The Regulatory and Legislative Framework for Trustee Services in New Zealand
A candidate must be able to place each trustee obligation within the correct statute and regulator. The Trustee Act 1956 supplies default powers and the indemnity and reimbursement rules, and remains relevant for trusts that are not governed by the newer regime; the Trusts Act 2019 is now the principal statute for express trusts, imposing mandatory duties, default duties that the deed may modify, and disclosure obligations. Know which duties are mandatory (for example the duty to act honestly and in good faith, and the duty not to act for the trustee's own benefit) and therefore cannot be excluded by the trust deed - a classic trap is a question that invites you to treat a mandatory duty as excludable.
Layer on the Financial Markets Conduct Act 2012, which governs offers of managed investment products, the licensing of managers and the conduct duties of those who provide financial services; a trustee holding trust property for a managed fund sits alongside an FMC-licensed manager and must understand the boundary between custodial and management functions. Finally, AML/CFT obligations under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009: a trustee or trust company that is a reporting entity must conduct customer due diligence, identify beneficial owners (including settlors, trustees and beneficiaries), monitor transactions and report suspicious activity to the FIU. Traps include confusing the threshold for enhanced due diligence, forgetting that a trust is itself a customer, and assuming the trustee can rely on the manager's CDD without an agreement.
Rule of thumb: name the statute, name the duty, then ask whether the deed can modify it. If the duty is mandatory or the obligation is statutory AML/CFT, the answer is no.