Introduction of the beneficial ownership transparency bill 2023

Dear Value Clients,

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We write to inform you about the introduction of the Beneficial Ownership Transparency Bill 2023 in the Cayman Islands. This significant legislation consolidates existing beneficial ownership rules from the Companies Act, Limited Liability Companies Act, and Limited Liability Partnership Act into a single, comprehensive piece of legislation. We understand that the Bill and consequential amendment bills are expected to be presented in Parliament in the fourth quarter of this year.

One of the primary objectives of this Bill is to enhance accessibility to information on the beneficial owners of companies. This increased transparency is essential in supporting the Cayman Islands’ Anti-Money Laundering (AML) regime and ensuring compliance with the Financial Action Task Force (FATF) Recommendations 24.

Notably, the Bill includes a provision that empowers the Cayman Islands’ cabinet to create regulations that would eventually open up information held in the jurisdiction’s beneficial ownership register for public scrutiny. It is important to clarify that this provision will only come into effect after formal approval by the parliament.

The Cayman Islands, while committed to transparency, does not intend to be a pioneer in publicly disclosing beneficial ownership information. Before taking this significant step, it will engage in discussions with the United Kingdom and other Overseas Territories and Crown Dependencies. The aim of these discussions is to ensure that adequate privacy safeguards are in place, taking into consideration the recent ruling by the Court of Justice of the European Union in the November 2022 C-37/20 and C-601/20 cases. These landmark judgments in the European Union found that unrestricted public access to beneficial ownership registries in EU Member States was not acceptable due to the “disproportionate” interference with privacy and data protection rights. The Cayman Islands are committed to striking the right balance between transparency and protecting the privacy and rights.

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Next Steps¹

We understand that the Bill expands upon the current scope of the beneficial ownership regime such that (i) entities eg. exempted limited partnerships and limited partnerships will be brought within scope of the regime;

(ii) current exemptions are to be removed; and

(iii) additional reporting requirements will be introduced namely information on the nature of ownership or control held and, in the case of individuals, their nationalities.

The effect of the Bill therefore is that entities which may not currently fall within scope of the Beneficial Ownership Regime may be in scope once the Bill is passed into law.

It is therefore important for entities to consider the following and to seek legal advice as required :

• Existing in scope entities will need to consider compliance with additional information requirements.
• Extending the scope of legal persons for the purpose of the Beneficial Ownership regime which now includes companies, limited liability companies, limited liability partnership, limited partnerships, foundations, exempted limited partnership or any other legal person that may be prescribed in regulations.
• Entities that benefit from an exemption under the current BOR because it is an entity which is, or a subsidiary of an entity which is, managed, arranged, administered, operated or promoted by an “approved person” as a special purpose vehicle, private equity fund, collective investment scheme or investment fund (or the general partner of such a vehicle, fund or scheme) are not exempted in the Bill but is replaced with an alternative route to compliance specifically for investment funds registered under the Private Funds Act or the Mutual Funds Act, which will not be required to establish and maintain a beneficial ownership register. Instead, such registered investment funds are required only to provide the contact details of a licensed fund administrator, or another contact person licensed or registered under a regulatory law for providing beneficial ownership information located within the Cayman Islands (the “Alternative Route“).
• Investment vehicles and entities within a fund structure which do not need to register under the Private Funds Act or the Mutual Funds Act will be required to establish and maintain a beneficial ownership register. Due to the ownership structures of such entities, there may be no individual who ultimately owns or controls, directly or indirectly, 25% or more of the shares, voting rights or partnership interests in the in-scope entity, meaning that the beneficial owner may be an individual who exercises ultimate effective control over the management of the entity or, if there is no such individual, a director or chief executive officer of the entity.
• The exemption under the Current BOR for entities which are registered with the Cayman Islands Monetary Authority under the Securities Investment Business Act or the Virtual Asset (Service Providers) Act is not included in the Bill and such entities will be required to establish and maintain a beneficial ownership register.

For further information, you can access the full text of the Bill via the following link: [Beneficial Ownership Transparency Bill, 2023 (gov.ky)

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We appreciate your continued trust in our services and will keep you informed as developments unfold regarding the Beneficial Ownership Transparency Bill 2023.

