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#2257578 - 08/03/21 04:37 PM Trusts and Beneficial Owners
ACBbank Offline
Power Poster
Joined: Jul 2006
Posts: 3,950
New York City
It's been a while since I looked into this. When a trust owns a LEC the Trustee is the Control Person. When the trust is opening the account, excluding statutory trusts, the trust is not considered a LEC so, unless the Bank's CIP or other policy requires it, the CDD Rule itself would not be applicable to the trust.

Does anyone disagree? If so, I'd be interested in thoughts as to why the above is incorrect.

"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu

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#2257586 - 08/03/21 06:34 PM Re: Trusts and Beneficial Owners ACBbank
John_Burnett Offline
Junior Member
Joined: Feb 2013
Posts: 32
Cape Cod
Except for a statutory trust, a trust is not a LEC because it doesn't meet the definition of an LEC (31 CFR 1010.230(e)(1)).

If a trust owns 25% or more of an LEC, the trustee (or a trustee if there is more than one) is identified as the owner (not the control person) (31 CFR 1010.230(d)(3)).

The control person of the LEC is an executive of the LEC (president, etc.), not necessarily an owner (31 CFR 1010.230(d)(2))

There may be cases, especially in smaller LECs, where an owner is also the individual identified as the control or management individual. And in some of those cases, a trustee identified as an owner (because a trust is a 25% owner) may also be the control or management individual.
Last edited by John Burnett; 08/04/21 05:26 PM. Reason: Added inf
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