Beneficial Ownership Exemptions

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Legal Entity Customer

The Final Rule defines “legal entity customer” as a corporation, limited liability company or other entity that is created by the filing of a public document with a Secretary of State or similar office, a general partnership, and any similar entity formed under the laws of a foreign jurisdiction that opens an account. Such definition includes limited partnerships and business trusts that are created by a filing with a state office. Legal entity customers do not include: sole proprietorships, unincorporated associations, trusts (other than statutory trusts that are created through a state filing) or natural persons opening accounts on their own behalf.


Exclusions. The Final Rule provides a specific list of entities that are excluded from the definition of “legal entity customer” (each, an Excluded Legal Entity) since beneficial ownership information for these entities is generally available from other credible sources:
  • A financial institution regulated by a Federal functional regulator or a bank regulated by a State bank regulator;
  • A department or agency of the United States, of any State, or of any political subdivision of any State;
  • Any entity established under the laws of the United States, of any State, or of any political subdivision of any State, or under an interstate compact between two or more States, that exercises governmental authority on behalf of the United States or any such State or political subdivision;
  • Any entity (other than a bank) whose common stock or analogous equity interests are listed on the New York, American or NASDAQ stock exchange (each, a Listed Entity);
  • Any entity organized under the laws of the United States or of any State and at least 51 percent of whose common stock or analogous equity interest is owned by a Listed Entity; 
  • An issuer of a class of securities registered under section 12 of the Securities Exchange Act of 1934 or that is required to file reports under section 15(d) of that Act;
  • An investment company, as defined in section 3 of the Investment Company Act of 1940, that is registered with the Securities and Exchange Commission (SEC) under that Act;
  • An investment adviser, as defined in section 202(a)(11) of the Investment Advisers Act of 1940, that is registered with the SEC under that Act;
  • An exchange or clearing agency, as defined in section 3 of the Securities Exchange Act of 1934, that is registered under section 6 or 17A of that Act;
  • Any other entity registered with the SEC under the Securities Exchange Act of 1934;
  • A registered entity, commodity pool operator, commodity trading advisor, retail foreign exchange dealer, swap dealer or major swap participant, each as defined in section 1a of the Commodity Exchange Act, that is registered with the Commodity Futures Trading Commission;
  • A public accounting firm registered under section 102 of the Sarbanes-Oxley Act;
  • A bank holding company, as defined in section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841) or savings and loan holding company, as defined in section 10(n) of the Home Owners’ Loan Act (12 U.S.C. 1467a(n));
  • A pooled investment vehicle that is operated or advised by a financial institution that is an Excluded Legal Entity;
  • An insurance company that is regulated by a State;
  • A financial market utility designated by the Financial Stability Oversight Council under Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010;
  • A foreign financial institution established in a jurisdiction where the regulator of such institution maintains beneficial ownership information regarding such institution;
  • A non-U.S. governmental department, agency or political subdivision that engages only in governmental rather than commercial activities; and
  • Any legal entity only to the extent that it opens a private banking account subject to 31 C.F.R §1010.620.

The following Legal Entity customers are subject only to the control prong of the beneficial ownership requirement:
  • A pooled investment vehicle that is operated or advised by a financial institution not excluded under paragraph (e)(2) of section 31 C.F.R §1010.230; and
  • Any legal entity that is established as a nonprofit corporation or similar entity and has filed its organizational documents with the appropriate State authority as necessary.

UPDATED: August 14, 2018