The European Union (Modifications of Statutory Instrument No.110 of 2019) (Registration of Beneficial Ownership of Certain Financial Vehicles) Regulations 2020 (“2020 Regulations”) came into effect on 25 June 2020. The 2020 Regulations require Irish Collective Asset-management Vehicles (ICAVs), unit trusts and credit unions to submit details of their beneficial owners to Central Bank of Ireland (“Central Bank”). This activity is necessary for the maintenance of a central register of beneficial owners. In addition, the 2020 Regulations amend and extend the application of the EU (Anti Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 (2019 Regulations) to ICAVs, unit trusts and credit unions.
Introduction - What changes do the 2020 Regulations introduce for ICAVs and unit trusts?
Since 2016 private companies, ICAVs and other legal entities incorporated in Ireland have been required to maintain an internal register of their beneficial owners. The 2019 Regulations extended the application of the beneficial ownership regulations by designating the Companies Registration Office as the State registrar with the function of maintaining a central register of beneficial owners of private companies and other legal entities incorporated in the State. The 2020 Regulations and bring ICAVs, unit trusts and credit unions into scope of the beneficial ownership regulations.
The 2020 Regulations provide for the establishment of a central register for the beneficial owners of ICAVs, unit trusts and credit unions (“Central Register”) and also designate the Central Bank as the “Registrar of Beneficial Ownership of Irish Collective Asset-management Vehicles, Credit Unions and Unit Trusts”.
The devil is in the details
ICAVs, unit trusts and credit unions are required to deliver details of their beneficial owners to the Central Bank. The information to be delivered to the Central Bank includes the name, date of birth, nationality and residential address of each beneficial owner as well as a statement of the nature and extent of the interest held by the beneficial owner or the nature and extent of the control the beneficial owner exercises. ICAVs and unit trusts are not required to verify details of beneficial owners by delivery of PPS numbers to the Central Bank.
Under the 2020 Regulations, ICAVs and unit trusts that are in existence before 25 June 2020 are required to file details of their beneficial owners to the Central Bank by 25 December 2020. There is a six-month filing deadline for ICAVs that are registered on or after 25 June 2020 or unit trusts that are authorised on or after 25 June 2020.
The 2020 Regulations clarify the definition of ”beneficial owner” of a unit trust, which helpfully corresponds to the definition of a beneficial owner of a private company or an ICAV, as being any person:
- Who holds more than 25% of the units of the unit trust, or
- Who exercises ultimate control over the unit trust by means of direct or indirect ownership
The Central Bank is required to impose a supervisory levy to cover the costs of maintaining the Central Register. Details of the supervisory levy will be clarified into course following consultation with the Minister for Finance.
What is the next step?
The Central Bank will have a dedicated area on its website providing general information in relation to the Central Register and a section with FAQs on how the public can access information on the Central Register. The Central Bank will shortly have a portal available on its website allowing for submission of the required information. A notification of when the required information can be submitted to the portal will be published on the Central Bank website.
Separately, the Minister for Finance has indicated that Investment Limited Partnerships registered under the Investment Limited Partnership Act, 1994 and Common Contractual Funds will be included on the Central Register.
The 2020 Regulations provide welcome clarification in relation to the beneficial ownership filing requirements for ICAV's, unit trusts and credit unions. With a deadline of six months that expires on 25 December 2020 industry should take this opportunity to familiarise themselves with the application of the 2020 Regulations and to prepare in advance for the filing of details of beneficial owners before the end of this year.
For more information and expert advice on fulfilling your entity’s obligations under the 2020 Regulations, contact a member of our Investment Funds team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.