On 18th June 2021, the Cyprus Securities and Exchange Commission (the "CySEC"), pursuant to Article 61E of the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2021 (the "AML Law"), has issued the CySEC Directive 269/2021 (the "Directive") which provides information and guidance in relation to the registration of express trusts and similar legal arrangements in the Beneficial Ownership Register (the "Trust Register").

Express Trusts

An "express trust" is defined as the trust arrangement which is created explicitly and voluntarily by the settlor and does not include any trust arising by operation of law or any trust or decision for which the settlor has no explicit intention to create.

Ultimate Beneficial Owner

An "ultimate beneficial owner" of an express trust, means any natural person who ultimately owns or controls of the trust through direct or indirect ownership or by other means:

  • the settlor;
  • the trustee or commissioner;
  • the protector, if any;
  • the beneficiary, or where the individual benefiting from the legal arrangement or legal entity have yet to be determined, the class of persons in whose main interest the legal arrangement or entity is set up or operates;
  • any other natural person exercising ultimate control over the trust by means of direct or indirect ownership or by other means; and
  • the trustee of an express trust or any other person holding equivalent or similar position who resides in the Republic of Cyprus.1

For the express trusts or similar legal arrangements:

  1. Name;
  2. Country and date of creation and/or establishment;
  3. Applicable law;
  4. Termination Date (if applicable);
  5. In case of a similar legal arrangement, the kind of such arrangement;
  6. Information in regards to the country of establishment or residence of the trustee, as well as his address;
  7. In case where the trustee is situated outside the EU and creates a business relationship in the Republic, the date of the beginning of the business relationship, the name of the person to whom such business relationship is established and the document regulating such relationship;
  8. In case where the trustee is situated outside the EU and acquires immovable property on behalf of an express trust in the Republic, the registration number of such immovable property and its title.
  9. Any other information and/or supporting documentation requested by CySEC for identification purposes.

In case where the beneficiary has not yet been identified, then the following shall be disclosed in relation to the beneficiaries:

  1. Description of classes and the members of each class;
  2. The nature and extent of the rights each class of beneficiaries has.

In case where the beneficiary has not yet been identified and the category of beneficiaries in whose interest the trust has been created and operates, is a legal entity then the following will be submitted:

  1. Name of the legal entity;
  2. Type of the legal entity;
  3. Registration number;
  4. Date and country of incorporation;
  5. Registered address;
  6. Its role in the express trust or in the similar legal arrangement;
  7. The particulars referred in the category of ultimate beneficial owners;
  8. Any other information and/or supporting documentation requested by CySEC for identification purposes of the beneficial owners.

Access to the Trust Register

CySEC can provide access of the Trust Register to the following:

  1. The Cyprus Tax Department, the Cyprus Customs Department and the Cyprus Police with no restrictions and/or prior notification;
  2. Any liable entity, in the context of due diligence and identification measures for their client;
  3. Any natural or legal person who can demonstrate a legitimate interest. This will be subject to acceptance by CySEC; and
  4. Any natural or legal person who has a controlling interest in a company or other legal entity, inter alia, either directly or indirectly, indirect ownership, or through shares in the bearer or through control by other means. This will be subject to acceptance by the CySEC.

If access is granted, any natural or legal person will have access to the name, month and year of birth, the country of residence and the nationality of the people involved in the trust and the type and extent of the rights they hold in the trust.

Submission Deadline

A six-month period from the has been granted for the submission of the aforementioned information and documentation in the Trust Register.

Footnote

1. The trustee of an express trust or any other person holding equivalent or similar position who resides in the Republic of Cyprus with fifteen (15) days from his appointment, should submit to the CySEC through the system an application for registering in the Register, and listing all required information.

Originally published 30 September 2021

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.