FATCA and CRS
The ‘Foreign Account Tax Compliance Act’ (FATCA) was enacted by the United States Congress in March 2010 as part of its effort to improve compliance with their US tax laws. FATCA imposes certain due diligence and reporting obligations on ‘Foreign (non US) Financial Institutions’, known as FFIs, such as CLSA.
Under FATCA, CLSA has registered itself with the ‘Internal Revenue Service’ (IRS) as a ‘Participating FFI’ and has obtained the ‘Global Intermediary Identifier Numbers’ (GIIN) for the member entities. Accordingly, CLSA is required to identify the account holders who are tax resident in the US, and report their details to the regulatory authorities. The degree to which FATCA affects CLSA’s clients varies depending on the type of account and products traded.
The United States has partnered with over 120 countries to make FATCA compliance a mandatory requirement under their respective local regulations. The detailed FATCA guidance is available on the FATCA portal.
The ‘Organization for Economic Cooperation and Developments’ (OECD) has developed the ‘Standard for Automatic Exchange of Financial Account Information’ (AEoI), also commonly referred to as ‘Common Reporting Standard’ (CRS). This requires financial institutions such as CLSA to identify the tax residencies of their account holders and report the same to the local tax authorities.
Over 100 jurisdictions have signed the ‘Multilateral Competent Authority Agreement’ (MCAA), which contains the detailed rules that govern the exchange of information amongst the signatory jurisdictions. The complete list of participating countries and the status of local guidance is available on the CRS portal.
CLSA’s policies and practices in relation to personal data are available here. Please also read our ‘Code of conduct’, ‘Password agreement’ and ‘Copyright and trademark notice’ whilst using this site.