What is a PSC tree and when do I need to walk it?

A PSC tree is what you get when you follow Companies House's Persons with Significant Control records upwards: start at a UK company, read each PSC (a person or another company), and for each company PSC read its own PSCs, level by level.

Regulated firms walk it to find a corporate client's beneficial owners. Under the Money Laundering Regulations 2017, regulation 5(1), a beneficial owner of a company is an individual who ultimately owns or controls (directly or indirectly) more than 25% of its shares or voting rights, who exercises ultimate control over its management, or who otherwise controls it. Through layers, stakes multiply: if HoldCo owns 50% of OpCo and a person owns 75% of HoldCo, that person's indirect stake in OpCo is 37.5%, more than 25%, so they are a beneficial owner. Control (for example the right to appoint or remove most directors) counts whatever the shareholding.

When to walk it:

• Taking on any UK company as a client, under customer due diligence (regulation 28).
• When the company's ownership changes during the relationship (ongoing monitoring, regulation 28(11)).
• Before relying on a company in a transaction where sanctions ownership matters (OFSI treats a company owned or controlled by a designated person as designated too).

Five levels covers almost every UK structure. Stratum's company and owners check walks the tree up to five levels and screens every director and owner it finds against the UK, UN, EU and US sanctions lists and the register of disqualified directors, with PEP when you ask for it: in a client's check in the Stratum register, or through the transactions API.