Glossary

 

A

Access Log: A list of all individual files that have been requested from a website. This includes the HTML files and their imbedded graphic images, and any other associated files that are transmitted. The access log (also referred to as the raw data) can be analyzed and summarized by another program. Access logs are categorized into three types:

  • Control/Management Logs: Provide information about CREATE, UPDATE, and DELETE operations.

  • Data Plane Logs: Provide information about events raised as part of resource usage. Examples of this type of log are the Windows event system, security, and application logs in a virtual machine (VM).

  • Processed Events: Provide information about analyzed events and alerts that have been processed.

Accounts & Payments (A&P): FinClusive’s platform that provides customers the ability to create and manage multiple master and subaccounts for clients, counterparties, employees, partners and vendors with FinClusive’s bank of record (BoR) partners and facilitate payments and transfers between accounts and to external parties via traditional (ACH, Wires) and non-traditional methods (blockchain enabled).

Acuant Compliance/IdentityMind: An AML/Compliance vendor that is embedded into CaaS. A partner to FinClusive.

Additional Control Person: Additional persons with significant operational, signatory or fiduciary roles within or for certain legal entity customers. (See Control Person)

Alternative Financial Services: Services provided outside traditional banking institutions, on which many low-income or de-risked individuals depend. These can and do include check cashers, pawn shops, payday lenders and in emerging markets can also include micro-finance services providers. Increasingly, this definition is used for some crypto-related financial intermediation activities.

Anti-Bribery & Corruption (ABC): All laws, regulations or orders relating to anti-bribery or anti-corruption (governmental or commercial), which apply to the business or dealings of FinClusive and/or its shareholders. These include, without limitation, the UK Bribery Act of 2010, the U.S. Foreign Corrupt Practices Act of 1977 and all national and international laws enacted to implement the Organization for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Officials in International Business Transactions.

Anti-Money Laundering (AML): All bank and nonbank financial institutions must have an AML program in place, which includes activities to protect against financial crimes. These include the requisite checks and reviews that must be performed on every customer/client (individual and entity—and for entities, their beneficial owners and control persons) and transaction in order to detect and assess the risk of illegal activities such as terrorist financing, money laundering, fraud and identity theft. (See also: Customer Due DiligenceCombatting the Financing of TerrorismKnow Your Customer, and Customer Identification Program)

Automated Clearing House (ACH): A payment system by which funds are electronically pulled from, or deposited into, a bank account. The ACH is a network that coordinates all electronic payments and automated money transfers.

Available Balance: The current account balance minus the amount of all pending debits.

Available Funds: The amount of money in a bank account that is available for immediate use. The current account balance minus the amount of all pending debits.

 

B

 

Bank of Record (BoR): Deposit institution partners who provide FinClusive customers and clients with one or more Federal Deposit Insurance Corporation (FDIC) insured or Federal Reserve Bank-backed accounts domiciled in the United States, as well as access to the ACH and Wire payment rails.

Bank Secrecy Act (BSA): Law passed in 1970 requiring financial institutions in the United States to assist government agencies and regulators in detecting and preventing money laundering. The BSA has been updated and amended periodically since 1970, most notably in 2001 with the Patriot Act, which expanded the scope of regulation and the form and types of institutions ‘covered’ by the BSA and obligated to ensure processes and procedures to combat money laundering and the financing of terrorism.

Beneficiary Account: The account that receives funds via an ACH transaction.

Beneficial Owner: A person that owns or controls 25% or more of the ownership interest in a legal entity. More than 10% where the individual is a non-U.S. citizen or where the legal entity is formed outside of the United States. Customer Due Diligence regulation requires all financial institutions to disclose the identity of all beneficial owners.

Blockchain: A decentralized public ledger in which transactions are distributed and tracked across several computers (blocks), linked in a peer-to-peer network. Each block contains a timestamp and a link to the previous block and all blocks must be updated simultaneously. Because of this, blockchain provides greater security and a more tamper-proof system for transactions.

C

Client (Individual): An individual who receives or engages services from FinClusive through a FinClusive customer. (See Customer)

Client (Entity): A corporation, partnership, LLC, or state-sponsored entity that utilizes FinClusive’s services through contract with a FinClusive customer. (See Customer)

 

Compliance-as-a-Service (CaaS): FinClusive’s platform that delivers comprehensive AML/CFT services for customers/clients in a single workflow. These services can be engaged via a web-enabled user interface or via API.

