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Society of Trust and Estate Practitioners in Malta

The worldwide organisation of the Society of Trust and Estate Practitioners (STEP) has established a Malta branch. The official launch will take place at the Hilton Malta on Thursday and over 300 invitations have been issued.

The event is being sponsored by key players in the local trust industry, namely HSBC Bank Malta plc, Bank of Valletta plc, The Malta Financial Services Authority, Ganado and Associates Advocates, Fenech and Fenech Advocates, Blevins Franks Trustees and Bentley Trust.

Parliamentary Secretary Tonio Fenech will give the opening address. MFSA chairman Joe Bannister, STEP worldwide deputy chairman Richard Pease from Geneva and STEP (Malta) chairman Malcolm Becker will be present.

STEP is the principal professional body for trust and estate practitioners worldwide. It is a unique society for professionals who help safeguard clients' personal and family assets. STEP has around 5,000 members in the UK and nearly 12,000 members spanning 33 countries in common and civil law jurisdictions and is celebrating its 15th anniversary this year.

The concept was to cut across old professional divides and gather all professionals working on trust matters. Members come from many professions such as accountancy, banking, legal, executors, trustees and related professions. As an international body STEP is recognised by many governments and international organisations such as the EU and the OECD.

In 2005, after four years of study and analysis, Malta introduced major changes to its existing trust regime through the enactment of the amended Trusts and Trustees Act. The Act includes a mechanism whereby all trustees have to be authorised by the MFSA, requiring a high standard of training, accountability and administrative performance.

The newly amended law eliminated the different treatment between a person based on residence or nationality, also meeting international requirements. It introduced concepts designed to encourage more widespread use of trusts in both local and international business.

This law recognises trusts and assets that constitute a separate fund, owned by the trustees, with the trustees having special duties imposed in relation to the rights of beneficiaries. Malta is probably the first jurisdiction seeking to avoid conflicts with its civil law system, which took place through careful analysis of the various legal provisions, resulting in various amendments to other legislation, such as the Civil Code. This is probably worthy of analysis by other civil law jurisdictions. To date, around 70 organisations have been approved by the MFSA to provide trustee services.

There are numerous advantages, which can be reaped through the use of a trust. It offers flexible estate planning for the future. If the trustee has enough discretion within the trust arrangement this can be used to maximise advantages when future environments change. Estate planning using trusts is a vast topic. Trusts could be established to segregate wealth to avoid those funds being exposed to future creditors or division through changes in family matters.

For many years, trusts have been utilised to maintain continuity in the ownership of a business, removing the fate of the business by sub divisions. Trusts can be established for dependencies, education, children with special needs or spendthrift trusts for maturing children. As well as individual and family matters, trusts can also be applied to commercial matters. Trusts can be more suitable for the holding of securities or for meeting the requirements of Occupational Pension Funds. Again, this is a flexible mechanism but one that requires professional advice.

Over the past two years, a task group of the Malta Institute of Financial Services Practitioners (IFSP) has been working on the setting up of a STEP branch in Malta. Over the same period the IFSP have organised introductory education courses on trust concepts and Maltese Trust Law leading to the attainment of The Foundation Certificate in Trust Law and Management.

This certificate has been attained by over 370 people. This course has now been recognised by STEP and is equivalent to its own foundation course, giving the local course international recognition. It is hoped that financial services practitioners with the requisite trust and wealth management experience will apply to become full members of STEP (Malta) enabling them to use the internationally recognised designation TEP (Trust and Estate Practitioner).

STEP will assist in providing additional recognition and interest in Malta's ever-growing financial services industry, and for each member there is an opportunity benefit both personally and professionally. With Malta being part of such a large and international organisation, it is hoped that this will provide many opportunities for the Maltese financial services industry.

Through awareness, communication and networking Malta will become more prominent in many other financial services jurisdictions and this may encourage networking, interaction and the development of business opportunities. STEP provides the opportunity to attend conferences and events. The STEP organisation, in collaboration with Central Law in the UK, also provide a distance learning diploma targeted at graduate level in the area of trust and estate planning.

STEP also provides a highly acclaimed MBA in this area and this is ranked the sixth best MBA by the UK Financial Times. For members, it also provides an opportunity to use publications and interactive services to learn, keep abreast with developments in the area and carry out research. STEP also provides an important platform for lobbying government departments, regulators and international organisations such as the EU, OECD and FATF that can have an important impact on the financial services industry.

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