Types of beneficial ownership relation

[timgdavies]

An issues related to the draft conceptual model

We will need a codelist to represent the different kinds of beneficial ownership and control relationships between an interested party, and the entity it controls.

This may need to be a hierarchical codelist, in which we have a number of top-level concepts, and then a range of sub-types. In the examples above, we have identified:

• Right to profits

  • Share ownership

• Right to direct decisions

  • Role-based

  • Contractual

• Role holder - with no implication of ownership or control (such as when a lawyer holds the role of being the nominee, but can only exercise that on behalf of another party)

We will need to find, or develop, a more detailed codelist here.

Local implementations of the standard may need to map between this interoperable codelist and their own local legal requirements and systems.

[sebbacon]

"Family member" is a kind of control often mentioned in legislation.

[jpmckinney]

Re: local implementations mapping the codelist to local requirements, is there something we can learn from other standards? I know countries have mapped SIC, etc. that we might learn from.

[ScatteredInk]

The UK PSC Register has a sub-category for LLPs that we can't represent with the current codelist:

1. Decisions
   • ...
2. Profits
   • ...
   • Rights to surplus assets on winding up

[ScatteredInk]

Extracting from #92, which I will close. We should add these control types - with better descriptions.

Interest	Description
contract	A contract that defines beneficial ownership rights beyond those otherwise implied by ownership structures.
conditionalContract	An agreement that defines conditions by which beneficial ownership rights could come into existence

[ScatteredInk]

Having read #178, I suggest renaming rights-to-surplus-assets to rights-to-surplus-assets-on-dissolution to properly reflect that control type.

[timgdavies]

There are outstanding issues in version 0.2 related to:

(a) The description of interestType codelist entries discussed here https://github.com/openownership/data-standard/issues/178#issuecomment-497590414 . In particular I note that the description of rights-granted-by-contract and conditional-rights-granted-by-contract in the standard do not appear to reflect those in the issue.

(b) The conceptual distinction between roles vs. interests discussed above and here https://github.com/openownership/data-standard/issues/178#issuecomment-500401855

As a result, we need to:

• Have a substantive discussion of (b). and identify whether there are any proposed changes to the structure of the standard to be brought forward

• Open specific issue for updates to codelist descriptions if required.

[ScatteredInk]

Another issue here is declaring the use of ownership or control mechanisms within a particular entity, as a way of enabling risk-based analysis. The most extreme example is companies that issue bearer shares and warrants. Some jurisdictions will have a lengthy sunsetting period for these instruments but still consider them a risk, so marking their presence may be desirable (and similarly for something like formal nominee shareholders and directors).

For bearer shares, I think we can model the following using an arrangement - but would like to understand if that is the best way and how we can be more explicit to make data use easier:

• an entity asked to declare that it issues bearer shares;
• an entity asked to declare what percentage of ownership or control is held in bearer shares;
• an entity asked to declare who owns and controls the entity through bearer shares.