Beneficial ownership / UBO
An Ultimate Beneficial Owner (UBO) is the flesh-and-blood individual who ultimately owns or controls a legal entity or on whose behalf a transaction is conducted. AML rules require firms to look through corporate structures, nominees and layers to find that person, because criminals use companies and trusts to hide who really benefits. FATF standards and national registers such as the UK's Persons with Significant Control (PSC) register aim to make this ownership transparent.
A UBO is always a natural person; identifying only the immediate corporate shareholder is not enough - firms must trace ownership and control through intermediate layers.
The common threshold is around 25% of shares or voting rights, but the exact test varies: the UK PSC test is 'more than 25%', while FATF, the EU and the US commonly use '25% or more'.
Control can arise without shareholding - e.g. the right to appoint or remove a majority of directors, or otherwise exercising significant influence or control.
FATF Recommendation 24 (legal persons) and Recommendation 25 (legal arrangements such as trusts) set the international standard; R.24 was strengthened in March 2022 to require a central register or equivalent, not just company-held data.
The UK maintains a public PSC register at Companies House (in force since 2016); many jurisdictions now operate beneficial-ownership registers, though access and public availability differ.
A register alone does not discharge a firm's own duty - operators must independently verify UBO information as part of customer due diligence.
Trust and nominee arrangements require identifying settlors, trustees, beneficiaries, protectors and anyone exercising effective control.
UBO checks matter most where an operator's customer or counterparty is a company or trust rather than an individual - for example corporate VIP accounts, B2B partners, white-label or affiliate arrangements, and payment intermediaries. Licensing authorities also apply beneficial-ownership scrutiny to the operators themselves, requiring disclosure of who ultimately owns and controls the licensed gambling business.
Reference, not advice. This is a teaching summary of the AML framework — not legal advice, and not an operational compliance procedure. Confirm requirements against the primary regulator and your own counsel.