The Financial Crimes Enforcement Network today issued a notice of proposed rulemaking that would implement provisions of the Corporate Transparency Act that govern the access to and protection of beneficial ownership information. The proposed regulations would govern the circumstances under which such information must be protected and how it is disclosed to federal agencies; state, local, tribal and foreign governments; and financial institutions. This is the second piece of a three-part rulemaking to implement the CTA.
Under the proposal, financial institutions would not be permitted to run “broad or open-ended queries” in the beneficial ownership database. “Rather, FinCEN anticipates that a financial institution, with a reporting company’s consent, would submit to the system identifying information specific to that reporting company, and receive in return an electronic transcript with that entity’s BOI.” FinCEN added that “this more limited information-retrieval process would reduce the overall risk of inappropriate use or unauthorized disclosures of BOI.”
The proposed rule also outlines how government officials would be permitted to access beneficial ownership information in order to support law enforcement, national security and intelligence activities, and how regulators could use the database when conducting supervisory activities. It also sets standards for protecting sensitive information.
Finally, FinCEN proposed amendments to the final reporting rule—issued Sept. 30—to specify when reporting companies may report FinCEN identifiers associated with entities. Written comments are due within 60 days of publication in the Federal Register.
