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SEC delays rule on disclosure of beneficial owner

The Securities and Exchange Commission has deferred for a period of six months the implementation of a new rule requiring companies to declare their beneficial owner to ensure they will not be used for money laundering and terrorist financing purposes.

The SEC in an en banc meeting approved the delay in the submission of the new general information sheet containing the beneficial ownership disclosure page to June 30, 2019 instead of the original target of January 1, 2019.

The SEC said the decision to defer the implementation of the new GIS aimed to give capital market participants and other stakeholders more time to acquaint themselves with the requirement.

“The deferral will also allow the Commission more time to hold an information campaign with regard to the new GIS,” the SEC said.

The SEC in November issued a circular on the revision of the GIS to include beneficial ownership information. 

The directive further required all SEC-registered domestic corporations to timely apprise the commission of all relevant changes in their submitted beneficial ownership information as they arise. 

Among the information about the beneficial owner that will be included in the report are complete name, residential address, nationality, tax identification number and percentage of ownership, if possible.

This means the updated GIS must be submitted within seven days after such changes occurred or became effective. 

The SEC issued the directive pursuant to its mandate to assist in the implementation of the Anti-Money Laundering Act and ensure timely access to adequate, accurate and current information on the beneficial ownership and control of SEC-registered corporations, and prevent their misuse for money laundering and terrorist financing purposes.

The SEC defines beneficial owner as any natural person who “ultimately owns or controls the corporation,” or “has ultimate effective control over the corporation.”

When a company is owned through multiple layers, the SEC said intermediate layers of the company’s ownership should be declared in the GIS.

Topics: Securities and Exchange Commission , SEC , disclosure of beneficial owner
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