From Good Faith to Gatekeeper: How Business Registries Are Becoming Competent Authorities

For decades, business registers in common law jurisdictions operated on a relatively simple premise: record what is presented in good faith (I know this firsthand as I’ve been working in registries for those decades!). Registries served as custodians of public filings, not investigators, not enforcers.

But that paradigm is undergoing a radical shift. Around the world, traditional registries are being redefined as competent authorities under the evolving standards of the Financial Action Task Force (FATF) and global transparency expectations.

This transformation isn’t just bureaucratic, it’s fundamental. It’s about moving from passive record-keeping to active responsibility in the fight against financial crime.

Why This Shift Is Necessary

The misuse of legal persons and arrangements for illicit purposes (money laundering, tax evasion, terrorist financing) is well documented. Whether it’s shell companies, complex trusts, or nominee structures, the opacity of ownership has long enabled bad actors to move and conceal wealth with ease.

FATF Recommendations 24 and 25, along with their updated interpretive notes and methodology, now demand more. Registries are expected to ensure that accurate, adequate, and up-to-date beneficial ownership (BO) information is collected and accessible to law enforcement and supervisory agencies. They must also enable domestic and international cooperation. This is not a hypothetical dream. It's measurable and enforceable; countries are being evaluated on it.

In New Zealand’s case, the upcoming FATF mutual evaluation underscores the urgency of this change. We lag in terms of the existence of a central beneficial ownership register. There are positive changes coming in terms of verification, enforcement, and use by competent authorities such as law enforcement, financial intelligence units (FIUs), and supervisors.

What This Means for Business Registries

This redefinition of role, from registrar to regulator in some respects, requires structural and operational change. Here’s what’s happening and what still needs to be done:

1. Legislative Enablement Registries need legal mandates that go beyond collecting information. For example, the proposed Corporate Transparency and Integrity Bill in New Zealand creates the legal scaffolding for the Companies Office to operate a BO register and enforce compliance.

2. Verification and Accuracy ‘File and forget’ is no longer acceptable. Registries must verify beneficial ownership declarations using independent government data (such as tax records or digital identity systems like those being proposed by the Department of Internal Affairs), and enforce timely updates when changes occur.

3. Access and Utility BO information must be immediately accessible to competent authorities, not via manual requests, but through digital interfaces and secure channels that support law enforcement and supervisory effectiveness. It's not enough to store the data; it has to be used to detect and disrupt crime.

4. Enforcement and Deterrence Registries are now expected to monitor compliance actively and issue penalties for non-filing, false declarations, or out-of-date records. Public confidence depends on the registry’s willingness to enforce the rules, and the FATF will judge effectiveness, not just effort.

5. International Cooperation Transparency is not only domestic. Registries must be ready to share beneficial ownership information with foreign counterparts, quickly and constructively, in support of international investigations.

6. Engagement with Gatekeepers Lawyers, accountants, and trust service providers play a key role in creating complex structures. Registries must build supervisory relationships with these designated non-financial businesses and professions (DNFBPs), and help them identify red flags.

7. Technology and Future-Proofing Digital transformation is not optional. Registries need to embrace digital identity, data analytics, and potentially AI tools to detect inconsistencies and risks in ownership data.

Why This Is a Positive Shift

For some, this transformation may feel like a loss of simplicity or neutrality. But the benefits are clear. Registries that rise to this challenge:

• Help their jurisdictions avoid FATF grey-listing and protect international reputation.
• Reduce the incidence of corporate fraud, money laundering, and economic crime.
• Enhance trust in the integrity of corporate entities.
• Support better decision-making by both public and private sector users of company data.

In essence, they fulfil their evolving public purpose in a 21st-century global economy.

The era of good faith registration is over. The new era calls for capable, accountable, and digitally enabled registries. Whether it’s in Wellington, London, or São Paulo, registries are on the front lines of financial transparency.

Becoming a competent authority isn’t just about meeting FATF benchmarks; it’s about meeting the expectations of a world that now demands more than just names on a register. It demands truth, traceability, and trust.