(July 2017) Businesses have new deadlines to comply with regulations around transparency of ownership from this month, under the so-called PSC regime. The move is happening as part of the implementation of the EU Fourth Money Laundering Directive (4MLD) which must be implemented across the EU by 26 June 2017.
Introduced last year as part of the Small Business, Enterprise and Employment Act 2015, the regime requires unlisted UK companies and LLPs to identify “People with Significant Control” over them, and to record their details in a statutory register. Until now, any changes to the PSC register could be notified annually using the company’s annual CS01 confirmation statement, but in future there’s a new process to notify any change, with 14 days to update the firm’s PSC register and a further 14 days to send the information to Companies House.
Listed companies were exempt from the PSC regime as they already report under Chapter 5 of the FCA’s Disclosure Rules and Transparency Rules (DTR5) but the changes introduced by 4MLD may mean that AIM-listed companies lose their exemption. That’s because 4MLD does not expressly allow for companies listed on prescribed markets to be exempt, only for those on regulated markets such as the main market of the London Stock Exchange. But although Companies House has announced that the DTR5 exemptions are changing, it’s still not clear what the impact will be on AIM companies.
Any AIM-listed companies need to keep watching to see what is decided. It may be that AIM retains the exemption, for example by being included as a Schedule 1 market, but if not, AIM companies will have to get procedures in place to comply with PSC as well as DTR5.
For all companies within the PSC regime, the changes on reporting mean that companies must be more responsive in future. Previously the updates to Companies House needed to be done just once a year, as part of the standard annual confirmation procedure, but now companies must make sure they’re hitting that 14 day deadline and using the new forms PSC1 to PSC9.
The PSC regime was designed to combat corporate crime, by making it easier to find out who is controlling a company as part of a global initiative to tackle misuse of company structures. The EU’s Fourth Money Laundering Directive requirements requires member states to hold a central register showing current corporate beneficial ownership. The PSC register provides the central register, but this change on notification procedures is required to comply with the requirement that the register be ‘current’.