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persons with significant control regime – changes on the way

28 June 2017

A revised regime from 26 June 2017…

From 6 April 2016, qualifying UK companies and LLPs have been required to keep a register of ‘persons with significant control’ (PSCs).

However, the UK's implementation of the Fourth EU Money Laundering Directive (4MLD) has involved certain changes to the current PSC regime – these changes came into force on 26 June 2017.

What are the key changes?

Key changes to the UK PSC regime affect:

  • Alternative Investment Market companies (AIM companies) – when the PSC regime was first enacted AIM companies did not have to comply with it. However, changes brought in as a result of the UK’s implementation of 4MLD mean that going forward AIM companies will need to comply with the UK PSC requirements. This could potentially increase the administrative and reporting burden on AIM companies in future – especially as they are already subject to additional regulation by virtue of their AIM listing.
  • the process for delivering PSC information to Companies House - which will now become events driven rather than being dealt with as part of the confirmation statement. Entities obliged to keep a PSC register will be required to update their PSC information within 14 days of any change occurring and will then have a further 14 days to file the information at Companies House on a series of new forms (PSC01 to PSC09). The confirmation statement will be amended to remove the PSC information, which is currently contained within Part 5 of confirmation statement (CS01).

    This is a significant change from proposals previously canvassed by the Government, which had suggested a six month period for notifying changes.
  • Scottish Limited Partnerships (SLPs) and general Scottish Partnerships (SPs) - from 24 July 2017 SLPs and SPs where all members are corporate bodies must register PSC information with Companies House. The protection regime (which prevents PSC information from being disclosed in certain prescribed circumstances) will be widened to cover SLPs and SPs as necessary.
  • the protection regime - currently someone who is a PSC can apply to have their details withheld from the public register if they or someone they live with are at serious risk of violence or intimidation (known as the protection regime). If a successful application is made, only specified public authorities can access this protected information at the moment. 4MLD also brings further changes to the protection regime, by extending access to protected information to certain credit and other financial institutions.

4MLD is a Europe wide directive that requires all EU member states to have registers showing the beneficial ownership of companies. As a result, from 26 June 2017 regimes equivalent or similar to the UK PSC regime should be put in place (to the extent they are not already implemented) across Europe.

PSC data at Companies House

Companies House has recognised that the PSC legislation can be complex and some companies need additional support to help them complete their PSC records properly. Companies House intends to contact companies with clearly incorrect PSC data in a collaborative rather than a punitive approach to help them to comply – they are also updating their PSC guidance. Companies House will also make it easier for those accessing information on the public register to report issues by introducing a ‘report it now’ button on their website.

Fifth Money Laundering Directive (5MLD)

Whilst we are still getting to grips with how the UK’s implementation of 4MLD will impact the PSC regime, further changes are already waiting in the wings by virtue of 5MLD. 5MLD is likely to introduce further key amendments to the PSC regime, including the reduction of the 25% threshold in the PSC regime to 10%. At present we are used to someone being a PSC if they hold (directly or indirectly) more than 25% of the shares or voting rights in the capital of a company – this could be reduced to a 10% threshold when 5MLD is implemented. More on this is likely to follow over coming months.

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