Requiring financial institutions to collect the (one to five) names and PII of what may or may not be the beneficial owners of a legal entity customer, as well as the name and “certification” of the representative of the legal entity that those are, indeed, the beneficial owner(s) of the legal entity, is a positive step. But without a centralized registry of beneficial ownership, it is an incomplete exercise.
A great blueprint for a centralized registry can be found in a December 2017 paper written by Mora Johnson of Publish What You Pay Canada. In “Building a Transparent, Effective Beneficial Ownership Registry: Lessons Learned and Emerging Best Practices From Other Jurisdictions”, Ms. Johnson provides a succinct list of the eight features a beneficial ownership registry must have. Her focus is on Canada, which has 14 provincial and territorial company registries, so much can be learned from this in applying it to the 50 state registries in the United States. Those eight features are:
- All legal entities
- Centralized registry
- Open to the public
- Verified information
- Skilled, empowered registrar(s)
- Prompt information updates
- Adequate data standards
- Intelligent design considerations (e.g., drop-downs and legal entity identifiers)
The report is available at http://www.pwyp.ca/images/documents/PWYP-Canada-CRBO-Policy-English-INTERACTIVE.pdf