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Beneficial ownership requirements and examples

Determining
beneficial owners
and control

Determining beneficial owners

Understanding and assessing the risks associated with the beneficial ownership of its customers is an essential component of AML/CTF which is established for the purpose of detecting, disrupting, and preventing money laundering and terrorism financing. This definition is broad and combines both ownership and/or control. ‘Owns’ means owning 25% or more of the entity. ‘Control’ means having the power to make decisions about the customer’s finances and operations which may be exerted through trusts, agreements, arrangements, understanding, policies or practices. This means that whilst one individual may own 100% of a company’s issued shares, that individual may be subject to control by another person.

Determining beneficial ownership & control

The first step is to determine and validate a customer’s beneficial ownership and/or control. This is most commonly achieved by asking the customer and then validating the information they provide by consulting independent and reliable documentation or electronic data.

Determining a customer’s ownership and/or control requires knowledge and understanding of the entity type and its ownership and/or control structure which is to be traced through each link in the chain. Beneficial ownership and/or control is not necessarily attributed to one individual but may be attributed to several individuals across multiple layers of a customer’s structure.

Also, one individual may have ownership of multiple entities in the customer structure which may result in an aggregate ownership of 25% or more. Only once the complete picture of a customer’s ownership and/or control structure is determined can all individuals that meet the definition of a Beneficial Owner be determined.

In respect to non-individual customers, in the event it is determined that a Beneficial Owner is subject to influence or control by a third party, further determinations are to be made until such time as the definitive structure of ownership and control is confirmed.

Any discrepancies between information collected and the documents or electronic data used for validation purposes are to be entirely resolved. If acceptable independent and reliable documentation or electronic data required to validate beneficial ownership or control does not exist or cannot justifiably be provided, a Disclosure Certificate may be accepted where requirements are met.

Types of beneficial ownership

For the purpose of determining beneficial ownership:

Types of Beneficial ownership

Owns means owning 25% or more of the entity. This can be directly (such as through shareholdings) or indirectly (such as through another company’s ownership) or a combination of both direct and indirect holdings

Controls includes control because of, or by means of, trusts, agreements, arrangements, understandings, and practices, and includes exercising control through the capacity to determine decisions about financial and operating policies.

 

Beneficial
ownership by
entity type

The table below outlines roles that would usually be considered in the determination of beneficial owners.

Discretionary trust (e.g. family trust, testamentary trust)

h

Beneficial owners

 How to determine beneficial owners
  • Individual trustee:

Named individual who owns or controls the trust

  • Corporate trustee:

Beneficial owners of the corporate trustee (e.g. individual shareholders with 25% or more of issued share capital); or

Individual(s) responsible for decision making of the trust, e.g. directors of the corporate trustee

  • Appointor (if any)
  • Protector(s) (if any)

This information would normally be contained in the trust deed, in particular the schedule page.

Where the trust has a corporate trustee, the company extract will contain the shareholders. If the corporate trustee is owned by other companies, the shareholders of those companies must also be reviewed, to determine the ultimate beneficial owner of the corporate trustee.

 

h
Beneficial owners How to determine beneficial owners

Any individual who directly or indirectly holds 25 % or more of the units in the trust, AND
individuals who directly or indirectly control the trust which includes:

  • Individual trustee:

Named individual

  • Corporate trustee:

Beneficial owners of the corporate trustee (e.g. individual shareholders with 25% or more of issued share capital); or

Individual(s) responsible for decision making of the trust, e.g. directors of the corporate trustee

  • Appointor (if any)
  • Protector (if any)

This information would normally be contained in the trust deed, in particular the schedule page.

Where the trust has a corporate trustee, the company extract will contain the shareholders. If the corporate trustee is owned by other companies, the shareholders of those companies must also be reviewed, to determine the ultimate beneficial owner of the corporate trustee.

 

Important information

Any advice does not take into account your personal needs and financial circumstances and you should consider whether it is appropriate for you. ANZ recommends you read the ANZ Savings and Transaction Product Terms and Conditions (PDF) and the Financial Services Guide (PDF) before deciding whether to acquire, or continue to hold, the product. Fees, charges and eligibility criteria apply.

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