This month's news items:
- Real Time Gross Settlement within the CREST system
- Common Reporting Scheme (CRS)
- Small Business, Enterprise and Employment Act 2015 (SBEE 2015)
- The Modern Slavery Act 2015
The Department for Business, Innovation & Skills has confirmed that ministerial agreement has been given for the preparation of a formal consultation on dematerialisation. The consultation is likely to be published in December. The Dematerialisation Steering Group (DSG) will meet again in the autumn when more is known about the likely format and whether, and if so what, assistance can be given (to BIS). The composition of the DSG will also be reassessed around that time.
Real Time Gross Settlement within the CREST system
As previously reported, the Bank of England (BoE) has agreed to an extended settlement period of 1 hour 20 minutes. The BoE and Euroclear have now confirmed that the change will come into effect on Monday 20 June 2016.
The BoE conducted a policy review in 2014, challenging the operators of both the CREST and CHAPS systems to survey their users about the initiative, and continues to consult with the industry to understand the best way to implement the changes. Equiniti is consulting with the BoE through the CREST system provider Euroclear UK and Ireland, the CHAPS Affiliate Group and a number of other recognised industry forums, and will act in the best interests of its clients but at this time our belief is that it will have minimal client impact but will affect Equiniti, particularly the window for dealing with corporate actions.
Common Reporting Scheme (CRS)
The Common Reporting Scheme will be enacted among OECD nations (over 60 have signed up so far) and will extend and amend the FATCA regime beyond the US in an initiative to inhibit global tax avoidance. Investment entities, including Investment Trust Companies (ITCs) – effectively their registrars on their behalf – will have to collect data on relevant existing shareholders as of 31 December, 2015, and on new shareholders from that date. They must then submit their first reports to HMRC in May 2017 for the 2016 calendar year. This is an extension of the powers of HMRC to be provided with information about shareholders, which the Companies Act does not require.
HMRC has just published its informal consultation on the draft guidance notes for the Automatic Exchange of Financial Account Information. The ICSA Registrars Group and the Association of Investment Companies are working on the impact of the changes in relation to ITCs. Equiniti has set up a project team to develop a solution which can be deployed on behalf of affected clients in the absence of the final HMRC guidance, likely to be published far too late for practical planning purposes.
Small Business, Enterprise and Employment Act 2015 (SBEE 2015)
The first main tranche of the Act is due for implementation on 10 October but has been reduced with the prohibition on appointing corporate directors delayed until October 2016 and implementation of the People with Significant Control [PSC] register delayed until April 2015. The delay in the implementation of the PSC register has had a knock-on effect, delaying the replacement of the annual return until June 2016. The October 2016 implementation sees a change in the appointment of directors.
The ‘consent to act’ previously required signature by the appointee. This has been changed to a signature on behalf of the company so companies will need to ensure that they have written confirmation that they are willing to be appointed to avoid any disputes later.
Form AP01 is being changed, and from 10 October Companies House will no longer accept the old versions of the form. The period for dissolution of companies is being shortened. In future, Companies House will only need to wait 14 days before sending follow-up letters, reduced from 28 days, and the gazette notice period is to be reduced from 3 months to 2 months.
Other measures implemented by SBEE 2015 include:
- The option to file details of subsidiaries with the annual return has been withdrawn and the details must now be included with the accounts.
- S.78 of the Equality Act is to be brought into effect and will require companies with 250 or more employees to disclose details of the difference in pay for men and women. Detailed guidance and draft regulations have not yet been issued.
- Payment practices of suppliers by large companies will require to be published on a central online database giving details of payment terms and proportion of suppliers paid within those terms and within 30 days, 31-60 days or later.
The Modern Slavery Act 2015
Passed on 26th March, The Modern Slavery Act 2015 obliges every company with a turnover of £36m or more to publish a slavery and human trafficking statement on its website which must include:
- Details of the steps the entity has taken during the financial year to ensure that slavery and human trafficking is not taking place in any part of its own business and supply chains, or
- A statement that no such steps have been taken.
Guidance has not yet been issued as to the content of the statement. Companies within groups meeting the £36m turnover level will have to provide individual disclosure but, if appropriate, can replicate the statements made by their parent companies.
Updated provided by Stuart Ellen, Managing Director, Registration Services