Arachnys developers have successfully integrated the new beneficial ownership data in the Companies House API from theDeveloper hub into Arachnys. Whilst this required additional efforts to attain full-integration, the approach paid off as the data is updated live and in real-time.
Why is real-time integration important? Risk and compliance need to move quickly on this: the legislation stipulates that nominal shareholders must now be listed on annual returns from 30th June 2016. As Companies House are adding to the new registry every day, our database is populated dynamically. Integration and a commitment to open APIs removes the need for any intermediary processes, which would impede availability.
The new registry brings advantages to Arachnys D3 & Investigator in using publicly available data to search for multiple entities rather than one-by-one, going far beyond the beta service offered by Companies House itself. D3 and Investigator’s offering delivers the ability to enrich the information available on beneficial owners, follow leads into other jurisdictions around the world and matches them to workflows.
The starting pistol has been fired
The UK government has recently published the first open register of beneficial ownership. The dataset is the first of its kind to be published by any G20 country. As the Department of Business, Innovation and Skills’ own whitepaper asserts, it will serve as just one of a string of institutional initiatives to prevent cross-border financial crime. Corruption adds an estimated 10% to the costs of global business, and, according to the OECD, the losses made account for 5% of global GDP.
After the Small Business, Enterprise and Employment Act, which received Royal Assent in March 2015 and came into force in April 6th 2016, all UK companies, including LLPs, CICs and SEs, must make a statement of Persons with Significant Control (PSC). These are then divided into three types, requiring three different classes from the Companies House data: an individual, a Relevant Legal Entity (RLE) (Corporate), or a legal person (a government body or Corporate Sole).
How can the API help track beneficial ownership?
There are many reasons and definitions by which an entity could exert significant control over a company, since the definition has been extended to cover ‘natural persons on whose behalf transactions are being conducted, even where that person does not have legal ownership or control over the customer’. Variously, the means of control could involve:
- Ownership of shares – such as with bearer shares, formal and informal nominee shareholders (family members or associates).
- Trusts which separate legal ownership and beneficial ownership of related assets.
- Shell companies incorporated that have no significant operations or assets.
- Voting and the use of intermediaries in forming legal ownership, directorial appointment, or other methods.
Helpfully, Companies House have published a full list of the included PSCs nature of control, avoiding excuses or exemption. In practice, the greatest outcome will be publicising the RLEs who own more than 25% of the equity, whether directly or indirectly.