Consultation Paper on Proposed Revisions to Beneficial Ownership Disclosures (2017-05-05)

Summary

This is a joint consultation paper issued by Bermuda's Ministry of Finance, Ministry of Economic Development and the Bermuda Monetary Authority proposing legislative changes to strengthen beneficial ownership disclosure requirements for Bermuda legal entities. It is prompted by commitments under the UK Exchange of Notes Agreement (effective 30 June 2017) and FATF Recommendation 24, and invites industry comment on proposed enhancements rather than imposing binding rules itself.

• Comprehensive filing: Proposes comprehensive beneficial ownership filing requirements for all legal entities formed in Bermuda, including local companies whose ownership changes are not currently required to be filed.
• Register at registered office: Would impose a duty on all entities to maintain a register of beneficial owners at the registered office or other place in Bermuda.
• New registry for local owners: Would introduce a registry for filing comprehensive information on local beneficial owners.
• Expanded definition of beneficial owner: Would expand the scope of beneficial owners to include controllers, meaning persons who exercise influence, appoint or remove directors, or control voting even without holding shares.
• Ongoing change reporting: Would require filing of any change in beneficial ownership or control of 10% or more with a central registry as and when it happens, and require identification of changes further up multi-lateral ownership chains.
• Reasonable measures duty: Would require all legal entities to take reasonable measures to know their beneficial owners and make that information accessible via a CSP or designated representative.
• Enhanced enforcement powers: Proposes additional information-gathering powers and new administrative sanctions and criminal penalties for non-compliance.
• CSP-linked general permissions: Notes that entities engaging a corporate service provider with an unlimited licence will get general permission for share issuances/transfers, conditional on the CSP filing beneficial ownership information with the Authority forthwith.

Comments on the proposals were requested by 22 May 2017, sent to the BMA or the Ministry of Economic Development. The paper indicates a subsequent outreach session was planned for May 2017 to discuss the proposals further; no final legislation is enacted by this document itself.

Applies to

companies formed in Bermuda, limited liability companies (LLCs), exempted partnerships, limited partnerships, corporate service providers (CSPs), local companies subject to the 60/40 ownership requirement

Deadlines

• 22 May, 2017: Deadline for industry and interested parties to submit comments on the consultation proposals to the BMA or Ministry of Economic Development.
• 30 June, 2017: Effective date for implementing the terms of the UK Exchange of Notes Agreement on sharing beneficial ownership information.