Beneficial Ownership Requirements: A Guide for Financial Institutions

Introduction

As a financial institution, it’s essential to understand and comply with beneficial ownership requirements as outlined in the Financial Transactions Reporting Act No. 6 of 2006 and the Financial Institutions (Customer Due Diligence) Rules, No. 1 of 2016.

Key Points: Beneficial Ownership Form

• Completion Requirements: Customers of designated financial institutions must complete a beneficial ownership form.
• Information Required: The form asks for customer details, including:
  • Name
  • Designation
  • Address
  • Beneficial ownership information

Understanding Beneficial Ownership

• Definition: A beneficial owner is a natural person who ultimately owns or controls the customer or the person on whose behalf a transaction is conducted.
• Declaration Requirements: Customers must declare whether they are the sole beneficial owner or not. If not, they must provide identifying information for all beneficial owners owning or controlling 10% or more of the customer’s equity.

Verification and Attestation

• Authorized Official Verification: An authorized financial institution official must verify the identity of the customer whose signature is on the form.
• Attestation: The official must attest to having identified the customer, ensuring compliance with beneficial ownership requirements.

By following this guide, financial institutions can ensure they meet the necessary requirements and maintain a transparent and compliant customer due diligence process.