What is included in the ownership criteria of the beneficial owner definition?

The correct answer is that individuals owning 25% or more equity are included in the ownership criteria of the beneficial owner definition. Under the Bank Secrecy Act (BSA) and the corresponding Customer Due Diligence (CDD) requirements, a beneficial owner is defined as someone who has significant control over a legal entity or a substantial ownership interest in it.

Specifically, the regulation indicates that any individual who owns 25% or more of the equity interest in an entity qualifies as a beneficial owner. This threshold is significant because it ensures that entities must identify and verify the identity of those who have a considerable stake in the ownership, thereby enhancing transparency and accountability in financial transactions.

The standards for beneficial ownership are established to combat money laundering and other financial crimes, making it crucial for financial institutions to accurately identify these individuals. Thus, the 25% ownership criterion serves as a clear benchmark for defining who should be recognized as a beneficial owner under the regulations.