For your reference, we have put together some of the most frequently asked questions (FAQs) about beneficial ownership. Jump to your exact question using the links below, or read through the entire section to learn more.
- What is the "beneficial ownership" regulation?
- What constitutes beneficial ownership?
- What types of legal entities are covered by this regulation?
- What information will I need to apply for an account?
- What if the identified beneficial owners or control persons are not WestStar Bank clients?
- I have a WestStar Bank business account. Will I need to provide additional information?
- Does the new regulation requirement apply to loan accounts?
In May 2016, the U.S. government passed a new regulation regarding the beneficial ownership of legal entity clients. Going forward, it will be mandatory for all financial institutions to identify and verify the identity of the beneficial owners of legal entity clients, as well as a controlling person of the legal entity anytime an account is opened or maintained.
In compliance with the regulation, WestStar Bank will implement the new information gathering requirements May 11, 2018. This means that any time an account is opened or maintained for a legal entity, we will request information which identifies the ultimate beneficial owner(s) and controlling person of the legal entity.
A beneficial owner is an individual who owns or controls the entity doing business with WestStar Bank. Federal regulation requires financial institutions to obtain, verify and record information about the beneficial owner.
The following individuals are considered beneficial owners:
- Each individual, if any, who owns, directly or indirectly, 25% or more of the equity interests of a legal entity (e.g. each natural person who owns 25% or more of the shares of the corporation), and
- An individual with significant responsibility for controlling or managing the legal entity (e.g., Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Managing Member, General Partner, President, Vice President or Treasurer).
A legal entity includes corporations, limited liability companies or other entities created by filing a public document with the Secretary of State, and partnerships. A legal entity does not include sole proprietorships, unincorporated associations, trusts (with some exceptions), publicly traded companies, and most financial institutions, among others.
When opening business accounts, in addition to collecting the usual business information (business name, business address, type of business, business registration number), WestStar Bank will collect information regarding the identity of all individuals who have a significant ownership or control position.
The beneficial ownership information includes:
- Name and title.
- Residential address.
- Date of birth.
- Identification number (Social security number, or passport number and country of issuance or similar ID number).
- Percentage of ownership.
At the time a new account is opened for a legal entity, financial institutions are required to obtain a certification from the individual opening the account on behalf of the legal entity, that the information provided on the beneficial owner and/or controlling manager is accurate.
What if the identified beneficial owners or control persons are not WestStar Bank clients? Do they still need to provide their personal information?
Yes. Regardless of client status, information about the ultimate beneficial owners and control person must be provided in order to comply with the regulation.
The change should not impact your existing accounts. However, this information will be collected for existing legal entity clients who establish additional accounts once this new regulation is implemented at WestStar Bank beginning May 11, 2018.
Yes, this requirement applies to all accounts, including checking, savings, certificates, loans, and safe deposit boxes.