Trustee Regulation 2020

1 Name of Regulation

This Regulation is the Trustee Regulation 2020.

2 Commencement

This Regulation commences on the day on which it is published on the NSW legislation website.

Note—

This Regulation repeals and replaces the Trustee Regulation 2015, which would otherwise be repealed on 1 September 2020 by section 10(2) of the Subordinate Legislation Act 1989.

3 Definition

(1)  In this Regulation—

the Act means the Trustee Act 1925.

Note—

The Act and the Interpretation Act 1987 contain definitions and other provisions that affect the interpretation and application of this Regulation.

(2)  Notes included in this Regulation do not form part of this Regulation.

4 Guidelines for trustees

(1)  For the purposes of section 14DB(1) of the Act, this clause sets out guidelines for the investment of trust funds by trustees where the value of the funds subject to the trust does not exceed $50,000.

(2)  The following investments are investments that a trustee might reasonably consider appropriate for the investment of trust funds—

(a)  public funds or Government stock or Government securities of the Commonwealth or a State,

(b)  debentures or securities guaranteed by the Government of New South Wales,

(c)  debentures or securities—

(i)  issued by a public or local authority, or a statutory body representing the Crown, constituted by or under a law of the Commonwealth, or of a State or Territory, and

(ii)  guaranteed by the Commonwealth, a State or the Northern Territory,

(d)  debentures or securities issued by the Northern Territory and guaranteed by the Commonwealth,

(e)  interest-bearing deposits in a bank,

(f)  deposits with, withdrawable shares in, or loans of money to, an authorised deposit-taking institution.

Note—

The obligations of a trustee are set out in section 14A of the Act, in other sections of the Act and in other rules and principles of law and equity. A trustee does not comply with the requirements of section 14A of the Act merely by investing trust funds in accordance with the guidelines set out in this clause. See, in particular, section 14DB(2) of the Act.

5 Prescribed insurers

For the purposes of section 18 of the Act, an insurer is a prescribed insurer, in respect of the insurance of the repayment of a loan, if the insurer—

(a)  is authorised under section 12 of the Insurance Act 1973 of the Commonwealth (the Commonwealth Act) to provide the insurance concerned, or

(b)  is a Lloyd’s underwriter who is authorised under Part VII of the Commonwealth Act to provide the insurance concerned, or

(c)  is a person (whether or not a Lloyd’s underwriter) in respect of whom a determination is in force under section 7(1) of the Commonwealth Act and the effect of the determination is to exempt the insurer from being required to be authorised under that Act to provide the insurance concerned.

Note—

A trustee lending money on the security of property is not chargeable with a breach of trust by reason only of the ratio of the loan to the value of the property so long as the trustee complies with the requirements of section 18 of the Act. One of those requirements is that the amount of the loan must not exceed two-thirds of the value of the property unless repayment of the loan is insured by a prescribed insurer, in which case the amount of the loan must not exceed 95 per cent of that value. This clause prescribes insurers for that purpose.

6 Prescribed agents for receipts and payments

For the purposes of section 53(4) of the Act, the following are prescribed persons and classes of persons—

Austraclear Limited (ACN 002 060 773)

Museum of Contemporary Art Limited (ACN 003 765 517)

NSW Trustee and Guardian

trustee companies

Note—

The effect of this clause is to enable trustees to employ specified persons to act on their behalf in the receipt and payment of money. Under section 53(4) of the Act, banks, building societies, credit unions, Australian legal practitioners, stockbrokers and real estate agents may also be employed for that purpose.

7 Repeal and savings

(1)  The Trustee Regulation 2015 is repealed.

(2)  An act, matter or thing that, immediately before the repeal of the Trustee Regulation 2015, had effect under that Regulation continues to have effect under this Regulation.