Parliament is set to consider clean-up legislation against the use of bearer shares and nominee directorships, removing legislative anomalies and implementing stronger controls.

The Government is expected to get broad agreement from the opposition One Bermuda Alliance for the measure.

As part of a global crackdown, most major jurisdictions have restricted, immobilised, or entirely abolished bearer shares, many since the turn of the century.

Bermuda’s legislative changes were recommended actions from the Caribbean Financial Action Task Force Fourth Round Mutual Evaluation.

The Companies (Prohibition of Bearer Shares and Nominee Directors) Amendment Act 2025 would further align Bermuda’s corporate governance standards with international regulatory requirements, specifically the transparency measures promoted by the FATF.

Scott Pearman, the Shadow Minister of Justice, said the OBA was supportive of the proposed legislation, which he said would continue to enhance Bermuda’s existing reputation as a top-tier international financial centre.

He said: “The OBA will support the Bill as the proposed amendments accord with international best practice and will help Bermuda to maintain our standing as one of the best places for companies to do business. It is fair to say that certain aspects of the legal changes are merely providing greater clarity to the existing position.

“In my experience, having practised as a Bermudian barrister for some time, it would be a very rare thing to find any company in Bermuda that has bearer shares. That said, there is little harm, and potential benefit, to clarify the prohibition of bearer shares and put matters beyond doubt.”

The Bill would require that should any be found, they should be converted to registered shares in the companies and limited liability companies.

Exempted companies and exempted limited liability companies moving from Bermuda would be required to appoint a local agent to retain the company’s and limited liability company’s beneficial ownership register and records of account for a minimum of five years.

The Companies Act 1981 is also being changed to prohibit the appointment of nominee directors and to require more information about alternate directors.

Mr Pearman commented: “Alternate directors are not uncommon in Bermuda, and the concept does provide some practical utility. This Bill will require alternate directors to disclose their additional particulars to the Registrar of Companies. Not many alternate directors would consider that to be overly burdensome.”

Bearer shares are stock certificates that are not registered to a specific owner. The person who physically holds the certificate is considered the legal owner. This gives bearer shares an anonymity and transferability that makes them a potential tool for money laundering or tax evasion.

Britain banned them in 2015 and Switzerland ended their use in 2019. They are also effectively banned in the United States and the European Union.

The amendments call for Bermuda companies to convert any bearer shares they may have to registered shares within 90 days of the amendment coming into force.

After three months, the bearer shares will become worthless and holders will no longer be able to register them.

The new Bill would also require exempt companies moving to another jurisdictions to appoint a local agent to retain the company’s beneficial ownership register and records of account for a minimum of five years from the effective date of discontinuance.

It would also require that such appointment and retention of the beneficial ownership register and records of account be contained in an irrevocable deed poll that is filed with the registrar.

Mr Pearman said: “The key here is for Bermuda to maintain a balance. Clearly, we must continue to ensure Bermuda is recognised as a jurisdiction that is knowledgeable, flexible and where it is easy to do business.

“At the same time, we must continue to ensure that Bermuda maintains our reputation for international best practice and that our Island is seen to be a leader in an increasingly competitive global marketplace.

“Historically Bermuda has been very adept at striking this vital balance.”

A request for comment from the Government had not yet been answered by press time.