The Ministry of Justice is analysing submissions received in 2016 on a draft Trusts Bill, which is likely to have implications for trusts and trustees governed by the Financial Markets Conduct Act 2013 (FMCA).
The current proposed Trusts Bill aims to restate, rather than to codify or reinvent the law for existing trusts. The proposed legislation aims to avoid forcing existing trusts and trustees to amend their trust deeds. The Trusts Bill would apply generally to FMCA trusts and trustees. But the Trusts Bill contains important exclusions in schedule 2 in relation to wholesale investment trusts.
Obligations not relevant or not important in the context of wholesale investment trusts, such as the requirement for a paid advisor to advise the settlor on the meaning of any modification of default duties, will not apply.
The Ministry of Justice has stated in its exposure draft that “[w]e will work to ensure that both [the FMCA and the new Trusts Bill] operate together in a way that minimises compliance costs for trusts governed by both pieces of legislation”.