Pending requirements that U.S. financial institutions more thoroughly vet their accountholders may especially challenge broker dealers, some of which are designing new systems to scrutinize investment advisers and others who control omnibus accounts and pooled investment vehicles, say sources.
Many compliance officers may have never heard of "circular ownership"- a corporate structure of holding companies and subsidiaries that financial institutions often struggle to map out and unravel during the customer-onboarding process.
Several of the world's largest financial institutions have moved quickly to limit risks posed by their corporate clients in the six months since U.S. officials finalized a long-anticipated customer due diligence rule, while smaller lenders have treaded a rougher path towards implementation.
The U.S. Treasury Department finalized its long-awaited customer due diligence rule Friday shortly after the introduction by the White House of a bevy of corporate transparency-related measures.
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