Ultimate beneficial owners: SECP directs companies to maintain up-to-date information

The Securities and Exchange Commission of Pakistan (SECP) has directed companies having members or shareholders to take measures to maintain up-to-date information relating to their ultimate beneficial owners in their registers of ultimate beneficial ownership. The SECP has issued circular number 20 of 2018 here on Friday.
According to the SECP, the companies having legal persons on their register as members or shareholders are directed to take reasonable measures to obtain and maintain up-to-date information relating to their ultimate beneficial owners, i.e. natural persons who ultimately own or control the company through direct or indirect ownership of not less than ten (10) percent shares, voting rights, ownership or controlling interest in that company, in a register of ultimate beneficial ownership (the 'register'). The information is required to be obtained and maintained irrespective of the number of levels of ownership pattern, until the natural person or individual exercising ultimate ownership or control and lying at the end of the ownership chain, is revealed.
Explanation: For the purpose of this Circular, the term "legal person" means a person which is not a natural person, SECP added.
It is important to mention here that the section 453 of the Companies Act, 2017 (the 'Act') requires every officer of a company to endeavor to prevent commission of any fraud, offences of money laundering including predicated offences as provided in the Anti-Money Laundering Act, 2010 (VII of 2010) with respect to affairs of the company, who shall take adequate measures for the purpose.
Financial Action Task Force (FATF), an independent inter-governmental body, has issued international standards containing recommendations to combat money laundering and the financing of terrorism and proliferation.' The FATF recommendations require countries to take measures to prevent the misuse of legal persons for money laundering and terrorist financing, and ensure that there is adequate, accurate and up-to-date information available with the companies on the ultimate (actual) beneficial ownership and control of legal persons that can be accessed in a timely manner by competent authorities.
Accordingly, companies having legal persons as members or shareholders are directed to take reasonable measures to obtain and maintain up-to-date information relating to their ultimate beneficial owners, i.e. natural persons or individuals who ultimately own or control the company, in a register of ultimate beneficial ownership (the 'register'). The information is required to be obtained and maintained irrespective of the number of levels of ownership pattern, until the natural person or individual exercising ultimate ownership or control and lying at the end of the ownership chain, is revealed.