When it comes to compliance, verifying Ultimate Beneficial Ownership (UBO) is a crucial step in due diligence processes for your business or organisation. But what exactly is UBO, and why does it matter?
What is Ultimate Beneficial Ownership (UBO)?
UBO, or Ultimate Beneficial Owner, refers to the individual who ultimately owns or controls more than 25% of a company's shares or voting rights, or exercises control over the company's management. This control can be direct or indirect, through holding companies, other corporate entities, or trusts.For entities subject to Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations, understanding UBO is essential for conducting thorough due diligence, enabling informed decision-making, and ensuring regulatory compliance.
Unravelling Ownership Structures
Ownership structures resemble layers of an onion, with each layer representing corporate entities between a company and its UBO.
First Layer: A company with a UBO at the "first layer" is directly owned by its UBO.
Second Layer: A company with a UBO at the "second layer" is owned by another entity, ultimately linked to the UBO.
Three or More Layers: The term "Three or more" indicates that there are more than two additional corporate entities between the company and its UBO.
How will UBO knowledge benefit you?
Transparency and Accountability: Identifying the UBO promotes transparency and accountability, preventing misuse of legal entities for illicit activities like money laundering and fraud.
Risk Assessment: Knowing the UBO facilitates accurate risk assessment, crucial for understanding potential risks associated with customers, partners, and suppliers.
Regulatory Compliance: Compliance with AML and KYC regulations mandates identifying and verifying the UBO to avoid penalties and reputational harm.
Due Diligence: UBO information is pivotal for conducting thorough due diligence, aiding in informed decision-making.
The Challenge of UBO Discovery
Uncovering the true owners behind complex corporate structures can be daunting. Traditional methods often involve manual data collection, time-consuming searches, and fragmented information, creating significant challenges for financial institutions and businesses.
Solutions to Verifying UBO
At Cynopsis Solutions, we're committed to empowering businesses and organisations with the tools needed for better regulatory outcomes. Through partnerships with industry leaders in UBO discovery such as AsiaVerify, Handshakes, and Opencorporates, we are able to streamline UBO verification into your compliance processes.
AsiaVerify, a prominent provider of business intelligence in Asia, grants access to a vast database of verified corporate ownership structures from 12 or more APAC jurisdictions, including valuable corporate data from China.
Handshakes, brings its expertise in entity verification and business network data, ensuring the info you receive is reliable and up-to-date. You are able to retrieve detailed Bizfile info of business entities registered with ACRA.
Opencorporates, leverages a vast global database of company information especially in European jurisdictions, to further enhance your corporate ownership awareness.
Our UBO discovery data partners are integrated into Artemis 3.0, providing a convenient one-stop solution for purchase, ingestion, and processing of UBO data.
Through these partnerships, you gain access to verified corporate ownership structures, ensuring reliable and up-to-date. This integration allows for effortless screening and risk evaluation within Artemis 3.0, streamlining the compliance process for your convenience.
Additionally, the Relationship Map functionality in Artemis 3.0 provides you with a visual overview of connections between businesses/organisations, including ownership percentage, as well as connections between related individuals and organisations.
Through leveraging each other’s strengths and expertise, we enhanced our product offerings to help address changing regulatory challenges and your needs.
Ready to strengthen your compliance processes with UBO verification?
Cynopsis Solutions helps companies digitize and automate AML/KYC compliance processes. Our focus is on know-your-customer, anti-money laundering, and counter-terrorism financing. Cynopsis Solutions’ accolades include MAS FinTech Awards, RegTech100, and Financial Times Top 50 High Growth Companies in APAC. Our end-to-end KYC/AML solutions are designed according to the global FATF recommendations and applicable in more than 180 jurisdictions. We've helped firms across various industries, not limited to Banking and Financial Services, FinTech, Blockchain companies and Designated Non-Financial Businesses and Professionals.