Trustees (Amendment) Act 1992 - Singapore Statutes Online

REPUBLIC OF SINGAPORE

GOVERNMENT GAZETTE

ACTS SUPPLEMENT

Published by Authority

NO. 23]

Friday, June 26

[1992

The following Act was passed by Parliament on 29th May 1992 and assented to by the President on 8th June 1992:—

Trustees (Amendment) Act 1992

(No. 23 of 1992)

I assent.

WEE KIM WEE

President.

8th June 1992.

Date of Commencement: 26th June 1992

An Act to amend the Trustees Act (Chapter 337 of the 1985 Revised Edition).

Be it enacted by the President with the advice and consent of the Parliament of Singapore, as follows:

Short title and commencement

1. This Act may be cited as the Trustees (Amendment) Act 1992 and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.

Amendment of section 3

2. Section 3 of the Trustees Act is amended —

(a)

by deleting the definition of “land” and substituting the following definition:

“ “land” means —

(a)	the surface of any defined parcel of the earth, all substances thereunder and so much of the column of airspace above the surface whether or not held apart from the surface as is reasonably necessary for the proprietor’s use and enjoyment, and includes any estate or interest therein and all vegetation growing thereon and structures affixed thereto; or
(b)	any parcel of airspace or any subterranean space held apart from the surface of the earth and described with certainty by reference to a plan approved by the Chief Surveyor and filed in the Survey Department, and includes any estate or interest therein and all vegetation growing thereon and structures affixed thereto;”; and

(b)

by inserting, immediately after the definition of “securities”, the following definition:

“ “shareholders equity”, in relation to a company, means the total assets of the company less the total liabilities of the company as disclosed in the last audited accounts of the company laid before a general meeting of the company in accordance with section 201 of the Companies Act (Cap. 50) (or the equivalent provision of the law of any other country which applies to that company) or, if a prospectus has subsequently been registered by the company in accordance with the requirements of law, the accounts contained in that prospectus;”.

Repeal and re-enactment of Part II

3. Part II of the Trustees Act is repealed and the following Part substituted therefor:

“PART II

INVESTMENTS

Powers of investment of trustees

4.—(1) Subject to the provisions of this Act, a trustee may invest any funds in his hands, whether at the time in a state of investment or not, in any manner specified in Part I, II or III of the First Schedule and may also from time to time vary such investments.

(2) Part IV of the First Schedule shall have effect for the interpretation and for restricting the operation of Parts I to III of that Schedule.

(3) Every power conferred by this section shall be exercised according to the discretion of the trustee, but subject to any consent or direction, with respect to the investment of the trust funds, required by the instrument, if any, creating the trust or by any written law.

(4) The Minister may, from time to time by order published in the Gazette, amend the First Schedule.

Duty of trustees in choosing investments

5.—(1) In the exercise of any of his powers of investment, a trustee shall have regard —

(a)	to the need for diversification of the investments of the trust, in so far as is appropriate to the circumstances of the trust, and to the degree of risk attaching to the holding of any particular investment or of investments of any particular description; and
(b)	to the suitability to the trust of investment of the description of investment proposed and of the investment proposed as an investment of that description.

(2) Before exercising any power conferred by section 4 to invest in a manner specified in Part II or III of the First Schedule, a trustee shall obtain and consider proper advice on the question whether the investment is satisfactory in accordance with Part V of that Schedule.

(3) A trustee retaining any investment shall determine at what intervals the circumstances, and in particular the nature of the investment, make it desirable to obtain such advice as aforesaid, and shall obtain and consider such advice accordingly.

(4) A trustee shall not be treated as having complied with subsection (2) or (3) unless the advice was given in writing or has been subsequently so confirmed.

(5) Subsections (2) and (3) shall not apply —

(a)	to one of two or more trustees where he is the person giving the advice required by this section to his co-trustee or co-trustees;
(b)	to the Public Trustee; or
(c)	to trust companies as defined in the Trust Companies Act (Cap. 336).

Statutory powers of investment

6.—(1) In the case of trustees constituted under any written law, other than the Companies Act (Cap. 50), the power to invest in any manner mentioned in Parts II and III of the First Schedule shall apply only in so far as the Minister may direct.

