FinCEN issued final rules under the Bank Secrecy Act to clarify and strengthen customer due diligence requirements for banks, brokers or dealers in securities, mutual funds, futures commission merchants and introducing brokers in commodities. The rules contain explicit customer due diligence requirements and includes a new requirement to identify and verify the identity of beneficial owners of legal entity customers, subject to certain exclusions and exemptions.
The 2016 Beneficial Ownership Rules Training Manual provides all of the information needed to understand the new regulations. The manual covers:
Upon completion of this training, participants will understand:
- Which formerly implied guidance has now been codified into express regulations;
- How to define a “legal entity customer”;
- Written procedural requirements under the new rule;
- The two types of beneficial owners: “ownership prong” and “control prong”;
- The types of accounts and legal entity customers excluded or exempted from identification and verification requirements;
- The model form provided by FinCEN to satisfy the identification requirements;
- How to develop a customer risk profile as part of the risk based due diligence requirements;
- The ongoing monitoring necessary under the new rules;
- Options for gathering beneficial ownership information for owners with less than 25% ownership;
- What changes need to be made to existing written policies, procedures and training programs; and
- Record retention requirements.
Compliance Resource training manuals are designed to be used when conducting in-house training, whether initial training upon implementation of the new requirement, periodic training for new team members or remedial training for longer-term team members.
Originally published 2016. Reviewed September 2019.