Trust companies, fund regimes and private banking licences

Wealth and asset management is not one licence. A family office group might need a trust company licence for its fiduciary arm, a fund manager authorisation, an administrator licence for its back office and, if it takes deposits, a bank licence. Each is granted against a different statute and tested against a different risk.

This guide explains the three main families: trust and fiduciary licences, fund regimes and their service providers, and private banking and wealth management.

Which activity needs which licence

Activity	Typical licence	Main supervisory concern
Acting as trustee, creating or administering express trusts	Trust company or fiduciary licence	Integrity of people, control of client assets, AML
Managing a fund’s portfolio and risk	UCITS management company, AIFM, or local fund manager licence	Investor protection, conflicts, liquidity, delegation
Fund accounting, valuation, investor registry	Fund administrator licence or authorisation	Accurate NAV, record keeping, AML on investors
Safekeeping fund assets	Depositary or custodian authorisation	Asset segregation, oversight of the manager
Discretionary portfolio management or advice for individuals	Investment firm or portfolio manager licence	Suitability, conduct, client money
Taking deposits and lending	Bank licence	Solvency, liquidity, depositor protection

Trust company licences

What counts as trust business

Definitions differ, but Singapore’s is typical. The Trust Companies Act 2005 covers providing services for the creation of an express trust, acting as trustee, arranging for someone to act as trustee, and providing trust administration services. Jersey’s concept of trust company business is wider and also covers company administration, registered office and nominee services.

Jersey

The Jersey Financial Services Commission registers trust company business under the Financial Services (Jersey) Law 1998, and its Code of Practice sets detailed standards:

• People: where a firm controls trust company business assets, its “regulatory span of control” must comprise at least three appropriately skilled and experienced individuals, locally based and working full time (3.1.1.2).
• Compliance officer: must be based in Jersey (3.5.4.2).
• Capital: at least £25,000 paid-up share capital and net assets of at least £25,000 at all times, plus adjusted net liquid assets of at least 110% of the expenditure requirement (5.1.4).
• Insurance: professional indemnity cover of at least the greater of three times relevant fees, thirty times fees from the largest customer, or £5 million, with no requirement above £10 million in aggregate (5.2.5 and 5.2.6).

Singapore

The Monetary Authority of Singapore grants a trust business licence under criteria in Guidelines TCA-G02, last revised 17 January 2024:

• a Singapore company or registered foreign company with a physical presence in Singapore;
• paid-up capital or qualifying assets of S$250,000;
• at least two resident managers, one with at least five years of relevant experience and the others with at least three;
• standalone professional indemnity insurance that MAS is likely to consider adequate at the higher of S$1 million or 2.5 times turnover, capped at S$10 million, with a deductible of no more than 50% of net asset value.

Switzerland

Since the Financial Institutions Act (FinIA) took effect, professional trustees in Switzerland need authorisation from FINMA. Ongoing supervision is delegated to a licensed supervisory organisation, except for group companies supervised by FINMA on a consolidated basis (FINMA). Requirements include a Swiss domicile, an adequate organisation, financial guarantees and managers of irreproachable business conduct.

Cayman Islands

In Cayman, trust business is licensed under the Banks and Trust Companies Act. The link to funds is direct: a unit trust that is a regulated mutual fund must have a licensed trust company as its trustee (Mutual Funds Act, section 4(1)).

The AML dimension

Under the EU AMLR, trust or company service providers are obliged entities in their own right, and from 10 July 2027 they must apply additional enhanced measures to higher-risk relationships involving at least EUR 5 million handled for a customer with total assets of at least EUR 50 million (Article 34(5)). Trust regulators outside the EU apply similar FATF-based standards, so source-of-wealth evidence is the core of any trust company’s onboarding file.

Fund regimes

The EU framework

EU funds fall into two families. UCITS are retail-eligible funds with a product passport. Alternative investment funds (AIFs) are everything else, regulated mainly through their manager (AIFM).

	UCITS management company	External AIFM	Internally managed AIF
Initial capital	EUR 125,000 (UCITS Directive, Art. 7)	EUR 125,000 (AIFMD, Art. 9)	EUR 300,000
Additional own funds	0.02% of portfolios above EUR 250 million	Same	n/a
Cap on capital plus additional amount	EUR 10 million	EUR 10 million	n/a

AIFMs must also cover professional liability risk with additional own funds or professional indemnity insurance (AIFMD, Art. 9(7)).

AIFMD II

Directive (EU) 2024/927 amended both directives. Member States had to apply it from 16 April 2026, with some provisions from 16 April 2027. Three changes matter most for new applicants:

1. Substance. An AIFM’s business must be conducted by at least two natural persons employed full time, or committed full time as executive or board members, and domiciled in the Union.
2. Delegation. Supervisors receive more information on delegation arrangements, and ESMA must report on delegation practices by 16 April 2029.
3. Loan origination. AIFs that originate loans face new rules, including leverage limits of 175% for open-ended and 300% for closed-ended loan-originating AIFs.