(2) Where any body of persons, not being trustees, have under any written law power (however expressed) to make the like investments as trustees are for the time being authorised by law to make, the power to invest in any manner mentioned in Parts II and III of the First Schedule shall not apply to the body except in so far and to such extent as the Minister may direct.

(3) Any direction under this section may be given generally or in a particular case, and unconditionally or subject to conditions.

Power to retain investment which has ceased to be authorised

7. A trustee shall not be liable for breach of trust by reason only of his continuing to hold an investment which has ceased to be an investment authorised by the trust instrument or by this Act.

Investment in bearer securities

8.—(1) A trustee may, unless expressly prohibited by the instrument creating the trust, retain or invest in securities payable to bearer which, if not so payable, would have been authorised investments.

(2) Securities payable to bearer retained or taken as an investment by a trustee shall, until sold, be deposited by him for safe custody and collection of income with a banker or banking company.

(3) A direction that investments shall be retained or made in the name of a trustee shall not, for the purposes of this section, be deemed to be such an express prohibition as aforesaid.

(4) A trustee shall not be responsible for any loss incurred by reason of such deposit, and any sum payable in respect of such deposit and collection shall be paid out of the income of the trust property.

Loans and investments by trustees not chargeable as breaches of trust

9.—(1) A trustee lending money on the security of any property on which he can properly lend shall not be chargeable with breach of trust by reason only of the proportion borne by the amount of the loan to the value of the property at the time when the loan was made, if it appears to the court —

(a)	that in making the loan the trustee was acting upon proper advice obtained in accordance with section 5(2); and
(b)	that the amount of the loan does not exceed two-third parts of the value of the property as stated in the report made by the person giving proper advice in accordance with section 5(2).

(2) A trustee lending money on the security of any leasehold property shall not be chargeable with breach of trust only upon the ground that in making such loan he dispensed either wholly or partly with the production or investigation of the lessor’s title.

(3) A trustee shall not be chargeable with breach of trust only upon the ground that in effecting the purchase, or in lending money upon the security, of any property he has accepted a shorter title than the title which a purchaser is, in the absence of a special contract, entitled to require, if in the opinion of the court the title accepted be such as a person acting with prudence and caution would have accepted.

(4) This section shall apply to transfers of existing securities as well as to new securities and to investments made before, on or after the commencement of the Trustees (Amendment) Act 1992.

Liability for loss by reason of improper investment

10.—(1) Where a trustee improperly advances trust money on a mortgage security which would at the time of the investment be a proper investment in all respects for a smaller sum than is actually advanced thereon, the security shall be deemed to be an authorised investment for the smaller sum, and the trustee shall only be liable to make good the sum advanced in excess thereof with interest.

(2) This section shall apply to investments made before, on or after the commencement of the Trustees (Amendment) Act 1992.

Powers supplementary to powers of investment

11.—(1) Trustees lending money on the security of any property on which they can lawfully lend may contract that such money shall not be called in during any period not exceeding 5 years from the time when the loan was made, provided interest be paid within a specified time not exceeding 10 days after every monthly or other day on which it becomes due, and provided there be no breach of any covenant by the mortgagor contained in the instrument of mortgage or charge for the maintenance and protection of the property.

(2) On a sale by trustees of land for an estate in fee simple, or held under a grant issued under the State Lands Act (Cap. 314), or for a term having at least 30 years to run, the trustees may, where the proceeds are liable to be invested, contract that the payment of any part, not exceeding two-thirds, of the purchase money shall be secured by mortgage of the land sold, with or without the security of any other property, but such mortgage, if any buildings are comprised therein, shall contain a covenant by the mortgagor to keep such buildings insured against loss or damage by fire to the full value thereof.

(3) The trustees shall not be bound to obtain any report as to the value of the land or other property to be comprised in such mortgage, or any advice as to the making of the loan, and shall not be liable for any loss which may be incurred by reason only of the security being insufficient at the date of the mortgage.

