Beneficial ownership and AML complianceWhen advising on retirement funds and employer benefits, it's crucial to distinguish between beneficial ownership and beneficial interest. Here’s what you need to know…ARTICLE BY: OLD MUTUAL CORPORATE CONSULTANTS | DATE: 27 June 2025 | READ TIME: 4 MIN

When advising on retirement funds and employer-sponsored benefit structures, it's important to clearly differentiate between beneficial ownership and beneficial interest – not only for risk management, but also for ensuring compliance with evolving AML (Anti-Money Laundering) regulations and Companies Act requirements.

Beneficial ownership: Who really controls the entity?

Under the Financial Intelligence Centre Act (FICA) and PCC 59, financial institutions must establish the beneficial owner of a legal entity. This refers to the natural person who ultimately owns or controls the entity, either:

  • Directly (holding 5% or more in shares); or
  • Indirectly (exerting control through a trust, nominee, or layered corporate structures).

For retirement funds and employer groups, this means identifying:

  • Who has decision-making control over the fund or employer entity
  • Who holds significant voting rights or financial influence
  • Trustees, fund sponsors, or any controlling parties behind the structure.
Beneficial interest: Financial gains without control

A beneficial interest holder is entitled to financial benefits – such as dividends or pension payments – but does not necessarily control the entity. For example:

  • A retirement fund member has a beneficial interest in the fund but is not a beneficial owner.
  • A trust beneficiary may receive distributions but has no authority over the trust’s operations.
Latest compliance updates: CIPC beneficial ownership filings

It’s been almost two years since amendments to the Companies Act and Companies Regulations, 2011, introduced mandatory beneficial ownership and beneficial interest disclosures.

  • The Companies and Intellectual Property Commission (CIPC) has implemented a hard stop restriction, preventing companies from filing annual returns until they update their beneficial ownership records.
  • On 27 January 2025, the CIPC warned that non-compliant entities with a deregistration status must comply by 31 January 2025, or they will be finally deregistered without further notice. The Minister of Trade, Industry, and Competition waived the usual notice period requirements.

Furthermore, the Draft General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill, 2024 (Draft GLA Bill) proposes additional penalties for companies failing to submit their securities registers or registers of beneficial interest. This aligns with South Africa’s commitment to strengthening AML controls following the Financial Action Task Force (FATF) mutual evaluation in 2021.

How does this affect retirement funds and employers?
  • Retirement funds must ensure that their company registers reflect accurate beneficial ownership information, particularly where an employer sponsors the fund.
  • Employer groups must identify and update beneficial ownership details in line with CIPC and FICA obligations to avoid regulatory penalties.
  • Failure to comply with beneficial ownership filings may lead to deregistration, financial penalties, or operational restrictions.

An AML compliance checklist for advisers

When assisting clients with AML compliance and beneficial ownership filings, you should request the following key information:

  1. Mandated official documentation
  • Signed resolution or official letter appointing the mandated official (if applicable)
  • Confirmation of authority (e.g. CEO, Director, or legally appointed representative)
  • Certified copies of identification (passport or ID document)

2. Ultimate Beneficial Owner (UBO) information
  • List of shareholders owning 5% or more (direct and indirect)
  • Company organogram or ownership structure to determine control
  • Details of individuals with decision-making authority (board members, trustees, or executive officers)
  • Certified copies of ID and proof of address for UBOs

3. AML risk assessment and due diligence

  • The process differs for new business, benefit improvements, remediation of existing clients, and trigger events. For new business, all clients must screened. For existing clients, you will need to check if the client is remediated and, if necessary, conduct remediation or repeat screening.
  • Screening for adverse media, Politically Exposed Persons (PEPs), and sanctions lists
  • Source of funds and wealth verification (if applicable)
  • Enhanced Due Diligence (EDD) for high-risk entities.
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