Regulatory Alerts2016-07-19
Frequently Asked Questions Regarding Customer Due Diligence Requirements for Financial Institutions
The Financial Crimes Enforcement Network issued guidance to clarify the Customer Due Diligence Rule, which mandates that covered financial institutions identify and verify the beneficial owners of legal entity customers. The rule requires institutions to implement risk-based procedures for ongoing due diligence, including understanding the nature of customer relationships and monitoring for suspicious transactions. Beneficial owners are defined as individuals owning 25% or more of the entity's equity or those with significant responsibility for its control, with compliance required by May 11, 2018.
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