Banks and Trust Companies (Private Trust Companies) Regulations

Link to law: http://laws.bahamas.gov.bs/cms/images/LEGISLATION/SUBORDINATE/2007/2007-0001/BanksandTrustCompaniesPrivateTrustCompaniesRegulations_1.pdf
Published: 2007-01-08

Banks and Trusts Companies Regulation
BANKS AND TRUST COMPANIES REGULATION [CH.316 – 35






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BANKS AND TRUST COMPANIES (PRIVATE
TRUST COMPANIES) REGULATIONS

(SECTION 24)
[Commencement 8th January, 2007]


1. These Regulations may be cited as the Banks and

Trust Companies (Private Trust Companies) Regulations.
2. (1) In these Regulations —
“Financial and Corporate Service Provider” means a

licensee under the Financial and Corporate
Service Providers Act;

“Special Director” means a person (who need not
necessarily be resident in The Bahamas) of good
reputation who also possesses at least five years’
experience in a discipline relevant to the
administration of trusts, which, in this context
shall include one or more of law, finance,
commerce, investment management or
accountancy;

“the Act” means the Banks and Trust Companies
Regulation Act;

“transaction” has the same meaning as in the Financial
Transactions Reporting Act.

(2) Any terms used in these regulations without
definitions shall unless the context indicates otherwise,
have the same meaning ascribed to those terms in the Act.

3. (1) A private trust company is exempt from the
requirements of section 3(2) of the Act if —

(a) it complies with the definition of “private trust
company” in section 2 of the Act;

(b) it has a single Designating Instrument in the form
specified in the First Schedule which designates
the individual or individuals who shall be the
Designated Person or Designated Persons in
relation to that company; and

(c) it does not solicit trust business.

S.I. 1/2007

Citation.

Interpretation.

Ch. 369.

Ch. 316.

Ch. 368.

Exemption.

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(2) A trust company which is exempt pursuant to
sub-regulation 3(1) shall not be required to obtain a licence
under section 4 of the Business Licence Act.

(3) A trust company which is exempt pursuant to
subregulation 3(1) shall, for the purposes of these
Regulations, be referred to as a “private trust company”
and such company shall also be exempt from the
requirements of sections 5, 8, 10, 12, 14, 15 and 20 of
the Act.

(4) Upon being appointed a Registered
Representative of a private trust company, the Registered
Representative shall:

(a) within six months of the date of coming into
force of these Regulations; or

(b) in the case of a company which has been
incorporated under the Companies Act, or the
International Business Companies Act after the
date of coming into force of these Regulations,
within three months of its incorporation,

certify to the Governor that the trust company qualifies for
an exemption by virtue of the restriction specified in sub-
regulation (1):

Provided that the Governor may extend the
time for such certification for such further period not
exceeding twelve months as he thinks expedient.

(5) If a private trust company ceases at any time to
meet the requirements of sub-regulation 3(1), its
Registered Representative shall within seven days of such
change, notify the Inspector in writing of such change.

4. (1) A private trust company shall, at all times:
(a) have a Registered Representative in The

Bahamas;
(b) have at least one Special Director, except where

an officer of a licensee serves as a Registered
Representative;

(c) maintain, at the offices of the Registered
Representative, a copy of the Designating
Instrument pertaining to such company; and

(d) where possible, be in possession of a settlor’s
acknowledgement in the form appearing in the
Second Schedule in respect of each trust for
which it serves as trustee.

Ch. 329.

Ch. 309.

Requirements for
Private Trust
Companies.

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(2) A private trust company shall notify the Inspector
of any change in the name or address of its Registered
Representative.

(3) A private trust company shall have a paid up
share capital of not less than five thousand dollars and shall
so long as it is a private trust company maintain such
minimum paid up share capital.

(4) A private trust company shall within ten (10)
days, or such shorter period pursuant to section 35 of the
Central Bank of the Bahamas Act, of being so requested by
its Registered Representative provide to it all information,
which such Registered Representative requires in order to
enable that Registered Representative to discharge its
obligations under these Regulations.

(5) A private trust company shall not —
(a) amend its Memorandum or Articles of

Association in any manner, which would cause
them to be or become inconsistent with its
definition in section 2 of the Act;

(b) conduct its operations in any manner inconsistent
with these Regulations.

5. A private trust company shall pay such fees as
may be prescribed in the Third Schedule to the Act.

6. (1) No person, other than a licensee may act as a
Registered Representative of a private trust company
unless that person’s business is limited to acting as a
Registered Representative only and, that person —

(a) holds a valid Financial and Corporate Service
Provider’s licence issued pursuant to the
Financial and Corporate Service Provider’s Act;
and

(b) has obtained the prior written approval of the
Governor.

