Corporate weekly highlights—29 June 2017

Welcome to the weekly highlights from the Lexis®PSL Corporate team for the week ending 22 June 2017, which provide news updates and a comprehensive list of dates for your diary. This week’s edition features: analysis examining the newly enhanced PSC regime; Information about People with Significant Control (Amendment) Regulations 2017; The Scottish Partnerships (Register of People with Significant Control) Regulations 2017; Companies House guidance on the PSC regime; revised FCA money laundering guidance issued for consultation; Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017; Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017; the European Commission’s guidelines on disclosure of non-financial information; and the news that the Recast Insolvency Regulation has come in force.

Headlines (News updates & analysis)

PSC register

Beneficial ownership—enhancement of the PSC regime

This analysis examines the newly enhanced beneficial ownership regime. On 26 June 2017 the regime for investigating and recording information about people with significant control (PSC) over companies and other entities was extended and enhanced. Reporting entities are now required to update their own registers within 14 days, and to update the information held on the central register at Companies House within a further 14 days. This is a significant change from the previous position where centrally-held PSC information was updated via the annual confirmation statement. In addition, the scope of the regime has been extended to cover unregistered companies, companies listed on prescribed markets such as AIM or the NEX Exchange Growth Market, and eligible Scottish partnerships.

For details see News Analysis: Beneficial ownership—enhancement of the PSC regime.

Information about People with Significant Control (Amendment) Regulations 2017

The Information about People with Significant Control (Amendment) Regulations 2017, SI 2017/693 came into force on 26 June 2017 (the 2017 Regulations).

These Regulations implement aspects of Article 30 (requiring a central register of beneficial ownership information for corporate and other legal entities) of Council Directive 2015/849/EU (the Directive) on the prevention of money laundering and terrorist financing, in relation to companies, including unregistered companies and limited liability partnerships. They also make minor changes to, and extend the scope of, Part 21A of the Companies Act 2006, which requires companies to keep a register of people with significant control over the company (a PSC register), its application to LLPs and the Register of People with Significant Control Regulations 2016, SI 2016/339, to bring the UK’s domestic regime into compliance with the Directive’s requirements.

For details see news, LNB News 26/06/2017 74.

Scottish Partnerships (Register of People with Significant Control) Regulations 2017

The Scottish Partnerships (Register of People with Significant Control) Regulations 2017, SI 2017/694 came into force on 26 June 2017. These Regulations transpose Article 30 of the Directive for Scottish limited partnerships and certain Scottish general partnerships.

The existing provisions are amended by the 2017 Regulations, where necessary, to complete the transposition. Note that transposition is not required in relation to limited or general partnerships registered or formed under the law applicable in the UK other than in Scotland.

For details see news, LNB News 26/06/2017 43.

Companies and LLPs issued guidance on changes to 'people with significant control' regime

Companies House (CH) has provided guidance on changes to the people with significant control (PSC) regime.

From 26 June 2017, PSC will not be updated on the confirmation statement (CS01). Instead, entities will need to tell CH—on forms PSC01 to PSC09—whenever there is a change. Entities will have 14 days to update their own register and another 14 days to send the information to CH.

DTR5 companies are exempt from requirements to hold information about their PSC. If the company is traded on an EEA or Schedule 1 specified market, it is still exempt.

From 26 June 2017, active Scottish Limited Partnerships and any general Scottish partnerships where all the partners are corporate bodies must identify their PSC and from 24 July send this information to CH within 14 days.

For details see news, LNB News 26/06/2017 67.

Money laundering

FRC plans update of money laundering guidance

The Financial Reporting Council (FRC) has issued revised guidance for consultation aimed at making auditors aware of their responsibilities under UK money laundering rules. The guidance has been updated to reflect the requirements of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, SI 2017/692 which came into force on 26 June 2017. They implement, in part, the Fourth Money Laundering Directive 2015/849/EU and revoke the Money Laundering Regulations 2007, SI 2007/2157.

To reflect the new rules, the FRC is proposing to issue revised guidance material. The main areas of change include: the legislative and regulatory framework, local public audit and UK anti-money laundering authorities.

The consultation is open until 8 September 2017.

For details see news, LNB News 26/06/2017 91.

Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, SI 2017/692

The Money Laundering Regulations 2007, SI 2007/2157 and the Transfer of Funds (Information on the Payer) Regulations 2007, SI 2017/692 have been revoked and replaced with updated provisions that implement, in part, the Fourth Money Laundering Directive 2015/849/EU and the Wire Transfer Regulation 2015/847/EU. The changes came into force on 26 June 2017.

The Fourth Money Laundering Directive 2015/849/EU and Wire Transfer Regulation 2015/847/EU seek to give effect to the updated Financial Action Task Force (FATF) global standards which promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.

For details see news, LNB News 23/06/2017 55.

Equity capital markets

Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017, SI 2017/701

Parts of Directive 2014/65/EU on markets in financial instruments (MiFID II) are transposed into UK law and provisions are also made giving effect to Regulation (EU) 600/2014 on markets in financial instruments (MiFIR). These changes come into effect in part on 29 June 2017, and in full on 3 January 2018.

MiFID II and MiFIR create more robust market structures, requiring more trades to be conducted through trading venues to promote transparency. They provide a stricter framework for commodity derivatives and strengthen investor protection. Together they replace and extend Directive 2004/39/EC in financial instruments (MiFID I), in light of the financial crisis and technological change.

The Financial Conduct Authority and the Prudential Regulation Authority are designated as UK competent authorities for the purposes of MiFID II and MiFIR. Provision is also made for the optional exemption of investment firms under Article 3 of MiFID II.

For details see news, LNB News 23/06/2017 53.

Insolvency for corporate lawyers

Recast Insolvency Regulation in force

The Insolvency Service has published guidance on the recast Insolvency Regulation (EU) 2015/848 which came into force, in part, on 26 June 2017. Regulation (EU) 2015/848 deals with cross-border jurisdiction, cooperation, recognition and enforcement of insolvency proceedings in the EU, makes changes to existing provisions and introduces areas of new policy.

For details see news, LNB News 27/06/2017 74.

Dates for your diary

Date Subjects covered
29 June 2017 Alternative Investment Fund Managers Directive (Reporting) Instrument 2017 (FCA 2017/3) comes into force. The directive amends the Investment Fund sourcebook. For further information, see LNB News 26/01/2017 178.
30 June 2017 Deadline for comments on the FRC's Financial Reporting Exposure Draft (FRED). The proposals aim to make the standard clearer and easier to use, resulting in more cost-effective financial reporting. For further information, see LNB News 23/03/2017 102.
3 July 2017 New transposition date for revised MiFID II. For further information, see LNB News 19/02/2016 93.
Further dates To look further ahead, see: Corporate horizon scanning—2017 and beyond.

Relevant Articles
Area of Interest