Q: What is the beneficial ownership rule?
A: Effective May 2018, the U.S. government has issued regulations requiring that before deposit, lending, or safe deposit accounts can be opened for “legal entity customers” (as defined below) information must be collected about certain “beneficial owners” and any one individual with “control” (as each term is defined below) of those legal entities. The purpose of these regulations is to assist law enforcement in financial investigations, help prevent the evasion of sanctions programs, improve the ability of financial institutions to assess risk, facilitate tax compliance, and advance U.S. compliance with international standards and commitments.
A: Effective May 2018, the U.S. government has issued regulations requiring that before deposit, lending, or safe deposit accounts can be opened for “legal entity customers” (as defined below) information must be collected about certain “beneficial owners” and any one individual with “control” (as each term is defined below) of those legal entities. The purpose of these regulations is to assist law enforcement in financial investigations, help prevent the evasion of sanctions programs, improve the ability of financial institutions to assess risk, facilitate tax compliance, and advance U.S. compliance with international standards and commitments.
Q: Who is a legal entity customer?
A: Legal entity customers include the following entities created by a filing with a state office or with a Secretary of State:
• Corporations
• Limited liability companies
• Limited partnerships
• General partnerships
• Business trusts (created by state office filing)
A: Legal entity customers include the following entities created by a filing with a state office or with a Secretary of State:
• Corporations
• Limited liability companies
• Limited partnerships
• General partnerships
• Business trusts (created by state office filing)
• Any other entity created by a state office filing, including similar entities formed under law of other countries
Q: What constitutes a beneficial owner?
A: Beneficial owners are defined in two ways:
•The term “beneficial owner” shall mean each individual, if any, who owns, either directly or indirectly, 25% or more of the equity interests of a legal entity customer.
• The term “control” shall apply to any single individual with significant responsibility to control, manage, or direct a legal entity customer. Such individual may include an executive officer or senior manager or any individual who regularly performs similar functions.
Q: What is the definition of an "individual with significant managerial control"?
A: This is the person that has significant responsibility to control, manage, or direct the company. Examples include a chief executive officer, chief financial officer, chief operating officer, managing member, general partner, president, vice president, or treasurer. Generally, this is the individual who has the authority to act on behalf of your legal entity.
A: This is the person that has significant responsibility to control, manage, or direct the company. Examples include a chief executive officer, chief financial officer, chief operating officer, managing member, general partner, president, vice president, or treasurer. Generally, this is the individual who has the authority to act on behalf of your legal entity.
Q: Are there any entities that are excluded from the definition of a legal entity customer?
A: Yes. The definition if a legal entity customer excludes certain entities such as:
• Individuals opening accounts on their own behalf
• Sole proprietorship's
• Unincorporated associations, such as a local Girl Scout troop or a neighborhood association
• Trusts, other than statutory trusts created by a filing with a state office
A: Yes. The definition if a legal entity customer excludes certain entities such as:
• Individuals opening accounts on their own behalf
• Sole proprietorship's
• Unincorporated associations, such as a local Girl Scout troop or a neighborhood association
• Trusts, other than statutory trusts created by a filing with a state office
Q: What information do I need to provide Rockland Trust?
A: Each time a business account is opened or maintained, we will be required to ask you for identifying information (name, residential address, date of birth, social security number) as well as identification documentation (driver’s license or passport). If you are opening an account on behalf of a business, you will be required to provide appropriate documentation and to sign a Certification of Beneficial Owners of Legal Entities form and certify that this information is true and accurate to the best of your knowledge.
A: Each time a business account is opened or maintained, we will be required to ask you for identifying information (name, residential address, date of birth, social security number) as well as identification documentation (driver’s license or passport). If you are opening an account on behalf of a business, you will be required to provide appropriate documentation and to sign a Certification of Beneficial Owners of Legal Entities form and certify that this information is true and accurate to the best of your knowledge.
Q: Does Rockland Trust collect beneficial ownership information on all of the beneficial owners of a legal entity?
