CIPC: Enforcement of beneficial ownership filings and securities registers

CIPC: Enforcement of beneficial ownership filings and securities registers

• 08 February 2024
• CIPC
• South African Accounting Academy

This notice also serves as a reminder to those entities that have not complied with their mandatory securities register filing obligations and or beneficial ownership filing obligations.

This notice follows the one issued in September 2023 (Notice 53 of 2023).

The Commission would like to thank the entities that heeded the call to file their beneficial ownership information in line with the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022 as given effect by the amended Companies Regulations 2023.

CIPC implemented a beneficial ownership register on 1 April 2023 voluntarily. The filing of beneficial ownership filings and securities registers became mandatory from 24 May 2023 upon promulgation of the Amended Companies Regulations. In terms of the amended Companies regulations, entities incorporated after their promulgation thereof, have to file beneficial ownership information within 10 business days after the date of incorporation. The same timelines apply concerning the updating of beneficial ownership records when there are changes.

Pre-existing entities, which had their anniversary date after the promulgation of the amended Companies Regulations are required also to file their beneficial ownership information. CIPC has noted that a huge number of entities still have yet to file their securities register and beneficial ownership information.

As of 1 April 2024, the Commission will be introducing a hard-stop functionality that will prevent entities that have not complied with beneficial ownership filing requirements from completing the process of filing their annual returns. The Commission will also be taking further and necessary enforcement actions against entities that continue to be non-compliant. 

All entities in CIPC’s register need to have filed their beneficial ownership information by 24 May 2024 as this will be the anniversary date of publication of the amended Companies Regulations which made the filing of beneficial ownership information mandatory.

Click here to download Notice 5 of 2024:

https://www.cipc.co.za/wp-content/uploads/2024/02/Beneficial-Ownership-Enforcement-Notice_2024.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• The Companies Act and Regulations is yet another piece of legislation that your clients must comply with, and which you must assess compliance with.  If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (Non-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.

• As an auditor, independent reviewer and accountant, you also need to monitor your client’s compliance with the Companies Act and all relevant notices/enforcements/practice notes/customer letters issued by CIPC as the regulator.

• Where you perform these compliance tasks on behalf of your client, you need to ensure that you comply with all relevant notices/enforcements/practice notes/customer letters issued by CIPC as the regulator.

• Your clients will also have to comply with the resultant General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act regarding anti-money laundering measures to be taken.

• As an auditor, independent reviewer and accountant you need to consider the impact of the Companies Act Regulations on your service offerings, as well as on your client’s beneficial ownership filing obligations.

Relevance to Your Clients:

• An entity (company or close corporation) must comply with the Companies Act, and all relevant notices/enforcements/practice notes/customer letters issued by CIPC as the regulator.

• Your clients will also have to comply with the resultant General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act regarding anti-money laundering measures to be taken – and more specifically, the Beneficial Ownership filing requirements.

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