Automatic Exchange of Information Regime. An emerging compliance challenge

Transcription

1 Automatic Exchange of Information Regime An emerging compliance challenge

2 What started off as a US initiative to clamp down on US citizens evading tax by imposing a 30% withholding tax penalty under the Foreign Account Tax Compliance Act (FATCA) has spread and triggered similar initiatives on a global level. While financial institutions globally struggle to meet the full FATCA compliance requirements, they must also deal with a wider global tax transparency initiative introduced by the Organisation for Economic Co-operation and Development (OECD) in the form of Common Reporting Standard (CRS). In February 2014, G20 finance ministers and governors endorsed the CRS as the new global standard for the Automatic Exchange of Information (AEoI). On May 6, 2014, a group of 44 1 countries (the early adopter group) committed to a specific and ambitious timetable to implement the new standard with an effective date of January 1, On July 21, 2014, the OECD released the full version of the Standard for Automatic Exchange of Financial Account Information in Tax Matters, including the detailed Commentary on the CRS, which was endorsed by G20 members in the recent summit, held on September 20-21, At the OECD Global Forum meeting held on October 29, 2014, fifty one jurisdictions*, many represented at Ministerial level, translated their commitments into action by signing the Multilateral Competent Authority Agreement that will activate automatic exchange of information. A further 38 jurisdictions also confirmed their commitment to start the information exchange by September, 2018, and it is expected the number will increase in near future. 2 Like FATCA, CRS requires financial institutions around the globe to play a central role in providing tax authorities with greater access and insight into taxpayer financial account data, which means Customer Due Diligence (CDD) and reporting obligations are set to increase considerably. Note: *The specific implementation schedule outlined by the early adopter group is only applicable to the original 44 jurisdictions. 2

3 CRS is not the first initiative aiming to achieve greater transparency and tackle offshore tax evasion. The European Union Savings Directive (EUSD) for automatic information exchange has been in place since 2005, although it is currently limited to reporting certain types of interest income, and not all EU member countries participate fully. In March 2014, the EU agreed to an extension to the existing EUSD to include new types of savings income, products that generate interest or equivalent income, life insurance contracts and a broader range of investment funds. The member countries have until January 1, 2016 to adopt the national legislation necessary to implement the extended directive, which will take effect on January 1, The EU has also proposed to expand the scope of its 2011 Directive on Administrative Cooperation (DAC), which foresees, among other things, the automatic exchange of information for the following five categories of income: employment, director s fees, life insurance products, pensions, and immovable property. In the UK, financial institutions also need to comply with the International Tax Compliance (Crown Dependencies and Gibraltar) Regulation 2014, which is widely known as UK FATCA. It remains unclear if there will be an alignment and consolidation among these various directives and regulations. Therefore, a strategic response to the wider AEoI regime is imperative to avoid skyrocketing compliance bills and to minimize the operational impact of these initiatives. Financial institutions need to develop strategies that meet compliance requirements in a cost-effective manner while supporting broader business objectives. 3

4 CRS HAS A MUCH WIDER SCOPE THAN FATCA CRS is modeled on FATCA principles and follows the same staggered approach in terms of obligations. There are, however, underlying differences which, coupled with a wider scope and ambitious implementation timelines, present a significant compliance challenge for many financial institutions. To prevent taxpayers from circumventing the CRS, it is specifically designed with a broad scope across four dimensions as seen in Figure 1 below. FINANCIAL INSTITUTIONS CRS has a broad definition of financial institution which includes custodial institutions, depository institutions, investment entities and specified insurance companies. Some low risk financial institutions carved out of FATCA (such as building societies, firms with a local client base, certain investment funds, firms with only low value accounts and sponsored investment vehicles) are also included under CRS. PRODUCTS The products in scope include depository accounts, custodial accounts, cash value insurance contracts, annuity contracts and certain equity or debt interests. Certain insurance products (such as pension funds) excluded from pre-existing remediation under FATCA may come into scope for CRS. In addition, equity interests in investment banking exchange traded funds are treated as financial accounts under CRS. DUE DILIGENCE Due diligence requirements increase considerably due to additional jurisdictions, a reduction of the de minimis carve-outs and a requirement to look through passive entities to report on the ultimate beneficial owners. Due diligence is based on tax residency as opposed to citizenship, which may require updates to Know Your Customer (KYC) systems. INFORMATION REPORTING The financial information to be reported includes all types of investment income (including interest, dividends and income from certain insurance contracts) but also account balances and sales proceeds from financial assets. Under FATCA, institutions were required to identify and report US citizens only. CRS seeks to implement a multilateral reporting regime (44 jurisdictions to start with) with bulk reporting of financial account data. Figure 1: Scope of CRS Financial Institutions Information Reporting CRS Compliance Scope Products Due Diligence Source: Accenture, November

