Since April this year, UK limited companies have been under an obligation to keep a register of people with significant control (PSC register), capturing information on their beneficial owners and others with significant influence or control over them (PSCs). The information contained in the PSC register must be made publicly available on a central register held at Companies House.
As the PSC regime currently stands, AIM companies, LSE Main Market companies and ISDX Growth Market companies are exempt from the obligations to maintain and disclose information on their PSCs – their significant shareholder reporting obligations under Chapter 5 of the Disclosure Rules and Transparency Rules (DTR5) were considered equivalent.
The government is now considering how the existing PSC regime will be affected by the implementation in the UK of the EU beneficial ownership disclosure requirements (as set out in the EU Fourth Money Laundering Directive). The Directive is due to be implemented in member states by 26 June 2017.
Whilst the Directive exempts regulated markets, such as the LSE Main Market, from its beneficial ownership disclosure requirements, it does not expressly exempt prescribed markets, such as AIM and ISDX. As a result, the government must now consider whether it is necessary to bring UK companies with shares traded on prescribed markets, such as AIM and ISDX, within the scope of the PSC regime. AIM companies could find themselves with the added administrative burden of having to both maintain a PSC register and comply with their DTR5 (and AIM Rule 17) significant shareholder reporting obligations.
The Department for Business, Energy & Industrial Strategy has published a discussion paper on the implementation of the Directive's beneficial ownership requirements, including the prescribed markets issue. BEIS invites views on the impact of this for affected companies. Responses must be received by 16 December 2016.
The Directive is due to be implemented into member states by 26 June 2017. The exit of the UK from the EU will not affect the implementation of the Directive in the UK; until exit negotiations run their course the UK remains a full member of the EU and must continue to apply EU legislation.
- For a brief look at ongoing developments in the drive for corporate transparency: Beneficial ownership – the PSC regime and beyond