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 an account.
In compliance with this new regulation, Midstates Bank will collect beneficial ownership information from legal entity customers. This means that any time an account is opened or maintained for a legal entity, we will request information that identifies the ultimate beneficial owner(s) and controlling person of the legal entity. The required identifying information includes name, address, date of birth, identification number, and other information that will help identify those individuals. This information will need to be collected whether or not the person identified is a Midstates Bank client. This information will also be collected for existing legal entity customers who establish or maintain accounts.
While we understand the information requested is personal and sensitive, we need to obtain this information in order to comply with the law. As always, we will treat all information collected with the utmost care. All information will be stored securely and handled with the same standard of privacy that we have always maintained.
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 owners 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 Midstates Bank been asked to collect this information?
Midstates Bank, as well as all other financial institutions in the U.S., is required to collect beneficial ownership information. The U.S. government implemented the new beneficial ownership regulation to help fight financial crimes. Midstates 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 Midstates Bank, and the new beneficial ownership regulation will be treated with the same level of importance.
Is Midstates Bank the only bank that is required to collect beneficial ownership information?
No. All financial institutions are required to comply with the new beneficial ownership regulation and will be collecting this 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 a 25% or more ownership interest in a legal entity, and (2) a person with significant managerial control or influence over a legal entity customer (e.g., CEO, CFO, COO, Managing Member, General Partner, etc.)
For every legal entity customer 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.
What if the people who have been identified as beneficial owners or control persons are not clients of Midstates Bank? Do I still need to provide their personal information to Midstates Bank?
Yes. Regardless of customer status, information about the ultimate beneficial owners and control person must be provided in order to comply with the regulation.
Where will beneficial ownership data be stored?
Midstates Bank will maintain beneficial ownership information in its system of record. We maintain strict privacy policies and procedures. Any client information, including beneficial ownership information, will not be shared.
I also have personal accounts with Midstates Bank. Will Midstates Bank also collect beneficial ownership information for my personal accounts?
No. The Beneficial Ownership regulation only applies to applicable legal entity accounts.
If I am a legal entity client and I have a certificate of deposit (CD) account, what do I need to do?
Please contact your Midstates Bank representative prior to the date of your CD's maturity to add beneficial ownership information to your account. Additionally, if your beneficial information changes in the future, you will be required to notify Midstates Bank. If we do not receive this information by the renewal grace period, we will be required to close your CD account and send a check for the account balance to the address we have on file.