FinCEN Customer Due Diligence Requirements Will Affect Certain Securities Offerings

Beginning May 11, 2018, the new Financial Crimes Enforcement Network (FinCEN) customer due diligence rule (the "CDD Rule") will require covered financial institutions to identify, and verify the identity of, the beneficial owners of all legal entity customers (i.e., corporations, limited liability companies, partnerships or other business entities) at the time a new account is opened, subject to certain exceptions, including limited exceptions allowing reliance on previously collected information from a customer who certifies or confirms that the information is current and accurate. Covered financial institutions include federally regulated banks and federally insured credit unions, mutual funds, brokers or dealers in securities, futures commission merchants, and introducing brokers in commodities. Significantly for underwritten securities offerings, the CDD Rule has been interpreted to require beneficial owner identification and verification each time a new account is