HOW DOES PIDM PROTECT MY TRUST ACCOUNT?

1. WHAT IS A TRUST ACCOUNT?
  • A trust account is a deposit account held by a depositor acting as trustee for the benefit of one or more beneficiaries.
  • Example of trust account:
    • One beneficiary in a single trust account: A mother (the account holder as trustee) deposits money in trust for her minor son.
    • Two or more beneficiaries in a single trust account: A law firm (the account holder as trustee) holding funds in trust for multiple clients pending completion of a number of real estate transactions.
 

2. HOW ARE TRUST ACCOUNTS HELD IN PIDM MEMBER BANKS PROTECTED BY PIDM?

  • Deposits in trust accounts are protected separately from deposits in other types of accounts.
  • Each beneficiary of a trust account is also protected separately from deposits held in their names.

Account

Account holder

Beneficiary name or code

Amount (RM)

Protected (RM)

1

Ramli & Co. (Office account of a law firm)

N/A

300,000

250,000

2

Ramli & Co. (Client account in trust of a law firm)

x 001

300,000

250,000

x 002

300,000

250,000

Total deposits

900,000

750,000

 

3. WHAT IF THERE ARE SEVERAL TRUSTEES WHO HOLD ACCOUNTS FOR THE SAME BENEFICIARY IN THE SAME MEMBER BANK?

The beneficiary will receive separate protection up to RM250,000 for each trust account.

Account

Trustee

Beneficiary

Amount  (RM)

Protected (RM)

1

Ramli & Co.

Andy

300,000

250,000

2

Chew & Co.

Andy

300,000

250,000

Total deposits

600,000

500,000

 

4. WHAT IF A TRUSTEE HOLDS SEVERAL ACCOUNTS FOR THE SAME BENEFICIARY IN THE SAME MEMBER BANK?

All deposits will be combined and protected up to RM250,000.

Account

Trustee

Beneficiary

Amount (RM)

1

Ali

Ahmad (son)

150,000

2

Ali

Ahmad (son)

150,000

Total deposits

300,000

Total deposits eligible for protection

250,000

 

5. WHAT IF A TRUSTEE HOLDS SEVERAL ACCOUNTS FOR DIFFERENT BENEFICIARIES IN THE SAME MEMBER BANK?

Each account is protected separately up to RM250,000.

Account

Trustee

Beneficiary

Amount (RM)

Protected (RM)

1

Ali

Ahmad (son)

275,000

250,000

2

Ali

Sara (daughter)

275,000

250,000

Total deposits

550,000

500,000

 

WHAT DO I NEED TO DO TO ENJOY THE SEPARATE PROTECTION?

6. WHAT INFORMATION MUST BE SUBMITTED BY A TRUSTEE ACTING FOR TWO OR MORE BENEFICIARIES, ANNUALLY?

A trustee acting for two or more beneficiaries is responsible for submitting the following information directly to the bank where the trust account is maintained:

  • The trust account number
  • The name, address and identity card number or passport number or any other identification of the trustee acceptable to the bank
  • The name and address of each beneficiary as at 31 December of the preceding year
  • The amount or percentage of each beneficiary’s interest in the trust account as at 31 December of the preceding year

7. WHEN IS THE SUBMISSION OF THE TRUST ACCOUNT INFORMATION DUE?

If you are a trustee acting for two or more beneficiaries in a single trust account, all the information stated in question (6) must be submitted to the banks by 31 March each year. The annual disclosure is to be made directly to the bank and not to PIDM.

You will receive a notification from your bank on the annual submission of information on trust accounts before 31 March each year.
 

For 2021 submission, please refer to “Submission by Trustees for Year 2021"

 

8. MUST A TRUSTEE DISCLOSE HIS OR HER CLIENT'S NAME TO THE MEMBER BANK?

Pursuant to PIDM’s Regulations, the trustee need not disclose the name and address of each client (“beneficiary of the trust account”) to the member bank. Instead, the trustee has the flexibility to use a separate alphanumeric code or other identifier to represent each beneficiary on the records of the trustee. There should be only one code or identifier for the same beneficiary if a trustee holds several accounts in the same bank.

9. WHAT IF NONE OF THE INFORMATION HAS CHANGED SINCE LAST DISCLOSED?

PIDM requires member bank to remind trustees acting for two or more beneficiaries of the annual submission requirements on an annual basis. If the information has not changed, annual confirmation of no change is to be provided by the trustee to the bank.

10. WHAT IF THERE IS ONLY ONE BENEFICIARY IN A TRUST ACCOUNT?

If you are a trustee acting for a single beneficiary in a single trust account, you do not need to submit your trust account information to your bank on an annual basis.

11. WHAT WILL HAPPEN IF A TRUSTEE FAILS TO SUBMIT THE TRUST ACCOUNT INFORMATION?

A trustee who fails to comply with the annual submission requirements commits an offence under Section 195 of the Malaysia Deposit Insurance Corporation Act 2011 and may be liable to a fine, or to imprisonment, or to both.

SUBMISSION BY TRUSTEES FOR YEAR 2021

12. WHEN IS THE SUBMISSION OF THE TRUST ACCOUNT INFORMATION DUE FOR YEAR 2021?

For Year 2021, the submission deadline has been extended from 31 March 2021 to 31 May 2021, in view of the continued challenges posed by the Covid-19 outbreak. If you are a trustee acting for two or more beneficiaries in a single trust account, please submit all the information stated in question (6) directly to the bank where the trust account is maintained by 31 May 2021.

13. I HAVE SUBMITTED THE TRUST ACCOUNT INFORMATION TO MY BANK IN FEBRUARY 2021. WITH THE EXTENSION OF TIME, WHAT IF THERE ARE CHANGES TO THE BENEFICIARY’S DETAILS AFTER MY SUBMISSION IN FEBRUARY 2021. DO I NEED TO RESUBMIT THE INFORMATION TO THE BANK?

No. Resubmission of the information is not required. A trustee acting for two or more beneficiaries in a single trust account is only required to submit information of each beneficiary as at 31 December 2020.

14. WHAT IF I DID NOT RECEIVE ANY NOTIFICATION ON THE EXTENSION OF THE DEADLINE FROM MY BANK? CAN I STILL SUBMIT THE INFORMATION TO MY BANK AFTER 31 MARCH 2021?

Yes, you still can submit the information to your bank until 31 May 2021. Member banks are encouraged to notify trustees on the extension of the deadline. Please contact your bank should you have further queries on the submission.


*For more information, please refer to the Malaysian Deposit Insurance Corporation  (Disclosure requirements for Trust Accounts and Joint Accounts) Regulations 2012.