 

Compliance Check: The process of performing a KYC check in order to verify the identity of a Client.

 

Compliance Check Status: The status that is returned when a compliance check is performed. A status will be either Approved, Pending, or Denied.

 

Combatting the Financing of Terrorism (CFT): The process of investigating and preventing the use of funds to finance violence, or the threat of violence, in order to achieve political, religious, or ideological goals. Also referred to as counter-terrorist financing or counter-financing of terrorism. (See also: Customer Due Diligence and Know Your Customer)

Commodity Futures Trading Commission (CFTC): The mission of the CFTC is to foster open, transparent, competitive, and financially sound markets. By working to avoid systemic risk, the Commission aims to protect market users and their funds, consumers, and the public from fraud, manipulation, and abusive practices related to derivatives and other products that are subject to the Commodity Exchange Act (CEA).

Community Development Financial Institution (CDFI): Private financial institutions that are 100% dedicated to delivering responsible, affordable lending to help low-income, low-wealth, and other disadvantaged people and communities so they can join the economic mainstream.

Community Development Financial Institutions Fund (CDFI): Managed by the U.S. Department of the Treasury, the CDFI Fund provides support for economic growth and opportunity in distressed U.S. communities, by offering tailored resources and innovative programs that invest federal dollars alongside private sector capital. The CDFI Fund serves mission-driven financial institutions that take a market-based approach to supporting economically disadvantaged communities.

Community Reinvestment Act (CRA): Enacted in 1977, the CRA requires the U.S. financial banking regulators (e.g. FDIC, FRB, OCC) to encourage financial institutions to help meet the credit needs of the communities in which they do business, including and in particular, low- and moderate-income (LMI) neighborhoods.

Consumer Financial Protection Bureau (CFPB): The CFPB regulates the offering and provision of consumer financial products or services under the federal consumer financial laws and educates and empowers consumers to make better informed financial decisions.

 

Control Person: A person who has significant decision-making influence and control over a legal entity. Some legal entities may have several control persons; however, Customer Due Diligence regulation requires all financial institutions to disclose the identity of at least one control person. Control persons may or may not also be Beneficial Owners in an institution.

Convertible Virtual Currency: “A medium of exchange that operates like a currency in some environments but does not have all the attributes of real currency.” Convertible virtual currency is a virtual currency that has “an equivalent value in real currency, or act[s] as a substitute for real currency.” Virtual currencies and convertible virtual currencies are not legal tender in any jurisdiction.

Correspondent Bank: A bank that provides services on behalf of another, equal or unequal financial institution, e.g. the facilitation of wire transfers, business transactions, acceptance of deposits or gathering of documents on behalf of another financial institution. Correspondent Banks operate via an agreement between a foreign and a domestic bank, where a correspondent account, usually referred to as a vostro or nostro account, is established at one bank for the other. Typically, these are reciprocal accounts between the two banks.

Credit: Funds that are electronically added directly to an account.

Currency Transaction Report (CTR): A report that U.S. financial institutions are required to file with FinCEN for each deposit, withdrawal, exchange of currency, or other payment or transfer, by, through, or to the financial institution which involves a transaction in currency of more than $10,000. Also referred to as Currency and Monetary Instrument Report (CMIR).

Customer: A company (or entity) that creates and maintains an account with FinClusive for the purpose of ledgering and moving money for a client.

Customer Due Diligence (CDD): Customer Due Diligence requires financial institutions to maintain written policies and procedures to verify the identity of their customers and beneficial owners of companies opening accounts. Financial institutions are required to understand the nature and purpose of customer relationships, develop risk profiles, and conduct ongoing monitoring in order to identify suspicious transactions.

Customer Identification Program (CIP): A programs that verifies the identity of individuals who wish to conduct financial transactions with a financial institution. This is required by United States law as a provision of the Patriot Act.

D

Debit: Funds that are electronically removed directly from an account.

Designated Non-Financial Business or Profession (DNFBP): Those businesses and professions that are covered under FATF’s AML/CFT compliance guidance; includes: casinos, real estate agents, dealers in precious metals/stones, lawyers, notaries, other independent legal professionals and accountants, trusts and company service providers.

