New deadlines for the People with Significant Control regime

Following the implementation of the Money Laundering Regulations on 26 June 2017, businesses need to be aware of important new deadlines under the People with Significant Control (PSC) Regime.

What are the changes to the “People with Significant Control” regime?

The regime, introduced by the Small Business, Enterprise and Employment Act 2015, requires all unlisted UK companies and LLPs to establish the identity of all “People with Significant Control” over them, and for these PSCs to be notified to Companies House. The regime was introduced in order to increase transparency of company ownership in a bid to tackle money laundering. Until 26 June any changes to the public PSC register could be notified using the company’s annual CS01 confirmation statement. That means there was no requirement to notify Companies House of the change until the CS01 was filed.

Following the implementation of the Money Laundering Regulations 2017 on 26 June pursuant to the Fourth Money Laundering Directive (4MLD), there is a new process firms must follow. The new process allows firms a 14 day time limit to update its own PSC register and a further 14 days to send the information to Companies House.

This change to the reporting of PSCs means that companies will need to be more responsive in future. They will need to ensure that they meet the fourteen day deadline and changes to the register are reported using the new forms PSC01 to PSC09.

PSC changes for AIM companies

There may also be new rules for listed companies. Under the previous regime AIM listed companies were exempt. This was because of their requirement to report under Chapter 5 of the FCA’s Disclosure and Transparency rules (DTR5). However, the Fourth Money Laundering Directive only expressly exempts companies listed on regulated markets, meaning that only companies listed on the main market of the London Stock Exchange and on similar worldwide markets will still benefit from the exemption. This means that AIM companies will have to put procedures in place to ensure that they comply with their new PSC requirements as well as their obligations under DTR5.

Non-compliance of the PSC regime

These are substantial changes to the PSC regime of which LLPs and companies, and particularly AIM listed companies, need to be aware. Companies House has indicated that they will be taking a more rigorous approach to non-compliance in future, so it is important that firms are aware of and adhere to the new time limits and ensure that the correct form is filed at Companies House. Failure to comply with obligations under the PSC regime is a criminal offence committed by the Company and its Directors which can be punishable with up to 2 years’ imprisonment or a fine.

The PSC regime was introduced in order to combat corporate crime and money laundering by making it easier to find out who controls a company. This is as part of a global initiative to prevent corporate structures being misused. 4MLD requires all member states to hold a central register showing current corporate beneficial ownership. In the UK the PSC register provides this. The change to notification requirements is so that the UK can comply with its obligation that the register be ‘current’.

To find out more about the PSC regime and what the changes mean for your business, call Howard on 02380 717717 or email howardrobson@warnergoodman.co.uk.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.