Luxembourg

Luxembourg offers the full range: UCITS, Part II funds, specialised investment funds (SIFs) and the reserved alternative investment fund (RAIF). The RAIF is the clearest example of a “manager-regulated” fund:

• It must be managed by an authorised AIFM, from Luxembourg, another Member State or, subject to AIFMD conditions, a third country (RAIF Law, Article 4).
• It is reserved to well-informed investors: institutional or professional investors, or others who confirm that status in writing and invest at least EUR 100,000 or have been assessed by a bank, investment firm or management company (Article 2).
• Its offering document must state on the cover that it “is not subject to supervision by a Luxembourg supervisory authority” (Article 39).
• A common fund must reach net assets of EUR 1,250,000 within 24 months (Article 20).

The product itself is quick to launch, but the quality of the AIFM and depositary carries the regulatory weight.

Ireland

Ireland is the other major EU fund domicile. Fund administrators are authorised by the Central Bank of Ireland under the Investment Intermediaries Act 1995. An application needs an application form, an individual questionnaire for each director and senior manager, and a detailed business plan, and incomplete applications are returned (Central Bank of Ireland). Timelines depend largely on the quality and speed of responses to the Central Bank’s comments.

Cayman Islands

Cayman remains the leading offshore domicile for hedge and private equity funds. The Cayman Islands Monetary Authority (CIMA) regulates both open-ended and closed-ended funds.

Open-ended funds under the Mutual Funds Act (2025 Revision) fall into several categories:

• Licensed funds (section 4(1)(a)), with full CIMA review of operators.
• Administered funds (section 4(1)(b)), whose principal office is provided by a licensed administrator.
• Registered funds (section 4(3)), with a minimum initial investment of eighty thousand Cayman dollars per investor, which CIMA presents as CI$80,000 or US$100,000, or a listing on a recognised exchange.
• Limited investor funds (section 4(4)), with no more than fifteen investors, a majority of whom can appoint or remove the operator.

Closed-ended funds register under the Private Funds Act (2025 Revision). A private fund must apply within 21 days after accepting capital commitments (section 5). It must have its accounts audited annually by a CIMA-approved auditor (section 13), and it must have valuation procedures (section 16), safekeeping of assets through a custodian or an approved alternative (section 17) and cash monitoring (section 18).

CIMA indicates about five business days for fund registration, four to six weeks for fund licensing and six to eight weeks for a mutual fund administrator licence once complete documentation is received. Local auditor sign-off is required for all regulated funds and administrators.

Private banking and wealth management

When a bank licence is needed

Private banking in the full sense, holding client deposits and lending against portfolios, requires a bank licence. In Switzerland, accepting deposits from the public on a professional basis requires a banking licence (FINMA). The requirements include fully paid-up minimum capital of at least CHF 10 million, a recognised audit firm for the licensing process, and, for foreign-controlled applicants, reciprocity from the countries where qualified participants are domiciled.

Switzerland also offers a narrower FinTech licence. Firms that accept public deposits of up to CHF 100 million and neither invest them nor pay interest on them are not treated as banks and may use this lighter route (FINMA). It does not suit a classic private bank, which invests and lends.

When a wealth management licence is enough

Many wealth managers never hold client money in their own name. They manage portfolios held at a custodian bank under a power of attorney. In Switzerland this requires a FINMA portfolio manager licence under FinIA, with ongoing supervision by a supervisory organisation (FINMA). In the EU the equivalent is usually a MiFID II investment firm licence for portfolio management and investment advice.

How the pieces fit together

A typical international wealth structure might combine:

1. a private bank or custodian holding the assets;
2. an independent portfolio manager or investment firm advising on or managing them;
3. a licensed trust company acting as trustee of the family trust;
4. a fund vehicle, such as a RAIF or a Cayman fund, pooling family or club investments, with its own manager and administrator.

Each layer is licensed separately, and each performs its own due diligence on the same family. Supervisors increasingly expect the layers to share information within the limits of data protection and secrecy laws, and to reconcile their views of source of wealth.

Practical points for applicants

• Start from the activity, not the vehicle. Decide who will hold assets, who will take decisions and who will keep records, then map each to a licence.
• Budget for people. Local management requirements, such as Jersey’s three-person span of control, Singapore’s two resident managers or AIFMD II’s two full-time EU-domiciled persons, usually cost more than the minimum capital.
• Check insurance early. Professional indemnity cover with fidelity and directors’ liability extensions can take time to place for a new firm.
• Choose service providers carefully. In light-touch regimes the regulator relies on the authorised manager, administrator, custodian and auditor, so their standing affects the fund’s credibility with banks and investors.
• Confirm marketing rules separately. A fund licence or registration in its home jurisdiction does not by itself permit marketing to investors elsewhere. Passports and private placement rules depend on the investor’s country.