Banks and Trust Companies (Amendment) Law, 2018

Gazette No. 81dated 24th October, 2018. A BILL FOR A LAW TO AMEND THE LIMITED LIABILITY PARTNERSHIP LAW, 2017 TO REQUIRE LIMITED LIABILITY PARTNERSHIPS REGISTERED IN THE ISLANDS TO ESTABLISH, MAINTAIN AND REGULARLY UPDATE BENEFICIAL OWNERSHIP REGISTERS; TO IDENTIFY LIMITED LIABILITY PARTNERSHIPS THAT ARE EXEMPT FROM THESE REQUIREMENTS AND REQUIRE THEM TO FILE WRITTEN CONFIRMATIONS OF EXEMPTION; TO ENABLE THE REGISTERS TO BE SEARCHED BY THE COMPETENT AUTHORITY DESIGNATED UNDER THE COMPANIES LAW (2018 REVISION); AND FOR INCIDENTAL AND CONNECTED MATTERS MEMORANDUM OF OBJECTS AND REASONS Further to the Financial Action Task Force (FATF) Recommendation 24 and the Exchange of Notes between the Cayman Islands and the United Kingdom signed in April 2016, the Bill seeks to require limited liability partnerships in the Islands to maintain registers of information concerning their beneficial owners, whether individuals or legal entities. The Bill would provide access to beneficial ownership registers of limited liability partnerships by the competent authority designated by the Minister with responsibility for financial services via the search platform to be established by that authority. Searches could only be performed in response to a request from a designated official in a jurisdiction that has entered into an agreement with the Government to share beneficial ownership information or to a request from a specified law enforcement body if the request is in compliance with the legislation governing the affairs of such body. Clause 1 provides for the short title and commencement of the legislation. Clause 2 amends the principal Law by inserting a new Part 8 entitled “Beneficial Ownership Registers”, which contains new sections 51 to 87 providing as follows: Section 51 provides the definitions for terms used in the legislation and includes an interpretation provision that provides that a number of legal persons, including governments and government departments, shall be treated as individuals under Part 8. Section 52(1) provides that Part 8 applies in respect of limited liability partnerships registered in the Islands and sets out a number of exceptions to this rule, including limited liability partnerships listed on the Cayman Islands Stock Exchange or an approved stock exchange and limited liability partnerships holding a licence under a regulatory law. The latter exception does not exclude limited liability partnerships registered as excluded persons under section 5(4) of the Securities Investment Business Law (2015 The section exempts from application of the Part special purpose vehicles, private equity funds, collective investment schemes and investment funds operated by an approved person and sets out in relation to which of these vehicles, funds and schemes the general partner of the vehicle, fund or scheme is exempt. The section also exempts from Part 8 legal entities regulated in jurisdictions listed in Schedule 3 of the Anti-Money Laundering Regulations (2018 Revision) and legal entities holding shares or interests in legal entities licensed under certain Cayman Islands Laws. Section 52(2) specifies the circumstances in which a legal entity is considered to be operated, managed, arranged, administered or promoted by an approved person and section 52(3) defines that term. Section 53 empowers the competent authority to do all things necessary to perform its functions under Part 8. Section 54 sets out a limited liability partnership’s duty to obtain information about individuals who are beneficial owners of the limited liability partnership and defines who is a beneficial owner. Section 55 sets out a limited liability partnership’s duty to obtain information about relevant legal entities and defines the meaning of that term. Section 56 provides that a limited liability partnership must give notice to beneficial owners, relevant legal entities and any person it knows or has reasonable cause to believe is a registrable person in relation to it. In addition, a limited liability partnership may give notice to a legal entity or a person it knows or has reasonable cause to believe knows the identity of a registrable person. The section also provides for cases where such notice is not required and protects from disclosure information subject to legal professional privilege and information that a person is prohibited by law from disclosing. The notices require the recipient to state whether they are registrable persons or know the identity of registrable persons and if so, to supply the required Section 57 places a proactive disclosure obligation on registrable persons and relevant legal entities in certain circumstances. The obligation to notify the limited liability partnership arises where persons know that they are registrable persons or relevant legal entities and that their particulars are not already registered in the limited liability partnership’s beneficial ownership register and where they have not received a notice from the limited liability partnership and these circumstances have continued for a period of at least one month. They must notify the limited liability partnership, within a specified time period, that they are registrable persons or relevant legal entities, stating the date on which they became such and giving the limited liability partnership their required particulars. Section 58 sets out which individuals or relevant legal entities are registrable Section 59 requires limited liability partnerships to which Part 8 applies to engage a corporate services provider or the Registrar to establish a register of their beneficial owners and relevant legal entities and requires that the register must be kept at their registered office. Section 60 requires a limited liability partnership to which Part 8 applies to give to its corporate services provider or the Registrar the required particulars of registrable persons and entities. The section requires a limited liability partnership that claims an exemption under section 52 to file a declaration with the competent authority, indicating the grounds for the exemption.The section also provides that no particulars need be entered in the limited liability partnership’s register until the information has been confirmed. Section 61 sets out the required particulars in respect of, among other things, an individual and a relevant legal entity. Section 62 provides for the duty of the limited liability partnership to keep the register up to date. The section defines the expression “relevant change” and requires the limited liability partnership to give notice to registrable persons and relevant legal entities as soon as reasonably practicable once the limited liability partnership knows that a relevant change has occurred. The notice must require the addressee to confirm, within the time period provided, whether the change has occurred and, if so, to state the date of the change and to correct, complete, or confirm the particulars included in the Section 63 requires the corporate services provider of a limited liability partnership or the Registrar to notify the limited liability partnership if either is of the opinion that, among other things, the limited liability partnership is not in compliance with its obligations under section 60 or 62 or that the limited liability partnership has provided them with false, deceptive or misleading information. On receipt of the notice the limited liability partnership must bring itself into compliance with Part 8. If the limited liability partnership is not able to provide the missing information for its beneficial ownership register, it must issue a restrictions notice to the registrable persons whose particulars are missing. The section gives a person who receives a restrictions notice the right to apply to the Grand Court to set it aside. Section 64 requires a registrable person to notify the limited liability partnership of relevant changes to information in its beneficial ownership register. The obligation arises where the person is entered in the limited liability partnership’s beneficial ownership register, has not received notice from the limited liability partnership under section 62, but knows that a relevant change has occurred and that the limited liability partnership’s register has not been altered to reflect the change. The notification must state the date on which the change occurred and provide any information needed by the limited liability partnership to update the register. The notification must be given within one month after the person discovered the change. Section 65 provides that an entry in the beneficial ownership register relating to a person who used to be a registrable person or an entity that used to be a registrable relevant legal entity may be removed five years after the date on which the person or entity ceased to be registrable. Section 66 provides that a person aggrieved or a person who is a registrable person in relation to a limited liability partnership may apply to the Grand Court for rectification of the limited liability partnership’s beneficial ownership register. The grounds for the application are that the information is entered in or