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6 CRS INTRODUCES EXTENSIVE DUE DILIGENCE AND REPORTING OBLIGATIONS CUSTOMER DUE DILIGENCE AND CLASSIFICATION OBLIGATIONS To identify and classify reportable customers for all participating jurisdictions, CRS introduces extensive due diligence requirements. These procedures are different for individual and entity customers and also distinguish between pre-existing and new accounts. To meet these requirements, financial institutions must follow a standardized approach with thorough due diligence procedures while minimizing downstream customer impact. To limit the opportunities for taxpayers to circumvent reporting by using interposed legal entities or arrangements, the standard also requires financial institutions to look through shell companies, trusts or similar arrangements, including taxable entities to cover situations where a taxpayer seeks to hide the principal but is willing to pay tax on the income. Financial institutions will need robust technical solutions to comply with such extensive classification obligations. PRE-EXISTING INDIVIDUAL ACCOUNTS As with FATCA, financial institutions are required to classify their entire pre-existing customer base for CRS; however, the de minimis exemption has been removed. Therefore, where previously institutions were able to exclude a significant proportion of their customer base by applying the exemption, now they will need to carry out appropriate due diligence procedures. This implies that a larger proportion of customers will need to be contacted to obtain selfcertification and/or documentary evidence. For high-value accounts (that is, accounts with an aggregate value of more than $1 million), enhanced due diligence procedures apply. These include both paper-based reviews and a reason to know relationship manager (RM) enquiry. Given the number of jurisdictions involved, manual enhanced review processes are expected to be complex and have a downstream impact on operational colleagues and RMs. NEW INDIVIDUAL ACCOUNTS CRS proposes self-certification for new customers (customers on-boarded after the CRS effective date), which require provision of all tax residencies of the account holder. This is different from FATCA, where the confirmation of whether the account holder is a US tax resident or not is sufficient. Also, institutions are required to capture the account holder s date of birth, as well as the Tax Identification Number (TIN) for all tax residencies. Many institutions will have to update their KYC systems and onboarding forms to be able to capture the mandatory data at the time of onboarding and record it in a format which allows it to be used for customer classification purposes by the compliance rules engine. The depository exemption for new bank accounts has also been removed, which will require additional customer contact for self-certification purposes. PRE-EXISTING ENTITY ACCOUNTS Financial institutions are required to determine whether the entity is a: 1. Reportable person, or 2. Passive non-financial entity (NFE) Generally, the reportable status can be determined based on anti-money laundering (AML)/Know Your Business (KYB) or publicly available information but where that is not sufficient, self-certification is required. Where the entity is a passive NFE, the institution must determine the residency of controlling persons. This information may not be available in existing KYB data and hence a self-certification will be required. If allowed by domestic law, entity accounts below $250,000 can be excluded from review until the balance exceeds the $250,000 threshold at the end of the calendar year. This is different from FATCA, where the balance threshold is $1 million. Therefore, under CRS, a greater number of entities will fall in scope of review. NEW ENTITY ACCOUNTS As is the case with pre-existing accounts, financial institutions are required to determine whether the account is held by one or more reportable persons or by a passive NFE with one or more controlling persons that are reportable persons. There is no need to determine any other status (such as FATCA partner financial institution, a participating foreign financial institution (FFI), a deemedcompliant FFI, or an exempt beneficial owner). As it is easier to obtain self-certification from new customers at the time of onboarding, the $250,000 threshold has been removed, and institutions are required to determine the tax residency of all controlling persons of passive NFEs. Institutions may also want to extend these due diligence requirements to