The Currency of Trust: Why Beneficial Ownership Still Fails the Transparency Test

When the UK launched the world’s first public beneficial ownership register in 2016, it was hailed as a breakthrough for financial transparency. The Persons of Significant Control (PSC) register positioned the UK as a reformer willing to pierce the corporate veil. The logic was compelling: sunlight would disinfect the system, deterring corrupt actors and strengthening public confidence in the legitimacy of corporate Britain. Yet almost a decade later, the system continues to struggle with data integrity, inconsistent verification and uneven enforcement. What was once a model of openness has become a case study in the limits of transparency without credibility.

Beneficial ownership transparency remains central to the fight against financial crime. It underpins the ability of authorities and regulated firms to follow the money, identify ultimate control and prevent companies being used for money laundering, corruption or sanctions evasion. The Financial Action Task Force (FATF) reinforced this in its 2022 revision of Recommendation 24, requiring jurisdictions to collect adequate, accurate and up-to-date beneficial ownership information and to verify it against reliable sources. The UK’s reform programme, anchored in the Economic Crime and Corporate Transparency Act 2023, is explicitly designed to address those shortcomings ahead of the country’s next FATF mutual evaluation.

A system built on good faith

The UK’s original approach to beneficial ownership transparency was built on trust. Companies House operated as a registrar rather than a regulator, accepting PSC filings without verification and intervening only when prompted. This reflected a long-standing feature of UK company law: incorporation should be fast, inexpensive and accessible.

That approach came at a cost. Investigations by Global Witness and Transparency International UK between 2018 and 2021 revealed thousands of PSC entries containing implausible or demonstrably false information, including fictitious individuals and non-existent overseas entities. These were not edge cases. They exposed structural weaknesses: no identity verification, negligible penalties for false filings and limited cross-checking with other government datasets.

The UK’s 2018 FATF Mutual Evaluation Report acknowledged the ambition of the PSC regime but assessed its effectiveness as only Moderate. Crucially, the FATF noted that competent authorities could not rely on the register without corroboration. For financial institutions, this created an enduring paradox. The UK had one of the most visible beneficial ownership registers in the world, yet firms were still required to treat it with scepticism.

From registrar to gatekeeper

The Economic Crime and Corporate Transparency Act (ECCTA) 2023 represents the most significant reform of Companies House in its history. It marks a deliberate shift from passive acceptance of information to active scrutiny. Since March 2024, the registrar has had powers to query, reject and remove filings, to share information with law enforcement, and to issue financial penalties for non-compliance.

The most consequential reform is mandatory identity verification. From 18 November 2025, all company directors and persons with significant control are legally required to verify their identity with Companies House, either directly through GOV.UK One Login or via an Authorised Corporate Service Provider. Successful verification results in the issuance of a personal code, which links an individual’s verified identity to their roles on the public register. This requirement is being rolled out over a 12-month transition period, with existing directors and PSCs required to complete verification by November 2026, , as confirmed by the government’s Companies House identity verification announcement.

The mechanics of PSC verification are prescriptive. PSCs must submit verification statements within a defined 14-day window, linked either to confirmation statement filings or, for PSCs who are not directors, to the individual’s birth month as displayed on the register. Failure to verify constitutes an offence and may result in financial penalties or annotations on the public record.

This reform is transformative in principle. For the first time, Companies House is positioned as a gatekeeper rather than a filing clerk. However, the scale of the task is unprecedented. Millions of individuals were appointed under the old trust-based regime, and verifying that legacy population will take time. Until that process is complete, the quality of the register will remain uneven.

For regulated firms, this transition period presents practical risk. Deciding when Companies House data can be relied upon, when additional verification is required, and how to evidence those judgments to regulators is now a core governance issue. OpusDatum supports institutions in assessing beneficial ownership risk during regulatory change, helping compliance teams design proportionate controls that remain defensible as the regime evolves.

