Changes to the PSC regime

From 26 June 2017, all EU Member States must have in place central registers of beneficial ownership, under the provisions of the 4th Money Laundering Directive (Directive). The UK put provisions in place ahead of the implementation date set by the Directive, with the effect that since 6th April 2016, UK companies and LLPs have been required to keep a register of persons with significant control (PSCs) over the entity. These persons may be individuals or corporate entities (known as relevant legal entitles (RLEs)) and may be the same as existing shareholders or may be different.

In order to meet with the remainder of the Directive requirements, a number of changes have now been made to the PSC regime, effective from 26 June:

Entities subject to the regime

Previously, companies were exempt from the requirements if they had shares traded on a regulated market such as the main market of the London Stock Exchange or on a prescribed market like AIM.

The exemption has been amended so that it now applies only to companies admitted to trading on a regulated market situated in an EEA State. The effect of this is that companies listed on prescribed markets such as AIM and NEX are now required to maintain a register, and have until 24 July 2017 to comply.

Also from 24 July, Scottish partnerships and Scottish limited partnerships will be required to file information on their PSCs at Companies House although they will not be required to maintain a register themselves.

Updating information

The Directive requires that information on PSCs is “adequate, accurate and current”. Consequently, companies and LLPs subject to the regime must now enter required particulars and additional matters in their PSC register within 14 days of the information being confirmed. The central register at Companies House will no longer be updated by means of the annual confirmation statement (form CS01). Instead, PSC changes will need to be reported within 14 days using separate individual forms (PSC01 to PSC09, or the equivalent forms for LLPs, LLPSC01 to LLPSC09).

Common changes that companies will now need to report include:

• A person becoming a PSC or RLE – for example, they acquire shares in a company and their ownership exceeds 25% of the company’s share capital for the first time.
• A person ceasing to be a PSC or RLE – for example, they dispose of shares so that they now hold 25% or less in the company’s shares or voting rights.
• Changes in specified details of a PSC or RLE – for example, a PSC changing their residential address or an RLE changing its name.
• Changes to the nature of an existing PSC’s control over the company – for example, they acquire or dispose of shares, which takes them into different ‘shareholding brackets’.

Protection for PSC information

There have also been changes to the protection regime afforded to PSCs from public disclosure of their information. Certain PSC information which forms part of the public record, for example the PSC’s date of birth and usual residential address, is currently only accessible by specified public authorities. Following the Directive changes, access will be extended to financial intelligence units, competent authorities and other entities that have an obligation to carry out customer due diligence. All PSC information held on the public record will now also be available to law enforcement agencies with no exceptions.

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The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.