omitted from the register without sufficient cause; or that there is delay or default in recording that a person is no longer a registrable person or relevant legal entity. The section sets out the action the court may take in response to such an application. The Court must require the limited liability partnership, in rectifying its register, to give notice of the rectification to the competent authority. Section 67 requires the competent authority to establish a search platform that will enable it to search limited liability partnerships’ beneficial ownership registers. The search platform must be secure, prevent disclosure of the search or the fact that a search has been carried out and allow searches by the name of a limited liability partnership, an individual or a legal entity. Section 68 requires corporate services providers and the Registrar to provide the limited liability partnerships that engage them with an information technology solution that maintains their beneficial ownership registers and connects those registers with the search platform. The section also requires corporate services providers to regularly deposit beneficial ownership information received from limited liability partnerships as directed by the competent authority. The provision imposes penalties for default by a corporate services provider or any of its officers in complying with this obligation. Section 69 sets out the bodies that may request searches of beneficial ownership registers. The section requires a senior official from the relevant body to certify that the search request meets the requirements of section 262 of the Companies Law (2018 Revision) and precludes any person from searching the registers other than the competent authority. Section 70 provides that the Cayman Islands Monetary Authority may, on request by the competent authority, disclose any information in its possession respecting a limited liability partnership or its subsidiary that is registered or holds a licence under a regulatory law that the limited liability partnership is required to provide under Part 8 as required particulars. Section 71 provides that information respecting searches of the Registry shall be kept confidential except for information that is permitted to be disclosed under the Confidential Information Disclosure Law, 2016. Section 72 provides that if a limited liability partnership serves notice on a person with a relevant interest under section 56 or 62 and that person fails to comply with the notice within the specified time frame, the limited liability partnership may issue the person with a restrictions notice. A restrictions notice may be served one month after the date of non-compliance with the section 56 or 62 notice if no valid reason has been provided for the noncompliance. The limited liability partnership must have regard to the rights of third parties in respect of the relevant interest in deciding whether to issue a restrictions notice. Section 73 sets out the effect of a restrictions notice and circumstances in which the restrictions do not apply. Interests subject to restrictions may not be transferred and no rights may be exercised or shares issued in respect of that interest. The limited liability partnership may not pay any sums due in respect of the interest other than in a liquidation. Section 74 provides that, following application by any person aggrieved that a restrictions notice issued by the limited liability partnership unfairly affects the rights of third parties in respect of the interest subject to restrictions, the Grand Court may give a direction that certain acts do not constitute a breach of the restrictions. The direction is given by the Court for the purpose of protecting the third party rights in question and is subject to such terms as the Court thinks fit. Section 75 specifies the actions that constitute offences in relation to an interest subject to restrictions. It is an offence for a person who knows their interest to be subject to restrictions to fail to tell any person with the right to vote in respect of that interest of that fact (unless they know the person to be aware of that fact). It is also an offence for a person to enter into an agreement in respect of an interest that is void, knowing that to be the case. Section 76 provides that, subject to direction given under sections 74 or 75, it is an offence for a limited liability partnership to issue a partnership interest in contravention of a restrictions notice. A limited liability partnership that commits an offence under this section is liable on summary conviction to a fine of five thousand dollars. Section 77 provides that a person aggrieved may apply to the Grand Court for the restrictions to be lifted. The Court may only do so if the relevant facts about the interest have been disclosed without any person having gained an unfair advantage or if the interest is to be sold. Section 78 sets out the procedure by which a relevant interest subject to restrictions may be sold. An application to the Grand Court to sell the interests may only be made by the limited liability partnership in question. Section 79 provides that, where a relevant interest is sold, the proceeds of the sale (less costs) must be paid into the Court for the benefit of persons beneficially interested in the relevant interest, who may apply to the Court to have the proceeds paid to them. Section 80 provides that a limited liability partnership must itself withdraw the restrictions imposed if it is satisfied that there is a valid reason to justify the person’s failure to comply with a restrictions notice. The limited liability partnership must also withdraw the restrictions if the relevant information in respect of the notice is provided or if it discovers that there is an unfair impact on third parties in respect of the interest subject to Section 81 provides that it is an offence for a limited liability partnership to contravene sections 54(1), 55(1), 59, 60(1) or (2) or 62(2) or to fail to issue a notice as required by section 56, 62 or 63(3). The section also provides for a continuing offence where the contravention or failure continues. Section 82 provides that it is an offence for a person to whom a notice is addressed under section 56 or 62 to fail to comply with the notice or to knowingly or recklessly make a false statement. However, the offence does not apply if the person can prove that the requirement was frivolous or vexatious. The offence is triable by summary conviction or indictment. Section 83 makes it an offence for a person to fail to comply with a duty under section 57 or 64 or to knowingly or recklessly make a false statement in respect of that duty. The offence is triable by summary conviction or Section 84 provides that it is an offence to contravene section 69(1) or (2) or to disclose confidential beneficial ownership information contrary to section Section 85 provides that it is an offence for directors or officers of a limited liability partnership or legal entity to connive in, consent to or wilfully neglect their duties in relation to an offence committed by the limited liability partnership under Part 8 and makes them liable to the same punishment as the limited liability partnership. Section 86 empowers the competent authority to exempt an individual or legal entity from various requirements of Part 8 in accordance with criteria prescribed by the Regulations, where there are special reasons to do so. Section 87 provides enabling powers for Cabinet to make regulations required to implement Part 8, including prescribing anything required to be prescribed under it. It enables Cabinet to make regulations for the interpretation of certain expressions that are utilized in the Part and to adjust the percentages set out in the specified conditions. The section also empowers Cabinet to exempt any limited liability partnership from the application of Part 8 by enacting Regulations subject to the affirmative resolution procedure. Clause 3 contains a transitional provision that delays prosecutions of limited liability partnerships for offences under section 80, as enacted by clause 2 of the amending Law, until one year has elapsed from the coming into force of that A BILL FOR A LAW TO AMEND THE LIMITED LIABILITY PARTNERSHIP LAW, 2017 TO REQUIRE LIMITED LIABILITY PARTNERSHIPS REGISTERED IN THE ISLANDS TO ESTABLISH, MAINTAIN AND REGULARLY UPDATE BENEFICIAL OWNERSHIP REGISTERS; TO IDENTIFY LIMITED LIABILITY PARTNERSHIPS THAT ARE EXEMPT FROM THESE REQUIREMENTS AND REQUIRE THEM TO FILE WRITTEN CONFIRMATIONS OF EXEMPTION; TO ENABLE THE REGISTERS TO BE SEARCHED BY THE COMPETENT AUTHORITY DESIGNATED UNDER THE COMPANIES LAW (2018 REVISION); AND FOR INCIDENTAL AND CONNECTED MATTERS ENACTED by the Legislature of the Cayman Islands. (1) This Law may be cited as the Limited Liability Partnership (Amendment) Law, 2018. (2) This Law shall come into force on such date as may be appointed by the Cabinet and different dates may be appointed for different provisions. The Limited Liability Partnership Law, 2017, in this Law referred to as “the principal Law”, is amended by inserting after Part 7 the following Part - “PART 8 - BENEFICIAL OWNERSHIP REGISTERS Interpretation

