On 26 August 2013, the Royal Government of Cambodia (“RGC”) issued Sub-Decree № 476 on Financial Trusts (“Sub-Decree 476”). Sub-Decree 476 is not a general law of trusts and applies only to trusts in relation to which the trustor is a development partner that has entered into an agreement with the RGC to entrust funds for the purposes of developing the banking and microfinance sectors.
Sub-Decree 476 aims to set out rules and procedures to establish, register, manage and control such trusts.
The Ministry of Economy and Finance (“MEF”) is the competent regulator in charge of supervising financial trusts. Sub-Decree 476 requires that all financial trusts must be the subject of a written trust instrument and registered with the MEF to be valid and effective. Moreover, all existing financial trusts are required to be registered with the MEF within six months from 26 August 2013.
The Sub-Decree contains comprehensive regulations and rules to govern the rights, duties and responsibilities of the trustor, trustee and the beneficiary. For instance, a trustee is required to execute its duties with care and diligence, to separate its own property from the trust fund it manages and controls, to insure its professional liability etc.
If you have any questions or require further clarification about how this development will impact your business, please do not hesitate to contact us.
For more information, please contact:
Deputy Head of the Banking & Finance Practice Group