and records of his trusteeship.

(5) A Trustee shall keep Trust Property separate from his personal Property and separately identifiable from any other Property of which he is a Trustee.

(6) A Trustee of an Express Trust shall:

1. (a) at all times take reasonable steps to obtain, maintain and record adequate, accurate and current UBO Details relating to the Ultimate Beneficial Owners of any party to the Trust, including the Settlor, Enforcer, Protector, Beneficiaries, any other Trustees and any other natural person exercising ultimate effective control over the Trust;
2. (b) at all times take reasonable steps to obtain, maintain and record adequate, accurate and current UBO Details of each party to the Trust which is an individual;
3. (c) keep records of the names and contact details of the agents and service providers engaged on behalf of the Trust;
4. (d) disclose its status as Trustee to financial institutions and DNFBPs when engaging their services on behalf of the Trust;
5. (e) maintain accurate and up-to-date records of the information required under subsections 56(6)(a) and (b) for a period of six (6) years from the date on which it ceased to act or be involved with the Trust;
6. (f) upon receipt of a notice issued by the AFSA, make the information referred to in subsections 56(6)(a) and (b) available to the AFSA for the purposes of subsection

56(7), at such time and at such place as may be specified in the notice; and

1. (g) upon receipt of a notice from the AFSA, provide to the AFSA particulars of its processes for compliance with its obligations under subsections 56(6)(a), (b) and (c).

(7) The AFSA shall:

1. (a) collect and process information obtained under subsection 56(6)(f) only for the purposes of regulation in relation to money laundering and terrorism financing, unlawful organisations and sanctions compliance in the AIFC, or to comply with any other applicable laws in the AIFC; and
2. (b) disclose such information only at the request of a regulator, a law enforcement agency or other government authority prescribed by the AIFC Co-operation and Exchange of Information Rules.

(8) A Trustee is entitled to rely in good faith, without further enquiry, on any information provided to the Trustee in response to enquiries made pursuant to subsection 56(6)(a), unless the Trustee has reason to believe the response is misleading or false.

(9) Where the Trustee fails to comply with the requirements in section 56(6), the AFSA may impose a fine in its discretion in respect of such non-compliance and, if the fine is not paid within 30 days, may make an application to the Court for orders under subsection 17(2)(a)(i) (Application to and certain powers of the Court). If the Trustee fails to comply with such an order, the AFSA may make an application under subsection 51(1) (Removal of Trustee by Court or under the terms of a Trust). For the avoidance of doubt, the AFSA shall be deemed, for the purpose of this section, to have standing to make applications to the Court under subsections 17(2)(a)(i) and 51(1).

(10) The AFSA has powers for supervision and enforcement with respect to fulfilment of requirements in section 56(6) by any means including but not limited to on-site/off inspections or other risk-based review procedures.

(11) In this section:

1. (a) “UBO Details” in relation to a party to the trust who is an individual or a person who is an Ultimate Beneficial Owner of a party to the trust which is a body corporate means:
2. (i) full legal name;

(ii) residential address and, if different, an address for service of notices;

(iii) date and place of birth;

(iv) nationality;

1. (v) information identifying the person from their passport or other government-issued national identification document acceptable to the AFSA, including the identifying number, country of issue, date of issue and of expiry;

(vi) the date on which the person became an Ultimate Beneficial Owner of a party to the trust; and

(vii) the date on which the person ceased to be an Ultimate Beneficial Owner of a party to the trust.

1. (b) “Ultimate Beneficial Owner” in relation to a body corporate which is a party to the trust has the meaning it has in the Companies Regulations; and
2. (c) if the party to the Trust is a body corporate which by reason of section 179-8 (Exemptions) of the Companies Regulations is exempt from the application of Part 14-1 of those regulations, the information which the Trustee must obtain in relation to that party is the information required in relation to that party by subsection 179-9(2) (Ownership through an exempt entity) of those regulations.

57. Duties of co-Trustees to act together

(1) Subject to the terms of the Trust, where there is more than one Trustee all the Trustees shall join in performing the Trust.

(2) Subject to subsection 57(3), where there is more than one Trustee no power or discretion given to the Trustees shall be exercised unless all the Trustees agree on its exercise.

(3) The terms of a Trust may empower Trustees to act by a majority but a Trustee who dissents from a decision of the majority of the Trustees may require his dissent to be recorded in writing.

58. Impartiality of a Trustee

Subject to the terms of the Trust, where there is more than one Beneficiary, or more than one purpose, the Trustee shall act impartially and shall not perform the Trust for the advantage of one at the expense of the other.

59. Cost of administration

In administering a Trust, the Trustee may incur only costs that are reasonable in relation to the Trust Property, the purposes of the Trust and the skills of the Trustee.

60. Enforcement and defence of claims

A Trustee may take reasonable steps to Enforce claims of the Trust and to defend claims against the Trust.

61. Collecting Trust Property

A Trustee shall take reasonable steps to compel a former Trustee or other person to deliver Trust Property to the Trustee, and, subject to the terms of the Trust, to redress a Breach of Trust known to the Trustee to have been committed by a former Trustee.

62. Duty to inform and report

(1) Subject to the terms of a Trust and any order of the Court, a Trustee shall, on application in writing by a Beneficiary, disclose to the applicant all documents which relate to or form part of the accounts of the Trust.

(2) A Trustee shall not be required to disclose to any person any document which:

• (a) discloses his deliberations as to the manner in which he has exercised a power or discretion or performed a duty conferred upon him;
• (b) discloses the reason for any particular exercise of such power or discretion or performance of duty or the material upon which such reason shall or might have been based; or
• (c) relates to the exercise or proposed exercise of such power or discretion or the performance or proposed performance of such duty.

(3) Notwithstanding the terms of the Trust:

• (a) the Court may on application made to it declare that in the particular circumstances of the Trust its terms do not render the Trustees sufficiently or appropriately accountable to the Beneficiaries or any of them; and
• (b) the Court may pursuant to such declaration extend or restrict the rights of all or any Beneficiaries to information regarding the Trust or may make such other order as it thinks fit.