FinCEN Provides Additional Guidance On Upcoming Customer Due Diligence Requirements

The U.S. Treasury Department's Financial Crimes Enforcement Network ("FinCEN") issued a new set of FAQs in advance of the upcoming customer due diligence rule ("CDD Rule") that goes into effect on May 11, 2018. Financial institutions subject to the CDD Rule, including banks, broker-dealers, mutual funds, futures commission merchants and introducing brokers, will be required to identify the beneficial owners (applying either a 25 percent ownership standard or an effective control prong) behind legal entity customers that open new accounts. In addition, covered financial institutions will be subject to new anti-money laundering requirements. The CDD Rule, originally published on May 11, 2016, was last amended on September 27, 2017, to incorporate various technical updates.