(4) Where any securities of a company are subject to a trust, the trustees may concur in any scheme or arrangement —

(a)	for the reconstruction of the company;
(b)	for the sale of any or any part of the property and undertaking of the company to another company;
(c)	for the acquisition of the securities of the company, or of control thereof, by another company;
(d)	for the amalgamation of the company with another company;
(e)	for the release, modification, or variation of any rights, privileges or liabilities attached to the securities or any of them,

in the like manner as if they were entitled to such securities beneficially, with power to accept any securities of any denomination or description of the reconstructed or purchasing or new company in lieu of or in exchange for all or any of the first-mentioned securities; and the trustees shall not be responsible for any loss occasioned by any act or thing so done in good faith, and may retain any securities so accepted as aforesaid for any period for which they could have properly retained the original securities.

(5) If any conditional or preferential right to subscribe for any securities in any company is offered to trustees in respect of any holding in the company, they may, as to all or any of the securities, either exercise such right and apply capital money subject to the trust in payment of the consideration, or renounce such right, or assign for the best consideration that can be reasonably obtained the benefit of such right or the title thereto to any person, including any beneficiary under the trust, without being responsible for any loss occasioned by any act or thing so done by them in good faith.

(6) The consideration for any assignment referred to in subsection (5) shall be held as capital money of the trust.

(7) The powers conferred by this section shall be exercisable subject to the consent of any person whose consent to a change of investment is required by law or by the instrument, if any, creating the trust.

(8) Where the loan referred to in subsection (1), or the sale referred to in subsection (2), is made under the order of the court, the powers conferred by those subsections respectively shall apply only if and as far as the court may by order direct.

Power to deposit at bank, to pay calls and to purchase dwelling house for beneficiary

12.—(1) Trustees may, pending the negotiation and preparation of any mortgage or charge, or during any other time while an investment is being sought for, pay any trust money into a bank to a deposit or other account, and all interest, if any, payable in respect thereof shall be applied as income.

(2) Trustees may apply capital money subject to a trust in payment of the calls on any shares subject to the same trust.

(3) Trustees may, where they are of the opinion that it is desirable to purchase a dwelling house for the use of any beneficiary under the trust, purchase a dwelling house with any trust funds, whether at the time in a state of investment or not, or retain any dwelling house that forms part of the trust notwithstanding any trust for conversion contained in the instrument creating the trust, and permit the beneficiary to reside in the dwelling house upon such terms and conditions consistent with the trust and the extent of the interest of the beneficiary as the trustee thinks fit.

(4) For the purposes of subsection (3), “dwelling house” means a dwelling house situated in Singapore and includes a lot on a strata title plan under the Land Titles (Strata) Act (Cap. 158).”.

Amendment of section 70

4. Section 70(1) of the Trustees Act is amended by deleting the word “First” in the fourth line and substituting the word “Second”.

Amendment of section 86

5. Section 86(1)(c) of the Trustees Act is amended by deleting the word “Second” in the fourth line and substituting the word “Third”.

New First Schedule

6. The Trustees Act is amended by inserting, immediately after section 89, the following Schedule:

“FIRST SCHEDULE

Sections 4 and 6.

Manner of Investment

Part I

1. In any securities of the Government.

2. In any securities the repayment of the amount received and the interest on which is or shall be guaranteed by the Government.

3. In fixed income securities issued in Singapore by any public authority established under written law.

4. In any interest bearing deposits held in Singapore currency in the Post Office Savings Bank or a bank or finance company in Singapore.

5. In negotiable certificates of deposits denominated in Singapore currency and issued by any bank in Singapore.

Part II

1. In any units, or any shares of the investments subject to the trusts, of an authorised unit trust scheme.

2. In any securities issued by a company (whether incorporated in Singapore or elsewhere) —

(a)	which are listed on the Stock Exchange of Singapore; or
(b)	for which prices are quoted on the Central Limit Order Book (CLOB) International.

3. In bank bills and trade bills denominated in Singapore currency which —

(a)	are endorsed by a bank in Singapore; and
(b)	will mature not later than 3 months after the date of the investment.

4. In or upon titles to land in Singapore, such titles being freehold titles or grants in perpetuity or leases (other than mining leases) of which their unexpired term at the time of such investment is not less than 30 years.