capture multiple tax residencies for pre-existing accounts. This may significantly reduce the cost of fresh due diligence for each new country which joins the CRS regime. OBLIGATIONS FOR CHANGE OF CIRCUMSTANCES As with FATCA, financial institutions are required to identify and react to any change, addition or removal of information to customer accounts or any associated account. Therefore, institutions must implement internal controls, systems and processes to monitor, track and react to any change in circumstances. A change in circumstance is only relevant if it affects the reportable status of the underlying customer. For example, a change in telephone number or address details within the same jurisdiction will not result in any change for reporting purposes. Therefore, institutions will need to implement lowimpact detection methodologies to only react to changes which affect reporting status. If a change in circumstance causes the financial institution to know, or have reason to know, that the existing documentation is unreliable, then it must contact the customer to obtain a new self-certification to establish the tax residency. 6

7 If a customer fails to respond to a selfcertification request, the institution must treat the customer as reportable for jurisdictions where it has indicia on record (such as tax residency or current residential address in a reportable jurisdiction) or has reason to know, until it is given the necessary information. REPORTING OBLIGATIONS CRS introduces a comprehensive reporting regime covering all types of investment income (including interest, dividends, income from certain insurance contracts and other similar types of income), and also addresses situations where a taxpayer seeks to hide capital that itself represents income or assets on which tax has been evaded (for example, by requiring information on account balances). Financial institutions must report the following information for each reportable account: 3 1. Name, address, TIN and date and place of birth (in the case of an individual) of each reportable person that is an account holder of the account. In the case of an entity where one or more controlling persons is identified as reportable, the institution must report the name, address, and TIN of the entity and the name, address, TIN and date and place of birth of each reportable person. 2. The account number (or functional equivalent in the absence of an account number). 3. The name and identifying number (if any) of the reporting financial institution. 4. The account balance or value (including, in the case of a cash value insurance contract or annuity contract, the cash value or surrender value) as of the end of the relevant calendar year or other appropriate reporting period; or, if the account was closed during such year or period, the closure of the account. 5. In the case of any custodial account: a) The total gross amount of interest, dividends and other income generated with respect to the assets held in the account, in each case paid or credited to the account (or with respect to the account) during the calendar year or other appropriate reporting period; and b) The total gross proceeds from the sale or redemption of property paid or credited to the account during the calendar year or other appropriate reporting period with respect to which the reporting financial institution acted as a custodian, broker, nominee, or otherwise as an agent for the account holder. 6. In the case of any depository account, the total gross amount of interest paid or credited to the account during the calendar year or other appropriate reporting period. 7. In the case of any account not described in section 5 or 6, the total gross amount paid or credited to the account holder with respect to the account during the calendar year or other appropriate reporting period with respect to which the financial institution is the obligor or debtor, including the aggregate amount of any redemption payments made to the account holder. The reporting challenge may appear far off with the obligation to file CRS reports annually, starting September 2017 (covering the previous calendar year). However, since many organizations are in the process of defining their solution for FATCA reporting, it is imperative that the CRS requirements be taken into account to minimize future compliance costs. The early adopter group of 44 countries has outlined an ambitious implementation roadmap (as shown in Figure 2 below) for these obligations. This is likely to present a serious challenge for many organizations. In our view, financial institutions will need to act quickly to define their CRS compliance operating model and should allow sufficient time for implementation and delivery of the underlying technical solution. Figure 2: CRS Compliance Timetable CRS Compliance Required by obligation 1. Effective Date January 1, Governance and Compliance 3. New Customers (Onboarding, identification and classification) 4. Pre- existing Customers (Identification and classification) January 1, 2016 January 1, 2016 December 31, 2016 (HV*) December 31, 2017 (Non-HV*) 5. Reporting September, 2017 onwards *HV = High value customers CRS Compliance Implementation timeline outlined by the early adopter group Source: Accenture, November 2014 Note: Timelines are based on the joint statement by the early adopters group released in August, Access at: 7

