FCC RegUpdate

On August 30, 2023, the Cayman Islands’ Ministry of Financial Services and Commerce (FSC) released the Beneficial Ownership Transparency Act 2023. This bill was formulated after extensive consultations with various stakeholders, including industry representatives, the public, government entities, and international organizations.

The Bill aligns with the Financial Action Task Force’s enhanced Recommendation 24, ensuring that competent authorities have access to current and accurate information about company beneficial owners. It also consolidates beneficial ownership rules from the Companies Act, the Limited Liability Companies Act, and the Limited Liability Partnership Act, simplifying the regulatory framework for both industry participants and public authorities.

The Bill outlines the following key provisions:

  • Beneficial Owner is defined as a person who holds or controls 25% or more of shares, voting rights, or partnership interests, exercises ultimate management control, or holds a senior managing official position.
  • Registrable beneficial owners are required to provide necessary details, including their status and the date of their beneficial ownership, to legal entities.
  • Conducting a search or disclosing beneficial ownership information is considered an offense, punishable by a fine of five thousand dollars, imprisonment for twelve months, or both.
  • Legal entities are obligated to notify registrable beneficial owners of any changes, record these changes, and instruct the beneficial owners to update the beneficial ownership register accordingly.
  • The Bill mandates the competent authority to establish a search platform, allowing specific individuals to access beneficial ownership register information on behalf of legal entities.
  • The enactment of this bill prepares the Cayman Islands for the fifth round of the Financial Action Task Force (FATF) evaluation process, scheduled to commence in 2025.