If we have information exchange do we need a public register?

The issue of beneficial ownership continues to make headlines, leading many trust professionals to question whether the UK government’s current approach to the issue is fit for purpose.

At the recent BL Jersey Trust Conference we heard from Christopher Schofield, a partner at Viberts, who asked whether the current climate signalled an end for trusts, or a brave new dawn. Most attendees were positive, despite the challenges and the expert panel, comprised of John Everett of the JFSC, Ashley Cox of Zedra and Ben Newman of First Names Group, echoed that view.

Ashley Cox noted that the level of legislation and regulation at the moment is unprecedented, and with exchange of information protocols in place, governments, law enforcement agencies and regulators had access to more information than ever before. He questioned whether, with all this already in place, there was any need for a public register of beneficial ownership?

Combatting crime, particularly money-laundering, is clearly important, according to Cox but there has to be a sense of perspective. If there was to be a central register, who would have access to it? If the public, or media, were granted access, could the beneficial ownership of an entity always be deemed in the public interest? What about cases where those owners need the privacy to manage their own affairs. In some cases there is real physical danger, of kidnapping or the like, if assets can be linked back to individuals.

John Everett of the JFSC also noted that significant investment would be needed to make the system work. Registers, he said, were more akin to holders of information, not verifiers. If the system works via self-reporting, what guarantees will anyone have that the information is accurate. It is not a huge leap to see conscientious investors disclosing information, while criminals simply report whatever they need to keep out of trouble. Keeping all the information in one place would also make it a prime target for hackers or other cybercriminals.

Much better, the panel agreed, to keep a properly licensed professional as the holder of that information, with the right systems in place to allow appropriate agencies (law enforcement and the like) access to that information if it is required – but not, as a register would have it, available to anyone, anytime.