Extension of the PSC Register – AIM companies are now caughtPrint publication
Changes in legislation came into force on 26 June 2017 which means that UK companies quoted on AIM are now within the scope of the persons with significant control (PSC) register regime. These changes to the PSC register regime have been expected for some time but it was only at the eleventh hour that it was confirmed that UK AIM companies would be losing their existing exemption.
The PSC register now applies to AIM companies alongside (not in place of) the existing significant shareholder notification requirements in Chapter 5 of the Disclosure Guidance and Transparency Rules (DTR5) and the significant shareholder disclosure obligation under Rule 17 of the AIM Rules. Whilst DTR5 and Rule 17 are broadly similar so that compliance with DTR5 will usually mean that an AIM company is complying with Rule 17, the PSC register regime is quite different and will require separate administration.
AIM companies have until 24 July 2017 to collect their PSC information and create their register. The information must then be filed at Companies House within 14 days (i.e. 7 August at the latest) using Forms PSC01 to PSC09. AIM companies must then keep their PSC register up to date in the same way as unquoted UK companies. There is a legal obligation on companies to update their PSC register within 14 days of any changes to the company’s ‘persons with significant control’ and then to notify Companies House of those changes within a further 14 days.
Private UK companies have had to comply with the PSC register regime for a little over a year now and so AIM companies with unquoted subsidiaries will already be familiar with its requirements. However for those who are new to the PSC register regime, here is a brief summary:
- The PSC register is a statutory corporate register, similar to the register of members, which must be individually maintained by companies.
- The PSC register records information about the individuals who have significant control over the company (or LLP). A company may have multiple people with significant control or none. For companies, the register records information about the individuals who ultimately own or control more than 25% of the company’s shares or voting rights, those that can appoint or remove the majority of the board, or who otherwise exercise significant influence or control over the company.
- If significant control is exercised through another entity which itself has to keep a PSC register or which is listed on certain stock exchanges, details about that entity must be registered instead of the individual’s details. However, if an individual exercises control through non-UK or unquoted entities (i..e outside the PSC regime), you must look through to find the individuals who are ultimately in control of those companies and enter their details on the register.
- In a bid to improve corporate transparency, each PSC register is open to public inspection and the Companies House record is free to search online (residential addresses and date of birth are kept confidential).
- Companies and LLPs are obliged to take reasonable steps to identify people with significant control and those people are in turn obliged to provide the information to the company / LLP to be recorded on the register. Failure to comply is a criminal offence which on conviction could lead to fines and/or imprisonment of up to two years.
- There are prescribed statements that must be entered on the register whilst the company is carrying out its investigation, or if there is no one with significant control.
Due to the short notice, AIM companies have very little time to get prepared and ensure they comply by 7 August 2017. Those AIM companies which are already required to gather PSC information for other group companies should find it easier to comply compared to those completely new to the regime.