Paper on trust services released by Swiss association

The Swiss Association of Trust Companies (SATC) has released a position paper on regulating trust services, a move towards greater regulation of a structure that has been long established in Switzerland.

The Swiss Association of Trust Companies (SATC) has released a position paper on regulating trust services, a move towards greater regulation of a structure that has been long established in Switzerland.

The SATC, founded in 2007, said that since the Hague agreement was ratified, trusts have been a reality in Switzerland, but a lack of rules regulating supervision and organization of trustees has been a detrimental to international competitiveness. It also “harbours risk” for the Swiss financial market place.

SATC’s position paper contains proposals for rules concerning the licensing and organisation of trustees that are to be applied parallel to the existing rules concerning the prevention of money laundering.

The aim of the additional regulation is to protect the legitimate interests of trust beneficiaries in a similar way to the rules protecting investors in the banking and asset management sector.

As the legitimate owner a trustee can dispose directly of the assets of a trust. “SATC considers that the introduction of protective mechanisms is of the utmost importance for the Swiss financial market place”, explains Alexandre von Heeren, President of SATC.

A working team consisting of members of SATC analysed the most important rules concerning trustees applied abroad and then derived corresponding rules to be applied in Switzerland.

The most challenging aspect was to separate the business of trusteeship from the administration of companies as commonly offered by Swiss fiduciary offices.

In its present form, the position paper solely applies to Swiss companies in their function as trustees, i.e. common fiduciaries and natural persons are not included as trustees. Further, it was necessary to separate the proposed rules concerning trustees from the existing ant money laundering rules.

The paper lists three main areas that the legislator ought to consider in future rules and regulations concerning trustees:

1. Duty of licensing for trustees: this contains the introduction of rules for an adequate minimal capital, appropriate insurance coverage and suitable organizational structures, including the availability of technical know-how.

2. Duty of documentation: guaranteeing that a trustee’s decisions can be reconstructed and understood and that one can check whether organizational standards have been maintained.

3. Control: SATC suggest delegating the monitoring function to an existing auditor to avoid any conflict with, for example the law on the fight against money laundering, and to make sure that trustees are not unduly burdened with additional tasks.

SATC’s general assembly has mandated a team led by Mark Barmes, Lenz & Staehelin in Geneva, to work out proposals for implementation. Until the rules have been introduced, standards are to be implemented by means of self-regulation. SATC rules are stricter than those presently enacted in legislation.

At the SATC’s recent AGM, Alexandre von Heeren of Mandaris AG in Basle replaced the outgoing (and founding) Chairman Kecia Barkawi-Hauser of VALUEworks AG in Zürich. The new Treasurer will be Rodney Hodges of Rawlinson & Hunter Trustees SA, Geneva, who replaces Adrian Escher of Kendris AG, Zürich. Patrick Renaud of Kendris SA in Geneva and Robert Darlington of Barclaytrust (Suisse) SA in Geneva have newly been elected to the SATC Board.

Additional information on SATC as well as the position paper governing the rules of trust services is available at

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