(1) In this Part - “beneficial owner”, in relation to a limited liability Short title and commencement Insertion of new Part 8 partnership, has the meaning assigned by sections 54(3), (4) and (5); “beneficial ownership register” means a register of adequate, accurate and current beneficial ownership information maintained by a limited liability partnership pursuant to section 59, containing the required particulars of registrable persons in relation to the limited liability partnership; “competent authority” means the Minister referred to in section 246(1) of the Companies Law (2018 Revision) or the person designated by the Minister under that section; “corporate services provider” means an individual or legal entity that provides corporate services under the Companies Management Law (2018 Revision), the Banks and Trust Companies Law (2018 Revision), the Insurance Law, 2010 or any other regulatory law pursuant to which the individual or legal entity is licensed or permitted to provide registered office services; “individual” means a natural person; “legal entity” means a company, limited liability company, limited liability partnership or other body that is a legal person under the law by which it is governed; “prescribed” means prescribed by regulations made under section 87; “registrable person” means an individual or relevant legal entity that is a registrable person under section 58; “regulatory law” means a law defined as such in section 2 of the Monetary Authority Law (2018 Revision), other than the Directors Registration and Licensing Law, 2014; “relevant interest” means an interest that a person holds in a limited liability partnership consisting of - (a) a limited liability partnership interest; or (b) the right to appoint or remove a majority of the managing partners of the limited liability “relevant legal entity”, in relation to a limited liability partnership, has the meaning assigned by section 55(3); “required particulars” means particulars in respect of a registrable person required to be kept in a limited liability partnership’s beneficial ownership register pursuant to sections 60 and 61; “restrictions notice” means a notice issued under section 72; and “specified conditions” means the conditions specified in sections 54(3), (4) and (5). (2) This Part is to be read and have effect as if each of the following were an individual, even if they are legal persons under the laws by which they are governed - (a) a corporation sole; (b) a government or government department of a country or territory or a part of a country or territory; (c) an international organization whose members include two or more countries or territories (or their governments); and (d) a local authority or local government body. Application Schedule 4

(1) This Part applies in respect of limited liability partnerships formed and registered, except a legal entity or subsidiary of one or more legal entities, each of which is - (a) listed on the Cayman Islands Stock Exchange or an approved stock exchange in Schedule 4 of the Companies Law (2018 Revision); (b) registered or holding a licence under a regulatory law (other than a limited liability partnership registered as an excluded person under 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 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 (ii) 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 the Companies Management Law Revision), the Insurance Law, 2010, Part III of the Mutual Funds Law (2015 Revision) or the Securities Investment Business Law (2015 Revision); or (g) exempted by the Regulations. (2) For the avoidance of doubt, a legal entity shall not be considered - (a) to be operated or managed by an approved person solely as a consequence of the entity having appointed an individual who is an employee of a legal entity which holds a licence under a regulatory law as a director or managing partner; or (b) to be managed, arranged, administered, operated or promoted by an approved person solely as a consequence of the entity having appointed an approved person to provide its registered office in the Cayman Islands. Schedule 4 (3) In this section, “approved person” means a person or a subsidiary of a person that is - (a) regulated, registered or holding a licence in the Islands under a regulatory law (other than a person registered as an excluded person under 5(4) of the Securities Investment Business Law (2015 Revision)); (b) regulated in an equivalent legislation jurisdiction that is included in the list published in the Gazette and referred to in regulations 22(d) and 23(1) of the AntiMoney Laundering Revision); or (c) listed on the Cayman Islands Stock Exchange or an approved stock exchange in Schedule 4 of the Companies Law (2018 Revision). (4) For the purposes of this section, a limited liability partnership (“S”) is a subsidiary of one or more legal entities described in subsection (1) if - (a) such legal entities, separately or collectively, hold in excess of seventy-five percent of the partnership interests with respect to profit sharing or voting rights in S or distributions of capital from S; (b) each such legal entity is a partner of S and, separately or collectively, such legal entities have the right to appoint or remove a majority of its managing partners; or (c) it is a subsidiary of one or more legal entities each of which is itself a subsidiary of one or more legal entities described in subsection

