The Regulations

Attorneys from the law firm of Schulte, Roth & Zabel wrote an article about FinCen’s request for input on the proposed regulations under 31 U.S.C. 5336, aka, the Corporate Transparency Act.

“On April 5, 2021, the Financial Crimes Enforcement Network, a bureau of the United States Department of the Treasury (“FinCEN” and “Treasury,” respectively) issued an advance notice of proposed rulemaking (“ANPRM”)[1] beginning the process of implementing regulations under the Corporate Transparency Act (“CTA”).[2] Enacted by Congress on Dec. 31, 2020, as part of the National Defense Authorization Act, the CTA requires certain companies created or registered to do business in the United States (each, a “Reporting Company”) to report certain identifying information, such as beneficial owners of 25% or more and certain control persons, directly to FinCEN.[3] That information is to be held in a non-public database maintained by FinCEN and will be shared with law enforcement and federal regulators, among others. The reporting obligations discussed herein will only take effect upon the promulgation of final regulations by FinCEN, which FinCEN is required to issue by Jan. 1, 2022. The ANPRM is the first step in this rulemaking process and requests public comment on numerous questions relevant to the implementation of the CTA. Comments are due May 5, 2021. Additionally, within a year of issuing a final rule under the CTA, FinCEN is required to issue implementing regulations to revise the existing customer due diligence (“CDD”) rule[4] to align it with the CTA implementing regulations.[5]

This Alert highlights certain aspects of the CTA and the ANPRM including implications of the CTA on investment funds and their advisers.”

On April 5, 2021, the Financial Crimes Enforcement Network (FinCEN) posted a notice of proposed rulemaking with respect to the Corporate Transparency Act.  The notice starts:

“FinCEN is issuing this advance notice of proposed rulemaking (ANPRM) to solicit public comment on questions pertinent to the implementation of the Corporate Transparency Act (CTA), enacted into law as part of the National Defense Authorization Act for Fiscal Year 2021 (NDAA). This ANPRM seeks initial public input on procedures and standards for reporting companies to submit information to FinCEN about their beneficial owners (the individual natural persons who ultimately own or control the reporting companies) as required by the CTA. This ANPRM also seeks initial public input on FinCEN’s implementation of the related provisions of the CTA that govern FinCEN’s maintenance and disclosure of beneficial ownership information subject to appropriate protocols.

Written comments on this ANPRM must be received on or before May 5, 2021.”

The notice is lengthy, but recommended reading for anyone who wants to learn more about the Corporate Transparency Act.