Exemptions and Limitations
A legal entity is defined as a corporation, limited liability company, other entity created by the filing of a public document with a Secretary of State, a general partnership, a limited partnership, business trust and any similar entity formed under the laws of a foreign jurisdiction. We are not required to identify and verify the identity of the beneficial owners of a legal entity customer when the customer opens any of the following:
•Accounts established at the point-of-sale to provide credit products, solely for the purchase of retail goods and/or services at these retailers, up to a limit of $50,000.
•Accounts established to finance the purchase of postage and for which payments are remitted directly by the financial institution to the provider of the postage products.
•Accounts established to finance insurance premiums and for which payments are remitted directly by the financial institution to the insurance provider or broker.
•Accounts established to finance the purchase or lease of equipment and for which payments are remitted directly by the financial institution to the vendor or lessor of the equipment.
These exemptions will NOT apply under EITHER of the following circumstances:
•If the accounts are transaction accounts through which a legal entity customer can make payments to, or receive payments from, third parties
•If there is the possibility of a cash refund for accounts opened to finance purchase of postage, insurance premium or equipment leasing.
Additionally, the Rule excludes from the definition of legal entity customer certain entities that are subject to Federal and State regulation and for which information about their beneficial ownership and management is available from the Federal and State agencies. The following list of exclusions have been outlined in the Rule:
•Financial institutions regulated by a Federal functional regulator or a bank regulated by a State bank regulator
•Department or agency of the U.S., of any State, or of any political subdivision of a State
•Any entity established under the laws of the U.S., or any State, or of any political subdivision of any State, or under an interstate compact
•Any entity (other than a bank) whose common stock or analogous equity interests are listed on the New York (NYSE), American (ASE) or NASDAQ stock exchange
•Any entity organized under the laws of the U.S. or of any State at least 51% of whose common stock or analogous equity interests are held by a listed entity
•Issuers of securities registered under Section 21 of the Securities Exchange Act of 1934 or that is required to file reports under 15(d) of that Act
• Any investment company, as defined in Section 3 of the Investment Company Act of 1940, registered with the SEC
• An SEC-registered investment adviser, as defined in Section 202(a)(11) of the Investment Advisers Act of 1940
• An exchange or clearing agency, as defined in Section 3 of the SEA, registered under Section 6 or 17A of that Act
• Any other entity registered with the SEC under the SEA
• A registered entity, commodity pool operator, commodity trading adviser, retail foreign exchange dealer, swap dealer or major swap participant, defined in Section 1a of the Commodity Exchange Act, registered with the Commodity Futures Trading Commission
• A public accounting firm registered under Section 102 of the Sarbanes-Oxley Act
• A bank holding company, as defined in Section 2 of the Bank Holding Company Act of 1956 or savings and loan holding company, as defined in Section 10(n) of the Home Owners’ Loan Act
• A pooled investment vehicle operated or advised by an FI excluded from the definition of legal entity customer under the CDD Rule
• An insurance company regulated by a State
• A financial market utility designated by the Financial Stability Oversight Council under Title VIII of the DFA
• A foreign financial institution established in a jurisdiction where the regulator of such an institution maintains beneficial ownership information regarding such institution
• A non-U.S. governmental department, agency or political subdivision that engages only in governmental rather than commercial activities
• Any legal entity only to the extent that is opens a private banking account subject to 31 CFR 1010.620