(2) A Financial and Corporate Service Provider who
desires to act as a Registered Representative for a private
trust company shall, before proceeding to act as such
Registered Representative, apply to obtain the prior written
approval of the Governor to perform the functions of a
Registered Representative and shall provide the following
information to the Governor:

Ch. 351.

Fees.

Application to
act as Registered
Representative.

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(a) a certified copy of the applicant’s current
Financial and Corporate Service Providers
licence;

(b) evidence, such as the Governor may require, of
the nature and sufficiency of the financial
resources of the applicant which are to be used to
fund the business of acting as a Registered
Representative;

(c) two character references;
(d) such other particulars as the Governor may

require.

(3) In determining whether or not to grant approval,
the Governor shall consider the following factors —

(a) whether the Financial and Corporate Service
Provider is a fit and proper person to act as a
Registered Representative for private trust
companies;

(b) whether the Financial and Corporate Service
Provider has sufficient human and physical
resources to discharge its duties as Registered
Representative of a private trust company;

(c) the business record and relevant experience of the
applicant or of the beneficial owner(s) of the
applicant; and

(d) the best interests of the financial system in The
Bahamas,

and, if satisfied, may grant approval for such Financial and
Corporate Service Provider to act as Registered
Representative subject to such terms and conditions, if any,
as the Governor may deem necessary.

(4) Whenever the Governor considers it to be in the
public interest, the Governor may refuse to grant approval
for a Financial and Corporate Service Provider to act as
Registered Representative and shall not be required to give
reasons for such refusal.

(5) In respect of an approval granted under
Regulation 5, the Governor may at any time —

(a) make the approval subject to such conditions or
limitations as the Governor considers necessary;

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(b) revoke any condition or limitation to which the
approval is subject;

(c) withdraw the approval:
Provided that before taking any action under

paragraphs (a),(b) or (c), the Governor shall provide the
Financial and Corporate Service Provider with an
opportunity to make representations regarding any
proposed action.

(6) A Registered Representative shall be exempt
from the requirements of sections 4, 11 and 21 of the Act.

7. A Registered Representative shall pay such fees
as are prescribed in these regulations and all such fees shall
be payable to the Treasurer and placed in the Consolidated
Fund.

8. A Registered Representative shall have and
maintain a minimum paid up share capital of not less than
fifty thousand dollars.

9. (1) An approval granted under Regulation 6 is
valid until the 31st December of the year in which it is
granted but is renewable as of the 1st January in each year
thereafter for a further period of one year.

(2) The Governor shall, before renewing approval
take into consideration those matters referred to in sub-
regulation 6(3).

10. Where any of the particulars provided in the
application of a Registered Representative change, such
Registered Representative shall within thirty days of such
change notify the Governor in writing of the change.

11. Approvals granted by the Governor pursuant to
regulations 6 and 9 shall be prominently displayed on the
premises where the Registered Representative conducts its
business.

12. No Registered Representative shall act for a
private trust company unless such Registered
Representative —

(a) is in possession of a Designating Instrument
identifying the Designated Person or Designated
Persons in respect of the private trust company;

(b) has been reasonably satisfied by the private trust
company that the private trust company is being
established for lawful purposes;

Fees.

Share capital for
Registered
Representative.

Approval valid
for one year.

Notification of
Change.

Approvals to be
displayed.

Requirements for
providing private
trust services.

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(c) has been reasonably satisfied that the company
shall operate as a private trust company as
defined in section 2 of the Act.

13. (1) A Registered Representative shall, except in
relation to paragraph (e) where he may, at all times
maintain in The Bahamas copies of the following
documents in relation to each private trust company for
which it provides private trust services —

(a) Memorandum and Articles of Association;
(b) Designating Instrument;
(c) curriculum vitae of the Special Director of each

private trust company, if any, from time to time
acting in such capacity; and

(d) trust instruments for each trust (including any
sub-trusts or appointed trusts) administered by the
private trust company;

(e) an acknowledgement in the form set out in the
Second Schedule; and

(f) a list of all private trust companies for which he
acts as Registered Representative.

(2) Every Registered Representative shall, on or
before 31st December of each year, obtain from the
directors of each private trust company for which it
provides private trust services, a duly completed
Compliance Certificate in the form set out in the Fourth
Schedule.

(3) Where a Registered Representative acts as a
Bahamas Agent of a private trust company, he shall enter
into a service agreement with the company to provide
administrative services to the company including —

(a) if requested, the preparation of the resolutions
and minutes of the company’s Board of Directors
meetings;

(b) maintenance of the resolutions and of the minutes
of the company’s Board of Directors meetings.

