Relational database design considerations for beneficial ownership information
4. Data capture
At the point of data capture, a series of claims are made about an entity and the ownership-or-control relationships that connect the entity to people and/or other entities. The beneficial ownership forms used to collect this data, whether paper-based or online, should be completed by a person nominated or authorised by a declaring company.
As shown in figure 1, this data may be entered directly via an electronic form or indirectly by filling in a paper form. Consider the following factors when designing a methodology for data capture:
a) Initial and update declarations
Consideration should be given to both initial declarations and updates, known as “update declarations”.
An update declaration could use pre-filled fields from the previous declaration, where the person making the declaration has the ability to update them. This will reduce errors and duplication. Also, capturing how and when a change in beneficial ownership occurs is key to being able to publish BODS statements from any point in the past.
b) Clarity about what is being declared
It should always be clear to the person submitting the declaration exactly what information they are declaring to be true. This is especially important with partial updates and corrections.
For example, a person may need to update the name of a beneficial owner. When they submit that updated information, are they also declaring that:
- All of the information about the beneficial owner is correct, or
- All of the beneficial ownership information is still correct, or
- Only that the name of the beneficial owner is now correct?
The interface must make the limits of what is being declared as true clear to the person making the declaration.
Those limits should then be respected and maintained as the information is processed and stored by the system. Ultimately, only the information actively declared to be true at the point of submission will be represented as new statements in the system.
This clarity is important from both a data integrity and a legal point of view.
c) Avoiding duplication
In an ideal running of a beneficial ownership database system, when a declaration is made about a natural person, there should be processes that check for an existing record of that person in the system.
Where there is an existing record, it should be presented in the interface, or printed on the form, for the declarer to update with any changes to the beneficial ownership of the entity.
Real-world identifiers and cross-checks with personally identifying forms of identification are two methods that could be used to avoid duplication of person record data.
d) Form design
Well-designed forms make it as easy as possible for the people completing them to provide accurate and unambiguous information. This reduces the number of accidental errors. Submitting more accurate information becomes easier, whilst disguising deliberately false information as mistakes becomes harder.
Beneficial ownership declaration forms: Guide for regulators and designers introduces a number of considerations for form development and presents a worked example of a form that addresses these issues. We recommend that this is read by anyone with the task of developing a beneficial ownership database.
Data entered by the person making the declaration will sometimes not be published in BODS statements due to privacy, and the form should make it clear to them when this is the case.
Wherever possible, use data capture methods that collect structured data, as described in the following section.
e) Collecting structured data
Dropdown lists, checkboxes, and radio buttons are all examples of data capture methods that collect structured data.
BODS specifies a number of its own codelists as well as using standardised open codelists. Providing the person making the declaration with closed data capture methods for these fields will improve the accuracy of the data that is captured. Free text entry is not recommended due to the unstructured nature of the data collected.
BODS codelist example
The interestLevel codelist contains the values direct, indirect, and unknown. An online form could implement a radio button or a dropdown box to capture one of those values.
Standardised codelist example
BODS specifies that countries should be identified by their ISO 2-letter codes. An online form should implement a dropdown menu using short names from the ISO list and populate the database with the 2- letter code.
f) Data lookups
Providing lookups to persons or entities is dependent on local systems and legislation. It may be possible to perform local checks on entities and people when they are disclosed in a company declaration.
These local checks might be made within the beneficial ownership register itself or held on other internal government systems. Wherever possible, these local checks should be performed. Some examples are given below.
Individuals (persons)
In some jurisdictions, national identity numbers are used and a beneficial ownership register may have access to them. It may be possible to ask the person making a declaration to enter a national identity number and then to confirm that person’s details to be correct.
Companies (entities)
A beneficial ownership register may be an extension to a company register. This should make looking up domestically registered entities a possibility. It may be possible to ask the person making a declaration to enter a company number and have them verify the associated company’s details.
g) Verification of data outside the jurisdiction of a register
Verifying the details of people or entities that are outside the jurisdiction of the register is more complex. OO recommends a risk-based approach, where choosing suitable verification methods involves an assessment of the risk of bad data being entered against the effort of making verification checks.
OO has published a policy briefing on verification best practice. It is recommended that this is read by anyone with the task of developing a beneficial ownership database. There is also a feature ticket in GitHub which summarises the latest thinking from OO about verification in BODS.
h) Ongoing improvement
Time and resources should be allocated to improve data capture based on analysis of the quality of data that is being entered in the register. For example, by identifying common data entry errors and redesigning the part(s) of the form(s) where these occur.