The nominee and the nominator
A nominee shareholder holds shares for another person and follows that person’s instructions about relevant rights. A nominee director performs director functions under another person’s instructions.
FATF calls the instructing person the nominator. These are international terms. Australian ownership, control and company-law duties need their own legal assessment.
Holding shares as a nominee does not make that person their beneficial owner. The relevant question is who ultimately owns or controls the customer.
Sources: FATF: Nominator; Nominee shareholder or director; AUSTRAC: Beneficial ownership; Control; Determining ownership and control.
Follow the arrangement
A register can identify the named shareholder or director. It may not explain a nominee arrangement or the person who gives instructions.
Examine the ownership chain, relevant agreements and actual decision powers. AUSTRAC’s ownership guidance uses both formal rights and practical influence to explain control.
The beneficial-owner article owns the Australian definition. A nominee label does not replace that test or make every nominator the ultimate beneficial owner.
Source: AUSTRAC: Beneficial ownership; Control; Determining ownership and control.
A named shareholder holds for someone else
In a fictional company, a register names Rowan as a shareholder. The customer says Rowan holds the shares for another company.
The practice records the arrangement and examines the ownership and control behind that company. Stopping at Rowan’s name would leave the explanation incomplete.
This example does not allege a crime. The reporting entity assesses the facts, missing information and applicable duties.
Sources: AUSTRAC: Beneficial ownership; Control; Determining ownership and control; FATF: Nominee shareholder or director.
Follow the arrangement beyond the registered name
Fictional example. A nominee label does not make every nominator the ultimate beneficial owner or prove money laundering.
Separate ownership from other duties
A nominee arrangement alone is not proof of money laundering. Incomplete or conflicting information still needs an answer before the relevant CDD matter can be established.
The person who represents the customer also needs the appropriate authority. Director duties and the validity of a particular arrangement are separate legal questions.
Sources: AUSTRAC: Beneficial ownership; Control; Determining ownership and control; AUSTRAC: What you must establish during initial CDD; How to establish matters on reasonable grounds.