banner banner

The rule talks about identifying directors, shareholders and owners. What is required?

When your client, or a third party your client is representing, is an organization and the receipt, payment or transfer of funds is involved, you must obtain and record with the applicable date, the names of all directors (unless the client or third party is a securities dealer).

You are also required to make reasonable efforts to obtain and record, with the applicable date, the names and addresses of all beneficial owners and information about the ownership, control and structure of the organization. Beneficial owners are individuals who own or control, directly or indirectly, 25% or more of the organization or the shares of the organization and the trustees, known beneficiaries or settlors of the trust. The purpose of this requirement is for you to obtain sufficient information about the organization so that you know who effectively owns and controls it.

You are also required to take reasonable measures to confirm the accuracy of information about directors, beneficial owners, and the organization’s ownership, control and structure.