How deeply must compliance officers drill through corporate layers to identify beneficial owners? The U.S. Treasury Department's pending customer-due diligence rule seems to answer the question authoritatively enough, mandating that banks and other institutions obtain the identity of persons who own at least 25 percent of a legal entity for whom they hold accounts, and identify individuals who supervise the firm's day-to-day operations. But does the 25-percent threshold set out by the U.S. Treasury Department's Financial Crimes Enforcement Network, or FinCEN, represent the certain, clearly defined paramater bankers sought, or only a minimum expectation that requires them to make a...
Financial institutions are taking vastly different approaches towards complying with the U.S. Treasury Department’s pending due-diligence rule, including by using their own percentage thresholds to identify the beneficial owners of legal entities for whom they hold accounts.
Federal banking regulators plan to publish revised standards for financial institutions to identify the ultimate owners and controllers of legal entities for whom they hold accounts well before a long-anticipated rule takes effect in May.
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 hundreds of millions of dollars in costs likely to be incurred by financial institutions implementing an expected customer due diligence rule will be offset by the regulation's benefits, U.S. officials said Wednesday.
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