STEP Hong Kong and the Hong Kong Trustees Association have submitted a business case to the HK Government asking for reform of the Trustee Ordinance – which has not been amended since 1934.

However, in a meeting with the HK Government at the end of April, the government suggested that changes to company law – which have been worked on for the past five years – may take another five years to complete; meaning trust law reform may also take five years before enactment.

STEP and HKTA say that private and commercial trust business is moving from Hong Kong to other jurisdictions, principally Singapore, and that HK is being bypassed for new business.

Hong Kong’s trust practitioners have pointed to Singapore’s revised trust laws and the strong support of the Monetary Authority of Singapore as a model example of what is required, but Hong Kong’s government appears unable to commit the necessary resources to fast track legislative change.

Mark Lea, of Lea & White solicitors in Hong Kong, who have been instrumental in drafting the proposed changes, stated in a recent STEP/HKTA meeting that of four recent trusts he has settled, three went to Singapore with more than $2 billion in assets. The fourth trust went elsewhere – but not Hong Kong.

Mr Lea also advised the Singaporean Government in drafting their highly successful trust law revision that came into effect in 2005. He is recommending more far reaching reforms to Hong Kong’s trust law, which could make it one of the most advanced, and attractive, jurisdictions.

This will be academic, say observers, without the support of the Hong Kong Government in pushing through legislative changes and then supporting the Hong Kong trust industry in its international marketing efforts.