79. Application of this Part

Except as otherwise provided in section 87(4) (Investment in bearer securities), this Part shall apply in relation to a Trust having a sole Trustee as it applies in relation to other Trusts, and references to Trustees in this Part (except in sections 81(1) and (3) (Persons who may act as agents) and 88(4) (Persons who may be appointed as nominees or custodians) shall be read accordingly.

80. Power to appoint agents

(1) Subject to the provisions of this Part, the Trustees of a Trust may authorise any person to exercise any or all of their delegable functions as their agent.

(2) In the case of a Trust other than a Charitable Trust, the Trustees’ delegable functions consist of any function other than:

• (a) any function relating to whether or in what way any assets of the Trust should be distributed;
• (b) any power to decide whether any fees or other payment due to be made out of the Trust funds should be made out of Income or capital;
• (c) any power to appoint a person to be a Trustee of the Trust; or
• (d) any power conferred by any other written law or the Trust Instrument which permits the Trustees to delegate any of their functions or to appoint a person to act as a nominee or custodian.

(3) In the case of a Charitable Trust, the Trustees’ delegable functions are:

• (a) any function relating to carrying out a decision that the Trustees have taken;
• (b) any function relating to the investment of assets subject to the Trust (including, in the case of land held as an investment, managing the land and creating or disposing of an interest in the land); and
• (c) any function relating to the raising of funds for the Trust otherwise than by means of profits of a trade which is an integral part of carrying out the Trust’s charitable purpose.

(4) For the purposes of subsection 80(3)(c) (Power to appoint agents), a trade is an integral part of carrying out a Trust’s charitable purpose if, whether carried on in the AIFC or elsewhere, the profits are applied solely to the purposes of the Trust and either:

• (a) the trade is exercised in the course of the actual carrying out of a primary purpose of the Trust; or
• (b) the work in connection with the trade is mainly carried out by Beneficiaries of the Trust.

81. Persons who may act as agents

(1) Subject to subsection 81(2), the persons whom the Trustees may under section 80 (Power to appoint agents) authorise to exercise functions as their agent include one or more of their number.

(2) The Trustees may not authorise 2 or more persons to exercise the same function unless they are to exercise the function jointly.

(3) The Trustees may not, under section 80 (Power to appoint agents), authorise a Beneficiary to exercise any function as their agent (even if the Beneficiary is also a Trustee).

(4) The Trustees may, under section 80 (Power to appoint agents), authorise a person to exercise functions as their agent even though he is also appointed to act as their nominee or custodian (whether under section 85 (Power to appoint nominees), 86 (Power to appoint custodians) or 87 (Investment in bearer securities)or any other power).

82. Linked functions, etc.

(1) Subject to subsection 82(2), a person who is authorized under section 80 to exercise any function shall, notwithstanding the terms of the agency, be subject to any specific duties or restrictions attached to the function.

(2) A person who is authorised under section 80 (Power to appoint agents) to exercise a power which is subject to a requirement to obtain advice shall not be subject to the requirement if he is the kind of person from whom it would have been proper for the Trustees, in compliance with the requirement, to obtain advice.

83. Terms of agency

(1) Subject to subsection 83(2) and sections 84(2) (Asset management — special restrictions), 53 (Remuneration of a Trustee) and 94 (Remuneration and expenses of agents, nominees and custodians), the Trustees may authorise a person to exercise functions as their agent on such terms as to remuneration and other matters as they may determine.

(2) The Trustees may not authorise a person to exercise functions as their agent on any of the terms set out in subsection 83(3) unless it is reasonably necessary for them to do so.

(3) The terms for the purposes of subsection 83(2) are:

1. (a) a term permitting the agent to appoint a substitute;
2. (b) a term restricting the liability of the agent or his substitute to the Trustees or any Beneficiary; and
3. (c) a term permitting the agent to act in circumstances capable of giving rise to a conflict of interest.

84. Asset management — special restrictions

(1) The Trustees may not authorise a person to exercise any of their asset management functions as their agent except by an agreement which is in writing or evidenced in writing.

(2) The Trustees may not authorise a person to exercise any of their asset management functions as their agent unless:

• (a) the Trustees have provided that person with a statement that gives guidance as to how the functions should be exercised (referred to in these Regulations as a policy statement); and
• (b) the agreement under which the agent is to act includes a term to the effect that he will secure compliance with:

(i) the policy statement; or

(ii) if the policy statement is revised or replaced under section 91 (Review of agents, nominees and custodians, etc.), the revised or replacement policy statement.

