Q: If an update to beneficial ownership information is required, can the change(s) be made in a covered financial institution’s databases without physically obtaining and re-certifying the information?
A: It depends. A covered financial institution must develop written internal policies, procedures, and internal controls with respect to collecting, maintaining, and updating a legal entity’s beneficial ownership information. The Rule requires that covered financial institutions monitor and, on a risk-basis, update the customer information, including the beneficial ownership information, and does not require re-certification when the information is up- to-date and accurate. Covered financial institutions may therefore update their records to reflect a change of information for an existing beneficial owner using the same or similar processes the institution implemented to record account information it obtains from customers in connection with the institution’s account opening processes. For example, if the update were only to a change of address for an existing beneficial owner whose identity information has already been collected and verified, then full re-certification would likely not be required. In this circumstance, it may be reasonable for the covered financial institution to communicate verbally with the legal entity customer to confirm the accuracy of the change of address and reflect such information in its databases. If, however, the updated information were a change of beneficial ownership, then the new beneficial owner’s identity would need to be collected, certified, and verified.
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: