On January 1, 2024, the Corporate Transparency Act (the “CTA”) comes into effect for reporting companies formed after that date, with reporting for existing companies taking effect a year later. With companies growing in complexity both in structure and number of investors, navigating the CTA can be daunting.

Kelley Drye partners, Matt Luzadder and Wendy Clarke will discuss how the CTA registry will be used, the companies that must report, exemptions from reporting and who is a beneficial owner. We will review how the CTA overlaps or aligns with FinCEN’s existing Customer Due Diligence (CDD) Rule applicable to financial institutions. We’ll explore how non-financial companies conduct counterparty due diligence, including sanctions screening and anti-money laundering controls, and provide a practical perspective on how the CTA may impact this process. Importantly, the regulations implementing the CTA are still being developed. FinCEN issued of the final regulations on “beneficial ownership information” (“BOI”) reporting requirements in September 2022, the first rulemaking in the trio planned to implement the CTA, and final rule for the second rulemaking on Beneficial Ownership Information Access and Safeguards is expected in 2023. We’ll focus on the third rulemaking that will revise FinCEN’s CDD Rule no later than January 1, 2024 and the comments and concerns that have illuminated how companies should view the CTA and prepare their compliance programs.

A View Into Compliance: The Corporate Transparency Act, Beneficial Ownership and Counterparty Due Diligence