Squeezed from the top and squeezed from the bottom. It’s only natural that custodians and other asset servicing providers are feeling the pinch. A barrage of new regulations, shorter settlement cycle, new European centralized settlement platform on the one side and, on the other, mounting client demands are forcing custodians to refocus their attentions on […]
US FINCEN: Digging Deeper into Beneficial Owner Identities
Financial firms have it hard enough verifying the identity of their customers. They have to make certain to ask all the right questions and hope they get the right answers. It is an error-prone process, but at least the main thing the bank, broker-dealer, or mutual fund has to know is just who it is directly […]
Fund Managers: Addressing the Regulatory Data Quagmire (Updated)
Dodd-Frank. EMIR. FATCA. AIFMD. Solvency II. The reporting obligations of fund managers just keep growing. The snowballing burden — with new regulations and reporting rules popping up at an alarming pace — is forcing many to step back from their usual resigned willingness to learn and follow one regulatory rule after another. The emerging alternative: looking at the bigger picture of […]
GATCA: Brace for FATCA on Steroids
The US Internal Revenue Service didn’t make any friends among financial firms abroad when it imposed the Foreign Account Tax Compliance Act (FATCA) to make non-US financial institutions responsible for preventing tax evasion by US persons. Yet it definitely caught the attention of tax authorities in other nations. Several dozen of the world’s largest markets — led […]
FATCA: Four Steps to Meeting IRS Reporting Requirements
When the US Treasury made foreign financial institutions responsible for catching potential American tax evaders overseas, it also gave them a major migraine they are now finding difficult to alleviate. Determining with certainty who is responsible for paying US taxes just became their job. If they choose not to cooperate with the US’s Foreign Account Tax Compliance […]
FATCA Responsible Officers: Be Careful, Very Careful
You’ve just been named by your financial firm as a responsible officer under the US Foreign Account Tax Compliance Act, or FATCA for short. Should you hand in your two-week notice, take the job in stride, or brace– and protect yourself — from hefty operational and legal liabilities? Those are the decisions and options now faced by potential FROs, or thousands of […]
Intergovernmental Agreements: Blessing or Curse in Complying With FATCA?
Intergovernmental agreements will help foreign financial institutions more easily meet the requirements of the US Foreign Account Tax Compliance Act (FATCA), which aims to curtail tax evasion by US persons abroad. Or so financial firms around the world were told by the US Internal Revenue Service (IRS) and their local tax authorities. That’s not exactly a […]
Fund Managers and FATCA: Behind the Curve Or Just Being Prudent?
The Foreign Account Tax Compliance Act (FATCA), which aims to help the US Internal Revenue Service catch potential tax evaders outside its radar, has always been viewed as a difficult regulation for financial firms to follow and with key deadlines close at hand some fund managers still apparently overwhelmed. They are so overwhelmed that they are massively unprepared […]
Compliance Officers: Taking the Regulatory Heat, Personally
Chief compliance officers at financial firms have always had it tough. Working long hours to address changing regulatory, investor and internal requirements, are an accepted part of everyday life. Yet, chief compliance officers and legal experts now say that the stress is hitting closer to home on a personal level. Securities watchdogs are drawing even […]
FATCA: How to Reduce Ops Risk
At the core of FATCA is the need for foreign financial intermediaries to know and report whether securities accounts are owned by US persons who are deliberately trying to avoid paying their correct share of US taxes.In fulfilling the rules of FATCA, the US legislation designed to catch US tax evaders, financial firms would be […]