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Jun 14, 2016

FinCEN Issues Final Beneficial Owner Identification Rules

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In May 2016, the U.S. Treasury Department’s Financial Crimes Enforcement Network issued final rules regarding beneficial owner identification obligations for legal entity customers (the “Rule”).

Under the Rule, covered financial institutions must establish procedures to: (1) Identify each natural person that directly or indirectly owns 25% or more of the equity interests of a legal entity customer (the “ownership prong”); (2) Identify one natural person with “significant responsibility to control, manage, or direct” a legal entity customer (the “control prong”), which may be a person reported under the ownership prong; and, (3) Verify the identities of those persons according to risk-based procedures, which procedures must include the elements currently required under the Customer Identification Rule at a minimum.

Identification of those beneficial owners must be conducted at the time a new account is opened. Compliance with the Rule’s requirements is mandatory by May 11, 2018.

View full memo, FinCEN Issues Final Beneficial Owner Identification Rules

Authors and Contributors

Russell Sacks

Partner

Financial Institutions Advisory & Financial Regulatory

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+1 212 848 7585

New York

Danforth Newcomb

Of Counsel

Litigation

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New York

Paul Schreiber

Of Counsel

Investment Funds

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+1 212 848 8920

New York

Nathan Greene

Partner

Investment Funds

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+1 212 848 4668

New York

Charles Gittleman

Of Counsel

Financial Institutions Advisory & Financial Regulatory

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+1 212 848 7317

New York

John (Sean) Finley

Partner

Investment Funds

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+1 212 848 4346

New York

Laura Friedrich

Partner

Investment Funds

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+1 212 848 7411

New York

Geoffrey Goldman

Partner

Derivatives & Structured Products

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+1 212 848 4867

New York

Reena Agrawal Sahni

Partner

Financial Institutions Advisory & Financial Regulatory

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New York

Timothy J. Byrne

Counsel

Financial Institutions Advisory & Financial Regulatory

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New York

Jennifer D. Morton

Counsel

Financial Institutions Advisory & Financial Regulatory

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New York

Christina Berlin

Associate

Financial Institutions Advisory & Financial Regulatory

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Washington DC

Jennifer Scott Konko

Associate

Financial Institutions Advisory & Financial Regulatory

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New York

Jenny Ding Jordan

Associate

Financial Institutions Advisory & Financial Regulatory

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+1 212 848 5095

New York

Jeffrey Tate

Counsel

Tax

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Washington DC

Steven Blau

Associate

Financial Institutions Advisory & Financial Regulatory

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Toronto