Companies Commission issues Guideline on Beneficial Ownership Reporting Framework
05 March 2020
The Companies Commission of Malaysia (‘CCM’) issued the
Guideline for the Reporting Framework for Beneficial Ownership of Legal Persons (‘Guideline’) on 27 February 2020.
The Guideline follows on from the Consultative Document on the Guidelines for the Reporting Framework for Beneficial Ownership of Legal Persons issued by the CCM on 8 November 2019.
The Guideline applies to all companies incorporated and foreign companies registered under the Companies Act 2016 and to local and foreign limited liability partnerships registered under the Limited Liability Partnerships Act 2012 (each an ‘affected entity’) except for the following companies–
- companies which are –
- licensed by Bank Negara Malaysia under the Financial Services Act 2013 or the Islamic Financial Services Act 2013;
- prescribed development financial institutions under the Development Financial Institutions Act 2002; or
- licensed money services businesses under the Money Services Business Act 2011;
- persons regulated under the following securities laws –
- an entity licensed or registered under the Capital Markets and Services Act 2007 (‘CMSA’);
- a stock exchange, derivatives exchange, clearing house or central depository under the securities laws;
- a recognised self-regulatory organisation under the CMSA; and
- a private retirement scheme administrator approved under the CMSA;
- companies whose shares are quoted in a local or foreign stock exchange; and
- companies whose shares are deposited in a central depository pursuant to the Securities Industry (Central Depositories) Act 1991.
The Guideline,
inter alia, gives an affected entity a period of nine months from 1 March 2020 to 31 December 2020 to obtain, establish, verify, maintain and update the information prescribed in the Guideline on its beneficial owners. It also provides guidance as to how a beneficial owner may be identified and specimen letters to be issued by an affected entity for the purposes of determining its beneficial owners.
Commencing 1 January 2021, the Registrar will require each affected entity to provide information on their beneficial owners to the Registrar.
The Guideline also requires an affected entity to take steps to keep the information on its beneficial owners updated. It also imposes an obligation on the directors and secretaries or agents of an affected entity which is a company, and the partners and compliance officers of an affected entity which is a limited liability partnership, to ensure that their respective affected entities comply with the requirements set out in the Guideline.
Businesses registered under the Registration of Businesses Act 1956 are deemed to have complied with the requirements under Guideline.