Beneficial Ownership

Overview

In May 2016, the U.S. government passed a new regulation regarding the beneficial ownership of legal entity customers. Going forward, it will be mandatory for all financial institutions to comply with this regulation by identifying the ultimate beneficial owner(s) and a controlling person of a legal entity customer opening or maintaining of an account.

Beginning May 11, 2018, federal regulation requires all banks to obtain the name, physical address, date of birth, social security number, and a copy of an identifying document for each individual owning, either directly or indirectly, 25% or more of the equity interest in a legal entity customer, and the same information and documentation for an individual with authority to direct and control the legal entity. The purpose is to increase transparency regarding the ownership of legal entities. This information is not collected by the Secretary of State at the time of formation.

Federal regulation requires the bank to obtain this information each time the legal entity opens a new account (deposit, loan or safe deposit box), including the renewal of a loan or certificate of deposit (CD). That means, we will need to obtain this information and documentation from you many times over the life of your relationship with Farmers State Bank. We apologize for any inconvenience and sincerely appreciate your cooperation.

You will be asked to complete a form to collect the required information and certification of beneficial owners.

Thank you for choosing Farmers State Bank to meet your financial needs. We value your business and look forward to assisting you in the future. If you have any questions, please call 217-285-5585 or stop by one of our locations to visit with a Personal Banker.

What you need to know about Beneficial Ownership

The new regulation impacts all legal entities opening or maintaining accounts at any financial institution.

Legal entities will need to identify and attest to all ultimate beneficial owner(s) that meet specific requirements as well as a controlling person (e.g., Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Managing Member, General Partner, President, Vice President or Treasurer).

Farmers State Bank will collect information regarding the ultimate beneficial owner(s) and control person of legal entities whether or not they have a personal relationship with Farmers State Bank.

Frequently Asked Questions:

What is the beneficial ownership regulation and why does it matter?

The beneficial ownership regulation is a federal law requiring all financial institutions to identify and verify the identity of the beneficial owner(s) of legal entity customers as well as a controlling person of the legal entity anytime an account is opened or maintained. The regulation is aimed at making financial institutions safer for their customers and protecting the country's financial system.

Why has Farmers State Bank been asked to collect this information?

Farmers State Bank, as well as all other financial institutions in the U.S., will be required to collect beneficial ownership information. The U.S. government implemented the new beneficial ownership regulation to help fight financial crimes. Farmers State Bank is doing its part in upholding the new regulation to protect the financial system. Compliance with regulations has always been of utmost importance to Farmers State Bank, and the new beneficial ownership regulation will be treated with the same level of importance.

Is Farmers State Bank the only bank required to collect beneficial ownership information?

No. All financial institutions are required to comply with the new beneficial ownership regulation and will be collecting the beneficial ownership information from applicable customers.

What constitutes beneficial ownership?

The U.S. government regulation defines "beneficial ownership" as being made up of two roles: (1) those that have an ownership interest in the legal entity and (2) those that control a legal entity.

For those people who have an ownership interest in the legal entity, Farmers State Bank is required to identify and collect personal information on anyone that meets or exceeds the following ownership thresholds:

Ultimate Beneficial Owners

A natural person having 25 percent or more of the equity interests of a legal entity; or

A natural person owning more than 10 percent if:

a. An individual, with any amount of ownership, is a non-U.S. person (i.e.-a non-U.S. citizen who is not a lawful permanent resident); or

b. The entity customer or intermediary entity is formed outside of the U.S.; or

c. The entity client is a Private Investment Companies (PICs) / Personal Investment Vehicles (PIVs)

Control Person

A person with significant managerial control or influence over a legal entity customer (e.g.- Chief Executive Officer, Chief Financial Officer, Managing Member, General Partner, etc.)

For every legal entity client subject to beneficial ownership, you must identify one control person.

NOTE: It is possible that the control person may also be an ultimate beneficial owner.

How will the change impact my existing accounts?

The change should not impact your existing accounts. However, please be aware that a Farmers State Bank Personal Banker or representative may reach out to you for beneficial ownership information to update your account file, ensuring necessary compliance for any future requests.

What if the people who have been identified as a beneficial owner or control persons are not customers of Farmers State Bank? Do I still need to provide their personal information?

Yes. Regardless of customer status, information about the ultimate beneficial owners and control person must be provided in order to comply with the regulation.

I have been asked for a Certification of Beneficial Ownership by Farmers State Bank. What is this and why is it necessary?

The Certificate of Beneficial Ownership is a legally required form that Farmers State Bank must collect from legal entity customers regarding their ultimate beneficial owners and the control person. By completing the form, you are attesting that the information provided is accurate to the best of your knowledge.

I have personal accounts with Farmers State Bank. Will I be required to provide beneficial ownership information for my personal accounts?

No. The Beneficial Ownership regulation only applies to applicable legal entity accounts.

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Beneficial Ownership

Overview

What you need to know about Beneficial Ownership

Frequently Asked Questions:

Please Be Aware

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