Further to the EU’s Fourth Anti-Money Laundering Directive, the UK is about to extend its “persons with significant control" (PSC) rules on transparency of corporate ownership. The PSC regime will cover more entities, in particular Scottish limited partnerships (SLPs), and there will be new deadlines for reporting ownership changes. The new regime should apply from June and July 2017 (although delays cannot be ruled out).
What is the PSC regime?
The current rules in force from April 2016 require unlisted UK companies and LLPs to gather, maintain and report details of individuals and certain entities with control or significant influence over the company/LLP (PSCs) (click here for more detail).
Key incoming changes
The final rules have not yet been published (so changes are possible) but announcements to date suggest that:
1. Filing deadlines (from 26 June)
Corporate bodies subject to the PSC regime will have to update their PSC register with any changes within 14 days, with a further 14 days to notify Companies House (the UK company registrar). New forms PSC01–09 (which currently apply only to companies that have opted for Companies House to hold their PSC registers) will be used to notify changes.
2. Extension to Scottish limited partnerships and others
SLPs (and Scottish general partnerships where all of the partners are corporate bodies) (from 24 July) and public companies (such as AIM or ISDX listed companies) which are not listed on an EEA or other Schedule 1 specified market (from 26 June) will now be obliged to maintain a PSC Register too. In relation to SLPs, this should also mean that an SLP that meets the test for being a PSC can be entered (as a “relevant legal entity") in the PSC register of an entity below it in a corporate chain.
New entities subject to the regime must set up a PSC register and may send out investigation notices to individuals they believe are (or have information about) a PSC. Individuals who think they may be a PSC should prepare to supply their details. Anyone who might be at risk of violence or intimidation if their details are made public should consider making an application to have their name and other personal information protected from public disclosure.
Compliance with the EU Directive will require some other incorporated entities, such as open-ended investment companies and investment companies with variable capital, to be brought into the PSC regime. No details on how this will be achieved have been announced.
The PSC regime is part of a package of measures designed to increase transparency around the ownership of UK incorporated entities, and hence to discourage the use of these entities for money laundering or other criminal activities. Other measures in the pipeline include proposals for a new register of non-UK corporate entities holding real estate in the UK (click here for more information).