Dear Commissioner and Others reflected in the email
I hope this email finds you well. I represent a significant number of stakeholders who utilize
our company's software in their secretarial departments. Additionally, attendees of our
webinars also look to us for guidance. Collectively, this encompasses thousands of
As stakeholders' our primary concern is that our regulators might proceed with the methods
they've established, and in a span of three years, the FATF could potentially downgrade us.
As stakeholders, we believe it's our duty to ensure that such an outcome is averted.
There are a number of important issues relating to standard operating procedures which
have been presented in the CIPC FAQs and webinars that appear inconsistent with the
Companies Act and secretarial practice. It is our intention to address each one over time. In
this communication, we will begin with Section 50 (3A) of the Companies Act.
In today's environment, it is inconceivable that there exists such a divide between the laws
set to be implemented and the actual practice on the ground. The Companies Act
commission, along with other regulatory bodies involved, must be held accountable for
allowing these inconsistencies to persist. Such discrepancies are costing our nation
countless hours, translating to millions of wasted man-hours, which is detrimental to our
productivity and efficiency.
I am writing to seek clarification on certain aspects of this section, specifically regarding the
documentation and disclosure of beneficial owners in the securities register.
1. Section 50 (3A) of the Companies Act Modifications:
o We understand that companies not classified as "affected companies" are
mandated to document specific details about the natural persons who are
the beneficial owners in their securities register.
o This documentation should adhere to the prescribed format, and companies
are responsible for ensuring timely updates to beneficial ownership.
2. Integration of Beneficial Owners (BOs) into Securities Register:
o The process of determining BOs can be intricate, especially when
shareholders are entities like other corporations or trusts. This necessitates a
comprehensive analysis to identify the ultimate individual beneficial owner.
We've observed that deriving BOs from a securities register might require an
organizational chart, like an organogram, to delineate the progression from
the shareholders listed in the securities register to the BOs.
3. Ambiguity in the Act:
o While the securities register is publicly accessible, the original directive from
the CIPC FAQs suggests that the Registers of Beneficial Owners are intended
solely for governmental regulatory purposes.
4. Filing Formats:
o As per the current mandate, are we still required to file a separate BO
Register in a data format and a Securities Register in a PDF format?
5. CIPC Webinar Query:
o In a recent CIPC webinar, when a question was raised regarding Section 50
(3A) of the Companies Act and its implications, the presenter's response was
to "refer to the legislation" without providing a direct answer or clarification.
We would appreciate further insight into this specific legislative provision and
6. Request for Policy Statement:
o In light of the aforementioned concerns and ambiguities, we kindly request
the CIPC to issue a clear and comprehensive policy statement on this matter
to provide guidance and clarity for all stakeholders involved.
There has been a noticeable tendency for the CIPC not to engage promptly or at all. This
approach is contradictory to your mandate, especially concerning the introduction of
enforcement compliance penalties.
Your prompt response and guidance on this matter would be greatly appreciated. Surely,
the CIPC was aware of the impending legislative changes in the Companies Act when
formulating their FAQs. In light of this, we kindly urge the CIPC to align the FAQs with the
stated policy to ensure consistency and clarity for all stakeholders.
Our primary objective is to streamline processes, ensuring they are both efficient and cost-
effective, while fully aligning with legislative standards. This communication serves as an
indication of our future engagements, and we sincerely hope to remain involved and not be
excluded from the ongoing processes.