Important changes are due to take place to the "register of people with significant control" (PSC Register) regime with effect from 26 June 2017 and 24 July 2017. Potentially bringing more entities within its scope (such as AIM companies) and altering the way in which changes to information on the PSC Register are dealt with. The changes are proposed as part of the implementation of the EU Fourth Money Laundering Directive (4MLD) which is required to be implemented across the EU by 26 June 2017 (and is being implemented in the UK despite the Brexit vote). The current position remains unclear and we await publication of draft regulations in respect of the proposed changes.
New entities caught by the PSC Register regime
When the regime was introduced last year AIM companies (and those listed on the main market of the London Stock Exchange) were specifically exempted as they are subject to shareholder disclosure requirements under Chapter 5 of the Financial Conduct Authority's Disclosure and Transparency Rules (DTR5). Last November, the Government announced a consultation on the regime in light of the implementation of 4MLD. The consultation stated that the Government was considering whether the PSC Register regime would need to be extended to cover companies quoted on AIM and other markets which do not fall within the 4MLD's definition of a "regulated" market (the main market of the London Stock Exchange is a "regulated" market whereas AIM is not). If brought into the regime, AIM companies could potentially have the burden of complying with both DTR5 and the PSC Register regime.
Dealing with changes to "people with significant control" (PSC) information
On 19 April 2017, Companies House issued a press release which stated that, from 26 June 2017, PSC changes will now become events driven rather than being dealt with as part of the confirmation statement process. Entities obliged to keep a PSC Register will be required to update their PSC Register within 14 days and to notify Companies House within 28 days of any change occurring. The consultation initially suggested a 6 month period so this is a significant change.
Scottish LPs and Scottish general partnerships
From 24 July 2017, it is also proposed that active Scottish limited partnerships and general Scottish partnerships (where all partners are corporate bodies) will be brought within the PSC Register regime.
Draft regulations to amend the Companies Act 2006 have not yet been published so we await confirmation of the proposed changes. If AIM companies are brought into the PSC regime, we expect that the guidance would be updated to clarify the interaction of DTR5 and the PSC Register regime.
Companies House has also stated in its Business Plan and Strategic Plan that it plans to review the accuracy and completeness of PSC information. It will adopt a collaborative rather than punitive approach which is to be welcomed bearing in mind that failure to comply with the PSC regime is a criminal offence. Companies House acknowledges that the legislation can be complex and plans to review its guidance and to contact those entities with clearly incorrect PSC information to help them complete their record properly.