ECCTA: Banking and Finance

The Economic Crime and Corporate Transparency Act 2023 - Banking and Finance

The Economic Crime and Corporate Transparency Act has received Royal Assent (the “Act”).

What are the aims of the Act?

Following on from the Government’s initiatives under the Economic Crime (Transparency and Enforcement) Act 2022, the Act aims to tackle economic crime and improve the transparency of corporate entities in the UK.

What is changing for banking transactions?

• New identity verification requirements

The Act introduces new identity verification requirements for anyone submitting documents to Companies House, including documents relating to the registration and release of charges. Only individuals whose identity has been verified, authorised corporate service providers (ACSPs) or employees and officers of ACSPs will be able to register or release security at Companies House.

It is our intention to become an ACSP and we will be ready to continue to assist clients in registering or releasing security at Companies House when these new requirements come into force.

• Changes to the Register of Overseas Entities

Some technical changes are being made to the Register of Overseas Entities (ROE) and to the information that must be submitted to this register. These changes will impact banking transactions where security is being taken over land owned or leased by an overseas entity (where the land and entity is in scope of the ROE).

The Act gives Companies House new powers to request information, to resolve inconsistencies between information on the companies register and the ROE and to remove information from either of those registers. Failure to timeously provide Companies House with requested information will result in a loss of “registered overseas entity” status, until the failure is remedied. This will mean that a lender would not be able to register security against land owned or leased by that overseas entity until the information is supplied and the entity’s status is restored. It will impact on the practical steps and timings relating to transactions involving overseas entities.

In due course, further legislation will be introduced to detail how these changes will take effect. We will keep this page updated with new information. You can also sign up for updates to stay informed and ahead of the curve on the Act’s impact on Banking and Finance.

Please get in touch with our specialists to find out how we can help you navigate the Economic Crime and Corporate Transparency Act.