The competent authority may do all things necessary or convenient to be done in the performance of the competent authority’s functions under this Part, including executing requests by senior officials referred to in section 69(1) to search for information concerning the beneficial ownership of limited liability partnerships registered in the Islands. Identifying Beneficial Owners, Relevant Legal Entities and Registrable Persons identify owners

(1) Limited liability partnerships to which this Part applies shall take reasonable steps to identify any individual who is a beneficial owner of the limited liability partnership. (2) For the purpose of identifying individuals who are beneficial owners under subsection (1), a limited liability partnership is entitled to rely, without further enquiry, on the response of a person to a notice in writing sent in good faith by the limited liability partnership, unless it has reason to believe that the response is misleading or false. (3) An individual (“X”) is a beneficial owner of a limited liability partnership (“Y”) if the individual meets one or more of the following conditions in relation to the limited liability partnership - (a) X must hold, directly or indirectly, a partnership interest in Y representing a right to share in more than 25 percent of any surplus limited liability partnership property of Y on a winding up of Y; (b) X must hold, directly or indirectly, a partnership interest in Y representing more than 25 percent of the rights to vote on those matters that are to be decided by a vote at meetings of the partners of Y; or (c) X must hold the right, directly or indirectly, to appoint or remove a majority of the managing partners of Y or those persons who hold a majority of the voting rights at meetings of the partners. (4) If no individual meets the conditions in subsection (3), X is a beneficial owner of limited liability partnership Y if X has the absolute and unconditional legal right to exercise, or actually exercises, significant influence or control over Y through the interests described in subsection (3) other than where that influence or control is soley in the capacity of a professional advisor or professional manager. (5) If no individual meets the conditions in subsections (3) and (4) but the trustees of a trust (or the members of a partnership or other entity that under the law by which it is governed is not a legal person) meet one of those conditions in relation to limited liability partnership Y in their capacity as such, X is a beneficial owner of Y if X has the absolute and unconditional legal right to exercise, or actually exercises, significant influence or control over the activities of that trust (or partnership or other entity) other than where that influence or control is soley in the capacity of a professional advisor or professional manager. identify relevant legal entities

(1) A limited liability partnership to which this Part applies shall take reasonable steps to identify all relevant legal entities that exist in relation to the limited liability (2) For the purpose of identifying relevant legal entities under subsection (1), a limited liability partnership is entitled to rely, without further enquiry, on the response of a legal entity to a notice in writing sent in good faith by the limited liability partnership, unless it has reason to believe that the response is misleading or false. (3) A “relevant legal entity”, in relation to a limited liability partnership, is a legal entity that - (a) is incorporated, formed or registered (including by way of continuation or as a foreign company) in the Islands under the laws of the Islands; and (b) would be a beneficial owner of the limited liability partnership if it were an individual. give notice to registrable

(1) Subject to subsection (5), a limited liability partnership to which this Part applies shall give notice in writing to beneficial owners and relevant legal entities identified by the limited liability partnership under sections 54 and 55 and to any person that it knows or has reasonable cause to believe is a registrable person in relation to it. (2) The notice shall require the persons to whom it is addressed, within one month of the date of receipt of the (a) to state whether or not they are registrable persons, within the meaning of this Part; and (b) if they are registrable persons, to confirm or correct any required particulars that are included in the notice and supply any required particulars that are missing from the (3) A limited liability partnership may also give notice in writing to a partner or a legal entity that it knows or has reasonable cause to believe is a relevant legal entity in relation to that limited liability partnership (or would be a relevant legal entity if it were registered under this Law), if the limited liability partnership knows or has reasonable cause to believe that such partner or legal entity knows the identity of a registrable person. (4) A notice under subsection (3) may require the persons to whom it is addressed - (a) to state whether or not they know the identity of a registrable person or any person likely to have that knowledge; and (b) to supply, within one month of receipt of the notice and at the expense of the limited liability partnership, any required particulars respecting such registrable persons that are within the addressee’s knowledge and to state whether the particulars are being supplied with or without the knowledge of the person concerned. (5) A limited liability partnership is not required to give a notice to an individual or a relevant legal entity if - (a) the limited liability partnership knows that the individual or entity is not a registrable person; or (b) the limited liability partnership has already been informed of the person’s status as a registrable person in relation to it, and has received all the required particulars. (6) A person to whom a notice under this section is given is not required by that notice to disclose any (a) in respect of which a claim to legal professional privilege could be maintained in legal proceedings; or (b) that the person is prohibited by any law applicable in the Islands from disclosing. Duty of owners and relevant legal entities to supply

(1) This section applies to a person if - (a) the person is a registrable person in respect of a limited liability partnership to which this Part applies; (b) the person knows the facts referred to in paragraph (a); (c) the person has no reason to believe that the person’s required particulars are stated in the liability partnership’s beneficial ownership register; (d) the person has not received a notice from the limited liability partnership under section 56; and (e) the circumstances described in paragraphs (a), (b), (c) and (d) have continued for a period of at least one month. (2) The person shall - (a) notify the limited liability partnership of the person’s status as a registrable person in relation to the limited liability partnership; (b) state the date, to the best of the person’s knowledge, on which the person acquired that status; and (c) give the limited liability partnership the required particulars. (3) The duty under subsection (2) must be complied with by the end of the period of one month beginning with the day on which the conditions in subsections (1)(a), (b) and (c) were first met with respect to the person. Individuals and relevant legal entities that are registrable

