ICI Urges Collaboration with Stakeholders on FinCEN BOI Rulemaking
In a comment letter on FinCEN's proposed rulemaking on access and safeguards to beneficial ownership information ("BOI"), the Investment Company Institute ("ICI") urged FinCEN to be mindful of the unique characteristics of mutual funds.
ICI stated that FinCEN should "consider the unique structural differences between open-end investment companies registered under the Investment Company Act of 1940 ("mutual funds") and other financial institutions, including (among other things) that mutual funds are externally managed financial products and do not provide ongoing banking or financial services."
ICI provided a number of specific recommendations on the proposed rulemaking that affect mutual funds, including that FinCEN:
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make voluntary the use of the BOI database, and ensure that institutions will not be required to use FinCEN identifiers;
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implement a data verification process that would validate the relationship between the reporting company and the reported beneficial owner;
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ease the proposed limitations on access to the BOI database, as the proposed limitations are burdensome and not consistent with the Corporate Transparency Act;
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allow for reporting companies to authorize consent capture through electronic negative consent;
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permit the disclosure and re-disclosure of beneficial ownership information to directors, officers, employees, contractors and agents in "trusted foreign countries";
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expand the proposed access limitations to include "any individual under contract or under the remit of the requesting entity";
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exempt financial institutions that are required to perform background checks on certain personnel under other regulatory requirements from the requirements under the proposal; and
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clarify how BOI query trends, statistics and other information regarding BOI database usage will be made available to financial institutions and recommending that FinCEN establish an interactive database that discloses generic BOI database query trends.
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