On 26 June 2017 changes will be made to UK anti-money laundering measures to help prevent money laundering and terrorist financing.
The aim is to increase the transparency of who owns and controls companies in the UK. This legislation will make changes to current requirements about “people with significant control” (PSC) information.
Informing Companies House of any changes to the PSC register
From 26 June 2017, where there is a change to the information on a company or limited liability partnership’s PSC register, it will have 14 days to update its register and another 14 days to send the information to Companies House. Forms PSC01 to PSC09 will need to be used to notify Companies House.
This change is being made because the 4MLD (4th Money Laundering Directive) requires information held on the PSC register to be “current”.
Presently, there is an effective 2 month period for a change in PSC information to be notified to the company but there is no specific time period within which the company must update its register once it has received notice of that change.
Unless the company has specifically elected Companies House to hold and maintain its PSC register (which is rare), the public record at Companies House only has to be updated once a year via the company’s “confirmation statement”.
The extension of the PSC regime has been expected, given the requirements of the 4MLD, but many details remain unclear so close to implementation. The dissolution of Parliament for the general election has meant that the ministerial statement setting out the government’s intentions, together with draft legislation, was not published as expected. Parliament will return on Wednesday 21st June 2017 which leaves less than a week for details to emerge. This is a less than ideal situation.
The changes should not prove too burdensome and will ensure the public register reflects an accurate picture of significant control throughout the year.
However, this will result in an odd divergence between the public record of a company’s shareholders versus its significant controllers. This is because transfers in shareholdings are not notified to Companies House as they happen: the public record of a company’s shareholders is only updated via the Confirmation Statement which only has to be filed once a year.
By contrast, when the changes are implemented, the public record of a company’s significant controllers will be updated as and when changes occur.