PSC Regime - reporting changes in company ownership
Businesses must now comply with regulations around transparency of ownership, under the so-called PSC regime. The move happened as part of the implementation of the EU Fourth Money Laundering Directive (4MLD) which had to be implemented across the EU by 26 June this year.
Introduced last year as part of the Small Business, Enterprise and Employment Act 2015, the regime requires unlisted UK companies and LLPs to identify “People with Significant Control” over them, and to record their details in a statutory register. Before this move, any changes to the PSC register could be notified annually using the company’s annual CS01 confirmation statement, but the new process requires notification of any change, with 14 days to update the firm’s PSC register and a further 14 days to send the information to Companies House.
Listed companies were exempt from the PSC regime as they already report under Chapter 5 of the FCA’s Disclosure Rules and Transparency Rules (DTR5) but the changes introduced by 4MLD may mean that AIM-listed companies lose their exemption. That’s because 4MLD does not expressly allow for companies listed on prescribed markets to be exempt, only for those on regulated markets such as the main market of the London Stock Exchange. But although Companies House has announced that the DTR5 exemptions are changing, it’s still not clear what the impact will be on AIM companies. Any AIM-listed companies will need to keep watching to see what is decided. It may be that AIM retains the exemption, but if not, AIM companies will have to get procedures in place to comply with PSC as well as DTR5.
For all companies within the PSC regime, the changes on reporting mean that companies must now be more responsive. Previously the updates to Companies House needed to be done just once a year, as part of the standard annual confirmation procedure, but now companies must make sure they’re hitting that 14 day deadline and using the new forms PSC1 to PSC9.
The PSC regime was designed to combat corporate crime, by making it easier to find out who is controlling a company as part of a global initiative to tackle misuse of company structures. The EU’s Fourth Money Laundering Directive requires member states to hold a central register showing current corporate beneficial ownership. The PSC register provides the central register, but this change on notification procedures is required to comply with the requirement that the register be ‘current’.