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Bermuda Relaxes Beneficial Owner Reporting Rules

Tuesday, February 26, 2013

The Bermuda Monetary Authority (BMA) has announced that it has increased the threshold above which beneficial owners of stakes in companies or partnerships, or companies that are subject to exchange control requirements, must disclose personal information to the Authority, to 10% from 5%.

Until the latest change, which takes immediate effect, in the formation process all entities were required to submit to the Authority a personal declaration form for beneficial owners of a partnership or company who owned 5% or more of voting interests or rights.

Jeremy Cox, CEO of the BMA said: “This filing has been in effect for several years and the Authority has managed this process on behalf of the Government. The authorities in Bermuda have received further clarification on recent revisions to the international standard for identifying and disclosing information on beneficial owners, which has established the disclosure threshold at 10% or more of voting rights.”

“We are now in a position to apply this standard across the board in Bermuda. This means that the disclosure threshold [has changed] and entities will now be required to provide personal declaration forms for persons who own or control 10% or more of voting rights in a company or partnership, rather than the previous 5% level.”

Cox said that the new 10% threshold will also apply for companies that are subject to exchange control seeking approvals from the BMA to transfer securities. “Under the Exchange Control Act 1972 the BMA is in fact the Controller and has to date reviewed all persons who own 5% or more of securities in these entities when they request securities transfer permissions. The threshold has now changed to 10% for such requests," he said.

Cox explained that for "persons submitting securities transfer requests who own less than 10% of an entity, the Authority will still provide approvals under its current general permission policy. So basically there is no change in this context for those who do not meet the revised threshold."