CIPC: Enforcement of beneficial ownership filings and securities registers

CIPC: Enforcement of beneficial ownership filings and securities registers

• 23 August 2024
• CIPC
• South African Accounting Academy

CIPC implemented a beneficial ownership register from 1 April 2023 on a voluntary basis. The filing of beneficial ownership filings and securities/beneficial interest registers became mandatory from 24 May 2023 upon promulgation of the Amended Companies Regulations to give full effect to the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022.

CIPC has noted that several entities which were supposed to file their beneficial ownership information and securities registers have not filed as required. This notice serves as a reminder for those entities who have not filed, to file accordingly and not wait for the annual return anniversary period.

The Commission will continue engaging the entities to enforce filing of their beneficial ownership information. The Commission will also continue to conduct inspections to verify if the filed beneficial ownership information that is on our records corresponds with records kept by respective entities.

Failure to comply will lead to a formal investigation and the issuance of compliance notices, and/or a court sanctioned administrative fine.

For guidance on how to file BO declaration, go to https://www.cipc.co.za/wp-content/uploads/2023/08/USER-GUIDELINES-BO-LEGISLATIVE-REQUIREMENTS_Aug-23.pdf

Click here to download Notice 54 of 2024:

https://www.cipc.co.za/wp-content/uploads/2024/08/Notice-54.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 – more specifically, the enforcement of Beneficial Ownership filings and securities registers).

Relevance to Your Clients:

• An entity (company or close corporation) has a duty to 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 enforcement of Beneficial Ownership filings and securities registers.

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