Malaysia legislation
Section 6
Section 6
(1)
In the exercise of any of his powers of investment a trustee shall have regard—
(a)
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; and
16 Laws of Malaysia ACT 208
(b)
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, shall, before exercising any power to invest in such securities, units or shares as are mentioned in section 5, obtain proper advice on the question whether the investment is satisfactory having regard to the matters mentioned in paragraphs (1)(a) and (b), 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 Act 1949.
(3)
For the purposes of subsection (2) proper advice is either the advice of a stock broker obtained through the trustee’s bank manager or the advice of an authorized accountant.
(b)
In this subsection “bank manager” means the manager of a bank (including a branch of a bank) licensed under section 3 of the
Banking Act 1973 [Act 102]***, and “authorized accountant” means a person authorized 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 5 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) unless the advice was given, or has been subsequently confirmed, in writing.
*NOTE—The words “Public Trustee” is now refered to as “corporation” under the name of Amanah
Raya Berhad incorporated under the Companies Act 1965 [Act 125] pursuant to section 3–see section 2
and subsection 43(3) of the Public Trust Corporation Act 1995 [Act 532].
**NOTE—Banking Act 1973 [Act 102] has been repealed by Banking and Financial Institutions Act 1989 [Act 372]–see subsection 128(1) of Act 372. Now Banking and Financial Institutions Act 1989
[Act 372]–was repealed by Financial Services Act 2013 [Act 758]–see section 271 of Act 758.
Trustee 17
(6)
Subsections (2) to (4) 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.
Statutory powers of investment