SEC Issues Policy Statement on AML Due Diligence
The SEC has issued a Policy Statement to provide guidance on obtaining beneficial ownership information for purposes of Anti-Money Laundering compliance. The Policy Statement recommends the establishment of Customer Due Diligence procedures to identify beneficial owners, which is defined as the person who controls, manages, or directs the account (but not necessarily the person with entitlement to the funds absent the control). The Policy Statement recommends Enhanced Due Diligence for private banking accounts (especially for foreign political figures) and foreign correspondent accounts. Due diligence includes understanding the structure of the beneficial owner (if not a natural person), understanding sources and uses of funds, and identifying the person with authority to direct transactions. The Policy Statement was issued jointly with the FinCEN, the Fed, the FDIC, the OCC, the OTS, and the NCUA.
OUR TAKE: We don’t see anything especially new in the Policy Statement. However, it offers a good roadmap for creating AML procedures.