BULLETIN: 26 January 2018

The beneficial ownership register regime for specified companies came into force on July 1 2017. Since its passing, there have been areas of uncertainty in relation to the application of the law to various structures. As a result, the law has been revised in the Companies (Amendment) (No. 2) Law 2017 (the “Revised Law”) which came into effect on December 13 2017.

Some of the salient features of the Revised Law include:1. The term “Regulatory Law” has been defined in the

manner set out in section 2 of the Monetary Authority Law (2016 Revision) but has excluded the reference to the Directors Registration and Licensing Law 2014.

2. The companies which are exempt under the Revised Law have been redefined in section 245. The section now makes it clear that it applies to companies incorporated or registered by way of continuation except a legal entity or subsidiary of one or more legal entities any of which is:(a) listed on the Cayman Islands Stock Exchange or an

approved stock exchange in Schedule 4;(b) registered or holding a licence under a regulatory law

(other than a company registered as an excluded person under section 5(4) of the Securities Investment Business Law (2015 Revision));

(c) managed, arranged, administered, operated or promoted by an approved person as a special purpose vehicle, private equity fund, collective investment scheme or investment fund, including where the vehicle, fund or scheme is a Cayman Islands exempted limited partnership;

(d) regulated in a jurisdiction included in a list published by the Anti-Money Laundering Steering Group of countries and territories whose Anti-Money Laundering legislation is deemed to be equivalent to the Anti-Money Laundering legislation of the Cayman Islands;

(e) a general partner of a vehicle, fund or scheme referred to in paragraph (c) which vehicle, fund or scheme -

(i) is registered or holds a licence under a regulatory law; or

(i) is managed, arranged, administered, operated or promoted by an approved person;

(f) holding directly a legal or beneficial interest in the shares of a legal entity which holds a licence under the Banks and Trust Companies Law (2013 Revision), the Companies Management Law (2003 Revision), the Insurance Law (2010 Revision), Part III of the Mutual Funds Law (2015 Revision) or the Securities Investment Business Law (2015 Revision); or

(g) exempted by the Regulations.

3. The definition of an “approved person” no longer includes a company registered as an excluded person under section 5(4) of the Securities Investment Business Law (2015 Revision).

4. A company that is exempt under section 245 of the Revised Law shall provide to the corporate service provider or the Registrar of Companies a written confirmation of the exemption identifying the paragraph that provides for the exemption and including the prescribed information about the regulated legal entity or regulated parent or approved person referred to in that paragraph.

5. The law imposes an obligation on the corporate service provider to regularly deposit beneficial ownership information received from the companies that have engaged the provider in such place and in such manner and at such intervals as may be prescribed. If the corporate service provider fails to do so, the corporate service provider and any officer thereof who is in default shall incur a penalty.

Legislative Amendments: Companies Law in the Cayman Islands

FOR MORE INFORMATIONMichele Bryan, Corporate Manager | mbryan@hjcorporate.com

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