(3) The Trustees shall formulate any guidance given in the policy statement with a view to ensuring that the functions will be exercised in the best interests of the Trust.

(4) The policy statement shall be in writing or evidenced in writing.

(5) For the purposes of this section, the asset management functions of Trustees are their functions relating to:

• (a) the investment of assets subject to the Trust;
• (b) the acquisition of Property which is to be subject to the Trust; and
• (c) the management of Property which is subject to the Trust and the disposal of, or the creation or disposal of an interest in, such Property.

85. Power to appoint nominees

(1) Subject to the provisions of this Part, the Trustees of a Trust may:

• (a) appoint a person to act as their nominee in relation to such of the assets of the Trust as they may determine (other than settled land); and
• (b) take such steps as are necessary to secure that those assets are vested in a person so appointed.

(2) An appointment under this section shall be in writing or evidenced in writing.

86. Power to appoint custodians

(1) Subject to the provisions of this Part, the Trustees of a Trust may appoint a person to act as a custodian in relation to such of the assets of the Trust as the Trustees may determine.

(2) For the purposes of these Regulations, a person is a custodian in relation to assets if he undertakes the safe custody of the assets or of any document or record concerning the assets.

(3) An appointment under this section shall be in writing or evidenced in writing.

87. Investment in bearer securities

(1) If Trustees retain or invest in securities payable to bearer, they shall appoint a person to act as a custodian of the securities.

(2) Subsection 87(1) shall not apply if the Trust Instrument or any written law contains any provision which (however expressed) permits the Trustees to retain or invest in securities payable to bearer without appointing a person to act as a custodian.

(3) An appointment under this section shall be in writing or evidenced in writing.

(4) This section shall not impose a duty on a sole Trustee if that Trustee is an Authorised Firm for Providing Trust Services.

88. Persons who may be appointed as nominees or custodians

(1) A person may not be appointed under section 85 (Power to appoint nominees), 86 (Power to appoint custodians) or 87 (Investment in bearer securities) as a nominee or custodian or continue to act as such nominee or custodian unless:

1. (a) the person carries on a business which consists of or includes acting as a nominee or custodian; or
2. (b) the person is a body corporate which is controlled by the Trustees.

(2) For the purposes of subsection 88(1)(b), a body corporate is controlled by the Trustees if the Trustees have power to secure:

1. (a) by means of the holding of shares or the possession of voting power in or in relation to that or any other body corporate; or
2. (b) by virtue of any powers conferred by the articles of association or other document regulating that or any other body corporate, that the affairs of the first-mentioned body corporate are conducted in accordance with the wishes of the Trustees.

(3) Subject to subsection 88(1), the persons whom the Trustees may, under section 85 (Power to appoint nominees), 86 (Power to appoint custodians) or 87 (Investment in bearer securities), appoint as a nominee or custodian include:

1. (a) one of their number, if that one is an Authorised Firm for Providing Trust Services; or
2. (b) 2 or more of their number, if they are to act as joint nominees or joint custodians.

(4) The Trustees may, under section 85 (Power to appoint nominees), appoint a person to act as their nominee even though he is also:

1. (a) appointed to act as their custodian (whether under section 86 (Power to appoint custodians) or 87 (Investment in bearer securities) or any other power); or
2. (b) authorised to exercise functions as their agent (whether under section 80 (Power to appoint agents) or any other power).

(5) The Trustees may, under section 86 (Power to appoint custodians) or 87 (Investment in bearer securities), appoint a person to act as their custodian even though he is also:

1. (a) appointed to act as their nominee (whether under section 85 (Power to appoint nominees) or any other power); or
2. (b) authorised to exercise functions as their agent (whether under section 80 (Power to appoint agents) or any other power).

89. Terms of appointment of nominees and custodians

(1) Subject to subsection 89(2) and sections 53 (Remuneration of a Trustee) and 94 (Remuneration and expenses of agents, nominees and custodians), the Trustees may, under section 85 (Power to appoint nominees), 86 (Power to appoint custodians) or 87 (Investment in bearer securities), appoint a person to act as a nominee or custodian on such terms as to remuneration and other matters as they may determine.

(2) The Trustees may not, under section 85 (Power to appoint nominees), 86 (Power to appoint custodians) or 87 (Investment in bearer securities), appoint a person to act as a nominee or custodian on any of the terms set out in subsection 89(3) unless it is reasonably necessary for them to do so.

