SSM National Conference 2024: Advancing Corporate Transparency And Beneficial Ownership Reporting

KUALA LUMPUR, Aug 28 (Bernama) -- The Companies Commission of Malaysia (SSM) is hosting its 13th National Conference with the aim of deepening the understanding of board members and corporate professionals regarding strategies to enhance resilience and corporate transparency in today’s rapidly evolving business environment.

Minister of Domestic Trade and Cost of Living (KPDN) Datuk Armizan Mohd Ali in his opening speech during the launch of the conference emphasised the importance of SSM’s recent enhancements to the Companies Act 2016, which took effect on 1 April, this year.

“In the 2018 Financial Action Task Force (FATF) assessment, Malaysia was compliant with 20 FATF recommendations, with 18 largely compliant and two partially compliant. The upcoming FATF mutual evaluation in 2024/2025 is a critical test of our resolve.

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“We must demonstrate to the world that Malaysia is a jurisdiction of substance, where laws are enforced and transparency prevails,” he was quoted as saying in a statement issued by SSM today.

The two-day virtual conference themed “Enhancing Corporate Transparency. Building Resilience” featured an extensive programme, including 11 plenary sessions, 39 distinguished speakers and 15 virtual exhibitors, offering a comprehensive view of contemporary issues and solutions in corporate governance.

Meanwhile, the statement also said that the amendment to the Companies Act 2016 was aimed at strengthening the corporate rehabilitation framework, aiding companies facing financial challenges while promoting economic recovery and competitiveness.

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SSM said the amendment focuses on advancing corporate transparency, particularly in the area of beneficial ownership (BO) reporting, bolstering enforcement efforts against money laundering, terrorist financing, corruption and other serious crimes. 

“This aligns with Malaysia's commitment to meet the standards set by the FATF and the Organisation for Economic Co-operation and Development (OECD) in their evaluations of Malaysia for 2024/2025.

“The Companies (Amendment) Act 2024 introduces 31 clauses divided into four policy clusters, each addressing different aspects of corporate governance,” it said.

SSM explained that Section 56 of the Companies Act 2016, introduces a framework for BO reporting, requiring companies to obtain, record and report beneficial owner information to the Registrar. 

The amendment Act also includes a new definition of "beneficial owner" and mandates the maintenance of a register of beneficial owners, aiming to significantly improve transparency within the corporate sector.

“By enforcing the disclosure of BO information to SSM, the amendment Act also supports enforcement and regulatory agencies such as the Royal Malaysia Police, Bank Negara Malaysia and the Malaysian Anti-Corruption Commission in their efforts to investigate and combat serious crimes, including money laundering, terrorism financing, corruption and tax evasion.

“A new Division 8A of the Companies (Amendment) Act, which came into effect on April 1, 2024, establishes a detailed framework for BO reporting. This framework specifies that companies must obtain, identify, verify, record and maintain BO information in their registers,” it said adding that companies are required to submit the information to the Registrar within 14 days of its recording.

SSM emphasised that no fees will be charged for lodging or updating BO information but any application to rectify previously submitted information will be handled according to Section 602 of the Act.

However it said, no extensions will be granted for lodging BO information and companies that fail to meet the specified timeframe will face penalties for late lodgement.

“From April 1 to Sept 30 this year, companies can lodge and update their BO information without adhering to the usual 14-day submission requirement. During this period, no penalties for late lodgement will be imposed, allowing companies to ensure their records are accurate and complete.

“Additionally, companies which have lodged their BO information but need to rectify any particular previously lodged with the Registrar, are able to do so without incurring any rectification fees,” it said.

As of July 31, 2024, a total of 374,774 out of 677,351 active companies listed in the company's registry have successfully fulfilled the requirement to submit their BO information, representing a compliance rate of 55.3 per cent.

This reflects ongoing efforts by companies to adhere to the new reporting standards introduced under the Companies (Amendment) Act 2024, demonstrating a substantial commitment to meeting legal obligations and supporting the broader objectives of corporate governance and accountability.

“To assist companies with this process, SSM issued a Practice Directive titled “Lodgement Of Beneficial Ownership Information Under The Companies Act 2016 Through e-BOS” on May 13, 2024. 

“This directive outlines the procedures for lodging BO information in accordance with subsection 60B(7) of the Act. The Practice Directive is available on SSM’s official portal at www.ssm.com.my,” it said.

Companies can contact SSM Customer Care (SSMCC) via the Complaints & Feedback section, SSM Chatbot, SSM Live Chat which can be accessed through the official SSM portal, call 03-7721 4000 or email to enquiry@ssm.com.my, for any inquiries.

-- BERNAMA