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. An interagency group began work in June on amending the Federal Financial Institutions Examination Council's Bank Secrecy Act exam manual to account for the new customer due-diligence rule issued by the Financial Crimes Enforcement Network last year, a senior regulatory official told ACAMS moneylaundering.com on condition of anonymity. The group, which represents the Federal Reserve, Federal Deposit Insurance Corp., National Credit Union Administration, Office of...
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.