CRF Hong Kong Central Register of Beneficial Ownership

7 March 2017 (Session 1)

“A good plan today is better than a perfect plan tomorrow”

-Proverb-

› Agenda

Julian Lamb Jersey Financial Services Commission (JFSC)

› Jersey policy - ‘Its Genesis’

› JFSC role and Registry roadmap

› Technical roadmap, Registry portal and API

› Summary

Jersey Policy

› International Standards and Global Initiatives

› The Government committed to ensure an appropriately regulated

financial services industry taking a proportionate risk-based approach in order to uphold our reputation and accountability to our business partners while ensuring that we remain competitive

› Transparency of beneficial ownership of corporate and legal entities has recently been headline news around the world

› Jersey recognises that beneficial ownership transparency is a critical factor preventing the abuse of the global financial system for laundering the proceeds of crime and the financing of terrorism.

› Beneficial Ownership – Jersey Regime

› Jersey has had a central register of beneficial ownership since 1989, and that is combined with the

regulation of Trust and Company Service Providers (TCSPs) ensuring oversight of those who form and

administer corporate and legal entities in Jersey which together ensures compliance with the international

standard of having available adequate, accurate and current beneficial ownership information. This

information is exchanged with law enforcement and tax authorities, on request, worldwide.

› Jersey has recently been assessed by MONEYVAL and a report was published earlier this year which

included a clear statement on the international recognition of Jersey’s leading position on beneficial

ownership transparency.

› In addition to the comments made by MONEYVAL, Jersey’s regime concerning transparency of beneficial

ownership has been recognised by the IMF and the World Bank in its project under the Stolen Assets

Recovery Initiative (“StAR”) - “The Puppet Masters. How the Corrupt Use Legal Structures to Hide Stolen

Assets and What to Do About It.”

› Agreement with the UK

Immediately prior to the London Anti-Corruption Summit earlier this year, Jersey signed an agreement with the United Kingdom to enhance exchange of beneficial ownership information between the law enforcement authorities

The agreement also underlines our continued commitment to law enforcement cooperation between the Governments of Jersey and the United Kingdom

› Commitment Requires Change

Our commitment to comply with enhanced international standards and the agreement with the UK requires us to make a number of changes to our domestic regime in two areas:

a) To further ensure the updating of beneficial ownership information held at the Companies Registry by Jersey corporate and legal entities, where those entities are administered by a TCSP, and the TCSP becomes aware of a change of beneficial ownership;

b) The introduction of a register of directors for Jersey and whether that register should be held publically or privately.

› Implementing Change

› Legislative amendments to implement the policy will be brought to the States Assembly in the first half of 2017 for adoption

› The policy must come into force by 30 June 2017

› Technology should help us achieve our aims with more success – and that is why we are engaging with you

JFSC Role

› Project Success – What We Need to do to Accord with the Exchange Notes

JFSC Change Programme

› Registry Roadmap

Use of Existing Infrastructure

› Use of the Existing Registry Systems (1)

› Easy Company Registry (ECR)

› New Online forms: › C23 Special resolution

› C50 Public company annual report and accounts

› C51 Prospectus

› C74 Online incorporation non-TCBs

› C75 Online incorporation TCBs

›P75 Partnership setups

Paper (if all else is exhausted)

Benefits

No paper (No delivery, printing costs and scanning costs)

Certificates sent electronically (The Registry will no longer (from 1 Jan 2017) produce hard copies, only upon request (£))

Speed of transaction

› Use of the Existing Registry Systems (2)

› Easy Company Registry (ECR)

› Online forms: › C20 2017 Annual return including BO

statement (C17S)

› C17S BO statement to be used between 1 January – 30 June 2017

› C17a For Changes for TCSPs (TCBs)

› C17b For Changes for non TCSPs administered companies.

Paper (if all else is exhausted)

Benefits

No paper

Choice of delivery

Ease of use

So, What's New?

› Changes to COBO Consents

› Replacement consents from 1.1.2017

› Amended wording

TCBs (changes to require updating on an on-going basis):

› Not prior approval › Notification within 21 days of

knowing of the change › Non TCBs (no change but

improved process): › Prior approval retained › Deemed notification applied within 21 days.

Process

7,900 replacement COBO consents issued to non TCB administered companies from 1 January 2017.

TCB administered companies - new COBO consents delivered with annual return receipts (existing process).

More complex COBO consents (mostly funds and mainly partnerships) to be reviewed between 1 Jan and 30 June 2017.

3,000 SPVs to be reviewed but article 2 consents usually separate from additional conditions.

› Changes to Registry COBO Forms

› Amended C2a

› Amended C17 (s, a & b)

Benefits

Consistent through all forms

More user friendly – particularly activity section

Target audience focused

Reflects the three tier test

They are not perfect!

Three Tier Test

› Three Tier Test

› #Ownership

› #Other means

› #Position held

Time Lines and Building Blocks

› Indicative 18 Month Timeline

› #Statement

› #6months

› #30June2017

Technical Roadmap and Impact

› Technical Architecture

Data/Reporting

Dynamics NAV

Finance

SharePoint

EDRMS Collaboration Web Content

Intranet Internet

CRM

Regulatory Services

Enforcement HR

Registry Platform

Online Portal

Registry Services

Functions & Services

Platforms

Data Warehouse

› API Services

Security Interests Register

January 2014

Beneficial Ownership System

February 2017

New Registry Platform

2018

› API Registration and Approval

› Registration in January for Users and Developers › Access to development API’s and support early Q1 › Certification programme

›All API users will have to complete a set of approval tests before live access

› Registry Portal Component

Access controls Electronically certified documents

Single sign-on Help guides

Secure communication Electronic filing Registry search

› Companies Registry API

Standard API Advanced API

Summary of Meeting and Actions

› TCB Action Timeline

“A good plan today is better than a perfect plan tomorrow”

-Proverb-

Follow us at @JerseyFSC

Like us at Jersey Financial Services Commission

Follow us at Jersey Financial Services Commission

Julian Lamb Deputy Registrar and Director of

Companies Registry j.lamb@jerseyfsc.org