Relevant to – all those working in UK companies, or in other sectors where a company forms part of the corporate structure
The Information about People with Significant Control (Amendment) Regulations 2017 were made on 22 June, laid before Parliament on 23 June and came into force on 26 June.
We predicted in our Technical Briefing on 16 June that, if the regulations were to meet the EU deadline for implementation, they would need to come into force at very short notice, but did not expect they would come into effect on the Monday after they were laid before Parliament on the Friday.
Fortunately, there are few changes from the draft legislation.
As we expected, the scope of the legislation has broadened. In addition to those companies formerly subject to the regime, it will now include UK traded companies which were previously exempt as ‘DTR5 issuers’, but which are not traded with premium or standard listing on the London market. This means that companies traded on AIM or markets such as the NEX Exchange will no longer benefit from exemption, although those companies traded on one of the non-EU markets previously exempted from the PSC regulations – for example, the NYSE or NASDAQ will continue to be exempt. UK unregistered companies – such as this Institute, Scottish limited partnerships and some qualifying Scottish general partnerships where all the partners are corporate bodies will also fall within scope of the legislation. All these entities will have to comply with the obligation to maintain and file information, although the regulations do allow for a four-week transitional period, which means they will not have to begin to do so until 24 July. We understand the Government will expect companies to use the four-week transitional period to investigate their ownership, so that they can comply with the 24 July deadline.
The other change we noted in the last Technical Briefing was around the increased frequency of reporting that will be required. As we indicated, rather than reporting changes to the PSC Register on the confirmation statement submitted at least annually to Companies House, the new requirement is that the register be updated within 14 days whenever there is a change and the new information sent to Companies House within a further 14 days, using forms PSC01 to PSC09. Again, this requirement has effect from 26 June, except for those companies to which the scope of the legislation has not previously applied, for which it will apply from 24 July.
Also on 23 June, BEIS published draft statutory guidance and revised non-statutory guidance for companies and other entities within the scope of the legislation and for people with significant control, reflecting the above changes.
By way of reminder for those companies new to the PSC Register requirements, entities within scope must take steps to identify any PSC or Relevant Legal Entity (RLE) and send notice to anyone it believes falls under either of these headings seeking confirmation of their position. There are detailed rules about when and how this information must be recorded, which are explained in the non-statutory guidance. A PSC Register must never be blank. Even where no PSC or RLE has been identified, or where it has been confirmed that none exists, the position must be recorded on the PSC Register using one of the prescribed forms of words.
Peter Swabey, Policy and Research Director at ICSA: The Governance Institute, commented: ‘This is a complex piece of legislation which has much broader application than may first appear to be the case. I strongly recommend company secretaries and governance professionals in all types of organisations check their situation and not assume they are outside the scope of the legislation because of the structure of their organisation.’
The Information about People with Significant Control (Amendment) Regulations 2017 can be found here
and the explanatory memorandum here
The guidance, both statutory and non-statutory, can be found here.