(1) The following are registrable persons in relation to a limited liability partnership - (a) an individual whom the limited liability partnership identifies pursuant to section 54 as a beneficial owner; and (b) a relevant legal entity identified by the limited liability partnership pursuant to section 55 - (i) that directly holds a partnership interest or meets one or more of the specified conditions directly in respect of the limited liability partnership; and (ii) through which any beneficial owner or relevant legal entity indirectly owns a partnership interest. (2) Whether a person holds a partnership interest in a limited liability partnership or meets a specified condition in relation to it directly or indirectly shall be determined in the manner prescribed. Establishing Beneficial Ownership Registers Duty to establish and maintain

A limited liability partnership to which this Part applies by virtue of section 52(1) shall - (a) keep its beneficial ownership register at the limited liability partnership’s registered office; and (b) engage a corporate services provider or the Registrar to establish and maintain its beneficial ownership register. Role of corporate services provider and Registrar

(1) A limited liability partnership to which this Part applies shall provide in writing to the corporate services provider or the Registrar, as the case may be, the required particulars of registrable persons in respect of that limited liability partnership, once those particulars have been confirmed. (2) A limited liability partnership that is exempt from the application of this Part shall, in the prescribed manner, provide to the corporate services provider or the Registrar, as the case may be - (a) written confirmation of the exemption - (i) identifying the paragraph under section 52(1) that provides for the exemption; and (ii) including the prescribed information about the regulated legal entity, regulated parent entity or approved person referred to in that paragraph; and (b) instructions to file the written confirmation with the competent authority. (3) The limited liability partnership referred to in subsection (1) shall instruct the corporate services provider or the Registrar, as the case may be, to enter the required particulars of registrable persons in the limited liability partnership’s beneficial ownership register in the prescribed form and manner, or if no registrable persons are identified, to enter a nil return. (4) It is not required for particulars to be entered in the register concerning an individual or relevant legal entity that is not a registrable person. (5) For the purposes of this section, particulars are considered to have been confirmed if - (a) the has reasonable grounds to believe that they were supplied or confirmed by the individual or entity to whom the particulars relate; (b) another person supplied or confirmed them to the limited liability partnership, and the limited liability partnership has reasonable grounds to believe that this was done with the knowledge of the individual or entity to whom the particulars relate; or (c) the particulars were included in a statement referred to in section 18 and delivered to the Registrar by persons wishing to form the limited liability partnership. Required

(1) The required particulars of an individual are - (a) full legal name; (b) residential address and, if different, an address for service of notices under this Law; (c) date of birth; (d) information identifying the individual from the individual’s passport, driver’s licence or other government-issued document, including - (i) identifying number; (ii) country of issue; and (iii) date of issue and of expiry; and (e) the date on which the individual became or ceased to be a registrable person in relation to the limited liability partnership in question. (2) In the case of a person in relation to whom this Part has effect by virtue of section 51(2), the required particulars are - (a) name; (b) principal office; (c) the legal form of the person and the law by which the person is governed; and (d) the date on which the person became or ceased to be a registrable person in relation to the legal entity in question. (3) The required particulars of a relevant legal entity are - (a) corporate or firm name; (b) registered or principal office; (c) the legal form of the entity and the law by which it is governed; (d) if applicable, the register of companies or limited liability companies in which it is entered and its registration number in that register; and (e) the date on which it became or ceased to be a registrable person in relation to the limited liability partnership in question. partnership to keep register up to date

(1) If a limited liability partnership to which this Part applies becomes aware of a relevant change with respect to a registrable person whose required particulars are stated in its beneficial ownership register, the limited liability partnership shall give notice to the registrable person, as soon as reasonably practicable after it learns of the change or first has reasonable cause to believe that the change has occurred, requesting confirmation of the change. (2) If the person to which a notice is sent under subsection (1) confirms the relevant change, the limited liability partnership shall record the details of the change and instruct the corporate services provider or the Registrar, as the case may be, to enter in the limited liability partnership’s beneficial ownership register in the prescribed form and manner - (a) the details of the relevant change confirmed by the limited liability partnership; (b) the date on which the change was made; and (c) whether there are further alterations to be made. (3) For the purposes of this section, a relevant change occurs if - (a) the registrable person ceases to be a registrable person in relation to the limited liability partnership; or (b) any other change occurs as a result of which the required particulars stated respecting the registrable person in the limited liability are materially incorrect or incomplete. (4) A relevant change with respect to a registrable person is considered to have been confirmed if - (a) the limited liability partnership has given notice to the registrable person requesting confirmation, within the period of one month from the date of the notice, of the relevant change, the date of the change and the required particulars included in the notice; and (b) the details, date and required particulars of the change have been supplied or confirmed to the limited liability partnership by the registrable person or by another person with the knowledge of the registrable person. Consequences of disclose

(1) If a limited liability partnership’s corporate services provider or the Registrar, as the case may be, is of the opinion that a limited liability partnership has failed to comply with section 60 or 62 without reasonable excuse or has made a statement to either of them that is false, deceptive or misleading in respect of a material particular, the limited liability partnership’s corporate services provider or the Registrar, as the case may be, shall give notice of the opinion to the limited liability partnership and send a copy of the notice to the competent authority. (2) On receipt of a notice under subsection (1), the limited liability partnership shall provide its corporate services provider or the Registrar, as the case may be, with - (a) the missing particulars required under section 60 or 62 pertaining to registrable persons; and (b) a justification or correction respecting any statement identified in the notice. (3) If the notified limited liability partnership fails, due to the failure of a registrable person to comply with the obligations under this Law, to provide the missing particulars referred to in subsection (2)(a) within one month of receipt of the notice, the limited liability partnership shall - (a) subject to section 72, issue a restrictions notice to the registrable persons whose particulars are missing with regard to the partnership interest or other relevant interest of such registrable persons in the limited liability partnership; and (b) send a copy of the notice to the competent authority within two weeks of issuing it. (4) A person to whom a restrictions notice is issued under this section may apply to the Court to set aside any restriction or cancellation imposed by the notice. Duty of other persons to update register

