Bill to boost beneficial ownership regime

A bill is being introduced to strengthen the Cayman Islands beneficial ownership regime. The bill is expected to pass before the end of the year, according to Harneys.

The Cayman Islands introduced the beneficial ownership regime in 2017. Following two years of implementation an internal review was conducted to assess the effectiveness and compliance of the regime. The review identified certain areas that require improvement and the Cayman Islands government has addressed these in the recently published Bill to amend the beneficial ownership regime.

To strengthen the effectiveness of the beneficial ownership regime a number of changes are proposed in the Bill. In a report by Harney, these include: all legal entities must maintain a beneficial ownership register, except those that are listed on the Cayman Islands Stock Exchange or are exempted in the regulations; investment funds will not be required to file the register with the government, however the government can serve a notice on an investment fund requiring it to provide beneficial ownership information on demand; and corporate services providers (in addition to the legal entity) must take reasonable steps to identify beneficial owners for each of their managed legal entities.

The bill would also legislate that: corporate services providers must establish and maintain a beneficial ownership register for each of their managed legal entities; corporate services providers, and any officer of the corporate services provider, in default of the requirement to establish and maintain a beneficial ownership register for a managed legal entity may be fined; the government can search the beneficial ownership register of a legal entity for the purpose of verifying the accuracy of the information provided; and reporting threshold changed from “more than 25 per cent” to “25 per cent or more”.