The BOT Act, together with the Beneficial Ownership Transparency Regulations, provides for administrative fines that may – subject to certain procedural requirements – be imposed for a breach of the BOT Act or the Beneficial Ownership Transparency Regulations. Cayman Islands legal persons should therefore begin working with their legal counsel and other service providers to prepare for compliance with the Beneficial Ownership Transparency Act by 1 January 2025.
Key changes to note in respect of Cayman Islands investment fund vehicles are as follows:
all partnerships (including exempted limited partnerships and limited partnerships) are within the scope of the Beneficial Ownership Transparency Act
exemptions available under the previous beneficial ownership regime have effectively been removed, including the exemption previously available for funds registered under the Mutual Funds Act or the Private Funds Act – instead, registered funds will be able to utilise an "alternative route to compliance"
Alternative route to compliance
The relevant "alternative route to compliance" provided for under the BOT Act will require Cayman Islands investment fund vehicles to provide the corporate service provider that maintains their beneficial ownership register in the Cayman Islands (typically, the registered office) with details of a "contact person" at:
a licensed fund administrator or
another person in the Cayman Islands that is licensed or registered under a regulatory law for providing beneficial ownership information (such as Bell Rock Group).
Such contact person may be required to provide the Registrar of Companies or Partnerships, as appropriate, with requested beneficial ownership information within 24 hours of a request for such information being made.
Bell Rock Group is able – subject to agreement – to act as the contact person for registered funds taking the "alternative route to compliance" referred to above and has established policies and procedures designed to assist funds in responding to Registrar requests for beneficial ownership information.
Investment funds registered with the Cayman Islands Monetary Authority (CIMA) will need to determine whether they will elect to take the "alternative route to compliance" referred to above or whether they will establish and maintain a beneficial ownership register. Registered funds that determine to take the "alternative route to compliance" should check that their corporate service provider is able to act as the contact person.
For more information on this, please feel free to contact us.
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