8 WHAT DOES THIS MEAN FOR FINANCIAL INSTITUTIONS NOW? Financial institutions will need to assess if the processes and solutions defined for US FATCA are able to accommodate the additional requirements of CRS and to determine if, in the longer term, there are more efficient ways to organize, consolidate specific capabilities to minimize operational costs, and generate benefits for the business. From a capability perspective, the CRS compliance requirements can be summarized in the four areas shown in Figure 3. Figure 3: CRS Compliance Requirements Know Your Client Compliance Data Store Management Information and Reporting Compliance Rules Engine CRS Compliance Source: Accenture, November 2014 KNOW YOUR CUSTOMER Successful classification and reporting comes down to the efficiency of onboarding collection. From a data management perspective, banks need to ensure that they are accurate on the first attempt, and avoid the problem of incorrect reporting. For the attributes and data that firms now gather at source or need as output for classification or reporting there should be definitions, data quality standards, guidance, and an understanding by the staff of the importance of high quality data. In that respect, KYC is a critical piece and one which will heavily influence the customer classification and reporting design. Financial institutions may have to update the existing KYC and client onboarding systems and procedures to be able to capture and record additional data such as multiple tax residencies and tax identification numbers. Institutions should consider the impact on the overall customer experience and try to keep requests for information to a minimum, while seeking to minimize the future changes and operational impact of the design. For most organizations, the key would be to assess to what extent the customer onboarding operating model designed for FATCA can be leveraged for CRS. Given the wide scope of jurisdictions and removal of some of the de minimis exemptions, a higher number of customers will be subject to due diligence procedures, and additional customer contact will be required to obtain necessary self-certification. Institutions need to define the appropriate self-certification procedures and implement systems to manage the workflow and systematically record this information. This information can then be accessed by the compliance rules engine for customer classification. The ability of firms to properly process information from documentation is essential. Firms can staff up to execute this manually, but having tools and technologies to automate this activity can be a huge benefit, especially for larger organizations. Organizations will also have to decide whether they want to develop a central shared services model for self-certification management or manage it locally on a business unit basis. Developing a centralized capability can help establish standardized processes, controls and colleague training, and future changes to self-certification forms should be easier to manage compared to implementing the change across several business units. However, the centralized operation may require establishing a new team. The greater the number of expected self-certification requests, the greater the volume of processing and subsequent fulltime equivalent requirements, which will be a key decision factor in the overall design. If a single processing center is created, the servicing of multiple jurisdictions (depending on data protection requirements) may either need to be performed by a dedicated team (with increased security standards) or it may need to be sited exclusively within the given jurisdiction. 8

9 COMPLIANCE DATA STORE Data gathering, integration and the alignment between the client data and the product data is perhaps the biggest challenge for financial institutions. Traditionally, data gathering and integration has been very focused on Standard Settlement Instructions (SSI); as long as firms captured settlement instructions, they were able to get the payment out the door, and the transaction was complete. Now, however, they need to use both transactional and counterparty information which has traditionally reposed, respectively, in account and client databases. Firms need to create a single client view and therefore need to move from a product view to a client view. The second challenge is determining how firms will evidence that they are compliant, with a clear audit trail. The problem is no longer merely capturing and processing the data; the data must also be stored and retained for audit and evidentiary requirements. This will require more space as well as better integration with current processes. Firms may want to explore a meta-data driven approach that keeps some of the data where it lives, but creates a more unified view holding only the key data elements in a centralized location. This serves as a compliance data store. COMPLIANCE RULES ENGINE CRS compliance requires the implementation of a complex regulatory rule engine, which can analyze the customer data and classify the customer as either reportable or nonreportable for each participating jurisdiction. Any attempt at a standardized approach to classify account holders will be complicated due to differences among CRS, FATCA, Crown