Welcome to Herbert Smith Freehills’ new monthly private wealth industry updates in Asia.

Every month we survey ten Asian jurisdictions for legal developments concerning trust and estate planning which are of interest to the private wealth industry, and provide a succinct summary in a table format.  The jurisdictions covered in the update are Hong Kong, Singapore, China, Taiwan, Japan, India, Malaysia, Indonesia, Thailand and the Philippines. We hope that these updates will prove to be a useful resource to keep private clients, business people, and lawyers abreast of legal updates in the region.

Hong Kong

HKMA has issued a Consultation Paper on Enhancing the Regulation and Supervision of Trust Business.

The Hong Kong Monetary Authority (HKMA) has issued a Consultation Paper on Enhancing the Regulation and Supervision of Trust Business. The paper proposes a Code of Conduct to bind trustees owned by entities regulated by HKMA (e.g. banks). Other trustees could voluntarily agree to adhere to the Code. The consultation closes on 9 October 2020.

Wu v Ng [2020] HKCFI 615.

In this case the Court had to decide whether to imply terms and/or find that there had been misrepresentation in interpreting a deed relating to joint beneficial (but not legal) ownership of a property.

The Court found that the alleged implied term was not necessary to give effect to the deed in question as the deed would not lack business efficacy without such a provision; the express wording in the deed contradicted the alleged implied term. There was also a lack of evidence to support the misrepresentation claim and therefore there were no demonstrated triable issues or any other good reason for withholding judgment.

Mattingley and Shenton Settlement [2020] HKCFI 673.

In this case the Court agreed to discharge trustees who had been unable to find beneficiaries of a trust for 80 years, but declined to release them from liability for the period during which they acted as trustees.

Regulator relaxes open-ended fund company regime.

Hong Kong’s Securities and Futures Commission (SFC) has amended the code governing open-ended fund companies (OFCs), introducing several improvements for private OFCs. These include: extension of the types of entities that can act as custodian; removal of investment restrictions and further development of a re-domiciliation capability. They have immediate effect, with the exception of existing custodians of private OFCs that have a six-month transition period to comply with the code’s additional safekeeping requirements.


SCM amends its Guidelines on Trust Deeds.

The Securities Commission Malaysia (SCM) has amended its Guidelines on Trust Deeds.

Amendments include:

  • Paragraph 1.03 specifies the Guidelines will apply to all issuers of corporate bonds or sukuk, other than issuances exempted under Schedule 8 of the CMSA and, where applicable, Schedule 9 of the CMSA. While the requirements in these Guidelines will not be mandatory for such issuances, they may be applied by the issuer upon considering the due interest of investors.
  • Paragraph 7.02(b) provides that a trust deed must clearly state the manner in which approval from bond holders and/or sukuk holders can be obtained (if prior approval is required).
  • Paragraph 11.03 specifies that a materiality or substantiality threshold in respect of a default event (for the purposes of subparagraph 11.01(a)) is strictly prohibited. However, remedy periods may be allowed but must not exceed seven business days from the date on which the payment is due.

The effective date of the amended version is 23 August 2020.


Amendments to AML regulations in progress in Thailand.

Thailand’s cabinet and parliament is now progressing key amendments to its anti-money laundering (AML) regulations, in order to comply with the international standards of the Financial Action Task Force (FATF).

The amendments, if approved by the cabinet and parliament, will update the Anti-Money Laundering Act 1999 (AMLA) and the Counter Terrorism and Proliferation of Weapons of Mass Destruction Financing Act 2016.

A heightened focus has been placed on financial technology services. The AMLA’s definition of financial institutions will be expanded to cover businesses related to financial services or financial technology services considered to be a money laundering risk, including but not limited to:

  • asset management and digital asset businesses; and
  • trustees in capital market trusts.

The government has also implemented new customer due-diligence regulations under the Ministerial Regulation on Customer Due Diligence 2020, which came into force on 12 August. This regulation exempts reporting entities from the requirement to identify beneficial owners of certain types of customers, including government entities, special financial institutions and listed companies.

Under the new laws, the powers of the AML authorities will increase, to allow the Anti-Money Laundering Office to act as a central financial intelligence agency regulating companies both within and outside of Thailand.

The contents of this document are for reference purposes only. Some of the information comes from public sources and this may not be comprehensive, accurate or up to date; where we have relied on third party information and sources, this has not been verified by us. The document does not constitute legal advice, and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication, and any facts in this document should be checked for your specific circumstances at the time you wish to use or refer to them.


Herbert Smith Freehills LLP is licensed to operate as a foreign law practice in Singapore. Where advice on Singapore law is required, we will refer the matter to and work with licensed Singapore law practices where necessary.