BearingPoint Tax Reporting Seminar 2016 Regulations, Tax & Reporting Review by SIX Jacob Gertel, Senior Project Manager Legal & Compliance Data November, 2016
Agenda Introduction SIX at a glance SIX Regulatory Overview SIX BearingPoint Page 2
What is the background context? Regulatory environment is comprehensive and continually expanding Too-big-to-fail Investor protection Tax Money laundering We offer data and value added services based on on-going discussion with customers in designated workshops (MiFID, FATCA, Section 871(m)). Page 3
Industry services for wide range of regulations to prevent unnecessary spend on disputes and classification headaches MiFID II CISA Sanctions Swiss Financial Services Act (FIDLEG) Swiss Financial Market Infrastructure Act (FinfraG) PRIIP FATCA / 871(m) EU Financial Transaction Tax Basel III Solvency II Common Reporting Standard (OECD CRS) Page 4
The SIX Value Proposition We provide comprehensive regulatory data and value-added-services for a wide range of regulations to provide its customers with the best possible support for achieving compliance. We aim to reduce the implementation burden for our customers (high costs, processes, monitoring, etc.) Page 5
A diversified business model Swiss Exchange Securities Services Payment Services Reference market for about 35,000 securities Leading exchange for life sciences in Europe Broad offering in the area of exchange-traded funds (1000) Self-regulation under Swiss law Provides an integrated range of post-trade services that are key for Switzerland s financial market International securities depository and custodian in over 65 markets Operates Securities Finance and Payment platforms for the Swiss National Bank Operates the platform for the electronic processing of land registry and mortgage transactions Leading provider of financial information in Europe Leader in the area of reference data International presence in 23 countries 86 years experience in the financial information business Market leader in the acquiring and processing of cards in Switzerland, Austria and Luxembourg and market leader in card issuing in Austria Leading one-stop provider of efficient solutions for cashless payments Offers e-bills and direct debits Page 6
SIX at a glance Founded in 1930 Core business is reference data Swiss brand with deep and longstanding roots in continental Europe Essential piece of the SIX Swiss value chain International player with global focus and local expertise Unique data universe in terms of information depth, breadth and structure Award-winning provider of internationally sourced data Trusted client and industry partner Page 7 11/9/2016
SIX is present in 25 countries all over the world Switzerland Zurich, Olten, Biel, Geneva, Lugano Austria Vienna Belgium Brussels Canada Toronto Czech Republic Prague Denmark Copenhagen France Paris Finland Helsinki Germany Frankfurt, Hamburg Hong Kong Hungary Budapest Ireland Dublin Italy Milan Japan Tokyo Luxemburg Morocco Casablanca Monaco The Netherlands Amsterdam Norway Oslo Poland Warsaw Singapore Spain Madrid Sweden Stockholm, Gothenburg UK London, Edinburgh USA New York, Boston, Stamford CT, San Francisco Page 8
We have 86 years of experience in delivering high-quality financial information to the global financial industry. We are the 4 th biggest data vendor in Europe, the Middle East and Africa. (Source: Financial Market Data/Analysis Global Share & Segment Sizing 2014 by Burton & Taylor.) Our data universe is comprised of 20 million financial instruments. Our IT infrastructure delivers over 100 terabytes of data to our clients monthly. We provide data to support more than 50 national, regional and global regulatory, compliance, and tax requirements. In 2015, we issued 1.777 billion financial instrument price updates. Page 9
We add value by ensuring a continuous flow of high quality information from data source to clients Raw data is supplied by over 1,500 global sources Disparate, diverse, disorderly and inconsistent data is collected SIX aggregates, streamlines, enriches, optimizes and organizes data Deliver consolidated, complete, clean data in a uniform structure ready for our clients to use Page10 11/9/2016
Consistent, accurate, timely and complete data from SIX helps clients grow their business. Page 11 11/9/2016
Systematic management of risk and compliance Regulatory and compliance data Our data is enhanced with regulatory and tax data. Our offering covers the following national and international laws and directives: AIFMD LEI FATCA Solvency II PIB, KIID, and PRIIP Service PEP-Check MiFID Basel III UCITS EU Saving Directives EU Interest Taxation Final Withholding Tax with UK / AT US IRS Withholding Tax French and Italian Transaction Tax SEC Rule 22-C-2 CH/LI Taxable Securities Swiss BVV2 Page12 11/9/2016