Enforcement remains tentative

The credibility of the new regime depends not only on verification but on enforcement. While Companies House now has powers to impose civil penalties and pursue criminal sanctions for false filings, early enforcement has been cautious. Parliamentary scrutiny during 2025 revealed that only a small proportion of issued financial penalties had been collected at that point, highlighting capacity and operational challenges as the organisation adapts to its new regulatory role.

This is not unexpected. Companies House is undergoing a fundamental cultural shift, requiring investigative capability, analytical capacity and confidence in using coercive powers. The government’s outline transition plan, updated in January 2026, makes clear that ECCTA implementation is phased and that some elements, including identity verification for those filing on behalf of companies, will not commence until later in 2026 at the earliest.

The risk is not that the reforms are poorly designed, but that enforcement lags ambition. Without visible and proportionate consequences for non-compliance, the deterrent effect of verification will be limited.

The compliance reality for financial institutions

For banks, professional services firms and other regulated entities, beneficial ownership transparency has never been a box-ticking exercise. Firms cannot outsource their obligations to Companies House. Even as identity verification beds in, institutions remain responsible for assessing whether ownership information is credible, consistent and supported by independent evidence.

The Financial Conduct Authority (FCA) continues to expect a risk-based approach, requiring firms to corroborate register data against share registers, corporate documentation and external intelligence. Until the Companies House regime is fully embedded and its enforcement track record established, firms face a continuing reliance dilemma: how much comfort can be taken from state-verified data, and when is further verification required? Updated Joint Money Laundering Steering Group (JMLSG) guidance is expected once the regime stabilises, but in early 2026 that clarity has not yet arrived.

Sanctions, national security and global relevance

Beneficial ownership transparency is no longer solely an AML concern. Since Russia’s invasion of Ukraine, opacity in corporate ownership has become a frontline sanctions enforcement risk. Investigations into UK property ownership continue to reveal extensive use of offshore structures and trusts that obscure ultimate control, limiting the effectiveness of both sanctions and asset recovery measures.

In this context, the UK’s reforms have global significance. If the transition to verified, enforceable beneficial ownership data succeeds, it offers a credible model for other jurisdictions grappling with similar weaknesses. If it fails, it will reinforce the lesson that transparency without enforcement delivers little more than the illusion of control.

Restoring the currency of trust

Transparency is not about visibility alone. It is about credibility, usability and confidence. The UK’s reforms create an opportunity to turn the PSC register into a genuinely trusted dataset, but only if three conditions are met. Verification must be robust and auditable. Data must be interoperable across government and financial intelligence systems. Enforcement must be visible and sustained, with meaningful consequences for persistent non-compliance.

The UK’s next FATF mutual evaluation will test whether legislative reform has translated into operational effectiveness. The FATF will look beyond statute to data quality, verification practice and inter-agency coordination. Success will be measured by whether authorities and firms can trace ownership structures quickly and reliably in real cases.

Conclusion

The UK’s experiment in beneficial ownership transparency began with idealism but was undermined by complacency. The Economic Crime and Corporate Transparency Act represents a long-overdue course correction, equipping Companies House with powers to verify, challenge and enforce. Yet as of early 2026, the system remains in transition, with legacy data issues unresolved and enforcement still finding its footing.

Beneficial ownership transparency will never be perfect, but it can be reliable. The challenge now is to ensure that the UK’s new model delivers what the original register promised: a system that illuminates control, deters abuse and restores confidence in the legitimacy of doing business in Britain. Only then will beneficial ownership information become what it was always meant to be: a true currency of trust.

As verification beds in, are your beneficial ownership controls regulator-ready?

If your organisation is navigating beneficial ownership risk, Companies House verification changes, or regulatory scrutiny linked to AML and sanctions exposure, OpusDatum works with financial institutions and professional services firms to assess control effectiveness, identify residual risk and design proportionate, regulator-ready responses.

To discuss how we can support your compliance strategy, contact us now.