Dependencies and Overseas Territories (CDOT) agreements, the EUSD and should the proposed amendments be agreed the DAC. Moreover, under CRS, each time a new country joins, institutions in participating jurisdictions will have to undertake due diligence procedure for back-book customers to identify reportable accounts for the new reporting jurisdiction. Therefore, scalability and future proofing are crucial to reduce the ongoing cost of compliance. The higher volume of customers subject to due diligence means that those firms which adopted tactical or localized classification procedures for FATCA will now have to invest in robust technical solutions to reduce the operational impact. They must also be able both to remediate the pre-existing accounts and to classify new accounts. MANAGEMENT INFORMATION AND REPORTING Because there are multiple reporting regimes running in parallel, financial institutions (FIs) are now challenged by the multiplicity effect of reporting, which will increase depending on how many jurisdictions an FI has to deal with, and the approaches to data classification, customer engagement and reporting. Differences between FATCA and CRS means the FIs may not be able to use the same reporting procedures for both standards. FIs with a significant customer base outside their home country, will be reporting big volumes of data to local tax authority under CRS and therefore manual or semi-manual solutions will need to be reappraised. The complexity of CRS reporting stems primarily from the level of granularity and extent of information to be reported, coupled with the high quality of report submissions that will be expected by local tax authorities. Bulk transfer of customer financial account information will also raise data security and privacy concerns, calling for robust tracking mechanisms. CRS allows additional due diligence and reporting requirements to be initiated bilaterally between reportable countries, which will also significantly increase the complexity of the reporting solution. Parallel to reporting, financial institutions will need robust completeness checking and reconciliation solutions to support internal and external audit and evidentiary requirements. The key assurance that institutions will need to provide to auditors, tax authorities and regulators is the proof that every single preexisting and new customer has been classified for each participating jurisdiction and appropriate due diligence procedures have been carried out. Providing such assurance will not be easy and will likely require an effective technical solution. 9

10 ACCENTURE S PERSPECTIVE ON CRS CRS is not a mere extension of FATCA and presents a significant compliance challenge for many organizations. A conscious effort is required to develop a strategic response to the wider AEoI regime, both to avoid enormous compliance bills and to minimize the impact on customers and operations. CRS is not FATCA version 2.0 and has a much wider scope in many respects. Financial institutions that took a tactical approach to FATCA compliance either by creating manual processes or by terminating business with US clients need to reappraise their approach to compliance with CRS. As a result of the removal of some of the de minimis exemptions and the greater number of participating jurisdictions, CRS requires institutions to remit a greater number of accounts, contact additional customers, and report a larger number of customers with additional information. As a result, institutions may not be able to use the same solutions for FATCA and CRS. In the UK, FIs will have to report under the CDOT and potentially the revised EUSD as well, which will further complicate the solution. At this stage it is unclear how different reporting regimes will co-exist or if there will be a convergence of these standards. CRS programs will be inherently complex in nature given the range of obligations, the relatively tight timescales and the instability of requirements. The tools, analysis and learnings from FATCA can provide the starting baseline; however, the differences are so profound that new processes, controls and systems will inevitably be required. All this is taking place in an intense regulatory environment which will place great demands on already constrained delivery resources. Sourcing the required subject matter expertise will be a key challenge. A strategic technical response is critical to meet compliance with AEoI emerging regulations and to reduce the cost of future compliance when new countries come on board or introduce their own version of 10 FATCA. A sustainable and flexible IT architecture should mean that institutions are prepared for new countries joining, or for evolving CRS requirements. Some key considerations for a successful CRS program include: Future proofing and scalability. FATCA and CRS are setting the scene for a wider global tax transparency system, so institutions need to ensure that their IT solutions are scalable and the focus is on the intent of the law as opposed to the letter of the law to achieve sustainable compliance. Managing overlapping and conflicting regulatory obligations and timelines. Financial institutions are dealing with a number of regulations affecting the same underlying capabilities. For example, the KYC and onboarding capabilities are affected by