A: Rockland Trust must collect and verify the beneficial ownership information of each beneficial owner that has an equity interest of 25% or more in the legal entity, and one individual that has significant managerial control of the business.
Here are some examples of how the form should be completed in certain circumstances:
- If there are four individuals, each owning 25%, then information on all four owners should be entered in the Ownership section of the certification, and information on one person in control of the entity should be entered in the Control section.
- If there are two individuals, each owning 40%, and one individual owning the remaining 20%, then information on the two 40% owners should be entered in the Ownership section of the certification. Nothing needs to be entered for the 20% owner. Information on one person in control of the entity should be entered in
the Control section. - If there are five individuals, each owning 20%, then no information needs to be listed on any of those owners in the Ownership section of the certification. The box that says “If checked, Beneficial Owner listing requirement is Not Applicable” should be checked, and information on one person in control of the entity should be entered in the Control section.
- If your organization is a nonprofit entity and does not have any individual owners, then nothing needs to be entered in the Ownership section of the certification, the box that says “If checked, Beneficial Owner listing requirement is Not Applicable” should be checked, and information on one person in control of the entity should be entered in the Control section.
Q: When will I be required to provide beneficial ownership information?
A: Beneficial ownership information is required when a new business account is opened, a new loan is obtained, or when renewing or extending certain products. This includes safe deposit boxes, loans, investments, and trust services.
Q: How will Rockland Trust collect the information?
A: A Certification of Beneficial Owners of Legal Entities form will be used to obtain the required beneficial ownership information.
A: A Certification of Beneficial Owners of Legal Entities form will be used to obtain the required beneficial ownership information.
Q: What does signing the Certification of Beneficial Ownership form mean?
A: Signing the Certification of Beneficial Owners of Legal Entities form means that the person signing the form is stating that to the best of his or her knowledge, the information on the form is complete and correct.
A: Signing the Certification of Beneficial Owners of Legal Entities form means that the person signing the form is stating that to the best of his or her knowledge, the information on the form is complete and correct.
Q: Will I have to provide this information to Rockland Trust on a regular basis?
A: Once Rockland Trust has obtained a Certification of Beneficial Owners of Legal Entities form for your legal entity, we may ask that you confirm the information when you open additional new accounts. If nothing has changed, we will ask you to re-certify the information on file. Please let us know if there is a change in ownership or control of your company so we can obtain an up-to-date Certification of Beneficial Owners of Legal Entities form that reflects accurate information.
Q: Does Rockland Trust need to collect beneficial ownership information for my personal accounts?
A: No. The beneficial ownership regulation only applies to applicable business accounts.
Q: What is considered an account under the beneficial ownership rule?
A: Any business deposit, lending, investment, or safe deposit account.
A: Any business deposit, lending, investment, or safe deposit account.
Q: What if one of the owners is from another country and doesn’t have a Social Security Number?
A: In that case, instead of entering anything in the Social Security column on the Certification of Beneficial Owners of Legal Entities form, you should enter a passport number and the name of the country that issued the number in the last column labeled “For Non-U.S. Persons”.
A: In that case, instead of entering anything in the Social Security column on the Certification of Beneficial Owners of Legal Entities form, you should enter a passport number and the name of the country that issued the number in the last column labeled “For Non-U.S. Persons”.
Q: Is Rockland Trust the only bank that is required to collect beneficial ownership information?
A: No. All federally regulated banks and federally insured credit unions, mutual funds, brokers or dealers in securities, futures commission merchants, and introducing brokers in commodities are required to collect this information.
A: No. All federally regulated banks and federally insured credit unions, mutual funds, brokers or dealers in securities, futures commission merchants, and introducing brokers in commodities are required to collect this information.
Q: Will Rockland Trust keep my information confidential?
A: Yes. Rockland Trust is subject to privacy and information security requirements that cover this information. For more information on Rockland Trust's Privacy Policy, click here.
A: Yes. Rockland Trust is subject to privacy and information security requirements that cover this information. For more information on Rockland Trust's Privacy Policy, click here.