De-risking: Ceasing or denying business or financial services due to perceived high compliance risk and associated costs.

E

Employer Identification Number (EIN): A unique nine-digit number that is assigned by the Internal Revenue Service to individual businesses operating within the United States. This number is used as identification for the purpose of administrating taxes.

Enhanced Due Diligence (EDD): A KYC process that provides a greater level of scrutiny of a client/customer (individual or entity) that may be required when basic customer due diligence assesses the subject to be ‘high risk’, and in need of further investigation.

F

 

Faster Payment Service (FPS): A banking initiative that reduces payment times between different banks’ customer accounts from several business days to seconds.

Federal Financial Institutions Examinations Council (FFIEC): A formal interagency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions by a number of the core federal financial regulators, including the following:

  • Board of Governors of the Federal Reserve;

  • Federal Deposit Insurance Corporation (FDIC);

  • National Credit Union Association (NCUA);

  • Office of the Comptroller of the Currency (OCC); and

  • Consumer Financial Protection Bureau (CFPB).

Importantly, in 2006, the State Liaison Committee (SLC) was added to the Council as a voting member, which brought to the Council representatives from the Conference of State Bank Supervisors (CSBS), the American Council of State Savings Supervisors (ACSSS), and the National Association of State Credit Union Supervisors (NASCUS).

Federal Reserve Bank (FRB, or Federal Reserve): The central bank of the United States. It performs five general functions to promote the effective operation of the U.S. economy and, more generally, the public interest. The Federal Reserve is responsible for the following:

  • Conducts the nation’s monetary policy to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy;

  • Promotes the stability of the financial system and seeks to minimize and contain systemic risks through active monitoring and engagement in the U.S. and abroad;

  • Promotes the safety and soundness of individual financial institutions and monitors their impact on the financial system as a whole fosters payment and settlement system safety and efficiency through services to the banking industry and the U.S. government that facilitate U.S.-dollar transactions and payments; and

  • Promotes consumer protection and community development through consumer-focused supervision and examination, research and analysis of emerging consumer issues and trends, community economic development activities, and the administration of consumer laws and regulations.

 

Financial Action Task Force (FATF): An inter-governmental body established in 1989 by the Ministers of its Member jurisdictions. The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. A number of FATF-style regional bodies (FSRBs) exist in subregions of the world: also working to promote adherence to the FATF Recommendations and carry out peer examinations of jurisdictions’ compliance with them.

Financial Crimes Compliance (FCC): The framework through which a financial institution complies with federal banking regulations such as the Bank Secrecy Act and Patriot Act.

Financial Crimes Enforcement Network (FinCEN): FinCEN is the lead federal AML/CFT regulator and financial intelligence unit (FIU) of the United States. FinCEN uses counter-money laundering laws (such as the Bank Secrecy Act, or BSA) to require reporting and record keeping by banks and other financial institutions (including MSBs, MTOs, fintech companies, and others). This record keeping preserves a financial trail for investigators to follow as they track criminals and their assets. The BSA also requires reporting suspicious currency transactions which could trigger investigations. As an FIU, FinCEN provides intelligence and analytical support to law enforcement. FinCEN's combines information reported under the BSA with other government and public information. This information is then disclosed to FinCEN's customers in the law enforcement community in the form of intelligence reports.

The mission of the FinCEN is to safeguard the financial system from illicit use, combat money laundering, and promote national security through the strategic use of financial authorities and the collection, analysis, and dissemination of financial intelligence. FinCEN belongs to the Egmont Group of FIUs, an international body of global FIUs whose mandate is to cooperate in sensitive investigations and efforts to combat terrorism financing, illicit finance and financial crime globally.

Financial Deposit Insurance Corporation (FDIC): The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by the Congress to maintain stability and public confidence in the nation's financial system by:

  • Insuring deposits;

  • Examining and supervising financial institutions for safety and soundness and consumer protection;

  • Making large and complex financial institutions resolvable; and

  • Managing receiverships.

The FDIC is a recognized leader in promoting sound public policies, addressing risks in the nation's financial system, and carrying out its insurance, supervisory, consumer protection, resolution planning, and receivership management responsibilities.

