Luxembourg RBE Law: Requests for Ultimate Beneficial Owners disclosures
LuxCSD1 provides clarification about the Luxembourg Law of 13 January 2019 setting up a dedicated Register of ultimate Beneficial Owners of companies and how to request details of Ultimate Beneficial Owners.
Background2
The Law of 13 January 2019 establishes a Beneficial Owner Register (Registre des bénéficiaires effectifs or “RBE”), and implements Article 30 of Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (the “4th AML Directive”), as amended by Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 (the “5th AML Directive”) (the “RBE Law”).
Published on 15 January 2019 in the Official Gazette (“Memorial”), this Law entered into force on 1 March 2019. Registered entities (as defined below) had a delay of six months to abide to the provisions of the Law, and proceed to the listing of their beneficial owners with the RBE by 1 September 2019.
The Law creates a register of Ultimate Beneficial Owners (“UBOs”) of corporate and legal entities (the “registered entities”) including for instance public/private limited companies, partnerships, not for profit associations, foundations and civil companies together with Luxembourg branches of foreign companies and UCITS. The UBO is any natural person who ultimately owns or controls a legal entity through direct or indirect ownership of a sufficient percentage of the shares or voting rights or ownership interest in that entity, or through control via other means. Alternatively, if such person cannot be identified after having exhausted all possible means and provided there are no grounds for suspicion, the individual holding the position of senior manager can be registered as the UBO.
The registered entities will have to make available specific information on their own UBOs in the RBE. The RBE is managed by the Luxembourg Trade and Companies Registers.
The obligation to report UBOs may also rest with the agents (“mandataires”) of the registered entities, a term that the Law unfortunately does not define. Depending on the situation at stake and the registered entities involved, an agent could for instance encompass a legal representative, a business entity domiciling a company, a transfer agent or a director/manager of a registered entity.
We understand that, according to article 3 (2) of the RBE Law, listed companies, which have their securities admitted to trading on a recognised regulated market are exempt from the obligation to indicate their beneficial owners in the RBE.
As to who will be able to access the information of the RBE, the national authorities, within the ambit of their attributions, will have unlimited access to the information stored in the RBE while any natural or legal person (that is, the public at large), including the financial stakeholders, will be able to obtain a limited set of information, including for the latter some data required for due diligence purposes under CSSF Regulation N°12-02.
The text of the RBE Law and of the EU Directive can be found in the External links below.
Requests for Ultimate Beneficial Owners - equities
Requests to disclose the UBOs in application with the EU Directive 2015/849 will be processed by LuxCSD following the standard corporate action flows for disclosures.
Upon receipt of the authenticated (MT564) and valid (with a business justification) request from Issuer/Agent, LuxCSD will transmit the requests to its participants.
The participants shall reply via standard corporate action instructions (to be sent by SWIFT MT565).
Requests for Ultimate Beneficial Owners - investment funds
For the UBO disclosure requests for investment funds transfer agents should make use of the existing customer holdings reporting made available to transfer agents.
If and when direct customers holding more than 25% of a specific fund issuance are identified, a UBO request can be raised by the transfer agent. Requests must detail the 25% threshold in shares/market value as the business justification for the reason for disclosure (to be sent by SWIFT MT568).
The UBO request should also contain the ISIN, the date for which a disclosure is required and the deadline to provide information. If the disclosure must be done on Umbrellas, transfer agents must provide the “Umbrella-to-ISIN” mapping.
It should be noted that in all cases LuxCSD only acts as an intermediary and therefore cannot guarantee that the shareholders will disclose any information and in a timely manner as well as the content of any information disclosed.
Further information
For further information, customers may contact their Relationship Officer.
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1. LuxCSD refers to LuxCSD S.A., registered office at 42, Avenue J.F. Kennedy, L-1855 Luxembourg, registered with the Luxembourg Trade and Companies Register under number B-154.449.
2. This background information is for guidance only. It is provided as general information and should not be considered in isolation or as constituting a complete or definitive legal advice on any specific matter. Please consult with your own legal advisor for more details. LuxCSD does not accept any responsibility to you as a result or otherwise for the contents of this background information.