Regulation cannot replace personal responsibility when it comes to trust providers

The Hong Kong SAR government recently implemented a new licensing regime for Trust and Corporate Service Providers (TCSPs) as part of a broader ordinance to combat money laundering and terrorist financing. The city is not the first jurisdiction to regulate the industry and unlikely to be the last. But while it is right to vet prospective providers and impose basic standards of operation, the industry will continue to be defined by those who deliver the highest level of professional services.

To obtain a Hong Kong SAR license, trustees must first provide basic information proving that they are “fit and proper” to operate, such as personal identification and a business certificate. These requirements are fair and unlikely to deter any credible provider. But meeting the minimum is far from sufficient to succeed in a market with over 5,500 rivals.