Financial Industry Regulatory Authority (FINRA): FINRA is dedicated to investor protection and market integrity through effective and efficient regulation of broker-dealers. FINRA is a not-for-profit organization authorized by the U.S. Congress to protect America’s investors by making sure the broker-dealer industry operates fairly and honestly. FINRA carries out its mission by:

  • Writing and enforcing rules governing the activities of all registered broker-dealer firms and registered brokers in the U.S.;

  • Examining firms for compliance with those rules;

  • Fostering market transparency; and

  • Educating investors. 

FINRA regulation plays a critical role in America’s financial system – by enforcing high ethical standards, bringing the necessary resources and expertise to regulation and enhancing investor safeguards and market integrity.

Financial Integrity Network (FIN): A Washington D.C. based risk and financial crimes compliance consulting and advisory company. A partner to FinClusive.

Financial Stability Oversight Council (FSOC): Prior to the formation of the FSOC, no single regulator had responsibility for monitoring and addressing overall risks to financial stability, which the U.S. is comprised of a myriad of financial firms operating across multiple markets. The formation of this important council was to facilitate regulatory coordination and information sharing that can better inform financial services policy development, consolidate the supervision of nonbank financial companies in particular, regardless of their form, and designated systemic financial market utilities and systems.

The FSOC also helps streamline activities in the U.S. finance and banking community amidst an already crowded and often confusing landscape of cross-functional state and federal regulators operating across jurisdictional authorities.

For Benefit Of (FBO): The organization (Customer) that moves money and performs ledgering for a Client.

For Benefit of (FBO) Account: A custodial/financial account set up for the benefit of one or more beneficiaries (clients) and administered/owned by a responsible person (customer), who has a fiduciary obligation to the beneficiary (client).

G

General Data Protection Regulation (GDPR): A legal framework that sets guidelines for the collection and processing of personal information from individuals who live in the European Union (EU).

I

Individual: A person that utilizes FinClusive services for the purpose accessing financial services and moving money.

International ACH Transaction: An ACH entry that is part of the payment transaction involving a financial agency’s office that is not located in the territorial jurisdiction of the United States. Governance of such transactions fall under the NACHA, the National Automated Clearinghouse Association.

Iteration (Iteration of Work): In agile software development, an iteration is a single development cycle, usually measured as one week or two weeks.

K


Know Your Customer (KYC): The mandatory process by which a financial institution or obligated entity verifies the identity of its Clients (individuals) in compliance with domestic international AML/CFT regulations. A KYC check helps assess the risk of illegal activities such as terrorist financing, money laundering, fraud, and other illicit financial activities.

Know Your Business (KYB): The mandatory process by which a financial institutions or obligated entity verifies the identity of its Clients (entities) in compliance with domestic and international AML/CFT regulations. A KYB helps check assesses the risk of illegal activities such as terrorist financing, money laundering, fraud, and other illicit financial activities. KYB includes the verification of the company’s  business identity, including EIN/TIN (or equivalent, as well as business registration and incorporation information, including, but not limited to corporate formation documentations, business certifications, jurisdictional certificates, etc. KYB must also include the due diligence of the entity’s beneficial owners and control persons (significant parties).

L

Legal Entity: A corporation, limited liability company, or other commercial non-person entity that is created by the filing of a public document with a Secretary of State or similar office, a general partnership, and any similar entity formed under the laws of a foreign jurisdiction that opens an account.

Listed Entity: Any entity, other than a bank, whose common stock or analogous equity interests are listed on the New York Stock Exchange or the American Stock Exchange or whose common stock or analogous equity interests have been designated as a NASDAQ National Market Security listed on the NASDAQ Stock Market (except stock or interests listed under the separate “NASDAQ Capital Markets Companies” heading).

Low-Cost Routing: Internal FinClusive orchestrator that determines the mechanism by which a payment/transfer of funds will occur (ACH/Wire by/through the BoR or via the Stellar or other network).

M

Merchant: The specific company that belongs to a customer.

Money Services Business (MSB): A nonbank financial institution/intermediary including any person doing business, whether or not on a regular basis or as an organized business concern in one or more of the following capacities: currency dealer or exchanger, check casher, issuer of traveler’s checks, money orders or stored value, seller or redeemer of traveler’s checks, money orders or stored value, money transmitter, U.S. Postal Service. This definition was created for financial regulatory purposes in the context of the coverage of regulatory obligations, including AML/CFT.

