What is it?

FATCA has been dubbed a revolution in tax withholding, tax reporting, and customer management. Starting in 2013, a wide range of financial firms will fall under the remit of FATCA. It will have an impact on Banks (both retail & private), Broker Dealers, Custodians, Investment funds, Mutual funds, Pension Funds, Insurance Companies, Hedge Funds and Private Equity firms amongst others.

Institutions based outside of the US will need to register as Foreign Financial Institutions (FFIs) under FATCA and will be subject to various reporting requirements.

Firms based in the US cannot simply ignore the legislation because their main place of business is the US. They will also be impacted as the law requires them to enhance the information they collect, for example on foreign financial institutions (FFIs) they do business with.

No firm will want to risk non-compliance. The penalties for non-compliance that will be applied are to serve as an incentive for increased transparency and reporting compliance. Their objective is to be an effective deterrent against fraud and to bring about a greater focus on due diligence on the parts of banks and other financial institutions.

 

Data Management Implications

One of the main consequences/implications of this legislation is the increased amount of data that will need to be collected and analyzed. In order to comply with FATCA, financial firms will, at the very least, need to modify existing workflows and processes. In most cases, they will need to deploy entirely new systems.

It all starts with good quality customer data. Without it, FATCA compliance cannot be achieved. You will need an effective data management solution that aggregates data spread across different geographical jurisdictions, different business lines and sometimes different IT infrastructures.

Once data is collected, a thorough exercise of data cleansing (normalization, mapping, matching, …) will need to be completed in order to ensure deduplication and alignment of the information that needs to be analyzed and reported upon.

However, it is not enough to clean your customer data once in preparation for the impending deadline. To ensure continued compliance, you will need workflows and processes that guarantee accuracy and consistency of data on a continuous basis.

For us, data cleansing is not a one-time task; it is an ongoing process. You can therefore put your mind at rest knowing you will be able to achieve continued compliance.

 

How can we help?

Information related to counterparties potentially falling under FATCA reporting requirements is often scattered across the enterprise. We facilitate the collection of data irrespective of its location. Once information is imported on EDMS, you can classify, report and monitor the status of all new and existing legal entities, ensuring compliance with FATCA and all related KYC, AML and Client Onboarding procedures. Our focus is on reducing manual input and automating tasks as much as possible (data entry, data collection, data classification, ongoing monitoring).

EDMS is that centralized platform where you can quickly find customer documentation and where entity data is dynamically maintained. You can easily connect/integrate EDMS to/with downstream or upstream systems to disseminate consolidated information throughout the enterprise. This ensures accurate and complete data is used to prepare the required reporting.

 

Benefits

  • Streamlined client identification and classification
  • Single view of the client & ongoing monitoring of client information
  • Capture and management of complex legal entity hierarchies
  • Centralized repository of legal entity data and documentation
  • Full transparency across silos
  • Increased efficiency of internal processes
  • Faster implementation time and lower project costs
  • Easy integration with existing processes, systems and workflows

You can rely on us to alleviate the pain associated with FATCA compliance. Our approach is to provide an effective entity data management solution that will make an arduous task easier. Ultimately, with our help, your auditors, your executives and, importantly, your regulators can be assured that your reporting is consistent, complete and accurate.