An ownership chart can be perfectly tidy and still leave the most important question unanswered: who ultimately controls the investor?

For a fund administrator onboarding a company owned through another company and a family trust, the difficulty sits between the documents. A registry extract identifies a shareholder. A declaration names a beneficiary. A trust document assigns powers to someone else. Each record may be accurate within its own scope, while the overall picture remains incomplete.

The EU Council's May 2024 AML package included reforms to beneficial ownership and due diligence. For an onboarding team, the practical question remains how to establish ownership when records span jurisdictions with different access arrangements. EU Council announcement

For investment services, separate records need to support an account of ownership and control that another analyst can follow.

Start with the investor, then explain each relationship

Consider a fictional subscription from a Luxembourg investment company. Its direct shareholder is an overseas holding company, whose shares are held by a trustee for a family trust. The investment manager receives an ownership chart, company extracts and a signed declaration.

The first task is to establish exactly which legal person is subscribing. The subscription agreement, incorporation record and supporting documents should refer to the same entity. Small naming differences may be harmless, but they need resolving before evidence from similarly named companies becomes mixed together.

The reviewer can then follow each ownership relationship upwards. Every connection needs an explanation of what it represents and evidence that supports it. A document proving that the holding company exists does not, by itself, prove that it owns the subscriber. A passport identifies an individual; it does not establish that individual's relationship to the trust.

The distinction between verifying a business and verifying the people behind it matters here: each record must support the relationship being assessed.

The chart is useful as an index to the evidence. Its value comes from being able to select any connection and see why the team believes it is correct.

Separate ownership from the ability to exercise control

Percentages can explain an economic interest. They may leave important decision-making powers unexplained.

In the fictional structure, the reviewer needs to understand the rights under the trust and company documents. Who can appoint or remove the trustee? Who can direct decisions? What powers are reserved? The applicable rules determine which people must be identified and verified.

FATF's guidance on legal arrangements distinguishes the trust's participants: the settlor contributes assets; the trustee holds and manages them under the trust's terms; beneficiaries, or a defined class, may benefit. A protector, where appointed, has powers set out in the arrangement. Other people may exercise ultimate effective control. Mapping those roles helps the reviewer understand whose interests and powers need examination. Recommendation 25 provides the international framework; the firm must apply the identification and verification requirements governing its own relationship. FATF guidance on legal arrangements

For the corporate layers, FATF's Recommendation 24 guidance supports combining information held by companies, registries and other mechanisms. These sources can corroborate different parts of the structure. FATF beneficial ownership guidance

The practical lesson is to keep the evidence attached to the question it answers. A register may support legal ownership. A constitutional document may explain voting rights. A trust instrument may identify powers that are absent from the ownership chart.

This also makes the review more proportionate. The team can ask for the missing document that resolves a specific uncertainty, instead of sending another broad request for the entire corporate pack.

Treat conflicting records as questions to resolve

Suppose the declaration names one holding company, while an older registry extract names another. Several explanations are possible: a recent transfer, a filing delay, a renamed entity or an inaccurate declaration.

The reviewer should preserve the disagreement and establish which explanation fits. That may involve obtaining the transfer record, checking effective dates or seeking clarification from the authorised representative. Quietly choosing the newest-looking document would erase the very issue the review needs to answer.

Access problems require the same precision. A register that cannot be searched is an unavailable source. It is not evidence that no beneficial owner exists. The file should distinguish an access restriction from a negative search result, and both from a record that has been found but remains inconclusive.

Where an important gap persists, the decision should explain its significance and how it will be handled under the firm's procedures. An unresolved control question cannot be made reliable by adding more unrelated documents. The reviewer needs either evidence that resolves it or an appropriate escalation and decision.

This approach also improves the investor experience. “Please provide the document confirming the transfer from the former shareholder” is a request someone can act on. “Please send additional KYC” invites another round of misunderstanding.

Keep the ownership explanation usable after approval

Preserve the structure as it stood at approval, including the effective dates of its supporting records. That gives the team a baseline for assessing a later change.

If the trustee changes, the team can identify the affected relationship and reassess it. If a holding company is renamed, it can preserve the entity's identity while updating its attributes. The periodic KYC review process can then focus on what has changed and whether the earlier evidence remains sufficient.

Steward is purpose-built for investment services, including verification of complex entity structures. Bringing the ownership information and supporting documents into its AI-first onboarding workflow gives the human reviewer a shared basis for assessing each relationship.

For each material link in the structure, the next reviewer should be able to find the supporting record, its effective date and the reason it was accepted. Any unresolved control question should have a named owner and an explicit status.