The Act has no number
Step 1 of the beneficial-ownership cascade asks for natural persons holding a “controlling ownership interest”. How much is that? The statute never says: the term is undefined in the FIC Act, and the current Regulations are silent on it (PCC 59 para 2.16). Every percentage you have ever seen on a FICA form was put there by guidance or by an institution’s own RMCP — never by the Act.
Where 25% came from — and where it went
| Date | Instrument | Position on the threshold |
|---|---|---|
| 2 Oct 2017 | Guidance Note 7, para 103 | Ownership of 25%+ of voting shares is “usually sufficient” to indicate control. The 25% era begins — as guidance. |
| 8 Aug 2024 | PCC 59, para 2.18 | The FIC “strongly recommends” identifying persons holding 5%+ of ownership interest as beneficial owners for purposes of section 21B(2). |
| 13 Feb 2025 | Guidance Note 7A, para 103 | The 25% wording survives one more edition, now alongside PCC 59. |
| 1 Sep 2025 | Revised Guidance Note 7A | The 25% indicator is deleted entirely; readers are referred to PCC 59 for beneficial ownership. The 25% era ends. |
(GN 7 para 103; GN 7A (Feb 2025) para 103; FIC, Revised GN 7A, 1 September 2025.) Any FICA form, checklist or article that still states 25% as “the rule” predates September 2025 — or copied something that did.
The FIC’s 5% recommendation
The FIC “strongly recommends that accountable institutions identify the persons who hold five percent or more of ownership interest in a legal person, which persons can be regarded as beneficial owners for purposes of section 21B(2)”.
Recommendation, not statute
Industry pushed back on exactly this point during consultation — arguing that if the FIC wants a mandatory 5% threshold, it should be put in the Act or the Regulations. The FIC’s answer was direct:
“The threshold sets the best practice standard… The guidance regarding the five percent threshold is therefore not an expansion of the law.”
An institution may set a different threshold in its RMCP — but FIC guidance is “authoritative”, and an institution departing from it must be able to show it achieves an equivalent level of compliance (GN 7A preface para iii). In practice: 5% is the safe-harbour position, and anything looser needs documented justification.
“How can 5% be control?”
Commentators objected during consultation that a 5% shareholder can never block an ordinary resolution (which needs more than 50%) or a special resolution (which a 25%+ holding can block) — so 5% “does not amount to control” and is “out of kilter with global standards” of 20–25%. The FIC’s response: for beneficial-ownership purposes, control includes the ability to influence decisions, not only to direct them. Right or wrong as a policy matter — that debate belongs to the consultation record — it is the regulator’s stated position, and it is what inspectors will apply.
The arithmetic across layers
The threshold is applied to effective interest, multiplied through the structure. The FIC’s own example (PCC 59 Annexure A): a person owning 60% of Company B, which owns 60% of Company A, holds an effective 36% of Company A and is a beneficial owner; a person whose effective interest works out to 4% is not, because it falls under the 5% marker. The mechanics of tracing through layers are covered in the cascade guide.
Why your bank’s form still says 25%
RMCPs lag guidance. Many institutional forms were drafted in the 25% era and have not been revised since September 2025. If a form asks only for 25%+ shareholders, that is the institution’s RMCP at work — you are not obliged to volunteer more than it asks. Conversely, if your attorney or a newer bank asks about 5%+ holders, that reflects the FIC’s current recommendation. Neither institution is “wrong” about you; they are at different points of catching up with the regulator.
Frequently asked questions
No. Neither 5% nor any other percentage appears in the Act or the Regulations. “Controlling ownership interest” is undefined. The 5% figure is the FIC’s strong recommendation in Public Compliance Communication 59 (August 2024) — authoritative guidance, not statute.
An institution may set a different threshold in its RMCP — but FIC guidance is “authoritative”, and an institution departing from it must be able to show it achieves an equivalent level of compliance (GN 7A preface para iii). Since the 25% indicator was deleted from the guidance in September 2025, a 25%-based RMCP carries that justification burden.
Different regime. The Companies Act’s beneficial-ownership filing rules (and the 5% that appears in the register of beneficial interest holders for affected companies) belong to the company’s own CIPC duties — not to an accountable institution’s FICA due diligence. See CIPC BO vs FICA.
That is step 2 of the section 21B(2)(a) cascade: a natural person who exercises control through other means — ownership of other entities in the chain, voting pacts, veto rights or dominant influence — is a beneficial owner regardless of percentage. See the cascade guide.