FinCEN CDD FAQ: Who is a beneficial owner?

Compliance > BSA > FinCEN CDD/BO Rule - eff 2016
Q:  Who is a beneficial owner?
 
A.  The Rule defines beneficial owner as each of the following:  
 
  • each individual, if any, who, directly or indirectly, owns 25% or more of the equity interests of a legal entity customer (i.e., the ownership prong); and
  • a single individual with significant responsibility to control, manage, or direct a legal entity customer, including an executive officer or senior manager (e.g., a Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Managing Member, General Partner, President, Vice President, or Treasurer); or any other individual who regularly performs similar functions (i.e., the control prong).This list of positions is illustrative, not exclusive, as there is significant diversity in how legal entities are structured.
Under this definition, a legal entity will have a total of between one and five beneficial owners (i.e., one person under the control prong and zero to four persons under the ownership prong).
 
 
 
This FAQ, and others, was released in July 2016.  The 2016 FAQs were issued to assist institutions in understanding the scope of the Customer Due Diligence (CDD) requirements that were published in May 2016.   They may be found here:  https://www.fincen.gov/statutes_regs/guidance/pdf/FAQs_for_CDD_Final_Rule_(7_15_16).pdf
 
 

Add Feedback