ISLAMABAD: With the issuance of Circular No. 16, the Securities and Exchange Commission of Pakistan has intensified its efforts to combat terror financing and money laundering.
The circular dated August 29 has been issued to all companies, making them responsible to comply with Section 453 of the Companies Act and maintain a register of ultimate beneficial ownership.
Under the directives of the circular, all companies having legal persons as their members/shareholders are required to maintain up-to-date information relating to their beneficial owners.
The natural person is the individual who ultimately owns or controls the company through direct or indirect ownership of not less than 10 per cent shares, voting rights, ownership or controlling interest in that company.
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All companies operating in the country are required to obtain the ultimate beneficial ownership information from their members and also ensure that this data is maintained and updated in a register of beneficial ownership.
The information must be obtained and maintained — irrespective of the number of levels of ownership pattern — until the natural person exercising ultimate ownership or control and lying at the end of the ownership chain is revealed.
The minimum fields of information required to be filled by the companies have been specified through the circular.
In case no natural persons are identified — after having exhausted all possible means or there is any doubt that the persons identified are the beneficial owners — these shall be entered in the register of beneficial ownership the names of the natural person(s) who hold the position of senior managing official(s) of the company.
This circular has been issued in pursuance of making Pakistan compliant with 40 recommendations which serve as international standards for combating money laundering and terror financing.
Pakistan is a member of the Asia Pacific Group on Money Laundering, a FATF-style regional body. The country is required to adopt the Financial Action Task Force (FATF) standards as per membership obligations, and must comply with the UN resolution.
Published in Dawn, August 31st, 2018