August 13, 2026
What happened?
On August 11, 2026, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued a final rule that permanently removes all requirements for U.S. companies and individuals to report beneficial ownership information under the Corporate Transparency Act (“CTA”). This final rule is effective upon its publication in the Federal Register.
Relief for U.S. Entities and Individuals
The final rule adopts the exemptions set out in the March 2025 interim rule, which permanently eliminates beneficial ownership reporting by U.S. companies and U.S. persons. This also eliminates the requirement for foreign companies to report U.S. persons who helped those foreign companies registered to do business in the United States (U.S. based “company applicants”). Further, foreign pooled investment vehicles registered in the United States are exempted from reporting the beneficial ownership information of U.S. persons in control of the investment vehicle.
Foreign Entities and Individuals are Still on the Hook
Foreign companies will still be required to report beneficial ownership information for foreign individuals who directly or indirectly own or control the foreign company. Under the final rule “reporting companies” only include those entities that are formed under the law of a foreign country and have registered to do business in any U.S. state or tribal jurisdiction by the filing of a document with a secretary of state or similar office. There are multiple exemptions still available to keep foreign companies from meeting the definition of “reporting companies” for purposes of the rule. Also, to be clear, foreign entities are only reporting foreign individual ownership information. FinCEN’s FAQ states that “[r]eporting companies do not need to report BOI of any U.S. persons, including U.S. company applicants and U.S. person beneficial owners.”
What does this mean for me?
Beneficial ownership reporting for U.S. entities has been on a rollercoaster from the beginning. Initially, the CTA would have required beneficial ownership reporting from almost every business in the country on the individuals, both foreign and domestic, that owned those businesses. The reporting would have been burdensome and faced lawsuits, preliminary injunctions, extensions, an interim rule, suspension of enforcement, and now a final rule that ends reporting for U.S. entities and individuals.
Fewer reporting obligations are always welcome, however, it does create a contradiction for the current administration. If harm to investors and U.S. markets are truly priorities, so much so that a new Retail Fraud Unit and a new Financial Reporting and Accounting Unit in the Division of Enforcement were created, why kill the CTA’s ownership reporting aimed at fighting money laundering? Why propose a new rule to allow for semi-annual, rather than quarterly, reporting for public companies? While the new units will certainly prosecute fraud and reporting violations, their work will have to be done with less information than the commission could have accessed.
We will continue to monitor regulatory updates and new developments that impact investment advisors. If you have questions, contact us. Fairview is here to help.
