Following lengthy discussions with the UK authorities, the government has now approved new legislation to introduce beneficial ownership registers for certain Cayman companies and limited liability companies (for further details please see "Introduction of beneficial ownership registers proposed"). The new legislation was published on April 7 2017 and will come into force on July 1 2017.
Companies which are subject to direct or indirect regulatory oversight are likely to be exempt from the requirements to maintain a beneficial ownership register.
For the investment funds industry, this means that the following will not have to maintain beneficial ownership registers (provided that they fall within one of several exemptions contained in the legislation):
- companies which are structured as Cayman investment funds, whether hedge funds or private equity funds;
- Cayman investment managers which are registered as 'excluded persons' under the Securities and Investment Business Law; and
- general partners of private equity funds or other investment funds.
There are no proposals to extend the registers to cover beneficial ownership of limited partners of Cayman exempted limited partnerships, or foreign companies and foreign limited liability companies registered in the Cayman Islands.
The UK authorities will be able to request that a search of information held on registers be done by the competent authority in the Cayman Islands; in future, other jurisdictions entering into similar agreements with the Cayman Islands may also be able to request a search. The register will otherwise be confidential and not open to public inspection. The government has confirmed that it will not consider the introduction of a public register of beneficial ownership unless that becomes an accepted and implemented international standard.
The legislation comes into force on July 1 2017 and all Cayman companies should now review whether they will be required to maintain a beneficial ownership register or whether they fall within one of the exemptions in the legislation.
For further information on this topic please contact Ian Gobin or Matt Taber at Harneys by telephone (+1 345 949 8599) or email (firstname.lastname@example.org or email@example.com). The Harneys website can be accessed at www.harneys.com.
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