Update on new PSC rules
Further provisions of the Fourth Money Laundering Directive (4MLD) were recently incorporated into UK law, widening the scope of the People with Significant Control (PSC) regime and implementing new record-keeping and notification requirements. Leanne Davidson discusses the changes which were implemented and how these will affect UK companies.
From 26 June 2017, the Information about People with Significant Control (Amendment) Regulations have extended the PSC regime to include companies listed on the AIM market (and other smaller exchanges). This marks a change to the previous position where all companies subject to the FCA's Disclosure Guidance and Transparency Rule 5 (DTR 5) were exempt, on the basis that they already provide information in relation to control and beneficial ownership via public announcements. However, the requirements of the PSC regime are more extensive than DTR 5 in some respects and 4MLD specifically exempts only those companies which are admitted to trading on a regulated market, meaning that AIM companies (and those on other smaller exchanges) are no longer exempt from this regime.
The 4MLD also extended the PSC to Scottish Partnerships (SPs) and Scottish Limited Partnerships (SLPs). These companies were given one month from the implementation of the 4MLD to file their PSC information with Companies House; the deadline for this was 24 July 2017.
Changes to the notification procedure
When the introduction of the PSC register was implemented on 6 April 2016, it was envisaged that all changes to a company's PSC information during the year would be notified to Companies House through the annual filing of the company's Confirmation Statement (unless a company had elected to hold their PSC information at the central public register at Companies House).
However, one of the main aims behind the 4MLD was to ensure that information regarding beneficial ownership was "current". This was not being achieved by the previous regime where information was only updated or confirmed once a year, meaning that there was a possibility that the public file would be out-of-date. Therefore, the PSC notification procedure was amended on 26 June 2017 and the new procedure is summarised below:
How to notify
- PSC information is no longer contained within the annual Confirmation Statement and changes must be submitted to Companies House using a separate form.
- For companies, forms PSC01 to PSC09 must be used to notify Companies House of PSC changes.
- For LLPs, forms LL PSC01 to LL PSC09 must be used to notify Companies House of PSC changes.
When to notify
- A company/LLP must update its own PSC register within 14 days of receiving the new/updated PSC information.
- The company/LLP then has a further 14 days to file this new information at Companies House.
So a company must now file new PSC information with Companies House within 28 days of receiving the information itself. This is a big change from the previous requirement to submit a statement annually; it is also a significantly shorter period than the period of six months that was suggested by the Government back in November.
It is a criminal offence not to keep your PSC register up-to-date, as with the other statutory registers; currently there is no case law regarding any action taken against a company/LLP or its officers that have failed to keep its PSC registers up-to-date. However, this is clearly an important area of corporate governance with more and more emphasis being put onto the PSC register, as these new amendments show.
If you would like assistance regarding these amendments, or would like guidance on completing the new PSC forms, please get in touch with a member of our Company Secretarial team at firstname.lastname@example.org and one of the team will be happy to assist.