FATCA: impact on data management. Dominique Tanner, Head of Business Development SIX Financial Information

Transcription

1 FATCA: impact on data management Dominique Tanner, Head of Business Development SIX Financial Information

2 The Key Data Management Challenges Identifying & classifying customers Maintaining accurate counterparty information Identifying instruments subject to withholding Monitoring instruments for Material Modifications 2

3 Maintaining Accurate Counterparty Information US Entity Foreign Entity FATCA Entity Type Non-Financial US Entity US Financial Entity Non-Financial Foreign Entity NFFE Foreign Financial Entity FFI GIIN-Number 98Q96B LE.250 The IRS will maintain a register for all FFIs which have signed the agreement (Participating FFI as well as potentially exempt and deemed compliant FFIs). Entities will be marked as compliant upon information provided by the IRS (The IRS committed to maintain and publish the list). Exempt FFI Deemed Compliant FFI Registered deemed compliant FFI Certified deemed compliant FFI Participating FFI Non-Participating FFI FFI Status 3

4 Sample Extract from the IRS FFI Register The IRS has published a first draft of the information they will make available for compliant FFIs. GIIN,FINm,CountryNm 98Q96B LE.250,Test Bank One,France Financial Institution 98Q96B BR.826,Branch,United Type Kingdom Lead = Q96B BR.036,Branch,Australia Sponsoring Entity 98Q96B BR.076,Branch,Brazil = Single = Q96B BR.818,Branch,Egypt Member = Last 598Q96B ME.276,Test characters of FATCA ID Bank Two,Germany 98Q96B BR.826,Branch,United Kingdom 8124H SP.208,Test Bank Three,Denmark C54S SL.276,Test Bank Four,Germany C54S BR.208,Branch,Denmark 126BM LE.826,Test Bank Five,United Kingdom 126BM BR.250,Branch,France 126BM ME.208,Test Bank Nine,Denmark FATCA ID Country Identifier 126BM ME.276,Test Bank Ten,Germany (first 6 characters) 126BM BR.344,Branch,Hong Kong SE19K SL.250,Test Bank Eleven,France 76GHU BR.036,Branch,Australia 76GHU BR.818,Branch,Egypt 92YNJG BR.076,Branch,Brazil Category Code LE = Lead SL = Single ME = Member BR = Branch SP = Sponsoring Entity 4

5 Identifying Instruments Subject to Withholding FATCA Instrument Tax Status Material Modification In Scope US Security In Scope Materially Modified Security Exempt Grandfathered US Security Exempt Short-Term Obligation Partly In Scope Security Issued by FFI Out of Scope Security Issued by NFFE 30% withholding tax deducted for recalcitrant account holders and non-participating FFIs Previously Grandfathered Security which has undergone a Material Modification and is now subject to withholding Obligations with a fixed maturity date outstanding on 1 July 2014 exempt from 30% withholding tax Obligations which are payable 183 days or less from the date of original issue Subject to the pass-through payment percentage rules for the purpose of the 30% withholding tax Not subject to the 30% withholding tax 5

6 EXAMPLE US Share 6

7 EXAMPLE US Grandfathered Obligation 7

8 EXAMPLE US Short-Term Obligation 8

9 Monitoring Instruments for Material Modifications Grandfathered obligations will be monitored for a series of event types that could potentially be treated as a material modification and hence cause the loss of the grandfathered status. Mergers & Takeovers Bankruptcies & Liquidations FATCA Relevant Events Legal Proceedings Defaults Material Modification? Changes to the Coupon Conditions Changes to the Redemption Conditions 9

10 Monitoring Instruments for Material Modifications cont. Grandfathered Securities Corporate Events Issuer / Agent Create Monitoring List Request Qualification Monitoring List Process Monitoring List FATCA Handling of Material Modifications Update Instrument Tax Status 10

11 Implementation Timeline Regulators Timeline Timeline of SIX /02/2012: Published 19/08/2013 Starting of Proposed 8 February regulations 2012: from IRS Starting FFI registration of FFI with IRS Published registration Proposed with IRS 5/05/2014 regulations from Recommen Summer 2012: Final 1 January ded FFI IRS 2014 regulations from 17/01/2013: IRS IRS published final the Final Regulations /2015: Start of registration anticipated withholding IRS and reporting of US clients personal 7 /8 July 10/11 Nov 6/7 July information 9/10 Nov and /8 July / /7 acc /17 balance Nov 2012 Nov July 2013* VDF * Releases Development Data Offering VDF Release 2/12: FATCA Structures 5/6 July 2014* 5/6 July 2014* 01/07/2014 Grandfathered Obligations cut-off 15/16 Nov 2014* 15/16 Nov 2014* /07/2014 : FATCA withholding begins for new NPFFI, recalcitrant account holders 02/06/2014 IRS posts the first IRS FFI List Issuer Classification (based on IRS-FFI List) 4/5 July 2015* /01/2017: Reporting of pass-through payments, Full info. on US accounts inc. gross proceeds 14/15 Nov 2015* FATCA Instrument Level Status available as of 25/01/ Implementation Pass- Through Payment Information Today 11

12 Thank you for your attention