Private Trust Companies Bill 2015 Ministers speech

Private Trust Companies Bill 2015 Minister for Financial Services and Gaming (Hon. AJ Isola): Mr Speaker, I have the honour to move that the Private Trust Companies Bill 2015 be now read a second time.

Mr Speaker, private trust companies, or PTC’s, may already be established in Gibraltar. Any limited company may act as a trustee provided that it is not carrying on a licensable activity.

Typically, however, such a company will notify the FSC (a) that it has been formed to administer a trust settled by one or more individuals; (b) that this is its sole purpose; and (c) that it will not receive remuneration for providing trusteeship… in order to be able to act as a trustee of any one or more trusts, often the trusts of the family.

Mr Speaker, while this provides a simple and cost-effective process for establishing a PTC, the lack of a formal registration procedure sometimes prevents clients and intermediaries from recommending Gibraltar as an appropriate jurisdiction for the incorporation of a PTC as there is no legislative or regulatory framework from within which the PTC is formally recognised and can operate. Introducing a law to govern the operation of PTC’s will provide greater legislative protection and certainty and encourage potential clients to consider Gibraltar as an attractive jurisdiction in which to establish a PTC structure. At present Gibraltar is at a disadvantage compared to other international financial centres, which have made specific provisions for PTC’s in their legislation. Indeed, Mr Speaker, it is appropriate to report and to mention to this House that the Society of Trust and Estate Practitioners, who have been promulgating this legislation together with a series of other Bills, some of which will we will be considering today… some seven years ago –are delighted at the steps that we are taking.

There are numerous benefits to appointing a PTC as a trustee of a trust in place of professional individuals or licenced profession trustees.

Mr Speaker, I must also mention the approach that we have adopted towards implementing this legislation. A mandatory registration regime could be unfairly and unnecessarily onerous, especially on PTC’s in respect of which the cost of registration and renewal might be disproportionate to the size of the trust fund. We therefore felt that a voluntary system of registration would provide, for those who chose to submit to it, a legal framework within which a PTC could be officially established and operated, whilst at the same time provide flexibility for those seeking to opt out of it.

The legislation therefore fills a gap in Gibraltar’s offering as an international finance centre without prejudicing those who may have felt caught by a mandatory system of registration.

Notwithstanding the voluntary character of the PTC regime however, Mr Speaker, the proposed legislation provides for, among other matters, the establishment of a register, and for inspection of the register by members of the public and registration and renewal to be accompanied by a declaration of compliance.

Before I close, I should briefly mention that amendments have been notified to you, Mr Speaker, in writing and these largely comprise the correction of minor errors and stylistic changes; however, we also decided, after input from the Finance Centre Council, that it served no purpose not to include the name and address of the registered administrator in the register and that information will now therefore be fully available for public inspection.

Mr Speaker, the Government is confident that the legislation we are proposing will be of great addition to Gibraltar’s trust offering especially, but by no means exclusively, in the context of family offices. Once again, Mr Speaker, the Government is indebted to the efforts of those individuals and firms, as well as the Committee, drawn from the private sector in bringing this Bill to fruition.