(4) A Registered Representative is required in
relation to each private trust company for which it acts as
Registered Representative:

(a) to verify the identities of the following persons in
accordance with the Financial Transactions

Documents to be
kept in The
Bahamas.

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Reporting Act and the Financial Transactions
Reporting Regulations and to maintain in The
Bahamas, information and documents relating to
such verification:
(i) the settlor and any person providing the

funds or assets which are subject to the trust
or trusts administered by the private trust
company;

(ii) a Designated Person;
(iii) the protector of any trusts of which the

private trust company is trustee;
(iv) a person who has a vested interest under any

trust of which the private trust company is
trustee;

(b) to report to the Financial Intelligence Unit any
transaction or proposed transaction which the
Registered Representative knows, suspects or has
reasonable grounds to suspect —
(i) involves proceeds of criminal conduct as

defined in the Proceeds of Crime Act; or
(ii) the Anti-Terrorism Act.

14. (1) Any person who —
(a) with intent to deceive, by any act or omission

contravenes any provision of these Regulations,
commits an offence and is liable on summary
conviction to a fine not exceeding $25,000;

(b) with intent to deceive, for any purposes of these
Regulations, makes any representation that he
knows to be false or does not believe to be true,
commits an offence and is liable on summary
conviction to a fine not exceeding $25,000;

(2) Where a limited liability company is convicted of
an offence under sub-regulation 14(1), every director and
every officer concerned with the management of the
company is also liable to be convicted for that offence
unless he satisfies the court that the offence was committed
without his knowledge or consent or that he took all
reasonable steps to prevent the commission of the offence.

15. The Governor may impose a fine not exceeding
$5,000 where a Registered Representative unreasonably

Ch. 93.

Ch. 107.

Offences.

Penalty for Non
Compliance.

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fails to comply with any of the provisions of these
Regulations.

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FIRST SCHEDULE

(Regulation 3)

DESIGNATING INSTRUMENT

[INSERT COMPANY NAME]
I, [DIRECTOR], hereby confirm that in relation to

[INSERT COMPANY NAME] a Company
[incorporated/to be incorporated] under the laws of The
Bahamas, the Designated Person or Designated Persons for
the purposes of Section 2 of the Act shall be: [INSERT
INDIVIDUAL (S) NAME (S)].


Signed:

...........................................................................
DIRECTOR

Acknowledged
by:..........................................................

[INSERT COMPANY NAME]



SECOND SCHEDULE

(Regulation 4 )

FORM OF ACKNOWLEDGEMENT TO BE EXECUTED BY
SETTLOR OF TRUST

I, [INSERT SETTLOR’S NAME), hereby
acknowledge that in relation to [INSERT COMPANY
NAME] (the “Company”) a company [incorporated/to be
incorporated] under the laws of The Bahamas:

(i) that the Company's directors are not required by
law to possess or exhibit expertise in trust
administration and, therefore, said directors may,
in fact, not be possessed of or exhibit such skill,

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(ii) that Company is not required by law to provide
any fidelity bond;

(iii) that the capital of the Company is not required by
law to exceed Five Thousand Dollars and may,
therefore, be minimal; and

(iv) that Company is not required by law to perform
an annual audit.

Accordingly, accepting the foregoing and fully
understanding the legal implications hereof, I hereby waive
any and all rights of complaint in respect of these matters.


Signed:

...........................................................................
Settlor

Acknowledged
by:..........................................................

[INSERT COMPANY NAME]



THIRD SCHEDULE

(Regulation 7)

FEES

The following shall be fees under these Regulations,
that is to say —
Matters in respect of which fee is
payable

Amount of fee
$

(a) Grant of approval to act as a
Registered Representative of a private
trust company.

2,500

(b) Continuance in being on the
first day of January in any year as a
Registered Representative as mentioned
in sub-paragraph (a) of this paragraph.

2,500



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FOURTH SCHEDULE

(Regulation 13)

COMPLIANCE CERTIFICATE

We, the undersigned directors (the “Directors”) of
[COMPANY NAME], a Private Trust Company
established under the laws of the Commonwealth of The
Bahamas pursuant to the Banks and Trust Companies
Regulation Act, (the “Company”) hereby declare that
between [DATE] and [DATE]:

1. The Company has served only as trustee for trust or
trusts for a Designated Person or Designated Persons or an
individual or individuals who are related by consanguinity
or other family relationships to the Designated Person or
Designated Persons and has not carried on any business or
activity which was prohibited; and

2. The Directors have acted honestly and in good faith
with a view to the best interest of the Company.

And we each make this solemn declaration
conscientiously believing it to be true.


.......................................

..........................................
Director Director
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