Can bonds be issued and used as a nominee?
No. A proposed structure whereby a nominee sets up a company, and issues a bond to be bought by the client. The nominee company's assets are managed by the client. Upon maturity, the bond is redeemed at the value of the company's assets.
Why this bond structure must be considered a nominee
A bond is a debt investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate. Thus if a bond is a debt instrument, the client purchasing the bond has a debt interest in the entity issuing the bond, and will be reported if the entity is an Investment Entity (i.e. its assets are managed by a Financial Institution).
Moreover, a bond is a fixed income product. Redemption of bond value based on the capital appreciation of underlying investments is a sham.
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