Principles for Effective Beneficial Ownership Disclosure

The Open Ownership Principles sets the gold standard for effective beneficial ownership disclosure. The OO Principles are intended to support governments implementing beneficial ownership reforms, and guide international institutions, civil society and private sector actors in understanding and advocating for effective reforms.

There are nine principles in total - together they provide a framework for implementing comprehensive transparent company ownership that generates actionable and usable data. Effective disclosure needs high quality, reliable data to maximise usability and minimise loopholes.

The OO Principles are based on Open Ownership’s work with almost 40 countries and on established good practices for open data and findings from practitioner and academic research. The OO Principles focus on the technical characteristics of effective disclosure regimes, rather than on the external political, social, economic and cultural factors that are known to influence implementation and impact.

As the policy area of beneficial ownership transparency continues to evolve, Open Ownership will continue to refine and update the OO Principles to ensure they remain a high but achievable standard that delivers impact.

The OO Principles are currently open for consultation with stakeholders. We will publish a set of framing questions for the consultation in January 2021, and welcome responses both in writing or by attending our roundtable discussion.

Register interest for the OO Principles consultation

Download the principles as a PDF

Draft principles

Last updated: November 2020

Beneficial Ownership should be clearly and robustly defined in law, with low thresholds used to determine when ownership and control is disclosed

  • Robust and clear definitions of beneficial ownership (BO) should state that a beneficial owner should be a natural person. Definitions should cover all relevant forms of ownership and control, specifying that ownership and control can be held both directly and indirectly.
  • There should be a single, unified definition in law in primary legislation, with additional secondary legislation referring to this definition.
  • The definition should comprise a broad catch-all definition of what constitutes BO, and couple this with a non-exhaustive list of example ways in which BO can be held.
  • Thresholds should be set low so that all relevant people with BO and control interests are included in disclosures. A risk based approach should be considered to set lower thresholds for particular sectors, industries, or people. Particular consideration should be given to thresholds that apply to ownership by politically exposed persons (PEPs), with a clear definition used to determine what constitutes a PEP.
  • Absolute values, rather than ranges, should be used to define a beneficial owner’s ownership or control.

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Disclosure should comprehensively cover all relevant types of legal entities and natural persons

  • All relevant legal entities and arrangements, and all relevant natural persons (i.e. people), should be included in disclosures.
  • Any exemptions from the disclosure requirements should be clearly defined and justified, and reassessed on an ongoing basis. Information on the basis for exemption should be collected, or the ownership of such entities should be collected elsewhere with comparable levels of quality and access (e.g. for publicly listed companies (PLCs)).
  • A shielding regime allowing certain natural persons at serious risk (e.g. domestic abuse or kidnapping) to restrict the disclosure of certain information should be in place, and should be proportionate and justified.
  • Particular attention should be given to the disclosure requirements relating to specific categories of companies, including state owned enterprises (SOEs) and PLCs listed on exchanges with insufficient disclosure requirements.

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Beneficial ownership disclosures should contain sufficient detail to allow users to understand and use the data

  • Key information should be included about the beneficial owner, the disclosing company, and the means through which ownership or control is held.
  • Clear identifiers should be used for people and companies.
  • PEPs should be clearly identifiable within the data.
  • Where BO is held indirectly through multiple legal entities, sufficient information should be published to understand full ownership chains.

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Data should be collated in a central register

  • BO disclosures should be collated and held within a central register.

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Data should be accessible to the public

  • The public should have access to BO data.
  • Data should be accessible and usable without barriers such as payment, identification, registration requirements, collection of data about users of the register, or restrictive licensing, and searchable by both company and beneficial owner.
  • Published information should be sufficient for users to understand and use the data to achieve policy goals, whilst respecting relevant privacy laws.
  • Where information about certain classes of persons (e.g. minors) is exempt from publication, the exemption should be clearly defined and justified.
  • Where a disclosure system permits exemptions from publication **on a case-by-case basis (for example, to mitigate personal safety risk), the grounds for exemption should be clearly defined, proportionate, and fairly applied.
  • Where data has been exempted from publication, the publicly available data should note that BO information is held by authorities but has been exempt from publication.

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Data should be structured and interoperable

  • BO data should be available as structured data, with each declaration conforming to a specified data model or template.
  • Data should be available digitally, including in a machine-readable format.
  • Data should be available in bulk as well as on a per record basis.

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Measures should be taken to verify the data

  • When data is submitted, measures should be taken to verify the:
    • beneficial owner;
    • entity;
    • ownership or control relationship between the beneficial owner and the entity;
    • person making the disclosure.

    This should be done by one or more of the following methods:

    • ensuring values conform to known and expected patterns;
    • cross-checking information against existing authoritative systems and other government registers;
    • checking supporting evidence against original documents.
  • After data has been submitted, it should be checked to identify potential errors, inconsistencies, and outdated entries, using a risk based approach where appropriate, requiring updates to the data where necessary.
  • Mechanisms should be in place to raise red flags, both by requiring entities dealing with BO data to report discrepancies and by setting up systems to detect suspicious patterns.
  • Ownership types that are difficult or impossible to verify (e.g. bearer shares) should be prohibited.

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Data should be kept up to date and historical records maintained

  • Initial registration and subsequent changes to BO should be submitted in a timely manner, with information updated within a short, defined time period after changes occur.
  • Data should be confirmed as correct on at least an annual basis.
  • All changes in BO should be reported.
  • An auditable record of the BO of companies should be created by dating declarations and storing historical records, including for dormant and dissolved companies.

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Adequate sanctions and enforcement should exist for non compliance

  • Effective, proportionate, dissuasive, and enforceable sanctions should exist for noncompliance with disclosure requirements, including for non-submission, late submission, incomplete submission, or false submission.
  • Sanctions that cover the person making the declaration, the beneficial owner, registered officers of the company, and the company making the declaration should be considered.
  • Sanctions should include both monetary and non-monetary penalties.
  • Relevant agencies should be empowered and resourced to enforce the sanctions that exist for noncompliance.

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