Beneficial Ownership Information of Trusts

This report aims to briefly summarize the key areas for improvement outlined in the MFSA’s publication, for the attention of trustees.

Policies and procedures

While most trustees were observed to have in place documented procedures on the reporting of BO information on TUBOR, the content of the reviewed policies was, in most cases, deemed to be too generic and lacking comprehensive detail. The MFSA highlighted the importance of referring to the reporting timeframes, the person responsible for reporting the information on TUBOR, the identification details that must be reported and a clear explanation of which parties are considered to be beneficial owners in a trust. This in addition to including guidance on specific and complex scenarios.

Timeliness of reporting of BO information

The MFSA encountered instances of late reporting, both in the case of initial BO reporting and changes made thereafter. This further highlights the importance of having comprehensive and detailed procedures in place, inclusive of reporting timelines as stipulated by law. In addition to procedures, trustees are obliged to implement robust systems and controls to ensure the information reported on TUBOR is accurate and always kept up to date. 

Quality of reports submitted on TUBOR

In this area of assessment, the MFSA noted good practices implemented by trustees for the submission of accurate and timely BO information, such as by implementing dual control measures when reporting or having in place an internal BO register, to ensure that the data reported on TUBOR is complete, accurate and up to date. Nevertheless, certain discrepancies were identified. The MFSA lists examples of omissions, while also explaining its expectations in terms of the reported beneficial owners. Trustees are encouraged to refer to the FAQs for further details on what information is to be reported.

Accuracy of reported BO information

The regulations oblige trustees to report BO information that is adequate, accurate and up to date. In a bid to reduce potential errors that may occur during the verification and reporting of BO information, trustees are urged to review and maintain valid due diligence documentation on file, and to double check all details being reported prior to submission. In such cases, training may also be necessary to ensure that staff involved in this process are fully aware of what is required.

Verification of reported BO information

Trustees are obliged to vet and maintain BO information throughout the course of the business relationship, and to notify the Authority of any changes within the stipulated timeframes. Ongoing verification is performed by obtaining updated due diligence documents on an ongoing basis, particularly upon trigger events that may lead to a change in BO information. Notifiable changes include changes to the benefit status of beneficiaries. Where changes need to be reported, the effective date of such change should also be declared.
To further strengthen the accuracy and timeliness of reporting, trustees are expected to carry out a gap analysis to ensure that the right tools and controls are in place for the accurate and timely reporting of BO information of trusts.

Risk of non-compliance

Trustees that do not implement the required controls for the prompt reporting of BO information become exposed to a number of serious risks, such as regulatory risk (breach of law), reputational risk (publication of penalties/adverse media) and legal risk (lack of proper understanding and control surrounding the trust and its beneficiaries). For this reason, trustees should take measures to identify any potential gaps in their BO verification and reporting procedures

BDO is here to help!

BDO Malta’s Compliance Advisory Team may provide tailor-made assistance to trustees to ensure the right set up is in place. Services may range from carrying out a gap analysis to identify any gaps or non-conformities with applicable regulation, to assistance with setting up the right controls. 

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