New Guidance on Obtaining Beneficial Ownership Information for Mutual Funds, Broker-Dealers, and Other Financial Institutions

March 19, 2010
The Financial Crimes Enforcement Network and several federal financial regulators jointly issued a release on March 5, 2010, Guidance on Obtaining and Retaining Beneficial Ownership Information. While the Guidance professes “to clarify and consolidate existing regulatory expectations” for obtaining beneficial ownership information about accounts, it effectively creates a new legal obligation—never before articulated by the regulators—to “look through” certain account holders and verify the identity of beneficial owners. This update discusses the Guidance and its implications for mutual funds, broker-dealers, and other financial institutions.