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Can you summarize Core Examination Procedures for Regulatory Requirements and Related Topics > Beneficial Ownership Requirements for Legal Entity Customers (2018)?
Core Examination Procedures for Regulatory Requirements and Related Topics > Beneficial Ownership Requirements for Legal Entity Customers (2018)
Short Summary
This document outlines the regulatory requirements for banks to identify and verify the beneficial owner(s) of legal entity customers. The purpose of these requirements is to enhance transparency and prevent money laundering and other illicit activities. A legal entity customer is defined as a corporation, limited liability company, or other entity that is created by filing a public document. The beneficial owner(s) of a legal entity customer can be determined under both a control prong and an ownership prong. Banks must establish and maintain written procedures to obtain identifying information for each beneficial owner, including name, date of birth, address, and identification number. The bank’s procedures must also include risk-based procedures for verifying the identity of each beneficial owner. The document provides guidance on recordkeeping and retention requirements, as well as the reliance on another financial institution for compliance with the Beneficial Ownership Rule.
Whom does it apply to?
Banks
What does it govern?
Beneficial Ownership Requirements for Legal Entity Customers
What are exemptions?
Certain types of business entities are excluded from the definition of legal entity customer under the Beneficial Ownership rule. Banks are not required to identify and verify the identity of the beneficial owner(s) of a legal entity customer when the customer opens certain types of accounts.
What are the Penalties?
Not mentioned
Jurisdiction
U.S. Federal Government