Notice - Corporate Service Provider (Beneficial Owner) Regulations 2012 (2012-12-21)

Summary

This is a Bermuda Monetary Authority notice, dated 21 December 2012, introducing draft Corporate Service Provider (Beneficial Owner) Regulations 2012 for public consultation. The draft regulations, made under section 66 of the Corporate Service Provider Business Act 2012, would require licensed corporate service providers (CSPs) to identify and maintain records of the beneficial owners of their clients, aligning Bermuda's framework with AML/CFT and OECD beneficial ownership standards.

• Scope of duty: CSPs would be required to take all reasonable steps to identify all beneficial owners of a client, including legal and intermediate owners, using a beneficial owner definition mirroring the AML/CFT regime (generally a 10% ownership or control threshold, varying by entity type).
• Record keeping: CSPs would need to maintain a written record of each beneficial owner's name, spouse's name, residential address, nationality, date of birth, nominee details, ownership percentage, and legal/intermediate owners, kept at the CSP's registered address.
• Reporting changes: Beneficial owners would be obliged to notify the CSP in writing within 28 days of any change (increase or decrease) in their beneficial ownership, with failure to do so an offence carrying a fine up to $10,000.
• Disclosure notices: CSPs could issue notices requiring a person to disclose beneficial ownership information within a stated time; failure to comply, or providing false or misleading information, would be an offence.
• Consequences of non disclosure: If a person fails to disclose beneficial ownership as required, the CSP could restrict that person's interest (e.g. block transfer, voting rights, or further purchase of interest) or cancel the beneficial owner's interest in the client.

The notice invited comments on the draft regulations by 10 January 2013, addressed to the Authority contact named in the notice. The regulations remain in draft form, with the commencement date left blank pending finalisation, so no obligations are yet in force under this document.

Key obligations

• Under the draft regulations, CSPs would need to take all reasonable steps to ascertain the identity of all beneficial owners of a client, including legal and intermediate owners
• CSPs would need to maintain a written record of specified beneficial owner details (name, spouse, address, nationality, date of birth, nominee, ownership percentage, legal/intermediate owners) at their registered address
• Beneficial owners would need to notify the CSP in writing within 28 days of any change in their beneficial ownership
• Persons receiving a CSP disclosure notice would need to disclose beneficial ownership information within the time period stated in the notice
• Interested parties were invited to submit comments on the draft regulations by 10 January 2013

Applies to

corporate service providers, beneficial owners of corporate service provider clients

Deadlines

• 10th January 2013: Deadline for interested parties to submit comments on the draft Corporate Service Provider (Beneficial Owner) Regulations 2012
• 28 days after change: Under the draft regulations, a beneficial owner must notify the corporate service provider in writing within 28 days after any change in their beneficial ownership
• [DATE] (unspecified in draft): Commencement date of the Regulations, left blank pending finalisation of the draft