The Trustee Ordinance (Cap. 29) is one of the core legal frameworks of Hong Kong’s trust system, providing the legal foundation for trustees in managing trust property. Its primary purpose is to regulate the powers and responsibilities of trustees, safeguard the interests of beneficiaries, and maintain the transparency and credibility of the trust system.

In trust arrangements, trustees are responsible for managing and handling trust property, fulfilling duties in accordance with trust deeds or statutory requirements. The Trustee Ordinance stipulates that trustees must adhere to the “duty of prudence,” meaning they must invest and manage assets in a reasonably cautious manner to avoid undue risks. Trustees are also bound by a duty of loyalty, placing beneficiaries’ interests above all else and refraining from exploiting their position for personal gain.

The Ordinance also grants trustees certain investment powers, enabling them to make reasonable investment decisions in diversified financial markets, provided they comply with statutory prudence standards. Trustees may appoint agents or custodians to handle certain matters, but they remain responsible for supervision to ensure trust property is not compromised.

It is important to note that the Trustee Ordinance is a highly stringent regulatory framework, imposing strict rules on trustee conduct. Trustees who act in violation or beyond their authority may face legal liabilities or even criminal consequences. As such, obtaining the relevant licence or qualification is not easy—applicants must demonstrate integrity, professional competence, and suitable background, and undergo rigorous vetting before being recognised as qualified trustees. This high threshold is designed to protect beneficiaries’ interests and uphold market confidence.

In summary, the Trustee Ordinance is not only the legal cornerstone of Hong Kong’s trust industry but also a robust and demanding regulatory regime. Through high-standard licensing approval and strict legal requirements, it ensures trustees perform their duties lawfully, compliantly, and professionally, thereby reinforcing Hong Kong’s reputation as a stable international financial centre.