Beneficial Ownership title

The Land Registry privatisation public consultation notes that 13% of land and property title is not registered and that could undermine lowest cost identity verification due diligence, credit scores and increase non-compliance rates to maintain the People with Significant Control register.

The Land Registry privatisation debate could progress open data and risk management with total registration and purchase options and — I am not familiar with the dataset — perhaps price first advertised by each agent, unique landlord reference and compulsory purchase reference.

Anyway, one response to the public consultation, prompted by the Open Data Camp in Bristol:

openmindedly-response

 

 

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Interim Unilateral Beneficial Ownership Option

Could an interim unilateral beneficial ownership option accelerate #anticorruption summit aspirations?

The beneficial ownership debate is about lobbying and policy statements and legislation and registers and incorporation systems.  By the end of the year, jurisdictions could have a public register or a private register or no progress on a register.

On 4th April 2016 OpenCorporates announced a Global Beneficial Ownership Register project with more context in a blog post from the Open Contracting Partnership and the ONE campaign policy director.

I have already established a proof of concept on declaration of beneficial ownership on a public register, it required an internal legal opinion from Her Majesty’s Attorney General chambers because deeds on a public register were assumed to be between two parties and that a declaration of beneficial ownership by definition only included one party:

https://openmindedly.wordpress.com/2014/10/05/country-growth-hacking/

Of course, ideally, the Isle of Man Deeds Registry would be online with public blockchain technology.

Does anyone actually have a register classification scheme to reference?  GOBR will support self-reporting to bypass any delays in specific jurisdictions or specific corporate entities (business names, charities, foundations, trusts) but a draft scheme would be helpful to prompt discussions.  For example:

Level Classification Notes
0 unregulated agents nothing on client file
1 regulated agents legal requirement to hold beneficial ownership details
11 Private 1 star reference to centralised corporate register to contact declared officers or the regulated agent
12 Private 2 stars reference to centralised corporate register to contact officers or the regulated agent

legal power to require beneficial ownership declaration by officers or disclosure by the regulated agent (without tipping off clients)

13 Private 3 stars centralised beneficial ownership register with meta data to decentralised beneficial ownership data (similar to IATIregistry.org)

legal requirement to update contemporaneously

14 Private 4 stars centralised beneficial ownership register
15 Private 5 stars centralised beneficial ownership register

a Service Level Agreement (for example, 24 hours) or perhaps cross-border law enforcement  logins with specific user audit trail and unique case references

15 Private 5 stars centralised beneficial ownership meta data register to decentralised beneficial ownership data (similar to IATIregistry.org)
16 Private 6 stars decentralised beneficial ownership register
17 Private 7 stars decentralised consolidated corporate register with beneficial ownership data (i.e. government only private blockchain to support tax information exchange agreements)
21 Public 1 star centralised corporate register with optional beneficial ownership declaration (i.e. self-reporting)
22 Public 2 star centralised beneficial ownership register
23 Public 3 star centralised beneficial ownership register

aggregated analytics on public interest trends

24 Public 4 star centralised beneficial ownership register

open data API to support projects such as GBOR

24 Public 4 star centralised beneficial ownership meta data register to decentralised beneficial ownership data (similar to IATIregistry.org)
25 Public 5 stars centralised beneficial ownership register

open data API to support projects such as GBOR

legal requirement to update contemporaneously

25 Public 5 stars centralised beneficial ownership meta data register to decentralised beneficial ownership data (similar to IATIregistry.org)

legal requirement to update contemporaneously with randomised regulator audits

26 Public 6 stars decentralised consolidated corporate register with beneficial ownership data i.e. public blockchain operated by governments, the media, stock exchanges, universities, charities, etc.
27 Public 7 stars decentralised consolidated corporate register with beneficial ownership data i.e. public blockchain operated by governments, the media, stock exchanges, universities, charities, etc.

legal requirement to update contemporaneously

I have relentlessly encouraged the Isle of Man to progress in the annual Open Knowledge open government league table from top 100 (rebased) to top 40 to top 20 and hopefully top 10 in Q3 2016.

On 6th May 2016 the Isle of Man Government announced new functionality with an online incorporation and demonstrates that new functionality is an option.  An important factor though is that smaller governments typically outsource the incorporation system and therefore any new functionality requires a prioritised business case in an increasingly complex (i.e. slower) cross-government procurement process or approval of an unplanned external cost (i.e. higher) prompted by global macro factors as either an upgrade by the existing supplier at backloaded commercial rates or a securitisation option that would increase fees that may not then be internationally competitive.

What do I mean by an interim unilateral system?

Something that would address reasonable concerns on competitor jurisdictions.

Consider a legal requirement that a specific beneficial owner must:

  • adopt a unique anonymised beneficial owner reference (similar to the global legal entity identifier) in a specific jurisdiction
  • consistently apply that unique beneficial owner reference to any corporate activity in a specific jurisdiction
  • declare that a unique beneficial owner reference has been applied on key documents such as incorporations, annual returns, share allotments and share transfers.

The largest impact is likely to be when agents discover they do not actually have an “exclusive” relationship with a beneficial owner (i.e. they lied) and technically they are not eligible for discounted management fees on corporate structures.

Unilateral actions could prompt a multilateral network effect.

Feedback welcome.

Funding offers welcome too!