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Greater transparency regarding beneficial ownership: MLD4 and impending changes to the UK PSC regime


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Summary: The Fourth Anti-Money Laundering Directive (MLD4) must be implemented by 26 June 2017. It goes further than the UK’s People with Significant Control (PSC) regime – by extending the entities that are required to report (so as to include other legal entities and trusts) and requiring information held centrally to be up to date. The government is currently consulting on its implementation.

Transparency of beneficial ownership is becoming a familiar theme. The UK is seen as a leader in this field, having already established a new public register of persons with significant control (PSC) over UK private companies, limited liability partnerships (LLPs) and Societates Europaeae (SEs). However, the Fourth Anti-Money Laundering Directive (EU 2015/849) (MLD4) which member states must implement by 26 June 2017, goes further. It extends the requirements on the holding and disclosure of beneficial ownership information to apply to corporate and other legal entities and trusts, and also requires the information held centrally to be up to date.

HM Treasury recently issued a consultation on the steps it proposes to take to implement MLD4, inviting feedback by 10 November. For the purposes of its consultation, HM Treasury is disregarding the European Commission’s July proposals to amend some of the MLD4 rules. These would involve significant changes to MDL4 as currently drawn, including a call on member states to bring implementation forward from 26 June 2017 to 1 January 2017, to widen the scope of the trust register and to reduce the threshold indicating ownership and control to 10% in certain circumstances.

We expect the MLD4 requirements on beneficial ownership to be implemented in the UK by way of amendments to the PSC rules. HM Treasury acknowledges in its consultation a parallel set of plans (set out in a BEIS discussion paper earlier this year) to require foreign companies to provide details of their beneficial ownership  before they can acquire UK real estate or participate in UK procurement projects. What this means for you is compliance with any amendments to the PSC regime in due course, including identifying which other entities in your business may also be subject to the revised regime.

Click here to read our full briefing, which provides an overview of MLD4 in respect of beneficial ownership registers, and explores some of the key issues on its implementation into UK law.

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