SIX Regulatory Overview 1/2 Category Name Description Due Date SIX Implementation Tax Transparency FATCA Foreign Account Tax Compliance Act First phase - In-force since 1.7.2014 Second phase Pass-through and gross-proceeds planned for 2019 Instruments flagged as of 25.1.2014, 32K GIINs mapped to the G-Keys Section 871(m) U.S. tax on dividends on underlying of derivatives (Equity linked Instruments, inclusive swaps) 1.1.2017 Data will be offered as of 1.1.2017. IRS will publish amendments to the Code in mid- November, 2016 (only delta one instruments inscope for 2017) EU FTT EU Financial Transaction Tax Open FTT for 10 EU countries still in the debating phase within the EU Commission final directives are still pending final decision expected in December, 2016 OECD: CRS The OECD Common Reporting Standards were introduced in order to combat international tax evasion 2016 for «early adopters» 2017 Switzerland joins (1 st reporting in Sep.18) SIX will provide the reporting flag for reportable transactions based on the Federal Tax Administration s Guidelines through its corporate actions service EUSD & FWHT data will be further provided by SIX for supporting tax reporting Page 13
SIX Regulatory Overview 2/2 Category Name Description Due Date SIX Implementation Systemic Risk Investor Protection / Market Abuse Dodd Frank Solvency II Directive 2009/138/EC BASEL III AIFMD MiFID I/II & FIDLEG The Dodd Frank Wall Street Reform and Consumer Protection Act (includes Volcker Rule, Swaps Push Out) EU Directive that regulates the amount of capital that EU insurance companies must hold to reduce the risk of insolvency. Global and voluntary regulatory standard on bank capital adequacy, stress testing and market liquidity risk Alternative Investment Fund Managers Directive Markets in Financial Instruments Directive Open LEI is in production as of 25.1.14 as per Now, 80K LEI were mapped to G-Keys 1.1.2016 Offering of CIC code on instrument level and the NACE code on Issuer level Multiple (expected to be globally in force on 2019) Effective as of July, 2014 3.1.2018 FIDLEG (Swiss Federal Services Act ) still in the legislation process with the parliament Providing of Swiss SNB s HQLA and Repo authorized instruments together with other reference data Instruments classification according to the directives is in place. 2014. On issuer level EU passport flagging in process (according to data availability from the ESMA and national regulators) Investor Protection - partnership with SwissQuant Group, development of ImpaQt a portfolio risk assessment service together with required product documentation (PIB/PRIIP-KID) Data offering of MiFID II attributes: Best trading venue, complex/non-complex, reportable instruments, etc. based on our MiFID I offering Page 14
SIX and BearingPoint DATA OPERATIONS BUSINESS RULES REGULATION & COMPLIANCE VALUE VDF TAX DATA TRANSACTION, ASSET CLASS & CLIENT DATA EasyTax Tax rules Classification Calculation Tax reporting Final levy & withholding CLIENTS AUTHORITIES FX Money market Trading BANKING SYSTEMS CRM Output Mgmt Risk Mgmt Page15 15
SIX Partnership with BearingPoint Link: http://www.six-financialinformation.com/en/shared/partner/bearingpoint.html Page16 11/9/2016
Thank you for your attention Page 17 11/9/2016
Disclaimer This material has been prepared by SIX Group Ltd, its subsidiaries, affiliates and/or their branches (together, "SIX") for the exclusive use of the persons to whom SIX delivers this material. This material or any of its content is not to be construed as a binding agreement, recommendation, investment advice, solicitation, invitation or offer to buy or sell financial information, products, solutions or services. It is solely for information purposes and is subject to change without notice at any time. SIX is under no obligation to update, revise or keep current the content of this material. No representation, warranty, guarantee or undertaking express or implied is or will be given by SIX as to the accuracy, completeness, sufficiency, suitability or reliability of the content of this material. Neither SIX nor any of its directors, officers, employees, representatives or agents accept any liability for any loss, damage or injury arising out of or in relation to this material. This material is property of SIX and may not be printed, copied, reproduced, published, passed on, disclosed or distributed in any form without the express prior written consent of SIX. 2015 SIX Group Ltd. All rights reserved. Page 18