(1) This section applies to persons if - (a) they have stated that they are registrable persons, within the meaning of this Part, in response to a notice received under section 56 or they have reason to believe that their required particulars are stated in a limited (b) a relevant change, within the meaning of section 62(3), occurs with respect to the person; (c) they know of the change; (d) they have no knowledge that the beneficial ownership register has been altered to reflect the change; and (e) they have not received a notice from the limited liability partnership under section 62 by the end of the period of one month beginning with the day on which the change occurred. (2) A person to which this section applies shall - (a) notify the limited liability partnership of the relevant change; (b) state the date on which the relevant change occurred; and (c) give the limited liability partnership any information needed to update the limited (3) The duty under subsection (2) shall be complied with by the end of the period of one month beginning with the day on which the person discovered the relevant change. Removal of entries from partnership’s

A limited liability partnership may cause an entry relating to a person that is no longer a registrable person to be removed from its beneficial ownership register on the expiration of five years from the date on which the person ceased to be a registrable person in relation to the limited liability partnership. Power of Court to rectify

(1) If - (a) the name of any individual or relevant legal entity is, without sufficient cause, entered in or omitted from a partnership’s beneficial ownership register as a registrable person; or (b) default is made or unnecessary delay takes place in entering on a limited liability the fact that the individual or relevant legal entity has ceased to be a registrable person, the person aggrieved, or any individual or relevant legal entity that is a registrable person in relation to the limited liability partnership, may apply to the Court for rectification of the limited liability partnership’s beneficial ownership (2) The Court may - (a) refuse the application; or (b) order rectification of the ownership register and payment by the limited liability partnership of any damages sustained by any person aggrieved. (3) On an application under this section, the Grand Court may decide any question - (a) as to whether the name of any person who is a party to the application should or should not be entered in or omitted from the limited register; and (b) that is necessary or expedient to be decided for rectification of the limited liability (4) If the Court makes an order for rectification of a limited liability partnership’s beneficial ownership register against the limited liability partnership, it shall direct notice of the rectification to be given to the competent authority. Access to Beneficial Ownership Information Duty of authority to establish search platform

(1) The competent authority shall establish a search platform by means of which access may be provided to information on all beneficial ownership registers maintained by corporate services providers or the Registrar on behalf of limited liability partnerships subject to this Part. (2) The search platform must - (a) be secure and accessible only by the competent authority; (b) be able to search all limited liability partnership beneficial ownership information provided to the competent authority by corporate services providers or the Registrar by the name of an individual, legal entity or limited liability partnership; and (c) prevent communication to any person of the fact that a search is being made or has taken place, except where the competent authority expressly discloses such communication. Duties of the Registrar and corporate services providers

(1) A corporate services provider engaged by a limited liability partnership pursuant to section 59, or the Registrar if so engaged, shall offer the limited liability partnership an information technology solution, either directly or through another corporate services provider, that enables the corporate services provider or the Registrar, as the case may be - (a) to establish and maintain the limited liability on behalf of the limited liability partnership; and (b) to provide information on the beneficial ownership register to the competent authority by means of the search platform established by the competent authority pursuant to section 67. (2) The corporate services provider shall regularly deposit beneficial ownership information received from limited liability partnerships that have engaged the corporate services provider in such place, in such manner and at such intervals as may be prescribed. (3) If there is default in complying with subsection (2), the corporate services provider and any officer of the corporate services provider who is in default - (a) shall incur a penalty of five hundred dollars; and (b) shall incur an additional penalty of one thousand dollars and a further penalty of one hundred dollars for every day during which the default continues if the competent authority is satisfied that the default was knowingly or wilfully authorized or permitted. Limits on searches that may be executed

(1) The competent authority shall execute a search of a limited liability partnership’s beneficial ownership register by means of the search platform if formally requested to do so - (a) by a senior official referred to in section 262(1) of the Companies Law (2018 Revision), provided that the senior official certifies that the request meets the conditions referred to in section 262(2) of that Law; or (b) by the Financial Crime Unit of the Royal Cayman Islands Police Service, provided that a senior official of the Unit certifies that the request meets the conditions referred to in section 262(3) of the Companies Law (2018 (2) No person shall use the search platform to search a limited liability partnership’s beneficial ownership register except the competent authority. Disclosure of information by the Cayman Islands Monetary

(1) The Cayman Islands Monetary Authority may, on request by the competent authority, disclose any information in its possession respecting - (a) a limited liability partnership; or (b) a subsidiary of such a limited liability partnership registered or holding a licence under a regulatory law, that the limited liability partnership would be required to provide under this Part as required particulars if this Part applied to it. (2) For greater certainty, section 50(1) of the Monetary Authority Law (2018 Revision) does not apply to a disclosure made under this section. Non-disclosure of information concerning requests for (Law 23 of (2017 Revision)

(1) Neither the competent authority nor any employee, servant or agent of the competent authority shall disclose any information relating to a request for beneficial ownership information referred to in section 69, including the fact that such a request was made or that a search was carried out, to any person other than the authorized personnel of the competent authority or the law enforcement agency that requested the search. (2) Information maintained by corporate services providers and the Registrar in respect of beneficial ownership of a limited liability partnership is deemed to be confidential information under the Confidential Information Disclosure Law, 2016. (3) Subject to sections 18 and 19 of the Tax Information Law (2017 Revision), information deemed to be confidential under subsection (2) shall only be disclosed in accordance with the Confidential Information Disclosure Law, 2016. Enforcement Right to issue

