Background

Most UK companies and all UK LLPs must keep a register of ‘persons with significant influence or control’ (“PSCs”). Up until now this information has also been provided to Companies House: (i) on the incorporation of a new company or LLP; or (ii) through the confirmation statements filed by companies and LLPs already in existence. The requirements were introduced in April 2016 as part of the gradual transposition of the requirements of the Fourth EU Money Laundering Directive (often referred to as ‘MLD4’) into UK law, and aim to improve transparency regarding the ownership of UK companies by making PSC information publicly available to view through the Companies House website.

Now, with the passing of the Information about People with Significant Control (Amendment) Regulations 2017, the regime has been expanded even further. This article focuses on the impact of the new rules on AIM companies.

Scope

With effect from 24 July 2017, the only companies that will be exempt from the PSC register requirements are those with voting shares admitted to trading on a regulated market in an EEA State or on a small number of other specified foreign exchanges. Effectively this means that as of 24 July 2017, UK-incorporated companies trading on AIM and other prescribed markets (such as ISDX and the NEX Exchange Growth Market) will be required to keep a PSC register and be subject to the PSC rules.

What are the next steps?

Immediately

There is a four week transitional period which started on 26 June and ends on 24 July 2017 during which time affected companies should be preparing to set up a PSC register by investigating and reviewing beneficial owners or other people/entities who may have significant influence or control. This process may require notices requesting information to be sent to potential PSCs/RLEs or third parties with information in order to:

• establish if they have any PSCs or ‘relevant legal entities’ (“RLEs”); and
• obtain(and, where relevant, confirm) the relevant information to input into the company’s PSC register.

Many AIM companies will be assisted by ongoing compliance with the voting rights notification regime under DTR5; however, there are differences between the two regimes and additional PSC conditions will require careful consideration.

Action to be taken on 24 July 2017

The company must make its initial entries in its register and file its prescribed PSC statement(s) at Companies House in accordance with the rules. Whilst the legislation is not entirely clear, commentary suggests that the cautious approach would be to ensure that an initial entry is made into the PSC register on 24 July 2017 relating to PSC/RLE information (or official statement confirming the company's current investigative status to the extent that investigations are outstanding), with that information/statements on the register then being due for filing at Companies House within 14 days (i.e. by 7 August 2017).

Changes to filing requirements

It will now also be a requirement for all companies and LLPs subject to the PSC regime to:

1. update their PSC registers within 14 days of any changes to PSC information; and
2. file that information at Companies House within a further 14 days.

Where a company knows, or has reasonable cause to believe, that a change has occurred to its PSC information, it must:

1. give a notice, seeking confirmation of the change, within 14 days; and
2. file that information at Companies House within a further 14 days.

Changes to the confirmation statement

As noted above the filing of PSC information at Companies House will now be event-driven and no longer filed on an annual basis as part of the confirmation statement regime. Instead, the new forms PSC01 to PSC09 will need to be used to notify changes as they happen (within the deadlines described above). Note, however, that the confirmation statement has not been phased out; it will still be a requirement that companies file a confirmation statement (form CS01) annually to confirm that the information held on the register is correct.

What now?

As noted transitional provisions are in place to allow affected companies to gather the information required by 24 July 2017 in order to make initial entries on their PSC register. Those companies now in scope should not delay in beginning to investigate their beneficial ownership and anyone else with significant influence or control – particularly if their structure is complex - with a view to having a register in place on time. Persons who, as a result of the new legislation, are now PSCs should not delay in applying to the registrar to have their information protected from public disclosure if they are at serious risk of violence or intimidation.

We would be happy to assist you in dealing with your PSC requirements, and support you in meeting your obligations in reporting your PSC information to Companies House. The new rules also apply to some extent to Scottish limited and general partnerships as well as impact on companies/LLPs that are already subject to the PSC rules and we can advise further on these as necessary.