participants in the company’s management, the company will be beholden to the known shareholders to provide relevant and timely information (particularly in circumstances where the regime uses a broad associate-inclusive definition). As noted earlier in section 1 of this submission, it is not apparent from the CP whether the third option, namely, the use of existing information sources (or modifications thereto) may already provide the solution. We do note, however, the Australian Taxation Office (ATO) already asks beneficial ownership questions in the company tax return (albeit currently limited, but clearly capable of being modified); both the income tax laws and tax administration practices have a long history of grappling with the pitfalls of beneficial ownership rules and developing tracing solutions these might be capable of being leveraged; and, the – ATO already has a legislative framework that facilitates wide domestic information gathering powers and an extensive international exchange of information network. When coupled with the existing Corporations law requirements, Australian Securities and Investments Commission (ASIC) powers, the Australian Business registry as well as possible enhancements to some or all or the above, the anecdotal evidence suggests that at least a partial solution might already exist through existing information sources and channels available to the regulatory authorities. However, we also acknowledge that special consideration would need to be given to the implications of this method under various privacy and secrecy rules. 2.2 Recommendation 2 A combination of using existing information already collected by various regulators (with possible modifications thereto) and/or imposing obligations at the company and shareholder levels to access natural person, beneficial ownership information appears to be the preferred high level design options. 2.3 Which companies could be out of scope? Certain Australian owned companies Given the levels of transparency that already applies to Australian listed companies, it is appropriate to grant beneficial ownership register exemptions to such entities. Even if relevant authorities may encounter some difficulties with the existing ownership information collected for listed companies, a risk based approach is likely to conclude that the compliance costs are not justifiable.
participants in the company’s management, the company will be beholden to the known shareholders to provide relevant and timely information (particularly in circumstances where the regime uses a broad associate-inclusive definition). As noted earlier in section 1 of this submission, it is not apparent from the CP whether the third option, namely, the use of existing information sources (or modifications thereto) may already provide the solution. We do note, however, the Australian Taxation Office (ATO) already asks beneficial ownership questions in the company tax return (albeit currently limited, but clearly capable of being modified); both the income tax laws and tax administration practices have a long history of grappling with the pitfalls of beneficial ownership rules and developing tracing solutions – these might be capable of being leveraged; and, the ATO already has a legislative framework that facilitates wide domestic information gathering powers and an extensive international exchange of information network. When coupled with the existing Corporations law requirements, Australian Securities and Investments Commission (ASIC) powers, the Australian Business registry as well as possible enhancements to some or all or the above, the anecdotal evidence suggests that at least a partial solution might already exist through existing information sources and channels available to the regulatory authorities. However, we also acknowledge that special consideration would need to be given to the implications of this method under various privacy and secrecy rules. 2.2 Recommendation 2 A combination of using existing information already collected by various regulators (with possible modifications thereto) and/or imposing obligations at the company and shareholder levels to access natural person, beneficial ownership information appears to be the preferred high level design options. 2.3 Which companies could be out of scope? Certain Australian owned companies Given the levels of transparency that already applies to Australian listed companies, it is appropriate to grant beneficial ownership register exemptions to such entities. Even if relevant authorities may encounter some difficulties with the existing ownership information collected for listed companies, a risk based approach is likely to conclude that the compliance costs are not justifiable.
c2017-t227751-KPMG.docx