Major revamp of Jersey Registry. Are you at risk if beneficial ownership details go public?

In response to the requirements of the international standard setting Financial Action Task Force Recommendation 24 (relating to the transparency and beneficial ownership of legal persons), the Jersey Companies Registry has undertaken a major overhaul not only of its online systems but also the legislation requiring the electronic submission of information to the new “myRegistry” platform. Hard copy applications or payment by way of a cheque are no longer acceptable. The changes apply not only to financial services businesses but all Jersey companies including butchers, bakers and candlestick makers!

Going forward the publicly available information on myRegistry will contain details of Directors (referred to as significant persons in the legislation) of the legal entity and for the first time introduces the concept of requiring entities to provide details of a nominated person.

Concealing the identity of the true beneficial owner, failing to provide the contact details of a nominated officer or providing the Registrar with false and misleading information all now carry significant fines or terms of imprisonment.

The annual return is replaced with an annual confirmation statement effectively requiring entities to confirm that the information held by myRegistry is up to date. Again, if the confirmation statement contains false and misleading information the risk of prosecution for providing false and misleading information is very real.  Legal gateways are strengthened to allow for the sharing of information between competent authorities.

Any change of a nominated person must be submitted to myRegistry within 21 days. The Jersey Financial Services Commission (“JFSC”) may, by notice in writing to the entity, revoke the appointment of a nominated person for that entity if the JFSC is satisfied that the nominated person is not eligible.

The JFSC may require an entity to authenticate any information or document provided to them under this Law in any manner reasonably determined by the JFSC.

Effectively the law and regulations put in place a framework to achieve the following,

• A requirement to provide information, for example, Memorandum and Articles of Association, to be filed with the company registry and made publicly available. This extends to foundations which will be required to file regulations.
• The introduction of provisions to introduce, for the first time, a public register of directors.
• The timely updating of information held by the Company Registrar including the future potential disclosure of the identity of shareholders and guarantor members (but not before the 31 May 2021).
• A requirement that information be provided by a natural person resident in the jurisdiction or by a regulated trust and company service provider, local lawyers/accountants, or funds services business (construed in accordance with Article 2(10) of the Financial Services (Jersey) Law 1998), acting as a nominated person.
• Prevention of the misuse of bearer shares.

The most significant change however can be found within the Financial Services (Disclosure and Provision of Information) (Jersey) Regulations 2020.

As from 1 October 2021 the JFSC may at its discretion publish the name, date of birth and address of shareholders of Jersey entities, although the JFSC website indicates that such details will not be made public for the time being. The provisions allow shareholders to apply to the JFSC for their details to remain private and sets out what information must be provided when making such an application. The regulations stipulate that such information can be withheld from public view if applications meet one of the following thresholds,

1. if the subject considers that there is a serious risk that the subject, or a person who lives with or is related to the subject, will be exposed to violence, intimidation or physical or mental harm as a result of the information being made available for public inspection;
2. if the subject considers that there is a serious risk of damage or threat to property as a result of the information being made available for public inspection;
3. if the information relates to a subject who lacks capacity to manage their own affairs; or
4. if there are exceptional circumstances that justify the making of the application.

The JFSC is empowered to issue guidance on what constitutes exceptional circumstances although no such guidance has been published to date.

If the JFSC refuses an application to withhold details from publication, the subject has 28 days within which to appeal the decision to the Royal Court. The decision to publish the details is effectively temporarily suspended during the period of appeal.

The JFSC may refuse to register information provided by an entity in purported compliance with this Law if the JFSC reasonably believes that the information is false or misleading.

Whilst the regulations empower the JFSC to publish the details of shareholders, it is not clear if or when they intend to do so or indeed what notice will be given to shareholders enabling them to make an application for their details to be withheld from public view. The international trend however is for jurisdictions to move towards publishing the details of beneficial owners and Jersey continues to be placed under pressure to do the same. When the JFSC will exercise its discretion to publish this information remains to be seen.  It is hoped that it will occur when there is a level playing field between international finance centres and their onshore equivalent.  While there is some recent legislative movement in the United States at a Federal level with the introduction of The National Defense Authorization Act, 2021 the signs are it will be a long time before such information is available in the US offshore jurisdictions such as Delaware, Wyoming and South Dakota

If you consider that publication of your details places you at risk and you require assistance in preparing an application to request the JFSC to withhold your name, date of birth and address from public view then please contact us.