The Beneficial Ownership Rule
Federal regulation requires us to obtain, verify, and record information about beneficial owners of Legal Entity customers.
Beneficial Ownership is a new rule from the Financial Crimes Enforcement Network (FinCEN), under the Bank Secrecy Act, which requires all covered financial institutions to collect and verify from certain non-exempt legal entities specific information about the beneficial owners of the entity at the time a new account is opened. The intent of the Beneficial Ownership Rule is to assist authorities in counteracting money laundering, tax evasion, and other financial crimes.
- Effective May 11, 2018, new rules under the Bank Secrecy Act will aid the government in the fight against crimes to evade financial measures designed to combat terrorism and other national security threats.
- Each time an account is opened for a covered Legal Entity, we are required to ask you for identifying information (name, address, date of birth, social security number) and identification documents (unexpired driver’s license, passport, etc.)
Definitions
- Beneficial Owner
- Each individual with 25% or more equity interest in the legal entity, whether directly or indirectly.
- Control Person
- Single individual with significant responsibility to control, manage, or direct a legal entity customer (e.g. executive officer or senior manager).
- Natural Authorized Persona (NAP)
- An individual authorized to open accounts or provide information on behalf of the legal entity.
- Legal Entity
- • Corporation
- • Limited liability company
- • Partnership
- • Other entity created by filing a public document with a Secretary of State or similar office
- • General partnership
- • Any similar entity formed under the laws of a foreign jurisdiction that opens an account
- A Legal Entity Does Not Include
- • Sole proprietorships or unincorporated associations.
- • Refer to the section on exclusions and exempt below for more details on whether your company is impacted by this requirement.
The Beneficial Owner Form
When opening an account at First National Bank, the Beneficial Ownership Form must be completed by the NAP. The form requires, among other information, the name, business address or primary residence address, date of birth, Social Security Number (as applicable), the name of the issuing state or country, and number of the passport or driver’s license for the Beneficial Owners and Control Person as applicable.
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USING THE FORM
You can review the form at any time to become familiar with it.
To complete the Beneficial Ownership Form, please save it to your computer. It can be completed as a PDF form but must then be printed as a hard copy; the Natural Authorized Person must sign in ink (“wet” signature). The completed and signed form may be scanned and returned to the bank as directed by a First National Bank representative or a paper copy may be brought to all new account openings.
First National Bank will verify the information provided.
Who does this change affect?
The following people will be required to provide the appropriate documentation required by federal regulation:
- Each individual that owns 25% or more of the Legal Entity AND
- One individual that has significant managerial control of the Legal Entity
Legal Entities do not include sole proprietorships, unincorporated associations, or a natural person opening accounts on their behalf.
WHEN DO I NEED TO PROVIDE THIS INFORMATION?
Which Entities are Excluded and Exempt?
- Exclusions
- Exclusions: The following legal entities are excluded from the Beneficial Ownership Rule and do not require the collection of Beneficial Ownership information or evidence supporting their exclusion:
- • Sole Proprietorships
- • Unincorporated Associations
- • Trusts (other than statutory trusts created by a filing with a Secretary of State or similar office)
- • Authorized Users for credit cards
- • Non-Account Owners
- Exemptions
- Exemptions: Legal entities in one of the following categories are generally exempt from the Beneficial Ownership Rules requirements.
- 1. Entities traded on a U.S stock exchange (NYSE, American or NASDAQ)
- 2. A charity or non-profit entity (requires a Control Person)
- 3. Trusts (not formed through a Secretary of State filing)
- 4. A Public Accounting firm registered under section 102 of the Sarbanes-Oxley Act
- 5. A Bank regulated by a U.S. state agency
- 6. An Insurance company regulated by a state of the United States
- 7. A U.S regulated financial institution
- 8. An agency of the U.S. Federal government)
- 9. An agency of a U.S. State government
- 10. A U.S. local government agency
- 11. A non-U.S. government agency engaged in government activities
- 12. A bank holding company
- 13. A savings and loan holding company
- 14. Equipment Finance/Leasing transactions that are purchases from third parties as Fifth Third is not the originating bank.
- 15. A financial market utility designated by the Financial Stability Oversight Council
- 16. A non-U.S. entity opening a private banking account subject to 31 CFR
- 17. A foreign Financial Institution established in a jurisdiction where the regulator of such institution maintains Beneficial Ownership information (requires review and approval by Fifth Third Bank)
- 18. An issuer of a class of securities
- 19. n SEC registered investment company, investment advisor, broker dealer or other registered firm with a current SEC registration number
- 20. A Commodity Futures Trading Commission registered entity
- 21. A pooled investment vehicle that is operated or advised by a financial institution that is exempt from Beneficial Ownership
- 22. Non-excluded pooled investment vehicles - those not operated by or advised by a financial institution such as a non-US managed mutual fund, hedged fund or private equity fund (requires Control Person)
- 23. An Entity, organized under the laws of the United States, with at least 51% of whose commons stock or analogous equity interest held by an entity traded on a U.S. Stock Exchange
- 24. Unincorporated Associations (such as scout troops or youth sport leagues) (Unincorporated Associations are excluded and are not required to provide beneficial ownership and signature from a Natural Authorized Person)
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