European Market Infrastructure Regulation (EMIR), the Dodd-Frank Act, the Markets in Financial Instruments Directive (MiFID) and the Alternative Investment Fund Managers Directive (AIFMD). While these regulations are different in purpose, scope and technical requirements, they all necessitate efficient and up-to-date, client data processes. Financial institutions should seek to identify synergies between other regulatory programs across key capabilities to establish a single change portfolio to overcome challenges related to resources, budget and future proofing, and to minimize the number of times the bonnet must be raised to implement change. Dealing with tight timetables. CRS delivery schedules are demanding, especially when balanced with other regulatory demands. However, the obligations for KYC, due diligence and reporting are staggered over the next few years. Therefore, institutions should ensure that any delivery strategy allows for individual obligation timelines to be met rather than packaging delivery into one drop with no subsequent flexibility to phase in as required. Consistency of interpretation and application. Institutions with many business units, operating across multiple jurisdictions should ensure consistency of interpretation and application of the regulation. These firms should consider a centralized program team driving interpretation, rule book creation and a standardized operating model. These can then be tailored to local needs if applicable. Data remediation and quality control. Financial institutions are likely to face their biggest challenge in the data gathering and integration space. They should, therefore, not undermine the data remediation work that may be required by starting late. Organizations should conduct a strategic review to assess the benefits of establishing or broadening the single customer view across the organization and weigh it against the effort required to develop localized solutions to make an informed decision. Establishing a robust control environment. Institutions should agree, as early as possible, upon the principles for management of the ongoing compliance and maintenance of the control environment across the organization, including policies, standards and procedures. Ownership, lines of control and responsibility should also be determined. Where possible, firms should try to leverage existing control environment structures. Considering custom versus packaged solution options. Institutions should consider the benefits of a vendor-packaged solution for compliance rules engine and regulatory reporting versus an internal custom build. The key factor driving the decision will be the solution s ability to leverage and extend the existing KYC/AML/FATCA platforms. Considering the wider benefits of the CRS program. The costs of compliance can be high, depending on the make-up of the organization. Considering the wider benefits of CRS change can enhance the business case. These include the benefits of further centralization and remediation of customer data and the opportunities that CRS change can provide the AML/Sanctions team. Establishing and maintaining operational expertise. Across the organization, operational expertise for CRS will be a challenge. A successful implementation will require subject matter experts in CRS legislation, tax, legal and risk, as well as a strong, centralized delivery team. Firms should consider centralization of this knowledge and expertise in a CRS Center of excellence.

11 HOW ACCENTURE CAN HELP Accenture has extensive regulatory change management and delivery experience and has helped many global financial institutions with their FATCA programs. We can help conduct the feasibility studies to identify detailed functional and technical requirements, and help define the appropriate compliance strategy to minimize the impact and cost to the business. Accenture has developed a comprehensive review of the new CRS regulatory requirements. This review covers changes related to due diligence, classification and reporting and also includes a comparison with FATCA requirements across these capabilities. To respond to the new regulatory requirements, we have also developed a target IT architecture framework design as seen in Figure 4 below. The sample IT design includes a new compliance rules engine, which can help clients address all functional and technical business requirements and also helps: Support the customer onboarding process by performing all new functionalities required for customer identification and classification (both for pre-existing and new customers). Interact with legacy systems to collect the data required for classification and reporting. Determine the final CRS status for each customer and manage the self-certification workflow. Report the required customer information to local tax authority and provide a robust reconciliation solution. Accenture has FATCA solution design and delivery experience in over 14 jurisdictions, which can be leveraged to analyze an existing FATCA solution and build a strategic response to CRS in a pragmatic and cost effective manner. We understand the wider regulatory landscape and can help deliver a consolidated compliance transformation program to help minimize the overall compliance cost. Moreover, we have strong industry alliances with third party vendors