Trustee’s Obligations to Report and Notify, and Request for Approval

On 20 December 2023, the Non- Bank Financial Services Authority issued Prakas No. 67 on Trustee’s Obligations to Report, Notify, and Request for Approval (“Prakas No. 67”). This new regulation specifically sets out a trustee’s obligations to submit reports, notifications, and seek prior approval from the Trust Regulator (“TR“) in order to enable the TR to more efficiently oversee the performance of the trustee’s duties and to ensure efficiency, transparency, and accountability in compliance with the law and regulations in the trust sector in Cambodia.

What’s new?

The following are some key obligations imposed by the Prakas No. 67:

Reporting Obligation: The Prakas No. 67 requires trustees to submit reports to the TR on a monthly, quarterly, and annual basis. Pursuant to Article 7 of the Prakas No. 67, trustees must now submit:
- monthly reports no later than the 10^th of the following month;
- quarterly reports no later than the 15^th of the first month of the following quarter; and
- annual reports no later than the 31^st of March of the following fiscal year.
Notification Obligation: The Prakas No. 67 also sets out obligations of trust companies to submit a written notification to the TR in any of the following events:

*Prompt Notice*	Changes in certain situations that may affect the trust company in its trust operation and/or the trust assets (i.e., a change in relation to management of the company, assets of the company, and/or credit/debt obligations of the company); The trust company itself, its holding company, its parent company, its subsidiary, its branch, its representative office, its shareholders, its head of operations, its accountant specializing in trusts, its compliance officer, its individual trustee and/or its senior officers, being charged with a misdemeanour or felony or being convicted under the law of any jurisdiction, or having its license/permit suspended or terminated by regulators in any jurisdiction; Subsidiary or holding company or parent company of the trust company, whether established in or outside of Cambodia, being subject to: any merger or partial/complete transfer of its business; prohibition or limitation on the issuance of securities; decision for liquidation of the company; any insolvency proceedings; or other instances as determined by the TR.
*Seven (7) day’s Notice*	Any circumstance leading to the trustee’s suspension or cessation of its trust operations; Any circumstance or any reason leading to termination or liquidation of a registered trust; Any resignation, termination, or alteration of the position of its approved person in trust sector or its individual trustee.
*Thirty (30) day’s Notice*	Notice of inspection or investigation from any competent authorities or court, including notice of inspection and investigation on its subsidiary or its representative office.

The requirement to secure approval: Trust company must request for TR’s approval prior to occurrence of any of the following events:
- any merger, acquisition of shares, transfer of trust operations, initiation of insolvency proceedings, dissolution, or suspension or cessation of its trust operations;
- establishment of a subsidiary, branch, or representative office related to trust operations.
The requirement for monthly contribution: The Prakas No. 67 requires trustees to remit to the TR’s account a monthly contribution amounting to 4% of the total monthly income derived from its trust operations. These monthly contributions must be made quarterly, specifically by the 15th of the first month of the following quarter or within an appropriate timeframe specified by the TR.

Contributing Authors:

Matthew RENDALL

Managing Partner

+855 10 890 632

matthew.rendall@soksiphana.com

Visot NOM

Associate

+855 81 238 195

visot.nom@soksiphana.com

Sopheareach PRUM

Paralegal

+855 81 886 274

prum.sopheareach@soksiphana.com

This alert is for general information only and is not a substitute for legal advice.

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