UBO reputation test
Published: 22 February 2021
On 15 October 2020, the 2020 Financial Markets Amending Act entered into force. This act stipulates, for example, that – in view of their reputation – the ultimate beneficial owner (UBO) of crypto service providers, trust offices and exchange institution “must be fit for their role as UBO, and their propriety must be beyond doubt”.
Definition of a UBO and substance of the UBO reputation test
For the purpose of carrying out the UBO reputation test, the definition of UBO as laid down in Article 10a(1) of the Wwft applies: “the natural person being the ultimate owner or having control over the corporate or legal entity.” This involves natural persons who ultimately own or control the company through directly or indirectly holding more than 25% of the shares, voting rights or ownership interest in the company. If there is no UBO as described above, the natural persons with actual control will be classified as UBO. If this is not the case either, the natural persons belonging to the senior management staff are classified as UBO (referred to as pseudo-UBO).
In principle, the UBO reputation test is performed only once and contains two elements:
- propriety: the assessment of the propriety of a UBO is in line with the current propriety requirements for policymakers and co-policymakers.
- fitness: in order to assess fitness, as regards reputation, the UBO must be sufficiently competent as a UBO and they must be competent in the field of the intended activities of the institution concerned. The degree of influence that the UBO can exert is decisive: the greater the influence, the stricter the demands of competence. The assessment of competence takes into account previous experiences as a UBO at other institutions, the candidate’s investment history and their CV. Any media coverage about the UBO will also be included in the assessment. If a holder of a qualifying holding is also a UBO, the propriety assessment for the holder of a qualifying holding is included in the UBO reputation test.
You can submit a request for a reputation test for a new UBO by completing the application form ‘Application for an initial assessment ultimate beneficial owner’, uploading the necessary information and submitting the documentation through Supervisory applications on My DNB. We will notify you about the outcome of the test within the set legal period for processing.