Starting Jan. 1, 2024, domestic and foreign entities registered to do business in the United States will need to comply with new beneficial ownership reporting requirements imposed under the Corporate Transparency Act (CTA). These requirements are designed to combat money laundering, terrorism financing and other illicit activities by mandating certain entities to disclose their beneficial owners.
Registered investment companies and their wholly owned subsidiaries are broadly exempt from reporting requirements under the CTA. Exemptions are also available for many other investment management entities, including investment advisers registered with the U.S. Securities and Exchange Commission (SEC) and some private funds. Nevertheless, a number of entities in the investment management space will be subject to CTA reporting requirements, including some that historically have been subject to few reporting obligations of any kind.
What Is the CTA?
The CTA was enacted by Congress in 2021 as part of the White House’s United States Strategy on Countering Corruption.
The CTA directs the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) to create a national registry of beneficial ownership information for certain entities (defined under the CTA as Reporting Companies). FinCEN issued a Final Rule on Sept. 30, 2022, which implements the reporting requirements of the CTA. Read more...
Information contained in this publication should not be construed as legal advice or opinion or as a substitute for the advice of counsel. The articles by these authors may have first appeared in other publications. The content provided is for educational and informational purposes for the use of clients and others who may be interested in the subject matter. We recommend that readers seek specific advice from counsel about particular matters of interest.
Copyright © 2023 Stradley Ronon Stevens & Young, LLP. All rights reserved.