Money Transmitter: Any person, whether or not licensed or required to be licensed, who engages as a business in accepting currency, or funds denominated in currency, and transmits the currency or funds, or the value of the currency or funds, by any means through a financial agency or institution, a Federal Reserve Bank or other facility of one or more Federal Reserve Banks, the Board of Governors of the Federal Reserve System, or both, or an electronic funds transfer network; or any other person engaged as a business in the transfer of funds.

 

N

National Automated Clearinghouse Association (NACHA): Nonprofit membership association charged with overseeing the Automated Clearing House (ACH) system, one of the largest payment systems in the world. (See ACH)

National Credit Union Administration (NCUA): The NCUA is an independent federal agency that insures deposits at federally insured credit unions, protects the members who own credit unions, and charters and regulates federal credit unions.

The NCUA protects the safety and soundness of the credit union system by identifying, monitoring and reducing risks to the National Credit Union Share Insurance Fund. Backed by the full faith and credit of the U.S., the Share Insurance Fund provides up to $250,000 of federal share insurance to millions of account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions.

Nationwide Mortgage Licensing System and Registry (NMLS): The system of record for non-depository, financial services licensing or registration in participating state agencies, including the District of Columbia and U.S. Territories of Puerto Rico, the U.S. Virgin Islands, and Guam. In these jurisdictions, NMLS is the official system for companies and individuals seeking to apply for, amend, renew and surrender license authorities managed through NMLS by 64​ state or territorial governmental agencies. NMLS itself does not grant or deny license authority. ​

Nonbank Financial Institution: A financial institution that does not have a full banking license or is not supervised by a national or international banking regulatory agency. Examples include insurance firms, venture capitalists, currency exchanges, money transfer companies/money services businesses, some micro-loan organizations, and pawn shops. These nonbank financial institutions provide services that are not necessarily suited to banks, serve as competition to banks, and specialize in sectors or groups.

Nonce: Numbers generated for a specific one-time use.

Non-Privileged Account: An operating system account with the authorizations of a non-privileged user.

Non-Privileged User: A user who does not have any authority or elevated access to the FinClusive information system compared with a privileged user (e.g., general user, client, customer).

O

Office of the Comptroller of the Currency (OCC): The OCC charters, regulates, and supervises all national banks and federal savings associations as well as federal branches and agencies of foreign banks. The OCC is an independent bureau of the U.S. Department of the Treasury. The OCC’s mission is to ensure that national banks and federal savings associations operate in a safe and sound manner, provide fair access to financial services, treat Customers fairly, and comply with applicable laws and regulations.

Office of Domestic Finance: The Office of Domestic Finance advises and assists in areas of domestic finance, banking, and other related economic matters. It develops policies and guidance for Treasury Department activities in the areas of financial institutions, federal debt finance, financial regulation, and capital markets. Components of the Office of Domestic Finance include:

  • Office of Financial Markets;

  • Office of Financial Institutions (this office includes the Community Development Financial Institutions (CDFI) Fund; and

  • Office of Fiscal Service. 

The Office of Domestic Finance also manages the Financial Literacy and Education Commission – This Commission is a Congressionally chartered body made up of more than 20 Federal entities that are coordinating and collaborating to strengthen financial capability and increase access to financial services for all Americans. The Secretary of the Treasury chairs the Commission, and the Director of the Consumer Financial Protection Bureau is the vice-chair.

Office of Foreign Assets Control (OFAC): OFAC administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States.

OFAC acts under Presidential national emergency powers, as well as authority granted by specific legislation, to impose controls on transactions and freeze assets under U.S. jurisdiction. Many of the sanctions are based on United Nations and other international mandates, are multilateral in scope, and involve close cooperation with allied governments.

Office of Intelligence and Analysis (OIA): Part of the Intelligence Community, OIA advances national security and protects financial integrity by informing the U.S. Department of Treasury decisions with timely, relevant, and accurate intelligence and analysis. It supports this mission by:

  • Driving intelligence to meet the priorities of Treasury decision-makers and external Customers;

  • Producing all-source assessments and other material to identify threats and vulnerabilities in licit and illicit networks that may be addressed by Treasury-led action;

  • Delivering timely, accurate, relevant intelligence to decision-makers; and

  • Providing the security infrastructure necessary to safeguard the Treasury's national security information.

