MSCI Supports News Corporate Transparency Act Interim Rule

In late March, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) released an interim final rule that removes the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act (CTA).

As a reminder, the Metals Service Center Institute (MSCI) actively opposed the CTA as it was originally written because it would place burdensome reporting requirements on businesses, especially small firms, without achieving the bill’s stated to goal to reduce money laundering and other financial crimes. Under FinCEN’s original disclosure requirements, which took effect in 2024, tens of millions of companies were required to disclose their owners’ names, addresses, and other information.

In the interim final rule, which MSCI supports, FinCEN has revised the definition for “reporting company” in its implementing regulations to mean only entities that are formed under the law of a foreign country and that 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. FinCEN also exempted entities previously known as “domestic reporting companies” from BOI reporting requirements. Read more about the interim final rule at this link and at this link.

This action clears up any remaining confusion as to whether domestic entities needed to file their beneficial ownership information. As the S-Corp Association said, “[F]iling information ‘just to be safe’ no longer appears necessary.” In a letter, available at this link, that was sent last week, MSCI and more than 100 other trade associations applauded a new interim rule, arguing FinCEN has “alleviated substantial compliance burdens that would have disproportionately affected law-abiding Main Street businesses, while also shifting to a risk-based enforcement protocol that will ultimately strengthen the effectiveness of the CTA.”

While the new rules alleviate the need to file, this relief is temporary. As long as the original, underlying CTA statute remains in place, a future presidential administration could rewrite the BOI rules to be more expansive. That means permanent relief will have to come from the courts or Congress.

Stay tuned to Connecting the Dots to see if lawmakers act on this important issue.