SECP rationalises requirement to maintain ultimate beneficial ownership information



In an effort to further streamline the procedure for obtaining and maintaining ultimate beneficial ownership information by the companies, the SECP has specified a threshold of 10% for the purpose of compliance with circular No. 16 of 2018 issued by it on August 29, 2018.

The SECP approved amendment to the aforesaid circular and it is now required from the companies having legal persons as their members or shareholders who hold not less than 10% shares, voting rights, ownership or controlling interest to obtain, maintain and update the ultimate beneficial ownership information. The aforesaid amendment has been notified vide circular No. 20 of 2018.

The move is likely to facilitate companies obtain ultimate beneficial ownership information in an effective manner, especially in the cases where there is a large number of small shareholders or investors in a corporate chain structure, as is the case with listed companies or mutual funds, or where there are multiple layers or numbers of companies in other jurisdictions. This is also in line with the recommendations of the Financial Action Task Force (FATF) on the subject, which require application of a risk-based approach for the purpose of compliance with the underlying standards.

This circular has been issued to ensure compliance with the 40 recommendations of FATF, which serve as international standards for combating money laundering and terror financing. Pakistan is a member of the Asia Pacific Group, a FATF-style regional body, and is required to adopt FATF standards as per membership obligations. NNI