Chapter 5
Termination of Trust

SECTION 51 A trust shall come into termination as specified in the trust instrument and in the following cases:
(1) a purpose of the trust instrument has been accomplished;
(2) a court gives a judgment or grants an order to terminate the trust under Section 29 or as requested by a trustee or a beneficiary;
(3) the trustee remains the only beneficiary;
(4) the causes of alteration of the trustee under Section 22(1) (2) (3) or (4) occurs whereas the trust instrument prohibits alteration of the trustee.

SECTION 52 Subject to Section 29, a trustee shall perform its duty in order to collect, dispose and allocate property in accordance with Section 53 upon termination of trust, except where dissolution, liquidation or bankruptcy of the trustee causes the termination of trust, a liquidator or an official receiver of the trustee, as the case may be, shall perform such duty.

SECTION 53 The payment of debts and expenses upon termination of trust shall be in the following orders:
(1) the expenses accruing from collecting, disposing of and distribution of property;
(2) the fees and tax that have to pay or due;
(3) the consideration of the person under Section 29 or Section 52, the expenses in taking legal action having been borne by a beneficiary under the third paragraph of Section 44, Section 45 or Section 46 and the expenses accruing in the management of the trust which the trustee can rightfully claim from the trust property, and consideration of trustee;
(4) other debts.

If the trust property is insufficient to pay expenses or debts in any order, the payment shall be allocated proportionally in such the order.

The remaining of the trust property after the payment under the first paragraph shall be allocated to the persons specified in the trust instrument or to the beneficiary, if not so specified.

Section 42 shall apply mutatis mutandis to the payment of debt to the trustee under the first paragraph.

The SEC Office has the power to specify in its notification the rules, conditions and procedures relating to collection, disposal or allocation of the property specified under the first paragraph.

Chapter 6
Supervision of Trustee

Division 1
Approval

SECTION 54 No person shall undertake trust business without an approval from the SEC.

SECTION 55 A person eligible to apply for an approval to undertake trust business shall be:
(1) a commercial bank under the Commercial Banking Act;
(2) a financial institution established under specific law;
(3) any juristic person as specified in the notification of the SEC.

The person applying for the approval under the first paragraph shall have financial condition, operating system, qualification and paying fees as specified in the notification of the SEC.

The SEC Office shall publish the names of the trustees approved to undertake trust business.

SECTION 56 Where it is necessary to maintain integrity or trustworthiness of the system of trust business, the SEC shall have the power to specify conditions for undertaking trust business.

In cases where there has been a change in the necessary circumstance as provided in the first paragraph, the SEC may modify or change the conditions already specified.

Division 2
Supervision of Business Operation

SECTION 57 In managing a trust, a trustee shall have appropriate operating systems to :
(1) segregate between trust property and the property held in its own capacity ;
(2) manage the trust property in accordance with the trust instrument and this Act;
(3) record the ownership or right over the trust property, incomes, expenses and debts of the trust and any relating accounts of the trust;
(4) oversee and collect interest of the trust;
(5) allocate interest to beneficiaries;
(6) control, audit and prevent the management of trust from contravention to the trust instrument and this Act as well as the management of trust property in dishonest manner;
(7) any other operating systems as the SEC may stipulate in its notification.

SECTION 58 In furtherance of the interest of the beneficiary or protect the third person engaging in juristic acts with a trustee, the SEC shall have the power to specify in its notification the rules relating to the power and duty of the trustee, the maintenance of the financial condition of the trustee, indemnity insurance for liability of the trustee and the
submission of report or any documents to the SEC Office.

SECTION 59 A trustee shall prepare financial statements of a trust segregating the property held in trust from that held in its own capacity, with consideration to the accounting standard as specified by the law relating to the accounting profession.

The financial statements under the first paragraph must be audited and given opinion by an auditor approved by the SEC Office, and such auditor must not be a director, an officer, or an employee of a trustee.

The financial statements under the first paragraph shall be submitted to the SEC Office and the SEC Office may disclose or direct the trustee to disclose financial statements publicly in accordance with the rules specified in the notification of the SEC Office.

The SEC shall have the power to specify in its notification the cases where it is proper not to prepare the financial statements under the first paragraph, whereby the conditions with which the trustee shall comply may also be prescribed.

SECTION 60 In order to prevent or cease the damage to a trust or the public, the SEC Office shall have the power to direct a trustee to act or refrain from acting within the prescribed period of time, in cases where its director, manager, officer, employee, agent or delegate acts or causes the trustee to act as follows:
(1) fail to perform the duty of the trustee under the trust instrument or this Act;
(2) manage the trust property inappropriately manner or cause damage to the trust.
(3) fail to submit reports or documents specified by the SEC’s notification under Section 58;
(4) fail to meet the conditions under Section 56.

Next Page
[1]  [2]  [3]  [4]  [5]  [6]  [7]  [8]