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PORTCULLIS GROUP
www.portcullis.co

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《2023年實質受益權透明化法案》概要說明

尊貴的客戶惠鑒，

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本文係針對開曼群島近期發布之《2023年實質受益權透明化法案》 (Beneficial Ownership Transparency Bill 2023) 之概要說明。前述法案旨在將《公司法》、《有限責任公司法》以及《有限責任合夥法》中與實質受益權相關之現行法規，整合為單一的統整性法案。該法案與相關配套修訂草案，預計將於今年第四季提交至開曼群島立法議會。

該法案的主要目的，係為放寬企業的實質受益人資訊之查閱權限。提升相關資訊之透明度將有利於強化開曼群島的洗錢防制 (AML) 制度，並確保開曼群島對防制洗錢金融行動工作組織 (FATF) 發布的第 24 項建議之遵循事宜。

該法案亦授權開曼群島內閣得制定相關法規，以利開放民眾查閱隸屬該司法管轄區之實質受益權登記名冊 (Beneficial Ownership Register，下稱「受益人名冊」) 所紀錄之資訊。上述法規將於立法議會正式通過後方得生效。

開曼群島雖致力於推動資訊透明化，惟對公開揭露實質受益權之相關資訊仍持保守謹慎態度。故而開曼群島計劃與英國、其他海外領地以及英國皇家屬地磋商後，方得落實該法案。前述討論之目的，係為確保當局已將歐盟法院2022年 11 月第C-37/20 號以及第 C-601/20號之判決納入考量，並制定適當的個資保護措施。自前述案例的判決結果顯示，由於民眾查閱歐盟成員國轄區之受益人名冊資訊未設有任何限制，已大幅侵害了受查者的隱私及個資保護等相關權益；因此，

開曼群島將戮力在實現資訊透明化以及維護隱私與權利之間取得平衡。

下一步

前述法案旨在擴大現行實質受益權規範之範疇，以利 (i) 納入更多實體（例如豁免有限合夥組織與有限合夥組織） 、(ii) 取消當前豁免資格以及 (iii) 新增額外的報告要求（即實體之所有權與控制權的相關資訊，以及其具所有權或控制權之自然人的國籍資訊）。最終，所有現行未受實質受益權規範控管之實體，將於正式立法後納入規範之範疇。

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因此，各實體應謹慎考量下列事項並於必要時尋求專業法律建議[1]：

• 現行納入範疇之實體，需考量其未來對提供額外資訊之遵循規定。
• 受實質受益權規範之法人，其範疇將擴大並涵納所有公司、有限責任公司、有限責任合夥組織、有限合夥組織、基金會、豁免有限合夥組織以及法規敘明之其他法人。

現行受益於實質受益權規範而得以豁免之實體，例如由「經核准人士」作為特殊目的之工具、私募股權基金、集體投資計劃或投資基金（或前述工具、基金或計畫之普通合夥人）所管理、安排、執行、營運或推廣之實體或其子公司，於新法通過後將無法維持其豁免資格。然而，前述實體如為投資基金，仍得以依據《私募基金法》或《共同基金法》之規定，無須建立或維護受益人名冊；即為前述法案之「替代方案」。 惟前述已註冊之投資基金，仍須按規定提供持有執照之基金經理人的聯繫資訊，或其他依法註冊或持有執照且可提供實質受益權相關資訊之開曼群島當地聯繫人。

• 原基金架構內無須依據《私募基金法》或《共同基金法》註冊之投資工具及實體，未來必須依法建立並維護受益人名冊。(敬請注意：前述實體所有權結構之設計，有可能導致無法辨識直接或間接實際持有、或控制實體 25% 以上之股份、投票權或合夥權之個體。於此情況下，該實體之實質受益人則應為具備實體最終有效控制權之人；如若仍然無法辨識，則應為該實體之董事或首席執行長。)
• 依據《證券投資法》或《虛擬資產及虛擬資產服務商法》於開曼群島金管局註冊且受益於現行實質受益權規範之實體的豁免權，將不予列入前述法案之豁免範圍，故而該實體仍需建立並維護受益人名冊。

欲了解更多詳情，請點閱法案全文：《2023年實質受益權透明化法案》(gov.ky)

感謝 貴客戶對保得利的長期支持與信任，我們將持續向您報告《2023年實質受益權透明化法案》的最新動態。

[1] 下列考量事項均為Walkers律師事務所出具之法律建議，詳情請參閱其官網之專文「開曼群島實質受益權規範之提案變更」 (walkersglobal.com)。

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保得利集團
www.portcullis.co