FinCEN CDD FAQ: Must covered financial institutions collect beneficial ownership information on all of the beneficial owners of a legal entity customer?

Compliance > BSA > FinCEN CDD/BO Rule - eff 2016
Q:  Must covered financial institutions collect beneficial ownership information on all of the beneficial owners of a legal entity customer?
 
A.  Covered financial institutions must collect and verify the beneficial ownership information of each person who meets the definition under the ownership prong, and of one person under the control prong.  Under the ownership prong, covered financial institutions are required to collect the beneficial ownership information only for each individual who owns directly or indirectly 25% or more of the equity interest of a legal entity and under the control prong, for one individual with significant responsibility to control, manage, or direct the entity.  However, the rule recognizes that there may be instances when no one individual owns 25% or more of the equity interest of the legal entity; in such instances, the financial institution is still required to collect the required information for one individual who controls, manages, or directs the legal entity customer.
 
 
 
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
 

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