(1) A limited liability partnership to which this Part applies may send a restrictions notice to a person who has a relevant interest in that limited liability partnership if - (a) a notice under section 56 or 62 was served on the person; (b) the person has not, by the end of the period of one month beginning with the date of receipt of the notice - (i) complied with the notice; or (ii) provided the with a valid reason sufficient to justify the person's failure to comply with the notice; and (c) the relevant interest is not subject to a security interest granted to a third party who is not affiliated with the person. (2) In deciding whether to send a restrictions notice, the limited liability partnership shall have regard to the effect of the notice on the rights of persons in respect of the relevant interest, including third parties, persons with a security interest over the relevant interest, other holders of a partnership interest and other beneficial owners. Effect of

(1) The effect of a restrictions notice with respect to a relevant interest is as follows - (a) any transfer or agreement to transfer the interest is void; (b) no rights are exercisable in respect of the (c) no additional rights may be granted in respect of the interest or in pursuance of an offer made to the interest-holder; (d) except in a liquidation, no payment may be made of sums due from the limited liability partnership in respect of the interest, whether in respect of capital or otherwise; and (e) other than in a liquidation, an agreement to transfer any of the following associated rights in relation to the relevant interest is void - (i) a right to be granted additional rights in respect of the relevant interest; or (ii) a right to receive payment of any sums due from the partnership in respect of the relevant (2) This section does not apply to an agreement to transfer a relevant interest referred to in subsection (1)(a) or to an associated right referred to in subsection (1)(e), if the agreement results from the making of an order referred to in section 76(2)(b). Protection of third party rights

(1) The Court may, on application by any person aggrieved, give a direction for the purpose of protecting the rights of third parties, persons with a security interest over the relevant interest, holders of a partnership interest or other beneficial owners in respect of a relevant interest, if the Court is satisfied that a restrictions notice unfairly affects those rights. (2) An order under this section - (a) shall direct, subject to such terms as the Court thinks fit, that certain acts will not constitute a breach of the restrictions placed on the relevant interest by the restrictions (b) shall specify the acts that will not constitute a breach of the restrictions; and (c) may confine the direction to cases where those acts are done by persons, or for purposes, described in the order. Breach of restrictions an offence

(1) A person commits an offence who, knowing that a relevant interest is subject to restrictions - (a) exercises or purports to exercise any right to dispose of the relevant interest; (b) exercises or purports to exercise any right to dispose of any right to be issued with the relevant interest; or (c) votes in respect of the relevant interest (whether as holder of the interest or as proxy) or appoints a proxy to vote in respect of the relevant interest. (2) A person who has a relevant interest that the person knows to be subject to restrictions commits an offence if the person - (a) knows a person to be entitled (apart from the restrictions) to vote in respect of the interest, whether as holder or as proxy; (b) does not know the person to be aware of the fact that the interest is subject to restrictions; and (c) fails to notify the person of the fact referred to in paragraph (b). (3) A person commits an offence if the person - (a) has a relevant interest that the person knows to be subject to restrictions or is entitled to an associated right; and (b) enters into an agreement that is void by virtue of section 73(1)(a) or (e). (4) A person who commits an offence under this section is liable on summary conviction to a fine of five thousand dollars. (5) No person commits an offence who contravenes subsections (1) to (3) in furtherance of compliance with a direction of the Court given under section 74 or 76. Offence: issuing interests contrary to restriction

Subject to a direction given under section 74 or 75, a limited liability partnership that issues partnership interests in contravention of a restriction imposed by virtue of a restrictions notice commits an offence and is liable on summary conviction to a fine of five thousand dollars. Relaxation of

(1) A limited liability partnership that issues a restrictions notice, or any person aggrieved by such notice, may apply to the Court for an order directing that the relevant interest cease to be subject to restrictions. (2) The Court may only make an order under this section if - (a) the Court is satisfied that the information required by the notice served under section 56 or 64 has been disclosed to the limited liability partnership and no unfair advantage has accrued to any person as a result of the earlier failure to make that disclosure; or (b) the relevant interest is to be transferred for valuable consideration and the Court approves the transfer. (3) An order made by virtue of subsection (2)(b) may continue, in whole or in part, the restrictions mentioned in section 73(1)(c) and (d) so far as they relate to a right acquired or offer made before the transfer. (4) Where any restrictions continue in force by virtue of subsection (3) - (a) an application may be made under this section for an order directing that the relevant interest cease to be subject to those restrictions; and (b) subsection (2) does not apply in relation to the making of such an order. Orders for sale

(1) On application by a limited liability partnership that issues a restrictions notice, the Court may order that the relevant interest subject to restrictions be sold, provided that the Court approves the sale. (2) A Court that makes an order under subsection (1) may make such further order relating to the sale or transfer of the interest as it thinks fit on application by - (a) the limited liability partnership that issued the restrictions notice; (b) the person appointed in pursuance of the order to effect the sale; or (c) any person with an interest in the relevant (3) On making an order under subsection (1) or (2), the Court may order that the applicant's costs be paid from the proceeds of sale. Proceeds of sale of relevant

(1) If a relevant interest is sold pursuant to an order under section 77, the proceeds of the sale, less the costs of the sale, must be paid into the Court for the benefit of persons who are beneficially interested in the relevant (2) A person who is beneficially interested in the relevant interest may apply to the Court for the whole or part of those proceeds to be paid to that person. (3) On an application under subsection (2), the Court shall order the payment to the applicant of - (a) the whole of the proceeds of sale together with any interest on the proceeds; or (b) if another person was also beneficially interested in the relevant interest at the time of the sale, such proportion of the proceeds (and any interest) as the value of the applicant's interest bears to the total value of the relevant interest. (4) Where the Court has ordered under section 77(3) that the costs of an applicant be paid from the proceeds of sale, the applicant is entitled to payment of those costs before any person receives any part of the proceeds under this partnership may withdraw

A limited liability partnership that issues a restrictions notice to a person shall by notice withdraw the restrictions notice if - (a) it is satisfied that there is a valid reason sufficient to justify the person's failure to comply with the notice served under section 56 or 62; (b) the notice served under section 56 or 62 is complied with; or (c) the limited liability partnership discovers that the rights of a third party in respect of the relevant interest are being unfairly affected by the restrictions notice. Offences Failure of a partnership to establish or maintain

