Certification of Beneficial Owners of Legal Entities
To help the U.S. Government fight financial crime, Federal regulation now requires all financial institutions to obtain, verify, and record information about the beneficial owners of legal entity customers. Legal entities can be abused to disguise involvement in terrorist financing, money laundering, tax evasion, corruption, fraud and other financial crimes. Requiring the disclosure of key individuals who own and/or control a legal entity (i.e., the beneficial owners) helps law enforcement investigate and prosecute these crimes.
What You Need to Know About Beneficial Ownership
Each time a new account is opened for a legal entity, the regulation requires West Pointe Bank to gather the following information from beneficial owners of its new and existing legal entity customers:
- Date of birth,
- Current physical residential or business address, and
- Social Security Number (or other government issued identification number for non-U.S. citizens without an SSN).
We are required to ask for this information for each individual that has beneficial ownership (25% or more) and one individual that has significant managerial control of the legal entity.
If you are opening an account on behalf of a legal entity, you will be required to provide the appropriate documentation and to certify that this information is true and accurate to the best of your knowledge.
Frequently Asked Questions
How will this information be collected?
A certification form will be used to obtain the required beneficial ownership information.
What is the definition of a "beneficial owner"?
A beneficial owner is defined as any individual who owns—either directly or indirectly—25 percent or more equity interest in a legal entity.
What is the definition of an "individual with significant management responsibility"?
Also referred to as the individual with control, this is the person with significant responsibility for managing the legal entity. For example, a Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Managing Member, General Partner, President, Vice President, or Treasurer. Generally, this is the individual who has the authority to act on behalf of your legal entity to make decisions related to financial relationships.
What personal information is required for each named individual on the certification?
For each person named on the certification, we are required to obtain their legal name, physical address, date of birth, and social security number (SSN). If they are not a U.S. citizen, then a passport number may be provided in lieu of the SSN. Additionally, we will need a copy of a government-issued ID, like a driver’s license or passport, for verification of each named individual. If this information has already been collected previously, going forward as of May 11, 2018, we will ask you to certify that the information is still accurate and up-to-date. If any of the information has changed or is out-of-date, we will be requesting current information before the account can be opened or the loan originated.
I am already a West Pointe Bank customer. Do I still need to provide this information?
The beneficial ownership information is required when a new account is opened and/or a new/renewed loan is obtained.
What if I am a sole proprietor?
There are a few exceptions to the collection of beneficial ownership information. It is not required to be collected for government agencies, publicly traded companies, sole proprietorships, or voluntary unincorporated associations (i.e., youth sports leagues or Scout troops).
Will I have to provide this information on a regular basis?
Once West Pointe Bank has obtained a beneficial ownership certification for your legal entity, we may ask that you confirm the information when you open additional new accounts or conduct higher risk services. If nothing has changed, we may not ask for a new certification. Please let us know if there is a change in ownership or control of your company so we can obtain an up-to-date certification that reflects accurate information.
What if my company is owned by another legal entity?
Indirect ownership means your legal entity may be owned by one or more legal entities. We are required to obtain information on the individual persons behind those layered entities who ultimately have the equivalent of 25 percent or more ownership of your legal entity.
Do we need to complete a certification if there are no individuals with 25 percent or more ownership?
Yes. You would simply mark the box indicating there are no individuals with beneficial ownership and complete the section for the individual with significant management responsibility.
Who from my company should complete the certification?
The individual requesting the account be opened or the loan be granted is the person to complete the certification. This could be the same individual named as the individual with significant management responsibility, or someone who has been designated by that individual to establish bank relationships on behalf of your legal entity. Either way, the person who completes the certification will sign it indicating the information is accurate to the best of his or her knowledge.
What will West Pointe Bank do with this information?
We are required to maintain this information as part of our records that are associated with your legal entity. We treat this information with the same high level of confidentiality and security as we do all our customer information.
If you have any further questions in regards to this new regulatory requirement, please contact our VP/Risk Officer at 920-303-6046.