The challenge of Ultimate Beneficial Ownership and the risks of not knowing

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1 The challenge of Ultimate Beneficial Ownership and the risks of not knowing Nina Kerkez - Senior Product Manager Julian Waite - Regional Manager

2 Key Takeaways There is ever increasing need for transparency around ownership structures Knowing your customer s UBOs is not an option, it is a regulatory requirement We must understand obscure relationships in complex ownership structures Bankers Almanac solutions offer best in class banking data with newly introduced UBO information

3 Agenda KYC - top three current challenges Ultimate Beneficial Ownership what does it mean? Identifying UBO the challenge Regulatory Requirements Beneficial Ownership will stay top of mind Bankers Almanac UBO Bankers Almanac UBO product demonstration Q and A

4 KYC top three current challenges This year Accuity surveyed 300 senior level compliance personnel on challenges in financial counterparty due diligence, KYC and compliance 1. Over 60% of respondents agree that gathering of ownership and UBO data is a challenge 2. Over 70% of respondents agree that changing regulatory requirements and complexity of local interpretation of regulations is a challenge 3. Over 50% of respondents agree that getting counterparties to respond to RFIs and feeling confident that the information is up to date is a challenge

5 Ultimate Beneficial Ownership what does it mean? No universal definition, different bodies have different interpretation Financial Action Task Force (FATF) definition the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted.

6 Identifying UBO the challenge Offshore banks, secrecy jurisdictions and opaque ownership structures represent the primary methods used by corrupt individuals to hide funds Complex corporate structures help criminals successfully launder dirty money Regulators are encouraging banks to look into these challenges 4 th EU MLD calls for central registers of beneficial owners challenges with keeping the data fresh; what about ROW?

7 Regulatory requirements Beneficial owner is a person with controlling interest in an entity directly or indirectly FATCA 10% FinCEN Bank Secrecy Act 25% CRS 50% 4 th EU MLD - 25% Russia 134 FZ - 25% MAS 626 % not specified

8 Beneficial Ownership will stay top of mind Beneficial Ownership came into forefront once again Two high profile leaks: Bahamas leaks directors and shareholders of 176,000 entities Panama Papers leaks more than 200,000 entities exposed All participants in these schemes do not pose risk; it is understanding these structures that will help banks assign a relevant risk profile Using offshore structures is entirely legal, people often use it for inheritance and estate planning Real owners usually hide behind nominees people who lend their signature, but have no real control

9 UBO

10 Delivering visibility & risk assessment Understand The ownership of banks you are doing business with Assess Any risks associated with that organisation Support Good regulatory practise Enable Significant efficiency benefits saving hours of research and manual mapping of banking ownership and the associated cost

11 New features in Bankers Almanac New capabilities are introduced in the latest release: Validate Review Graph Export See date and source of data validation by our analysts View direct owners and UBOs*, and highlight by country and filter to 0.1 % ownership Illustrate the ownership structure of a bank (entity) in a graph Export and print the chart or a snap shot of the graph *Ultimate Beneficial Ownership data is a premium subscription

12 Ultimate Beneficial Ownership data Premium data that allows you to see the individuals who have an owning interest in a financial institution. See right down to 0.1% ownership Get proof documentation provided by the banks that certifies ownership Review, Graph, Export & Print with Bankers Almanac tools* Stock exchange information, primary Stock exchange indicator, Stock Symbol

13 UBO data collection methodology 130 data analysts Proactively collected data and documents from primary sources Transparency on date of validation and source of information updated at minimum annually Rigorous quality control process for documents Indication that there are no UBOs available

14 UBO - Product Demonstration

15 Bankers Almanac UBO Summary Proof See Graph Export Get proof documentation provided by the banks that certifies ownership See direct and indirect ultimate beneficial owners down to 0.1% Provides the ability to illustrate the ownership of a bank in a graph Export and print the graph or a snap shot of the graph *premium service

16 Key Takeaways There is ever increasing need for transparency around ownership structures Knowing your customer s UBOs is not an option, it is a regulatory requirement We must understand obscure relationships in complex ownership structures Bankers Almanac solutions offer best in class banking data with newly introduced UBO information

17 Q and A Nina Kerkez // Senior Product Manager Nina.Kerkez@accuity.com Julian Waite // Regional Manager Julian.Waite@accuity.com accuity.com