Your compliance team needs a standardized way to collect and verify beneficial ownership information. This script guides your frontline staff through the identification and verification process required under the Beneficial Ownership Rule, ensuring you capture the right data in the right format while meeting your customer due diligence obligations.
Purpose of the Script
This verification script addresses the Beneficial Ownership Rule's requirement to identify individuals who own 25% or more of a legal entity customer, as well as the single individual with significant control. Use this during account opening for any legal entity customer, whether a corporation, limited liability company, partnership, or other structure.
The script structures your conversation to collect the name, date of birth, address, and identification number for each beneficial owner. It also includes the control-person identification that many institutions miss during initial onboarding.
Prerequisites
Before deploying this script, confirm:
- Your institution has written procedures defining your beneficial ownership identification and verification approach.
- Staff understand the difference between legal ownership (who holds title) and beneficial ownership (who ultimately benefits).
- You've established a risk-based threshold for when additional documentation is required beyond customer certification.
- Your core system or CRM can store the collected beneficial ownership data in a searchable format.
- Staff are trained to recognize situations that question the reliability of customer-provided information.
You don't need to apply this script retroactively to customers established before May 11, 2018, per FFIEC guidance. Focus on new accounts and existing relationships during periodic reviews based on risk.
The Verification Script
Opening:
"As part of our account opening process, federal regulations require us to identify the individuals who own or control [Entity Name]. I'll need to collect some information about your beneficial owners. This should take about five minutes."
Ownership Identification:
"First, I need to identify any individuals who own 25% or more of [Entity Name]. This includes direct ownership and indirect ownership through other entities. Do you have any individual owners who meet this threshold?"
[If yes:] "For each owner, I'll need their full legal name, date of birth, residential address, and either a Social Security number or passport number if they're not a U.S. citizen."
[Collect information for each owner. If no one owns 25% or more, note this and proceed to control identification.]
Control Identification:
"Now I need to identify one individual who has significant responsibility to control, manage, or direct [Entity Name]. This is typically your CEO, CFO, COO, managing member, general partner, president, or similar executive officer. Who fills this role?"
[Collect the same identifying information: name, date of birth, address, identification number.]
Certification:
"I'm going to provide you with a certification form that confirms the accuracy of the information you've given me. This form states that the individuals you've identified are the beneficial owners as defined by federal regulation. Please review it and sign here."
[Present Beneficial Ownership Certification Form. Ensure customer signs and dates.]
Verification Step:
"Thank you. I'll now verify this information using [specify your verification method: government-issued ID, database check, or documentary verification]. Can you provide [specific document needed]?"
[Conduct verification according to your institution's written procedures. Document the verification method and result.]
Closing:
"We're required to keep this information current. If there's any change in ownership or control, someone acquires more than 25%, an owner drops below 25%, or your control person changes, please notify us within 30 days so we can update our records."
Customizing the Script
Adjust the verification method section based on your institution's risk-based approach. For lower-risk entities, you might accept customer certification without additional documentary verification. For higher-risk relationships, entities in high-risk jurisdictions, complex ownership structures, or customers engaged in high-risk activities, require documentary verification and possibly conduct enhanced due diligence.
If your customer indicates that equity holders are structured to avoid the 25% reporting threshold (for example, five individuals each holding exactly 24.9%), escalate to your compliance officer. You may need to file a Suspicious Activity Report if you suspect deliberate threshold avoidance.
For trust structures, adapt the ownership identification to identify the settlor, trustee, protector (if applicable), and beneficiaries. The control person will typically be the trustee, but you'll need to capture the beneficial owners who ultimately benefit from the trust assets.
If you're working with a complex tiered structure where ownership flows through multiple entities, look through each layer until you reach natural persons. Don't accept "Entity A owns 40%" as your final answer. Ask: "Who are the natural persons who own Entity A?"
Validation Steps
After completing the script with a customer, verify:
Completeness Check: You've identified at least one beneficial owner (either through ownership or control identification, or both). If you have zero beneficial owners documented, something went wrong.
Data Quality Check: Each beneficial owner record includes all four required data elements: name, date of birth, address, and identification number. Incomplete records won't satisfy the rule.
Certification on File: Your customer has signed the beneficial ownership certification form. This signed certification is your basis for relying on customer-provided information unless facts call its reliability into question.
Verification Documented: You've recorded what verification method you used and the result. If you verified against a driver's license, note the license number and expiration date. If you used a database, note which database and the match result.
System Entry: The beneficial ownership information is entered in your core system or CRM in a way that supports monitoring and reporting. You should be able to run a report showing all accounts where a specific individual is a beneficial owner.
Risk Assessment Updated: If the beneficial ownership information revealed higher-risk factors (Politically Exposed Person status, ownership from a high-risk jurisdiction, complex structures), you've documented this in your customer risk rating.
When updating customer information during periodic reviews, you don't need to re-collect everything from scratch. Ask: "Have there been any changes to the individuals who own or control your entity?" If the answer is no and you have no reason to doubt it, document that you asked and received confirmation. If yes, collect updated information for the changed beneficial owners only.
This script gives your team a consistent framework for meeting the Beneficial Ownership Rule's requirements while building the transparency that makes your institution less attractive to money launderers attempting to exploit opaque corporate structures.