Part III

In any fixed income securities of a government outside Singapore having a Triple A credit rating or equivalent given by any of the following credit rating agencies:

(a)	Moody’s Investor’s Service, Inc., USA;
(b)	Standard and Poor’s Corporation, USA.

Part IV

1.—(1) Paragraph 2 of Part II shall not apply to securities of any company unless —

(a)	the total issued and paid-up share capital of the company, if incorporated in Singapore, is not less than $15 million and, if incorporated elsewhere, is not less than $30 million;
(b)	the company has, in each of the 3 financial years immediately preceding the financial year in which the investment is made, paid a dividend on all shares issued by the company, excluding any shares issued after the dividend was declared and any shares which by their terms of issue did not rank for the dividend for that financial year;
(c)	the shareholders equity of the company is not less than $30 million; and
(d)	the company has reported a profit (excluding any extraordinary item) in the profit and loss account in the annual accounts of the company in the financial year immediately preceding the financial year in which the investment is made.

(2) A company formed —

(a)	to take over the business of another company or other companies; or
(b)	to acquire the securities of, or control of, another company or other companies,

or for either of those purposes and for other purposes, shall be deemed —

(i)	to have paid a dividend as mentioned in sub-paragraph (1)(b) in any financial year in which such a dividend has been so paid by the other company or each of the other companies, as the case may be;
(ii)	to have had a shareholders equity of not less than $30 million as mentioned in sub-paragraph (1)(c) if the other company or companies, as the case may be, had a shareholders equity of not less than $30 million; and
(iii)	to have reported a profit as mentioned in sub-paragraph (1)(d) in the financial year in which such a profit has been so reported by the other company or each of the other companies, as the case may be.

(3) For the purposes of sub-paragraph (1) (a) and (c), the issued and paid-up share capital and the shareholders equity shall, if they are in a currency other than Singapore currency, be converted into Singapore currency at a rate of exchange certified by a bank licensed under the Banking Act (Cap. 19) to be appropriate on the day the trustee exercises his power to invest in such securities.

(4) The securities referred to in paragraph 2 of Part II do not include shares or debenture stock not fully paid up, except shares or stock which by the terms of issue are required to be fully paid up within 9 months of the date of issue.

(5) Where immediately before the date of commencement of the Trustees (Amendment) Act 1992 the securities of a company were investments in which trustees were authorised by this Act to invest and the total issued and paid-up capital of that company, if incorporated in Singapore, was less than $15 million and, if incorporated elsewhere, was less than $30 million, sub-paragraph (1) (a) shall have effect in relation to those securities only after the expiry of 3 years from that date.

(6) Where immediately before the date of commencement of the Trustees (Amendment) Act 1992 the securities of a company were investments in which trustees were authorised by this Act to invest and the shareholders equity of that company was less than $30 million, sub-paragraph (1) (c) shall have effect in relation to those securities only after the expiry of 3 years from that date.

2. The land referred to in paragraph 4 of Part II shall not include land, the gross rental whereof is at the time of such investment less than 7% of the purchase price of such land, in the case of a purchase, or the value of such land ascertained in accordance with paragraph 2 of Part V, in the case of a mortgage.

3. Not more than 30% of the funds belonging to the trust shall at any time be invested in the investments in Part III taken together.

Part V

1. In relation to the investments specified in paragraphs 1, 2 and 3 of Part II and paragraph 1 of Part III, proper advice for the purposes of section 5(2) means the advice of an investment adviser licensed under the Securities Industry Act (Cap. 289) or a bank licensed under the Banking Act (Cap. 19) or a merchant bank approved under the Monetary Authority of Singapore Act (Cap. 186) as to the matters referred to in section 5(1).

2. In relation to the investments specified in paragraph 4 of Part II, proper advice for the purposes of section 5(2) means the advice on the value of the land at the time of the investment given by an appraiser who is licensed under the Auctioneers’ Licences Act (Cap. 16) to value or appraise land and is instructed and employed independently of any owner of the land.”.

Amendment of First Schedule

7. The First Schedule to the Trustees Act is amended by deleting the word “FIRST” in the first line and substituting the word “SECOND”.

Amendment of Second Schedule

8. The Second Schedule to the Trustees Act is amended by deleting the word “SECOND” in the first line and substituting the word “THIRD”.

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