Beneficial Ownership Question

Posted By: CoSmIc GoPhEr

Beneficial Ownership Question - 04/21/17 03:42 PM

While working on the process of implementing the beneficial ownership rule, I received the following question:

Can an individual, who is not an owner (25% or more) or the control person, sign the certification statement on the Certification of Beneficial Owner(s) form?

Posted By: Elwood P. Dowd

Re: Beneficial Ownership Question - 04/21/17 03:58 PM

The certification is to be signed by the person who is opening the account. That may be a beneficial owner. It might also be a wino somebody scooped up off a park bench and sent into the bank with a new account resolution from the legal entity customer. The regulation does not dictate that this person have any qualifications whatsoever.

This is the weakest point in this regulatory scheme. You are to write down unverifiable information provided by an individual whose identity you are not required to verify and who may or may not have a connection to the legal entity customer. Yet, you are to accept that information as gospel based on a certification that amounts to: "Well, as far as I know, these dudes own the company."

Sleep well tonight..