BERMUDA REFINES DISCLOSURE REQU IREMENTS FOR COMPANY FORMATIONS

The Bermuda Monetary Authority (the Authority or BMA) announced that Bermuda is taking another step forward in its review and administrative procedures for company or partnership formations.

Specifically, there will be a refinement to the beneficial owner information companies must submit to the Authority as part of the formation process, and under exchange control requirements. 

 

Currently in the formation process, all entities must submit to the Authority a personal declaration form on beneficial owners of the partnership or company who own 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.”

“Bermuda was already well ahead in moving towards adopting this standard, the most recent example

being the Corporate Service Provider Act 2012 which took effect on 1 January 2013,” added Mr. Cox. “We are now in a position to apply this standard across the board in Bermuda. This means that the disclosure threshold will change 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.” 

 

Mr. 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,” he said. “The threshold will now also change to 10% for such requests.” 

 

“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,” Mr. Cox stated. 

 

Mr. Cox advised that the policy shift from 5% to 10% will take effect immediately both for company formation applications and exchange control permissions.