This summer the Financial Crimes Enforcement Network ("FinCEN”) issued a notice of proposed rulemaking proposing a rule that, if adopted, would mandate that financial institutions require their legal entity customers to identify natural persons meeting certain ownership thresholds.
Introduction -
The proposed rule represents a departure from current FinCEN regulations, under which financial institutions exercise their own judgment in making risk-based assessments whether to require beneficial owner information for legal entity accounts. The proposed rule would apply to all financial institutions currently subject to customer identification program (“CIP”) requirements: banks, broker-dealers, mutual funds, futures commission merchants, and introducing brokers in commodities (“covered financial institutions”).
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