Singapore legislation
Clause 8
Clause 8
Duty of trustees in choosing investments
(1)
In the exercise of any of his powers of investment a trustee shall have regard —
to the need for diversification of the investments of the trust, in so far as is appropriate to the circumstances of the trust, and to the degree of risk attaching to the holding of any particular investment or of investments of any particular description;
to the suitability to the trust of investment of the description of investment proposed and of the investment proposed as an investment of that description.
(2)
A trustee whose power of investment is restricted to the making of investments specified in section 4 of this Act, shall, before exercising any power to invest in such securities, units or shares as are mentioned in section 7 of this Act, obtain proper advice on the question whether the investment is satisfactory having regard to the matters mentioned in paragraphs (a) and (b) of subsection (1) of this section, and shall consider the advice obtained:Provided that this subsection shall not apply to the Public Trustee and to trust companies defined in the Trust Companies Ordinance (Cap. 33).
(3)
For the purposes of subsection (2) of this section proper advice is either the advice of a stockbroker obtained through the trustee’s bank manager or the advice of an authorised accountant.In this subsection “bank manager” means the manager of a bank (including a branch of a bank) licensed under any written law for the time being in force relating to banking and “authorised accountant” means a person authorised in writing under any written law relating to companies, to be an auditor of companies generally.
(4)
A trustee retaining any such security, unit or part as is mentioned in section 7 of this Act shall determine at what intervals the circumstances, and in particular the nature of the investment, make it desirable to obtain such advice as aforesaid, and shall obtain and consider such advice accordingly.
(5)
A trustee shall not be treated as having complied with subsections (2) to (4) of this section unless the advice was given, or has been subsequently confirmed, in writing.
(6)
Subsections (2) to (4) of this section shall not apply to one of two or more trustees where he is the person giving the advice required by this section to his co-trustee or co-trustees.