Beneficial Ownership - Frequently Asked Questions


In May 2016, the U.S. government passed a new rule regarding the beneficial ownership of legal entity customers. Going forward, it will be mandatory for all covered financial institutions to comply with this rule by identifying the beneficial owner(s) and a control person of a covered legal entity customer opening or maintaining an account.

In compliance with this new rule, Pennian Bank will collect beneficial ownership information from legal entity customers beginning in May 2018. This means any time an account is opened or maintained for a legal entity, we will request information that identifies the beneficial owner(s) and a control person of the legal entity. The required identifying information includes name, address, date of birth, social security number, identification number and other information that will help identify those individuals. This information will be collected whether or not the person is a Pennian Bank customer. This information will be collected for existing legal entity customers who establish or maintain accounts once this new rule is implemented at Pennian Bank.

What do you need to know about Beneficial Ownership?

All covered financial institutions are subject to the Beneficial Ownership Rule under the Bank Secrecy Act.

If your business is a covered legal entity under this rule, it will impact your business when opening an account, a loan or if there are changes made to the structure or ownership of your account(s) or business.

What is the Beneficial Ownership regulation and why does it matter?

The Beneficial Ownership rule is a federal law, requiring all covered financial institutions to verify the identity of the beneficial owners of legal entity customers as well as the control person of the legal entity anytime an account is opened or maintained. The rule is aimed at making financial institutions safer for their customers and protecting the country’s financial system.

Why has Pennian Bank been asked to collect this information?

Pennian Bank, as well as all other covered financial institutions in the US will be required to collect beneficial ownership information. This rule was implemented by the US Government to help fight financial crimes. We are doing our part in upholding the new rule to protect the financial system.

Is Pennian Bank the only bank required to collect this information?

No. All covered financial institutions in the US are required to comply with the new beneficial ownership rule.

What constitutes beneficial ownership?

The rule defines beneficial ownership as being made up of two roles: 1. Those that have an ownership interest in a legal entity and 2. Those that control a legal entity.

The rule defines beneficial owner(s) as the following:

  1. Each individual, if any, who directly or indirectly, owns 25% or more of the legal entity; AND
  2. One individual who has significant managerial control of the legal entity.

A legal entity will have a total of between one and five beneficial owners.

What if the people who have been identified are not customers of Pennian Bank? Do I still need to provide their personal information?

Yes. Regardless of customer status, information about beneficial owner(s) and control person must be provided.

My Pennian Bank representative has asked me for a Certification of Beneficial Ownership. What is this and why is it necessary?

The Certification of Beneficial Ownership is a form that Pennian Bank uses to collect information from legal entity customers regarding their beneficial owner(s) and control person. By completing the form, you are attesting that the information provided is accurate to the best of your knowledge.

Where will beneficial ownership information be stored?

Pennian Bank will maintain ownership information on its system of record. We maintain strict privacy policies and procedures.

I also have personal accounts with Pennian Bank. Will beneficial ownership information be collected for my personal accounts?

No. The Beneficial Ownership rule only applies to legal entity accounts.

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