the CTA was enacted in 2021 to address these issues by requiring certain entities to report beneficial ownership information (BOI) directly to FinCEN. The CDD Rule, effective since May 11, 2018, mandates that financial institutions collect BOI as part of their due diligence processes to ensure th...
Beneficial ownership informationPurposeTo highlight pertinent points in the frequently-asked questions (FAQs) issued on April 3, 2018 by the US Treasury Department Financial Crimes Enforcement Network concerning its Customer Due Diligence Requirements for Financial Institutions ("CDD Rule"), which were ...
Customer due diligence (CDD): Under the ‘CDD Final Rule,’ an amendment to the BSA, firms must establish and verify the identities of their customers, including the ultimate beneficial owners (UBOs) of companies, and conduct risk assessments of customer relationships. They must also conduct ongo...
For more information from FinCEN about the Access Rule, see FinCEN, Beneficial Ownership Information Access and Safeguards, 88 FR 88,732 (Dec. 22, 2023); FinCEN, Fact Sheet: Beneficial Ownership Information Access and Safeguards Final Rule (Dec. 21, 2023); FinCEN, Small Entity Compliance...
In addition, the Proposed Access Rule uses the definition of CDD provided under 31 CFR 1010.230 ("CDD Rule"), which only requires covered FIs to identify and verify each 25% or more beneficial owner and a single person with operational control of a legal entity customer. FinCEN notes that ...
The Proposed Rule would not immediately require covered investment advisers to comply with the CIP Rule (i.e., procedures to verify the identity of customers), or the beneficial ownership requirements of the CDD Rule. However, those requirements will eventually be imposed through separate r...
steps that should be included in CDD procedures to protect against heightened risks related to the beneficial owners of an account, enhanced due diligence that is appropriate for accounts that pose heightened risk, the suggestion in the Guidance to implement CDD policies and procedures on an enterpri...