On September 30, 2022, the Financial Crimes Enforcement Network of the Department of the Treasury adopted a final rule to implement the beneficial ownership reporting requirements of the Corporate Transparency Act, as part of the Anti-Money Laundering Act of 2020.
The CTA and Final Rule require a range of U.S. entities, and non-U.S. entities registered to do business in the United States, to report information on their underlying beneficial owners who are individuals to FinCEN. Notably, certain investments advisers exempt from registration and subsidiaries of private fund clients of investment advisers will be subject to these reporting requirements.
Specifically, while SEC-registered investment advisers are exempt from the reporting requirements, private fund advisers, foreign private advisers, and family offices are not. And of importance to registered private equity and other advisers, while the 3(c)(1) and 3(c)(7) private fund clients of RIAs are exempt from reporting, subsidiaries of those private fund clients are not exempt and will require analysis to determine whether reporting must be provided to FinCEN under the Final Rule.
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