How can financial services organizations prepare for shifts in beneficial ownership information regulations?
The Egmont Group has identified many techniques bad actors use to obscure beneficial ownership (BO). Examples include using complex ownership and control structures, appointing close associates or family members as informal nominee shareholders and directors, separating legal ownership from assets through trusts and other legal arrangements, and employing intermediaries in forming legal persons.
Consequently, Financial Action Task Force recommendations require competent authorities to have access to adequate, accurate, and timely beneficial ownership information. The Corporate Transparency Act (CTA) will help provide this access by developing a national ultimate beneficial owner (UBO) registry as many other countries have done. Financial services organizations will be required to update their processes to align with the changing requirements.