'Know your client' obligations cover beneficial owners

Among the customer due diligence (or 'know your client') duties that a Regulated firm must undertake is the identification of beneficial owners where this is relevant.

Under Section 5 of the Money Laundering Regulations 2007 (the Regulations), regulatedfirm's must " take adequate measures...to verify...identity so as to be satisfied that they know who the beneficial owner is, including, in the case of a legal person, trust or similar legal arrangement, measures to understand the ownership and control structure of the person, trust or arrangement."

The Regulations provide a comprehensive definition of the phrase "Beneficial Owner" but in very general terms it applies to those who have a 25% or more interest in the subject matter of the relevant transaction.

The important point to emphasise is that carrying out due diligence on Beneficial Owners involves making sure that you understand the nature of the relevant beneficial ownership and that you are satisfied that this is consistent with your instructions and your knowledge of the transaction in question

ML Solutions 4U offers a complete and fully flexible anti-money laundering training programme to Regulated firms, allowing them to meet their training obligations under UK law in a cost-effective and efficient manner. Courses can be delivered in-house, online or through money laundering seminars around the country, and can be tailored to meet a firm's specific needs.

For full information regarding the accredited training packages offered by ML Solutions 4U, please contact an advisor by telephone, on 0845 402 0001, or by completing our online contact form.

Money Laundering Information » Beneficial Owners and Know Your Client Rules