Office of Terrorism and Financial Intelligence (TFI): TFI develops and implements U.S. government strategies to combat terrorist financing domestically and internationally, develops and implements the National Money Laundering Strategy as well as other policies and programs to combat terrorist financing, specific financial crimes, and illicit finance broadly.

Office of Terrorism Financing and Financial Crime (TFFC): TFFC is the policy office for TFI, and works across all elements of the national security community—including the law enforcement, regulatory, policy, diplomatic and intelligence communities—and with the private sector and foreign governments to identify and address the threats presented by all forms of illicit finance to the international financial system.

Ownership Percentage: The percent of the company that is held (owned) by the beneficial owner.

P

Patriot Act: Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT Act or "Patriot Act"), passed in 2001. Title III of the Act—International Money Laundering Abatement and Financial Anti-Terrorism Act—directly expanded the AML/CFT obligations of bank and nonbank financial institutions and expanded the nature and type of financial institutions to be covered by the BSA.

Perceived High Compliance Risk (PCR): FinClusive term for entities and/or individuals that may show characteristics of a ‘high compliance risk’ customer/client, and subject to traditional bank de-risking.

Revised Payment Services Directive (PSD2): The second Payment Services Directive, designed by the countries of the European Union. Its aim is to better protect consumers when they pay online, promote the development and use of innovative online and mobile payments such as through open banking, and make cross-border European payment services safer.

Politically Exposed Persons (PEP): An individual who is or has been entrusted with a prominent public function. Due to their position and influence, it is recognized that many PEPs are in positions that potentially can be abused for the purposes of commuting money laundering and related predicate offenses, including corruption and bribery, as well as conducting activity related to terrorist financing. PEPs require enhanced due diligence (EDD) and enhanced monitoring.

Privileged User: A user who has authority and additional access to the FinClusive information system than a non-privileged user (e.g., root access, Microsoft Azure, Microsoft DevOps, Chief Information Security Officer (CISO), Chief Technology Officer (CTO)).

R

Real Currency: FinCEN defines “real” currency as (i) a jurisdiction’s coin and paper money that is (ii) designated as legal tender for that jurisdiction and (iii) is customarily used and accepted as a medium of exchange in the jurisdiction.

Remote Access: Remote access is defined as network access that involves communication through external networks (the Internet, for one). Internal networks include local area networks and wide area networks. In addition, the use of encrypted Virtual Private Networks (VPNs) for network connections between organization-controlled endpoints and non-organization-controlled endpoints may be treated as internal networks, from the perspective of protecting the confidentiality and integrity of information traversing the network. Remote access is the primary form of access for FinClusive, based on its cloud computing platform.

Remote Deposit Capture (RDC): Process by which checks can be deposited to a financial institution account via electronic (mobile) means.

Replay Attack: A man-in-the-middle style attack which allows an attacker to repeat or alter a valid data transmission that may enable unauthorized access to the application.

S

Sanctions: Commercial and financial penalties applied by one or more countries against a targeted self-governing state, group, business or individual.

Specially Designated Nationals and Blocked Persons (SDN) List: The SDN List is a compilation of entities and individuals that have been targeted under one or more of Treasury's sanctions programs and maintained by the U.S. Treasury’s Office of Foreign Assets Control (OFAC).

Section 314(a) Request: Section 314(a) of the Patriot Act enables U.S. federal law enforcement agencies, through FinCEN, to reach out to more than 45,000 points of contact at more than 27,000 financial institutions to locate accounts and transactions of persons that may be involved in terrorism or money laundering.

Section 314(b) Request: Section 314(b) of the Patriot Act provides financial institutions with the ability to share information with one another, under a safe harbor provision that offers protections from liability, in order to better identify and report potential money laundering or terrorist financing activities.

Securities Exchange Commission (SEC): The mission of the SEC includes the following:

  • Protect investors;

  • Maintain fair, orderly, and efficient markets; and

  • Facilitate capital formation.

The SEC strives to promote a market environment that is worthy of the public's trust. The SEC oversees the key participants in the securities world, including securities exchanges, securities brokers and dealers, investment advisors, and mutual funds. The SEC is concerned primarily with promoting the disclosure of important market-related information, maintaining fair dealing, and protecting against fraud.

