UK AIM companies are now within scope of the persons with significant control (PSC) register regime, as a result of changes which came into force on 26 June 2017. Changes to the PSC register regime have been expected for some time. But it was not until late on Friday 23 June, when the relevant legislation was published, that it was confirmed that UK AIM companies would be losing their previous exemption.
The PSC register now applies to UK AIM companies alongside 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 DTR 5 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 (see our comparison box below).
UK AIM companies have until 24 July 2017 to gather their PSC information and create their PSC register. Where a UK AIM company does not have a PSC or is still undertaking investigations as at 24 July 2017, the register will need to set out the appropriate statutory statement. The information or statutory statements on the register must then be filed at Companies House within 14 days using Forms PSC01 to PSC09. So the latest date that AIM companies can make their filings at Companies House is 7 August 2017. UK AIM companies will then be required to keep their PSC register information up to date in the same way as other unlisted UK companies; any changes will need to be recorded on the company’s own PSC register within 14 days and notification of the change filed at Companies House within another 14 days.
What is the PSC register?
UK AIM companies with private UK subsidiaries will already be familiar with the PSC register regime which came into force for unlisted UK companies and LLPs on 6 April 2016. For those who are new to the PSC register regime, here is an overview:
- The PSC register is a new 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 or LLP 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, 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. That way the same information does not have to be recorded on multiple registers but significant control can be tracked through chains of entities. However, if an individual exercises control through non-UK or unlisted entities (i..e outside the PSC regime), you must look through to find the individuals who are ultimately in control and enter their details on the register.
- Each PSC register is open to public inspection and the Companies House record is free to search online (residential addresses and day 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.
- Companies and LLPs can impose a “restrictions notice” on a person’s interest if they fail to provide requested information. An interest which has had a restrictions notice applied to it cannot be transferred, cannot exercise any rights (e.g. voting rights), no shares may be issued in respect of the interest and cannot have any payment made in respect of it (e.g. dividend or capital payments).
- The register cannot be blank. There are prescribed statements that must be entered on the register whilst the company or LLP is carrying out its investigation, or if there is no one with significant control.
For further information on the PSC register, see our insights pages here.
Comparison of shareholder notification requirements under PSC register, DTR5 and Rule 17 for UK AIM companies
|PSC register||DTR5||Rule 17|
PSC register must also record statutory statements if there is no PSC or if the company is still investigating.
All other changes to PSC information are also notifiable (e.g. change of PSC’s name or address)
Osborne Clarke comment
The late publication of the legislation is less than satisfactory leaving UK AIM companies very little time to get up to speed and ensure they comply by the tight deadline. But similarities with the existing regime should make it easier for UK AIM companies which are already required to gather PSC information for other entities in their group.