Bearer Bonds, Nominee Accounts, and Beneficial Ownership: What HNW Clients Need to Know

The days of anonymous financial ownership — the classic bearer bond, the nominee account with no declared beneficial owner — are effectively over in the major international financial centres. Regulatory change over the past decade, driven by FATF, the G20, and OECD, has systematically dismantled the infrastructure of anonymous financial ownership. Understanding what remains, what has changed, and what the implications are for HNW clients who structure their financial affairs across jurisdictions is essential knowledge for 2026.

Bearer Instruments: The End of an Era

A bearer bond was a debt instrument for which ownership was determined solely by physical possession. The holder — whoever physically held the bond — was the owner. No name was registered anywhere. Coupons (interest payments) were literally cut from the bond and presented to a bank for payment. This made bearer bonds ideal for anonymous wealth holding: the instrument was as anonymous as cash.

Bearer shares operated similarly for companies — ownership of the company was determined by physical possession of the share certificates, with no register of shareholders.

Both instruments have been substantially eliminated:

UK: bearer shares in UK companies were abolished under the Small Business, Enterprise and Employment Act 2015. UK companies registered after 26 May 2015 cannot issue bearer shares; existing bearer shares had to be converted to registered shares by a specified deadline.

EU: the 5th Anti-Money Laundering Directive (5AMLD, implemented 2020) required EU member states to prohibit bearer shares and require conversion of existing instruments.

Switzerland: historically one of the last holdouts for bearer shares, Switzerland completed its prohibition and mandatory conversion programme. Since 2019, Swiss companies cannot issue bearer shares (unless they are listed on a stock exchange), and existing bearer shares were required to be converted or deposited with an intermediary.

Cayman Islands, BVI, and other offshore jurisdictions: most major offshore jurisdictions have now abolished or severely restricted bearer shares as a condition of FATF compliance and continued access to global financial infrastructure.

The practical result: physical bearer instruments of significant value are now essentially non-functional. Banks will not accept them as collateral, broker-dealers will not process them, and depositing them triggers immediate AML/KYC scrutiny.

Nominee Accounts and Beneficial Ownership

A nominee account is an account held in the name of one party (the nominee) on behalf of the true owner (the beneficial owner). This is entirely legitimate and remains widespread — virtually every retail investor who holds shares through a stockbroker or investment platform holds in nominee form.

The key issue for HNW clients is not the nominee structure itself but the disclosure of beneficial ownership that is now required in most jurisdictions.

UK Companies House Register of Persons with Significant Control (PSC Register)

Since 2016, UK companies have been required to maintain and file a Register of Persons with Significant Control — identifying any individual with more than 25% of shares or voting rights, or who otherwise exercises significant influence or control. This register is publicly searchable at Companies House.

The practical implication for HNW clients: ownership of UK companies above the threshold is disclosed publicly. Structures that previously used nominee shareholders to obscure the identity of the beneficial owner are no longer effective for UK-registered entities.

Trust Register (UK)

Under the 5th Anti-Money Laundering Directive implementation, the UK's Trust Registration Service (TRS) requires most UK express trusts to register beneficial ownership information with HMRC. From September 2022, the register expanded to cover trusts that have a business relationship with a UK-regulated entity (bank, solicitor, accountant).

Most UK trusts — even those entirely managed by UK-resident trustees for UK-resident beneficiaries — must now be registered. The information includes the identity of the settlor, trustees, protector (if any), and named/identifiable beneficiaries. The TRS is not currently public, but it is accessible to law enforcement and (to a limited extent) parties with a "legitimate interest."

EU Beneficial Ownership Registers

The 4th and 5th AML Directives required EU member states to establish publicly accessible registers of beneficial owners of companies and trusts. In 2022, the Court of Justice of the EU (in the Sovim case) ruled that mandatory public access to the full register was incompatible with the EU Charter of Fundamental Rights privacy provisions — access must now be granted only to those with "legitimate interest."

This ruling has created inconsistency across EU member states in how they implement access — some still have broadly public registers, others have restricted access. The direction of travel under the EU's new single-supervisory AML authority (AMLA, based in Frankfurt, operational from 2025) is towards more consistent, restricted-access beneficial ownership disclosure.

Cayman, BVI, and Offshore Registers

The major offshore jurisdictions have established beneficial ownership registers in response to international pressure. The Cayman Islands and BVI now maintain centralised beneficial ownership registers accessible to domestic competent authorities and, under exchange of information agreements, to foreign counterpart authorities. These registers are not publicly accessible (contrast with the EU direction).

Nominee Directors and Professional Fiduciaries

The use of nominee directors — individuals who appear as company directors on the public record while acting under a power of attorney or instruction from the true controller — remains technically lawful in many jurisdictions but is now heavily scrutinised.

A nominee director who does not exercise genuine oversight of the company's affairs risks personal liability if the company causes harm. A client who uses nominee directors to obscure their control of a company structure should understand that the nominee arrangement will be discoverable by any competent authority conducting due diligence, and that the existence of a nominee structure is itself a red flag in many AML contexts.

Genuine professional fiduciary services — where a licensed trustee or corporate service provider exercises real oversight, has genuine responsibilities, and is regulated — are different and legitimate. The distinction is between substance and form.

What This Means for HNW Clients

Structures should be designed around substance, not secrecy. The era of using offshore structures primarily to achieve financial anonymity is over in any jurisdiction that participates in the global financial system. Legitimate structures — trusts for succession planning, holding companies for asset management, offshore accounts for currency diversification — remain entirely valid when used for genuine purposes with full disclosure.

Review old structures regularly. Structures established 10-20 years ago may have relied on bearer instruments, nominee arrangements, or register opacity that is no longer available. A regular review — ideally with a cross-border private client solicitor and accountant — is essential for internationally mobile clients with complex structures.

Corporate registers and beneficial ownership information is increasingly exchanged. Common Reporting Standard (CRS) exchange includes information on account holders and controlling persons. The FATF Recommendations require member jurisdictions to share beneficial ownership information with counterparts. Information that appeared confidential in 2010 may be routinely exchanged today.

Legitimate privacy remains available. Restricted access registers (rather than fully public registers), professional trustee structures with robust confidentiality protocols, and offshore jurisdictions maintaining high-quality regulation while not publicising their registers — these remain appropriate tools for HNW clients with genuine privacy concerns beyond tax.

Practical Due Diligence for Banking Clients

Banks conducting enhanced due diligence (EDD) on HNW clients will now routinely:

• Request beneficial ownership declarations for all entities in the account-opening structure
• Search UK/EU company registers and offshore beneficial ownership registers
• Request documentation establishing the chain of ownership from the entity to the individual
• Apply PEP screening to all named individuals
• Request source of funds and source of wealth documentation for the amounts expected to flow through the account

Clients who understand this process and come to account-opening meetings with a prepared documentation pack — ownership charts, supporting documentation for each layer, source of wealth narrative — will have a significantly smoother experience than those who present the minimum information and answer questions reactively.

How Global Investments Can Help

Global Investments advises internationally mobile HNW clients on structuring their financial and property affairs across jurisdictions. We work with regulated legal and tax advisers to ensure that our clients' structures are appropriate for the current regulatory environment — effective, compliant, and capable of surviving bank due diligence processes across the major markets in which our clients hold assets internationally.

If you have legacy structures that you are uncertain about, or if you are establishing new arrangements and want to ensure they are both effective and fully compliant with current beneficial ownership requirements, contact us. We can coordinate the relevant professional advisers and help you develop a clear picture of your obligations and options.