A limited liability partnership that knowingly and wilfully contravenes section 54(1), 55(1), 59, 60(1) or (2) or 62(2) or knowingly and wilfully fails to issue a notice as required by section 56, 62 or 63(3) commits an offence and is liable on summary conviction for each such contravention - (a) to a fine of twenty-five thousand dollars; and (b) if the offence is a continuing one, to a fine of five hundred dollars for each day or part of a day during which the offence continues, up to a maximum of twenty-five thousand dollars. comply with notices

(1) A person to whom a notice under section 56 or 62 is addressed commits an offence if the person - (a) knowingly and wilfully fails to comply with the notice; or (b) in purported compliance with the notice - (i) makes a statement that the person knows to be false in a material particular; or (ii) recklessly makes a statement that is false in a material particular. (2) A person does not commit an offence under subsection (1)(a) if the person proves that the requirement to give information was frivolous or vexatious. (3) A person who is guilty of an offence under this section is liable - (a) on conviction on to imprisonment for a term of two years or a fine of ten thousand dollars, or to both; (b) on summary conviction to imprisonment for a term of twelve months or a fine of five thousand dollars, or to both. provide

(1) A person commits an offence if the person - (a) knowingly and wilfully fails to comply with a duty under section 57 or 64 within the time required by that section; or (b) in purported compliance with such a duty - (i) makes a statement that the person knows to be false in a material particular; or (ii) recklessly makes a statement that is false in a material particular. (2) A person who is guilty of an offence under this section is liable - (a) on conviction on to imprisonment for a term not exceeding two years or a fine of ten thousand dollars, or to both; (b) on summary conviction to imprisonment for a term of twelve months or to a fine of five thousand dollars, or to both. Unlawful search or disclosure of

A person who conducts a search of a limited liability partnership’s beneficial ownership register contrary to section 69(1) or (2) or who discloses beneficial ownership information contrary to section 71 commits an offence and is liable on summary conviction to a fine of ten thousand dollars or imprisonment for twelve months, or to both. Offences by partners and managers

Where a limited liability partnership or a legal entity is guilty of an offence under this Part and it is proved that the offence was committed with the consent or connivance of, or was attributable to, wilful default on the part of a partner or person concerned in the management of the limited liability partnership or legal entity, the partner or person is guilty of the same offence and liable to the same penalty as the limited liability partnership or legal entity. Supplementary Provisions Exemptions

(1) The competent authority, if satisfied, having regard to any undertaking given by an individual or a legal entity, that there are special reasons for an exemption from compliance with a notice or duty under this Part, may exempt - (a) the individual or legal entity from complying with a notice issued under section 56 or 62; (b) a limited liability partnership from taking steps to identify that individual or legal entity or give notice under sections 56 or 62 to or with respect to them; (c) anyone from sending a notice or giving information pursuant to a notice under section 56(3); (d) the individual or legal entity from the duties imposed by sections 57 and 62; or (e) the individual or legal entity from being entered on a limited liability partnership’s beneficial ownership register as a registrable person in relation to any limited liability (2) The competent authority shall exercise the exemption powers in subsection (1) in accordance with the prescribed criteria. under this Part

(1) The Cabinet may make regulations respecting anything required to carry out this Part or prescribing anything required to be prescribed under this Part, including (a) specifying criteria for the exercise of the competent authority’s exemption powers under section 86; (b) respecting the giving of notices under section 56 or 62, including the form, content and manner of giving such notices; (c) to add to or remove from any of the lists of required particulars, including specifying the particulars required respecting the nature of control of an individual over the limited liability partnership referred to in the (d) requiring additional matters to be noted in a partnership's ownership register; (e) requiring the a corporate services provider, the Registrar or a limited liability partnership to refrain from using or disclosing of a prescribed kind from a limited liability (or to refrain from doing so except in prescribed circumstances) where an application is made to the competent authority requesting the respective entity to refrain from so doing; (f) specifying the manner and form in which a limited liability partnership shall keep its beneficial ownership register; (g) setting the fees that the Registrar may charge for services pursuant to an engagement by a limited liability partnership pursuant to section 59 to establish and maintain the company’s beneficial ownership register; (h) respecting the procedure to be followed by limited liability partnerships issuing and withdrawing restrictions notices, including regulations providing for - (i) the form and content of restrictions notices, and the manner in which they must be given; (ii) the factors to be taken into account in deciding what counts as a reason sufficient to justify a person's failure to comply with a notice issued under section 56 or 62; and (iii) the effect of withdrawing a restrictions notice on matters that are pending with respect to the relevant interest when the notice is withdrawn. (2) The Cabinet may make regulations respecting the interpretation of the terms “beneficial owner”, “significant influence or control”, “specified conditions”, “registrable person” and “relevant interest”, including regulations - (a) to replace any or all references in section 54(3) to a percentage figure with references to some other (larger or smaller) percentage figure; (b) to change or supplement the specified conditions in section 54(3) so as to include circumstances (for example, circumstances involving more complex structures) that give individuals a level of control over limited liability partnership Y broadly similar to the level of control given by the other specified conditions; and (c) specifying the circumstances in which a person holds a right in a limited liability partnership or meets a specified condition in relation to it directly or indirectly through any number of persons or arrangements of any description. (3) The Cabinet may, by affirmative resolution, make regulations to add to, remove from or otherwise revise the list of limited liability partnerships to which this Part applies or does not apply under section 52(1)(g).”. No prosecution may be commenced against a limited liability partnership for an offence under section 81, as enacted by clause 2 of this Law, unless the act or omission that constituted the offence took place at least three months after the coming into force of that section. Transitional provision Passed by the Legislative Assembly the day of Speaker. Clerk of the Legislative Assembly.