Our Corporate Governance Expert Group contributed to our response to the BEIS consultation – Implementing the Fourth Money Laundering Directive: beneficial ownership register.
We noted that, since 6 April 2016, UK companies and companies that have a subsidiary incorporated in any part of the UK have been required to keep and maintain a register of people with significant control (the PSC register). We noted that this indicated Parliament's wish to make a distinction between the tests to determine people with significant control and those who are beneficial owners. Therefore, we encouraged the Government to publish guidance explaining how this will work in practice.
We noted our concern that the Fourth Money Laundering Directive could effectively obligate AIM and ISDX companies to keep a PSC register if they have a shareholder who owns more than 25% of the company, despite the fact that listed companies are exempt from this requirement in the text of the Directive.
We noted that if companies on UK prescribed markets, such as AIM and ISDX, were required to comply with UK PSC register requirements from June 2017, then these would have to be complied with at the same time as, yet separately from, the DTR 5 requirements. This would yield no benefits to these companies.
We questioned why it would be sufficient for companies listed on the Main Market to only comply with DTR 5, but insufficient for companies listed on multilateral trading facilities with a primary market function, such as AIM and ISDX. We noted that such a situation could result in more companies applying to the Standard List to avoid the additional compliance burdens.
We commented that it could be helpful to align the timing and process with the confirmation statements to try to reduce the number of times a company needs to update Companies House. We remarked that if companies were required to submit a PSC confirmation statement at least every six months, with every other one being an omnibus version including an additional part covering the other areas currently contained within a confirmation statement in addition to the PSC confirmation statement, it would ensure that PSC information is never more than six months old and would put in place one clear regime.
We also noted that it would be clearer to have a fixed deadline of six months from the last confirmation statement rather than six months from a change, especially given that companies may not be immediately aware of a change in their PSCs. We remarked that it would be very useful if the Government could make it clear that its interpretation of the word “current” will result in no action for breach by any company which follows it and to indemnify each company for doing so.