FinCEN Releases First Set of Guidance on the New Beneficial Ownership Information Reporting Requirement

On March 24, 2023, FinCEN issued its first set of guidance on the beneficial ownership information (BOI) reporting requirements, which were discussed in our previous Advisory available here. The guidance includes:

• An introductory video and a more detailed informational video about the reporting requirement
• One Pagers on key filing dates and key questions
• Answers to Frequently Asked Questions (FAQs) about the reporting requirement.

These materials are also available on FinCEN’s new beneficial ownership information reporting webpage.  The new guidance serves as a useful tool to better understand the application of FinCEN’s BOI reporting requirements. The BOI final rule requires certain entities to file reports with the agency that identify their beneficial owners. Specifically, each “reporting company” must submit a report to FinCEN that identifies two categories of individuals: (1) the beneficial owners of the entity; and (2) its company applicants.

The guidance provides a streamlined, quick reference summary of the key pieces of information contained in the rule, and the FAQs offer examples to illustrate how reporting companies can identify their beneficial owners or company applicants. The guidance also adds detail to how FinCEN will accept the required BOI reports. According to the guidance, FinCEN will begin accepting BOI reports on January 1, 2024, through a secure filing system available via FinCEN’s website.  The secure filing system is still under development.

In addition, the FAQs describe who will be able to access the reported information and how FinCEN will protect the reported information. The guidance, although general in nature, offers a window into how FinCEN may evaluate the issues raised in its proposed rule governing access to the BOI reports.  For example, the BOI database will be cloud-based and will implement the highest security standards required under the Federal Information Security Modernization Act.

Although the guidance will be helpful when preparing a BOI report, additional guidance—including a Small Entity Compliance Guide—will be published on FinCEN’s website in the coming months that is expected to provide specific guidance regarding how the reporting requirements may apply to the various reporting companies. We will continue to monitor developments under the BOI final rule and provide our analysis regarding the practical implications for reporting companies as they occur.

For additional information on BSA/AML reform, including FinCEN efforts under the AML Act, please visit Arnold & Porter’s BSA/AML Reform Resource Center, where we track the legal developments and rulemaking resulting from the AML Act and provide our insights on the impact on the financial services industry.

© Arnold & Porter Kaye Scholer LLP 2023 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.