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How to Comply With Fincen’s Beneficial Ownership Rule

As part of FinCEN’s Customer Due Diligence(CDD) Rule, firms are required to:

  • Identify and verify the identity of new customers
  • Identify and verify the identity of the beneficial owners of companies opening accounts
  • Understand the nature and purpose of customer relationships to develop customer risk profiles
  • Conduct ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information

The requirement to identify the beneficial owners of legal entity customers was a dramatic change in policy and procedure with respect to on-boarding and ongoing monitoring of legal entity customers and was one of the challenges presented in the implementation.

This 24-page white paper explores the most significant challenges faced by financial institutions in implementing the beneficial ownership requirement of the CDD Rule as well as recommendations for complying with the various requirements. It includes the following sections tips on:

  • Identifying beneficial ownership, including the legal entity
  • How to collect, store, manage and maintain beneficial ownership information
  • Identity verification for beneficial owners
  • Storing, managing, and maintaining beneficial ownership data
  • Opportunities for enhanced transaction monitoring and customer risk assessment from beneficial ownership data
  • Documentation: The key to regulatory compliance