The Cook Islands continues its global lead as an offshore asset protection jurisdiction with new integrity legislation you can take comfort from. The Trustee Companies Act 2014 came into force on the 7th of November 2014. The Act overhauls and replaces the Trustee Companies Act 1981-82 with a modern regulatory regime for Cook Islands trustee companies and improved licensing procedures.
Key changes that benefit you include:
• Investigation and intervention powers for the Cook Islands Financial Supervisory Commission to address inadequate management. E.g. where there is a suspected breach of fiduciary duty or dishonesty, or the trustee company is believed to have insufficient financial resources to carry out its business. Under the new Act you can complain directly to the Commission if you are concerned with how your trustee company has transacted business.
• A ‘fit and proper person’ test for senior management of all Cook Islands trustee companies. This means more comprehensive background checks and vetting of the people that look after your assets.
• Minimum record keeping standards and periodic reconciliation of client moneys for which trustee companies have responsibility.
• New regulations detail comprehensive professional indemnity insurance requirements to cover negligence, error, omission and employee dishonesty, with financial penalties for non-compliance. The 2014 Act also removes the right to self-insure.
Southpac Trust takes pride in the high standard of service it provides its clients and welcomes these law changes.
To view the Act in its entirety, go to: https://www.fsc.gov.ck/cookIslandsFscApp/content/regulatory-framework/legislation
Attorney at Law, Manager – Client Services