and can help select and implement the right vendor solution for your organization. Figure 4: Accenture s Perspective on an Architecture Compliant with the AEoI Regime Customer Due Diligence AML/CDD Onboarding Platform Customer identification Pre-existing account due diligence Periodic reviews Compliance Rules Engine (Customer Identification and Classification) Product Blueprint Product classification Accounting and balance information Management Information and Reporting Customer data and transaction reporting Reconciliation and completeness checking Aggregated Positions Securities Cash Account Other Payments AEoI Regulatory Reporting Engine Workflow Management Document management system Self-certification Engine (Electronic document storage and processing) Data Management Compliance data store Customer s Master Data Existing application Enhancements/new logical modules Source: Accenture, November

12 ABOUT THE AUTHORS Jamie Woodhouse is managing director, Accenture Finance & Risk Services. Based in London, he leads Accenture UK and Ireland Finance & Risk Services. Specialized in the financial services space, Jamie brings his broad experience and focus in regulatory and compliance, operating models, cost reduction, capital optimization, post-merger integration and technology to guiding global financial services clients in driving their operational effectiveness and growth agendas. Jamie is also a certified GARP (Global Association of Risk Professionals) Financial Risk Manager (1999). Peter Beardshaw is a managing director, Accenture Finance & Risk Services. Based in London, he leads the UK and Ireland Finance and Risk Management consulting practice. Peter brings nearly 20 years of deep and broad experience in the risk and capital management space, with a focus on large, high profile Capital Markets and Banking clients, assignments and transformations. He and his team craft solutions to address a wide range of prudential, conduct of business, treasury, fraud and financial crime, reporting and data, transformation agenda and associated regulatory and regulatory remediation situations and topics. Sulabh Agarwal is a managing director, Accenture Finance & Risk Services. Based in London, he leads the finance, risk and regulatory work for Banking clients in the UK. With a focus on financial services, Sulabh has extensive experience in transformation engagements and defining and delivering large-scale and complex regulatory programs like Foreign Account Tax Compliance Act (FATCA), anti-money laundering (AML) and Directive on Payment Systems (PSD). He also leads Accenture s global FATCA and Common Reporting Standard (CRS) community of practice professionals. Umer Hamid is a management consultant, Accenture Finance & Risk Services. Based in London, Umer s primary focus is supporting financial services clients in their compliance transformation projects. He has extensive experience in regulatory change management assignments and is a subject matter expert on regulations like Foreign Account Tax Compliance Act (FATCA), the Organisation for Economic Co-operation and Development s Common Reporting Standards (OECD s CRS) and the European Union Savings Directive (EUSD) and leads Accenture s efforts in these areas within the UK and Ireland region. ABOUT THE PUBLICATION This paper looks at the impact of CRS on financial institutions and suggests possible strategies to help meet compliance in a cost effective manner, while driving wider business strategy both from a business and technology perspective. NOTES 1. Automatic Exchange of Information, valid as of October 30, 2014, Organisation for Economic Co-operation and Development website. Access at: org/ctp/exchange-of-tax-information/ automaticexchange.htm 2. Major new steps to boost international cooperation against tax evasion: Governments commit to implement automatic exchange of information beginning 2017, Organisation for Economic Co-operation and Development press release, October 29, Access at: 3. Standards for Automatic Exchange of Financial Information in Tax Matters, valid as of October 30, 2014, Organisation for Economic Co-operation and Development website. Access at: ctp/exchange-of-tax-information/standardfor-automatic-exchange-of-financialinformation-in-tax-matters.htm ABOUT ACCENTURE Accenture is a global management consulting, technology services and outsourcing company, with more than 305,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$30.0 billion for the fiscal year ended Aug. 31, Its home page is DISCLAIMER: This document is intended for general informational purposes only and does not take into account the reader s specific circumstances, and may not reflect the most current developments. Accenture disclaims, to the fullest extent permitted by applicable law, any and all liability for the accuracy and completeness of the information in this document and for any acts or omissions made based on such information. Accenture does not provide legal, regulatory, audit, or tax advice. Readers are responsible for obtaining such advice from their own legal counsel or other licensed professionals. STAY CONNECTED Accenture Finance & Risk Services: financeandrisk/pages/index.aspx Connect With Us groups?gid= Join Us accenturestrategy Follow Us Watch Us Copyright 2014 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture