Publications

FinCEN and Regulators Issue Joint Guidance on Obtaining Beneficial Ownership Information, Potentially Expanding Certain Financial Institutions’ USA PATRIOT Act Obligations

November 22, 2010
Journal of Investment Compliance

On March 5, 2010, the Financial Crimes Enforcement Network (‘‘FinCEN’’), along with the Federal Banking Regulators (i.e. the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency and the Office of Thrift Supervision) and the Securities and Exchange Commission, in consultation with staff from the Commodity Futures Trading Commission, issued guidance (the ‘‘Guidance’’ or ‘‘Joint Release’’) regarding ‘‘obtaining beneficial ownership information for certain accounts and customer relationships’’. Although the Joint Release states that it is intended to ‘‘clarify and consolidate existing regulatory expectations’’ and that it ‘‘does not alter or supersede previously issued regulations, rulings, or guidance regarding the Customer Identification Program (‘‘CIP’’) requirements’’, in fact, the Guidance appears to expand certain concepts previously applied to banks by the Federal Banking Regulators to other financial institutions (including broker-dealers, futures commission merchants, mutual funds, insurance  companies, and money services businesses) and appears to expand concepts set forth in Rule 312 of the USA PATRIOT Act of 2001 (‘‘PATRIOT Act’’) beyond private banking and correspondent banking.