Significant Parties: Persons who own or control a business entity, otherwise known as Beneficial owners or control persons (see above). Customer Due Diligence regulation requires all financial institutions to disclose the identity of all beneficial owners.

Social Security Number (SSN): A unique nine-digit number that is issued by the Internal Revenue Service to United States citizens, permanent residents, and temporary working residents. Although this number is primarily for tax purposes, it is also used as an identifier for record-keeping and employment verification purposes.

Software-as-a-Service (SaaS): Software that is licensed, delivered, and accessed through an online subscription.

Source Account: The account from which funds pulled (debited) via an ACH transaction.

Stellar Development Foundation (SDF): SDF is a non-profit organization founded in 2014 to support the development and growth of the open-source Stellar network. SDF and Stellar seek to unlock the world’s economic potential by making money more fluid, markets more open, and people more empowered. The Foundation helps maintain Stellar’s codebase, supports the technical and business communities around Stellar, and is a speaking partner to regulators and institutions.

Stellar Anchor: To facilitate moving value from the traditional banking system into Stellar and vice-versa, the network relies on anchors, which are regulated financial institutions, money service businesses, or fintech companies that offer one—or both—of the following component services:

  • Issue fiat tokens: Issue one-to-one fiat-backed tokens (also known as stablecoins) and maintain fiat reserves equivalent to the value of the issued tokens, so users can redeem them back to fiat at any time; and

  • Provide a fiat on/off-ramp: Connect the Stellar network to the anchor country’s banking system by maintaining a service that handles regulatory processes such as KYC/AML and allows users to make seamless deposits and withdrawals.

These two components can be provided by a single entity, or by multiple entities, in which case the fiat on/off-ramp becomes a reseller of the fiat token issued by the token issuer. Learn more.

As an anchor on the Stellar network, FinClusive can send/receive payments (directly and/or for or on behalf of its customers and clients) to other anchors (and/or their clients). Such transfers can happen individually or in batch. All transactions are captured in the Stellar network compliance server.

Stellar Ecosystem: An ecosystem composed of companies or anchors around the world using Stellar to create, send, and trade digital representations of all forms of value (dollars, pesos, bitcoin, etc).

Subaccount: A distinct account nested under a larger account or relationship. A subaccount is spawned from and linked to a primary account. At the most basic level, a sub account can be thought of as an account within an account.

Suspicious Activity Report (SAR): Information regarding any transactions that a financial institution may suspect are related to money-laundering or terrorist financing. SARs must be reported to a local Financial Intelligence Unit (FIU). Also called, Suspicious Transaction Report (STR).

T

Tax Identification Number (TIN): A unique nine-digit number used as identification for the purpose of administering taxes. For individuals, this is usually a Social Security Number (SSN), issued by the Social Security Administration (SSA); for businesses this is the Employer Identification Number (EIN), issued by the Internal Revenue Service (IRS).

Transaction: A deposit, withdrawal, transfer between accounts, exchange of currency, loan, extension of credit, purchase or sale of any stock, bond, share certificate, or other monetary instrument or investment security, or any other payment, transfer, or delivery by, through, or to a financial institution, by whatever means effected.

Travel Rule: A Bank Secrecy Act (BSA) rule, often called the "Travel" rule—requires all financial institutions to pass on certain information to the next financial institution, in certain funds transmittals involving more than one financial institution. The funds transfer rules are designed to help law enforcement agencies detect, investigate and prosecute money laundering and other financial crimes by preserving an information trail about persons sending and receiving funds through funds transfer systems. Only transmittals of funds equal to or greater than $3,000 (or its foreign equivalent) are subject to this rule, regardless of whether or not currency is involved.

Treasury Executive Office for Asset Forfeiture (TEOAF): The Treasury Forfeiture Fund (TFF) is the receipt account for deposit of non-tax forfeitures made pursuant to laws enforced or administered by the U.S. Department of Treasury and U.S. Department of Homeland Security agencies. The mission of the TFF is to affirmatively influence the consistent and strategic use of asset forfeiture by participating agencies to disrupt and dismantle criminal enterprises.

TFF was established in 1992 as the successor to what was then the Customs Forfeiture Fund. The TFF participating agencies are:

U

User: An individual that uses (or interacts with) the FinClusive API or Accounts & Payments Portal.

W

Withdrawal: The process of electronically removing funds from an account. (See Debit)