The sector in brief
A registrar maintains the register of security holders for companies and funds. It records who owns what, processes transfers and may handle dividends and other payments. The Capital Markets Authority lists registrars among the firms it supervises.
The AML significance lies in the integrity of the record. If a register hides the true owner, uses false details or is altered without proper authority, it becomes a tool for concealing ownership. Registrars are also in a position to see unusual patterns, such as many shares moving between connected holders.
Supervisors expect registrars to verify the identity of holders, understand the structures behind them and check the authority behind every instruction to change the register.
Where the risk sits
False or incomplete holder details
Holders who give inaccurate details, or whose real owner is not recorded, defeat the purpose of the register.
Nominee holdings
Shares held through nominees can hide the beneficial owner. The registrar should know who the nominee acts for or satisfy itself that someone has checked.
Transfers between connected holders
A pattern of transfers between related holders, without a sale, may move value or build a controlling stake out of sight.
Fraudulent instructions
Forged or unauthorised instructions to change a register can transfer ownership to the wrong person.
Dividend and payment redirection
Changes to the bank details for payments to a holder are a common way to divert funds.
Who supervises you
Registrars are supervised by the Capital Markets Authority onshore, and by the regulator of a financial free zone where they operate in one. Check your licence and the guidance of the authority that issued it.
The supervisor decides the detailed rules for your licence category, so always read its current guidance alongside this page.
What supervisors expect
- A named compliance officer with authority to question changes to the register.
- A risk assessment that covers the companies and funds served, the types of holders and the countries involved.
- Identification and verification of holders in line with the risk, and understanding of the owners behind corporate and nominee holders.
- Checks on the authority of anyone instructing a change, and on changes of bank details.
- Sanctions screening of holders, with the ability to act promptly on a match.
- Monitoring of transfers and unusual patterns, reporting through goAML where there is suspicion, training and record keeping.
- Independent testing of controls proportionate to the firm.
Red flags to watch
- A holder who will not supply identification or details of the owner.
- A request to change bank details just before a dividend is paid.
- Repeated transfers between holders with the same address or contact details.
- Instructions that arrive from an unfamiliar person claiming authority.
- Transfers that build a significant stake in small parcels.
- A company that asks for ownership details to be hidden or changed without explanation.
A worked example
New bank details before a dividend
A long-standing holder emails the registrar a few days before a large dividend asking for payment to be made to a new account in another country in the name of a company. The email address is slightly different from the usual one. The registrar's procedure requires it to call the holder on a known number, ask for supporting documents and record the outcome. The holder cannot be reached. The registrar holds the payment, informs the compliance officer and considers whether the matter indicates fraud or laundering that should be reported.
How Adventant helps
Questions answered
Does a registrar need to know who the beneficial owner is?
It depends on the structure and the risk. A registrar should understand who sits behind corporate and nominee holders to the extent the rules and risk require, and should know what checks the nominee applies.
How should we verify a change of bank details?
By contacting the holder through a known channel, not the one the request came from, and by asking for documents. Keep a record of what you did.
What if the same address appears across many holders?
That is a pattern worth investigating. It may be innocent, such as a shared office, but may signal connected holders trying to hide a stake.
Do registrars report suspicion?
Yes, through goAML where the rules apply. The compliance officer decides, after review.
How often should holders be reviewed?
By risk. Higher-risk holders should be reviewed more often and whenever something changes, such as ownership or the pattern of transfers.