SECP Issues Guidelines For Ultimate Beneficial Ownership Regime

Technology

The foreign company is required to obtain, maintain and duly update the records of the Ultimate Beneficial Owner (UBO) in the foreign company, according to the Securities and Exchange Commission of Pakistan (SECP).

The SECP Friday issued guidelines for legal entities to comply with the ultimate beneficial ownership (UBO) regime, pursuant to the applicable laws of Pakistan.

According to the SECP, SECP has promulgated the Foreign Companies Regulation, 2018 in exercise of the powers conferred by sub-section (1) of section 512 of the Companies Act, 2017. The FC Regulations 2018 describes step-wise procedure to establish a place of business by a foreign company in Pakistan.

SECP has made certain amendments in the FC Regulations 201813 in exercise of the powers conferred by sub-section (1) of section 512 of the Companies Act, 2017 (XIX of 2017) in order to require reporting of particulars about ultimate beneficial owners of such companies. 4. Regulation 2(1)(ix) of FC Regulations 2018 defines the term “ultimate beneficial owner”. The “ultimate beneficial owner” means a natural person who ultimately owns or controls a foreign company, whether directly or indirectly, through at least 25% of shares or voting rights or by exercising effective control in that company through other means. ‘Control through other means’ may be exercised through a chain of ownership or through close relatives or associates having significant influence or control over the finances or decisions of the foreign company.

Regulation 6A (Maintenance of records of ultimate beneficial owners of foreign company) requires obtaining of additional particulars of UBO(s) from members of foreign companies holding at least 25 percent of the shares, voting rights or controlling interest in the foreign company on behalf of some other person. The foreign company is required to obtain, maintain and duly update the records of UBOs in the foreign company.

The foreign company needs to observe the following procedure in order to comply with the requirement of regulation 6A of the FC Regulations 2018. The foreign company shall the members holding at least twenty-five percent of the shares, voting rights or controlling interest in the foreign company on behalf of some other person. (Regulation 6A of FC Regulations 2018).

The foreign company shall submit declaration of compliance to the Registrar that necessary information about the ultimate beneficial owners of the foreign company has been obtained and is available on record, through electronic submission or physical submission on amended forms, SECP maintained.

Source: Pro Pakistani