• Because of the strict wording of the Directive, a UK company with shares traded on AIM or the NEX Exchange Growth Market is no longer exempt, and must maintain a PSC register. The 25 per cent threshold means that, for many AIM companies, they will not have a PSC or relevant legal entity (RLE) to register, but they must still have PSC registers and file updates with Companies House. The exemption will still apply to companies with ordinary shares traded on regulated markets within the EEA, such as the London Stock Exchange’s Main Market, or traded on major markets in the United States, Switzerland, Japan or Israel.
• Certain other UK legal entities will now have to comply with an equivalent PSC regime. In the UK this will mainly impact on unregistered companies and Scottish limited partnerships (as well as Scottish general partnerships whose members are all limited companies). Affected Scottish partnerships will not have to maintain their own separate PSC registers, but must obtain and submit their PSC information to Companies House, and update any changes. (This also means an affected Scottish partnership can be an RLE for the purposes of the PSC regime generally, and so where the partnership satisfies the PSC tests in relation to a company, it is necessary to register it on the company’s PSC register, instead of having to ‘look through’ the partnership to see if there is a registrable PSC or RLE above it.)
• Helpfully, there is a transitional period to allow AIM and NEX Exchange companies, affected Scottish partnerships and unregistered companies to comply with the new rules. They have until 24 July 2017 to create their PSC registers (where required) and a further 14 days from 24 July 2017 to file the information with Companies House.
• Personal information that a PSC has managed to get redacted from the public register (other than his or her date of birth and home address) will now be available to credit institutions or financial institutions where required to comply with their anti-money laundering due diligence obligations.
• Equivalent changes have been made to the regime applying to UK limited liability partnerships.
• Equivalent regimes will have to be put in place throughout the EEA.

Companies House has said that it will work to improve the accuracy and completeness of PSC data. It plans to contact those entities with clearly incorrect PSC data to help them complete their records properly. It will also make it easier for those accessing public PSC information to report problems with the information by introducing a ‘report it now’ button. It has also reviewed its guidance to assist entities with identifying their PSCs correctly and providing the right details for inclusion on registers.

A separate set of regulations, the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, implements other aspects of the Directive. Part 5 (Beneficial Ownership Information) requires unlisted body corporates (this would include AIM companies) and certain express trusts to provide beneficial ownership and other information, on request, to those who have to comply with anti-money laundering due diligence requirements (such as financial services businesses) and to law enforcement authorities. Affected trusts must also maintain up-to-date records of their beneficial owners. Certain trusts that pay UK tax have further obligations to provide their beneficial ownership information, together with other detailed information, to HMRC by 31 January 2018 (this could include some collective investment schemes). The beneficial ownership information will be included on a central register available to law enforcement authorities in the UK and elsewhere in the EEA.

The government has also updated its guidance on the UK PSC regime. This includes:

• An update of the government’s non-statutory guidance on the regime, including an explanation of how the regime applies to affected Scottish partnerships.
• Revised statutory guidance (in draft) on the meaning of ‘significant influence or control’ as it applies to companies (amended for the Scottish partnerships and AIM/NEX Exchange company changes).
• Non-statutory guidance on the meaning of ‘significant influence or control’ as it applies to affected Scottish partnerships.
  The guidance is available at: gov.uk.

Client Alert 2017-157