The Corporate Transparency Act: US CLO Co-Issuers and Issuer Subsidiaries

With the implementation of the Corporate Transparency Act (“CTA”) potentially capturing US CLO co-issuers and issuer subsidiary vehicles, managers should be fully engaged in discussions with US counsel regarding their circumstances and ability to avail of any exemptions.  In scenarios where these vehicles are within scope of the CTA, the Maples Group provides a dedicated range of CTA services, which will significantly alleviate the regulatory and compliance burden for clients and US counsel from this legislation.

Importantly, regarding the Beneficial Ownership Information (“BOI”) Reports that must be filed for in-scope entities under the CTA, the Maples Group can: (1) in certain circumstances, serve as the 'Beneficial Owners’; (2) provide both of the 'Company Applicants' that are required; and (3) apply to the IRS for the required Employer Identification Numbers (“EIN”).  The key advantage of this approach is that it allows the Maples Group to conduct all the relevant filings ‘in-house’, in a streamlined process for efficient and effective compliance.

Formation Services

In instances where the vehicles are orphaned and the Maples Group is a service provider and therefore a stakeholder in the transaction, we can provide individuals to be named as both Company Applicants when forming the co-issuer or issuer subsidiary (where we are also providing independent manager / director services.)

• Company Applicant #1 – Our team of experienced professionals will file the formation documents with the Secretary of State and be named on the BOI Report as Company Applicant #1. 
• Company Applicant #2 – Where we are providing independent managers / directors, we can implement processes with US counsel to ensure the Maples Group independent manager / director is the person who is primarily responsible for directing or controlling the filing and can be named on the BOI Report as Company Applicant #2.   This approach would avoid any investment manager or law firm personnel from being required to disclose their personal information on the BOI report as Company Applicant #2. 

EIN Application Services

The Maples Group can simplify the EIN Application process, dealing directly with the IRS to obtain the EIN number that co-issuers and issuer subsidiary vehicles must obtain for the BOI Report.  With our deep bench of directors, we can avoid unnecessary delays that may be caused by the IRS limitations on the issuance of EINs (one per day, per responsible party).

Beneficial Owners

The Maples Group’s CTA solution can provide the required beneficial owner of co-issuers or issuer subsidiary vehicles through the provision of the following services: 

Ownership Interest: 

• The Maples Group can provide share trustee services where the ownership interests are held under a Cayman Islands charitable trust with no individuals, directly or indirectly, owning more than 25% of the ownership Interests of the co-issuer or issuer subsidiary vehicles.

Substantial Control:

• Onshore Co-Issuer / Issuer Subsidiary – Maples Group Delaware can provide managers / directors to the US co-issuer and issuer subsidiary vehicles.
• Offshore Issuer – The Maples Group can provide the offshore directors.  Whilst this is still under consideration by the IRS, if it is determined that the offshore directors need to be named as beneficial owners as a result of their decision making on behalf of the offshore issuer, which in turn is the sole member of the onshore co-issuer), the issuer's Cayman Islands based independent directors provided by the Maples Group can be named. 

CTA Filing Services

To the extent the co-issuer or issuer subsidiary vehicles are determined to be reporting entities for CTA purposes, the Maples Group can file the BOI reports on the entities’ behalf, further reducing the administrative burden.  We have developed efficient controls to manage any updated BOI report filings within the 30-day reporting deadline.