KYB (know your business)
KYB (know your business) is the due diligence a financial firm carries out on a business customer: verifying the entity, understanding its ownership and control, and identifying the individuals who ultimately own or control it. US, UK and EU rules set the beneficial ownership test at or around 25%.
This page explains the rules in general terms and is not legal or regulatory advice. Check the primary source and take advice on how the rules apply to your firm.
Jurisdiction: United States: FinCEN, 31 CFR 1010.230, and FinCEN exceptive relief order FIN-2026-R001 (13 February 2026). United Kingdom: Money Laundering Regulations 2017, regulations 5 and 28. European Union: Regulation (EU) 2024/1624 (AMLR), Articles 51 and 52, applying from 10 July 2027.
How it works
In the US, FinCEN's customer due diligence rule (31 CFR 1010.230) requires covered financial institutions to identify and verify the beneficial owners of a legal entity customer when it opens an account. Under a FinCEN exceptive relief order of 13 February 2026, they must do so when the customer first opens an account, when facts call previously obtained information into question, and as their risk-based ongoing due diligence requires, rather than at every new account. Covered institutions are banks, broker-dealers, mutual funds, and futures commission merchants and introducing brokers. Beneficial owners are each individual who owns 25 percent or more of the equity, plus a single individual with significant responsibility to control, manage or direct the entity.
In the UK, the Money Laundering Regulations 2017 treat as a beneficial owner of a company any individual who ultimately owns or controls more than 25% of its shares or voting rights (regulation 5). Regulation 28 requires firms to take reasonable measures to understand the ownership and control structure of a corporate customer and to verify the identity of the beneficial owner.
In the EU, the Anti-Money Laundering Regulation (EU) 2024/1624 applies from 10 July 2027. Article 52 sets the ownership test at direct or indirect ownership of 25% or more, with indirect stakes calculated by multiplying holdings along each chain. The UK test is more than 25%, while the US and the new EU tests are 25% or more, so a holder of exactly 25% is treated differently.
Example
A payment firm onboards a merchant owned 40% by Holding A and 60% by Ms B. Holding A is 70% owned by Mr C. Under the EU's multiplication method, Mr C's indirect stake is 40% times 70%, or 28%, so he is a beneficial owner, as is Ms B at 60%. The firm verifies both before it activates the account.
Frequently asked questions
Does the FinCEN beneficial ownership rule apply to money services businesses?
The rule applies to covered financial institutions as defined in 31 CFR 1010.605(e)(1), which does not include money services businesses. Banks apply it when they open accounts for payment companies.
What if no one owns 25% or more?
Each regime has a fallback. The US rule always requires one individual with significant control. The UK regulations let a firm treat the senior person responsible for managing a company as its beneficial owner in specified cases.
Where Polynopsis fits
Polynopsis does not perform KYB checks. It focuses on liquidity: where a payment company's money is and how long each corridor's balance will last.
Related terms
Sources
- 31 CFR 1010.230, Beneficial ownership requirements for legal entity customers · Electronic Code of Federal Regulations
- The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, regulation 5 · legislation.gov.uk (The National Archives)
- The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, regulation 28 · legislation.gov.uk (The National Archives)
- Regulation (EU) 2024/1624 on the prevention of the use of the financial system for money laundering or terrorist financing (AMLR) · EUR-Lex, Publications Office of the European Union
Know where all your money is.
Polynopsis gives cross-border payment teams one live position across every bank, payout partner, exchange and wallet, including money in flight, and warns before a corridor runs dry.
About Polynopsis
Polynopsis is liquidity management software for cross-border payment companies. The name joins poly, many, and synopsis, a seeing together: one live view of money spread across many banks, payout partners, exchanges and stablecoin wallets, including money in flight, with a warning before any corridor runs dry.
Why it is called Polynopsis · About Polynopsis · Glossary · Corridor runway calculator