Why are we collecting this information?
You may be familiar with these types of checks as they’re common with institutions like banks where identification needs to be confirmed to mitigate risk. To meet our regulatory requirements, we need to periodically confirm this information. Going forward, we’ll audit it as we prepare your annual regulatory filings.
What is KYB and why is Betterment requesting beneficial ownership information?
KYB stands for "Know Your Business." It’s a regulatory requirement aimed at verifying the identity of businesses and their owners. Collecting beneficial ownership information is a key part of our anti-money laundering compliance program.
Who is considered a beneficial owner?
A beneficial owner is an individual who either:
- Exercises substantial control over a business, or
- Owns or controls at least 10% of a company’s ownership interests.
Entities such as corporations and trusts are not considered beneficial owners.
Why is Betterment using a 10% ownership threshold instead of 25%?
Although the legal standard defines beneficial owners at a 25% threshold, Betterment collects ownership at a 10% threshold.
I’ve already submitted ownership information. Why am I being asked again?
Previously, we may have only captured data on owners who are also plan participants. We now require full ownership details, even for non-participant owners, to meet updated compliance standards.
What happens if no individual owns 10% or more of the company?
You still need to provide information for at least one control person. This is someone with significant responsibility to manage, direct, or control the company.
Who should complete the beneficial ownership form?
Ideally, a control person should complete the form. A control person is someone with significant responsibility to manage, direct, or influence the business. This can include roles like Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Managing Member, General Partner, President, Vice President, Treasurer, or anyone who regularly performs similar executive functions.
It’s also acceptable for an administrator to fill out the form on behalf of a control person, as long as the preparer’s personal information is included.
What if our company is owned by another entity or an LLC?
If a company or LLC owns 10% or more of your business, we must collect ownership details on the individuals who ultimately own that entity and have a 10% or greater indirect interest in your business.
Do nonprofits need to complete the beneficial ownership form?
Yes. While nonprofits may not have traditional owners, they must still identify a control person such as the CEO, CFO, or another key executive.
Do we need to complete the form if we are terminating our plan?
Yes, as long as your plan is still active on the platform, you must provide beneficial ownership information.
Do we need to submit a form for each plan if ownership is the same?
Yes, but if ownership information is identical across multiple plans, you can confirm this and we will mark each plan accordingly to avoid duplicate requests.
We use a TPA. Why do we still need to fill this out?
Even if a third-party administrator (TPA) is involved, this requirement applies directly to any legal entity that is our customer. We must independently collect this information under regulations for Anti-Money Laundering.
What documents can we submit to verify our EIN?
Acceptable documents include IRS tax forms like a W-9, SS-4 issuance letter, or any official documentation that confirms your EIN.
What if I don’t want to provide this information?
We understand this can be sensitive, but it's a regulatory requirement for all plans. If you have specific concerns, we’re happy to discuss them with you.
How will this information be stored and protected?
All information is handled in accordance with our data privacy and security protocols. It will only be used for regulatory compliance and will not be shared outside of necessary parties.
How often will we need to provide this information?
We collect annual beneficial ownership information within our compliance testing questionnaire.
What if our company is remote and only uses a P.O. Box?
Regulations require us to collect a physical business address. Please provide the location where business is primarily conducted, even if all work is done remotely.
Can you fill out the form on our behalf?
While we cannot complete the form for you, we can guide you through it. A control person or administrator should complete it using accurate information.
Our ownership has changed. Do you need information on our new owner(s)?
We collect annual beneficial ownership information within our compliance testing questionnaire. You’ll need to make sure you enter this information on the compliance questionnaire when it becomes available.
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