(Editor’s Note: After this article went to press, the US Treasury said it had adopted a rule requiring banks, broker-dealers, mutual funds, futures commission merchants and introducing brokers in commodities to collect and verify information on beneficial owners. The Treasury also sent to Congress legislation to approve requiring that companies formed in the US file […]
Europe’s New AML Directive: Keep Digging for Customer Data
As if knowing the basics about your customer weren’t difficult enough, how about knowing a lot more, verifying what you think you know, and doing the same when it comes to the customer’s direct and indirect investors and controlling parties. That is what European regulators will eventually require from financial institutions doing business in the […]
KYC Onboarding: Taking a Global Centralized Approach
Name, rank and serial number. That’s what national military organizations across the globe use to identify their members. Too bad the same simplicity can’t be used by financial firms when it comes to identifying their customers and counterparties, bemoan operations and compliance specialists. Instead financial firms must deal with a hodgepodge of regulatory requirements across […]
FATCA Reporting Round One: The Scorecard
Wrong client classification, missing documentation proving country of citizenship, and incomplete information on investor income and account values. Those are the top three mistakes offshore fund managers tell FinOps Report they experienced when trying to send information to their local tax authorities to comply with the recent first round of reporting for the US Foreign Tax […]
KYC Utilities: How Many is Too Many?
When is four too high a number? When it is the number of virtually interchangeable third-party services specializing in helping financial firms meet their know-your customer and other regulatory requirements, acknowledge fund managers and even the providers themselves. Of course, just how many should be left standing and who that should be is a difficult question […]
Common Tax Reporting Standards: The Tower of Babel
When US lawmakers decided to force foreign financial institutions to ante up the names of all their customers and investors that might owe unpaid US taxes, maybe they knew that they were burdening these financial firms with a complex and costly reporting burden. But who could have foreseen that they were launching a global fad among tax […]
FinOps Takes a Byte out of the News — 3/17/2015
A few news items that may be of interest to our readers… CalPERS Pioneering: US pension giant California Public Employees Retirement System (CalPERS) has become the first pension plan to join a fully committed repo facility at Chicago-headquartered derivatives clearinghouse OCC. The repo facility provides contingency liquidity in the event of a member default or […]
Hedge Funds: Beating the Lost-Administrator Blues
You’re the chief executive or chief operating officer of a small or mid-sized hedge fund manager and have just received a call, visit, or letter from your brand-name fund administrator. The message: Sorry, we love you, but can no longer afford to take care of you, because you are too small to be profitable for us. […]
Countdown to FATCA Reporting: Will IT Glitches Mar Good Efforts? (Updated)
UPDATE: Following the publication of this article, the IRS announced it will offer another testing window from March 10 at 2AM EDT to March 12 at 5PM EDT. The test will be open to financial institutions and tax administrations which enrolled in the IDES by March 5 at 5PM EDT. With about a month left to comply […]
FATCA: Cost-Overruns Come With the Territory
Red might be a festive color for the approaching holiday season, except for the red ink many fund management shops are facing in cost overruns complying with the Foreign Account Tax Compliance Act (FATCA), foisted by the US Internal Revenue Services on financial institutions around the world. With the end-of-year deadline for arranging new budgets coming up fast, it […]