Prakas on the Code of Professional Ethics for Trustees

On 6 January 2026, the Non-Banking Financial Services Authority issued Prakas No.004 on the Code of Professional Ethics for Trustees (“Prakas“).

This Prakas consists of 11 chapters and 43 articles that apply to all trustees licensed or permitted by the Trust Regulator (“TR“) to conduct operations in the Kingdom of Cambodia. The purpose of this regulation is to define professional ethics to ensure that trust operations are managed and supervised with efficiency, transparency, accountability, and order.

This Update highlights the key features of the Prakas which are set forth as follows:

1. Fundamental Principles of Professionalism

Trustees are required to adhere to a strict set of general principles that include acting with honesty, integrity, and independence while maintaining professional confidentiality. The regulation mandates that trustees must operate with professional skill, care, and diligence to maximize the benefits for the beneficiary. Furthermore, trustees must verify and validate the information of trustors, contributors, and beneficiaries to ensure compliance with laws regarding Anti-Money Laundering and Combatting the Financing of Terrorism, dated 27 June 2020.

2. Standards for Operational Care and Diligence

The Prakas emphasizes a high standard of duty of care by requiring trustees to establish sufficient mechanisms for the rapid implementation of a trustor’s instructions. Trustees must verify that instructions are received only from legally authorized individuals, such as the Trustor and/or the Contributors of the trust and the Beneficiary, and are obligated to suspend any instruction if they suspect unauthorized access to a Trustor’s information. Additionally, trustees must maintain independent monitoring of all transactions and investments and are prohibited from relying solely on information provided by third parties.

3. Asset Safekeeping and Financial Integrity

Trustees are also mandated to open trust accounts at commercial banks that are licensed as trust operators for safekeeping or escrow services. For trusts involving movable or immovable property, the value of the trust must be determined based on market rates appraised by companies recognized by the Trust Regulator. Trustees are also responsible for maintaining accurate accounting books and records for each trust and must notify the Trust Regulator of any identified irregularities within seven working days.

4. Transparency and Stakeholder Disclosures

Before providing services, a trustee shall explain the details of the trust deed and registration procedures to the trustor. Trustees must implement a formal policy to identify and manage conflicts of interest, including establishing internal reporting structures and keeping accurate records of all identified risks. Furthermore, the Prakas mandates the disclosure of any monetary or non-monetary benefits received from third parties that could potentially influence trust operations or the trustee’s professional judgment. These disclosure and conflict policies must be submitted to the TR within five working days of approval and strictly enforced across all levels of the trustee’s management and staff.

5. Governance and Accountability of Leadership in Trust Companies

While the ethical principles of the Prakas apply to all trustees, specific governance obligations are also introduced for trust companies. The Prakas establishes a clear hierarchy of personal and collective responsibility for the board of directors, executive committee, and senior officer. The board is specifically mandated to review the effectiveness of internal control policies at least once per year and ensure robust mechanisms for the security and segregation of trust assets.

In relation to reporting obligations, the Prakas sets out that the management is held accountable for appointing a primary liaison with the TR and ensuring that said obligations are met punctually. Furthermore, the Prakas places a direct duty on senior officers to effectively implement risk management processes and maintain accurate, secure records.

6. Administrative Timeline and Compliance

The Prakas introduces a series of strict timelines for specific trust activities to ensure regulatory compliance and operational efficiency.

7. Administrative Sanctions and Fines

The TR is empowered to impose several types of administrative sanctions on any trustee who violates the professional ethics or fails to fulfill the obligations set forth in the Prakas. These sanctions include: (i) a written warning; (ii) disciplinary action; (iii) public warning and instruction to rectify; (iv) limitations to management and/or administration of the trust; (v) limitation of the licence and permit; (vi) suspension of the licence and permit; (vii) suspension or removal of board of directors, executives, senior officers and/or the individual responsible for the breach; and (viii) revocation of licence.

The Prakas also provides for administrative fines for violations ranging from KHR1,000,000 (approximately US$250) to KHR200,000,000 (approximately US$50,000), which could be doubled in the case of repeated offences.

If you have any queries on the above, please feel free to contact our team members who will be happy to assist.