FinCEN CDD BO FAQ 2 - 1 – Can an institution adopt more stringent policies and procedures for the collection of beneficial ownership information than the obligations prescribed by the Beneficial Ownership Requirements for Legal Entity Customers?

Compliance > BSA > FinCEN CDD/BO Rule - eff 2016
Q:  Can a covered financial institution adopt and implement more stringent written internal policies and procedures for the collection of beneficial ownership information than the obligations prescribed by the Beneficial Ownership Requirements for Legal Entity Customers (31 CFR 1010.230)?
 
A:  Yes.  Covered financial institutions may choose to implement stricter written internal policies and procedures for the collection and verification of beneficial ownership information than the requirements prescribed by the Rule. 
 
Transparency in beneficial ownership provides highly valuable information that supports law enforcement, tax, regulatory or counterterrorism investigations.  The Rule sets forth the standard for collecting such valuable information at 25 percent of beneficial ownership.  Therefore, covered financial institutions will meet their beneficial ownership obligations by collecting information on individuals, if any, who hold directly or indirectly, 25 percent or more of the equity interests in and one individual who has managerial control of a legal entity customer.  A covered financial institution may choose, however, to collect such information on natural persons who own a lower percentage of the equity interests of a legal entity customer as well as information on more than one individual with managerial control.
 
 
ADDITIONAL INFORMATION:
The above FAQ was included in FinCEN’s 2nd set of CDD FAQs that were released in April 2018.  The FAQs are provided to assist financial institution in understanding the scope of the customer due diligence / beneficial ownership rule.  The 2018 FAQs may be found here:  https://www.fincen.gov/sites/default/files/2018-04/FinCEN_Guidance_CDD_FAQ_FINAL_508_2.pdf
 

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