(3) The terms for the purposes of subsection 89(2) are:

1. (a) a term permitting the nominee or custodian to appoint a substitute;
2. (b) a term restricting the liability of the nominee or custodian or his substitute to the Trustees or to any Beneficiary; and
3. (c) a term permitting the nominee or custodian to act in circumstances capable of giving rise to a conflict of interest.

90. Application of sections 91 and 92

(1) Sections 91 (Review of agents, nominees and custodians, etc.) and 92 (Liability for agents, nominees and custodians, etc.) shall apply in a case where Trustees have, under section 80 (Power to appoint agents), 85 (Power to appoint nominees), 86 (Power to appoint custodians) or 87 (Investment in bearer securities):

1. (a) authorised a person to exercise functions as their agent; or
2. (b) appointed a person to act as a nominee or custodian.

(2) Subject to subsection 90(3), sections 91 (Review of agents, nominees and custodians, etc.) and 92 (Liability for agents, nominees and custodians, etc.) shall also apply in a case where Trustees have, under any power conferred on them by the Trust Instrument or by any written law:

1. (a) authorised a person to exercise functions as their agent; or
2. (b) appointed a person to act as a nominee or custodian.

(3) If the application of section 91 (Review of agents, nominees and custodians, etc.) or 92 (Liability for agents, nominees and custodians, etc.) in a case is inconsistent with the terms of the Trust Instrument or any written law, that section shall not apply to that case.

91. Review of agents, nominees and custodians, etc.

(1) While the agent, nominee or custodian continues to act for the Trust, it shall be the duty of the Trustees:

1. (a) to keep under review the arrangements under which the agent, nominee or custodian acts and the manner in which such arrangements are being put into effect;
2. (b) if circumstances make it appropriate to do so, to consider whether there is a need to exercise any power of intervention that they have; and
3. (c) if they consider that there is a need to do so, to exercise the power of intervention.

(2) If the agent has been authorised to exercise asset management functions, the duty under subsection 91(1) shall include, in particular:

1. (a) a duty to consider whether there is any need to revise or replace the policy statement made for the purposes of section 84 (Asset management — special restrictions);
2. (b) if the Trustees consider that there is a need to revise or replace the policy statement, a duty to do so; and
3. (c) a duty to assess whether the policy statement (as it has effect for the time being) is being complied with.

(3) Section 84(3) (and (4) (Asset management — special restrictions) shall apply to the revision or replacement of a policy statement under this section as they apply to the making of a policy statement under that section.

(4) In this section, “power of intervention” includes:

1. (a) a power to give directions to the agent, nominee or custodian; and
2. (b) a power to revoke the authorisation or appointment of the agent, nominee or custodian.

92. Liability for agents, nominees and custodians, etc.

(1) A Trustee shall not be liable for any act or default of the agent, nominee or custodian unless he fails to comply with the any of the duties applicable to him under chapter 1 of Part 8 when:

• (a) entering into the arrangements under which the person acts as agent, nominee or custodian; or
• (b) carrying out his duties under section 91 (Review of agents, nominees and custodians, etc.).

(2) If a Trustee has agreed to a term under which the agent, nominee or custodian is permitted to appoint a substitute, the Trustee shall not be liable for any act or default of the substitute unless he has failed to comply with the any of the duties applicable to him under chapter 1 of Part 8:

• (a) when agreeing to that term; or
• (b) when carrying out his duties under section 91 (Review of agents, nominees and custodians, etc.) in so far as they relate to the use of the substitute.

93. Effect of Trustees exceeding their powers

A failure by the Trustees to act within the limits of the powers conferred by this Part:

(1) in authorising a person to exercise a function of theirs as an agent; or

(2) in appointing a person to act as a nominee or custodian, shall not invalidate the authorisation or appointment

94. Remuneration and expenses of agents, nominees and custodians

(1) This section shall apply if, under a power conferred by Part 10 or any other written law, or by the Trust Instrument, a person other than a Trustee has been:

1. (a) authorised to exercise functions as an agent of the Trustees; or
2. (b) appointed to act as a nominee or custodian.

(2) The Trustees may remunerate the agent, nominee or custodian out of the Trust funds for services if:

1. (a) he is engaged on terms entitling him to be remunerated for those services; and
2. (b) the amount does not exceed such remuneration as is reasonable in the circumstances for the provision of those services by him to or on behalf of that Trust.

(3) The Trustees may reimburse the agent, nominee or custodian out of the Trust funds for any reasonable expenses properly incurred by him in exercising functions as an agent, nominee or custodian.