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

Summary

This is a Bermuda Monetary Authority notice introducing the draft Corporate Service Provider (Beneficial Owner) Regulations 2012, made under section 66 of the Corporate Service Provider Business Act 2012. It explains why beneficial ownership rules are being imposed on corporate service providers (CSPs) and summarises the duties the draft regulations would create.

The regulations require CSPs licensed under the Act to identify and maintain records on the beneficial owners of their clients, using a definition of beneficial owner modelled on the AML/CFT regime (generally a 10% ownership or control threshold, varying by entity type such as company, partnership, trust, or estate).

• Identification duty: CSPs must take all reasonable steps to ascertain the identity of all beneficial owners of a client, including legal and intermediate owners.
• Recordkeeping: CSPs must maintain a written record of beneficial owner at their registered address, including name, spouse's name, residential address, nationality, date of birth, nominee details, percentage ownership, and legal/intermediate owners.
• Reporting changes: A beneficial owner must notify the CSP in writing within 28 days of any change (increase or decrease) in their beneficial ownership; failure is an offence carrying a fine of up to $10,000.
• Disclosure notices: A CSP may serve notice on a person requiring disclosure of beneficial ownership information within a stated time period; failing to comply without reasonable excuse, or providing false or misleading information, is an offence.
• Consequences of non disclosure: If a person fails to comply with a disclosure notice, the CSP may restrict that person's interest (e.g. transfer, voting, purchase rights) or cancel the beneficial owner's interest in the client entity.
• Public comment period: The notice invites comments on the draft regulations, to be submitted to the BMA by 10th January 2013.

The regulations were circulated as a draft at the time of this notice, with the commencement date left unspecified pending finalisation.

Key obligations

• A licensed corporate service provider must take all reasonable steps to ascertain the identity of all beneficial owners of a client, including legal and intermediate owners.
• A corporate service provider must maintain a written record of beneficial owner (name, spouse's name, residential address, nationality, date of birth, nominee details, ownership percentage, and legal/intermediate owners) at its registered address.
• A beneficial owner must notify the corporate service provider in writing within 28 days of any change in their beneficial ownership interest in a client, or commit an offence punishable by a fine up to $10,000.
• A person served with a notice under regulation 7 must disclose requested beneficial ownership information within the time period stated in the notice, or commit an offence.
• Interested parties were invited to submit comments on the draft Regulations to the BMA by 10th January 2013.

Applies to

corporate service providers, beneficial owners of clients of corporate service providers

Deadlines

• 10th January 2013: Deadline for submitting comments on the draft Corporate Service Provider (Beneficial Owner) Regulations 2012 to the BMA.
• 28 days after a change in beneficial ownership: A beneficial owner must notify the corporate service provider in writing of any change in their beneficial ownership within this period.
• [DATE] (unspecified in text): The Regulations are stated to come into operation on a commencement date left blank in the draft text.