Tags and monitors grandfathered securities ahead of new regulation
Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals, today announced the launch of a new solution to help financial institutions, including custodian banks, better prepare for the Foreign Account Tax Compliance Act (FATCA). The Thomson Reuters FATCA Grandfathered Obligations (GO) solution will identify and tag securities of US sourced dividends, interest and other fixed or determinable annual/ periodic income (FDAP income) and those that are exempt (Grandfathered) from FATCA withholding as of January 1, 2014, the date that the new regulation takes effect.
The launch of Thomson Reuters FATCA GO solution supports Thomson Reuters vision to connect and enable the global financial community and builds on the growing portfolio of solutions that Thomson Reuters provides to assist firms in taking a multi-disciplinary approach to FATCA.
“As the global financial community adjusts to new and pending regulation, FATCA serves as one of several types of regulations that will affect how our clients report and conduct business in the very near future,” said Debra Walton, managing director and head of Enterprise Content at Thomson Reuters. “Our primary role is to provide solutions such as Thomson Reuters FATCA GO that help our growing client base meet their business and regulatory obligations.”
Filtering nearly ten million records within Thomson Reuters core databases to identify securities that will be impacted by FATCA, this solution will provide a comprehensive source of securities generating FDAP income and those that meet the IRS requirements as Grandfathered Obligations. Pending further guidance from the IRS, Thomson Reuters will also monitor material modifications that may remove an exemption from FATCA withholding. Future plans include monitoring the registration status of Foreign Financial Institutions “FFIs” in terms of their compliance with FATCA reporting. The Thomson Reuters FATCA GO solution eliminates the need for companies to create their own development program, allowing them to focus on running their business.
“The impact of knowing which securities are grandfathered will drive organizations’ tax withholding calculations and could have implications regarding their ability to comply with FATCA regulations,” said Tim Lind, global head of Middle Office at Thomson Reuters. “We worked closely with several of our clients to better understand their specific needs around FATCA and in turn designed a FATCA GO solution to provide clients with the information they need to act now. With all the uncertainty regarding the impact of regulation, banks are doing everything they can to comply with new disclosure rules; often this means looking to third parties for accurate data. We believe Thomson Reuters FATCA GO will be a critical asset to help our clients manage regulatory changes.”
Thomson Reuters FATCA GO solution is powered by Thomson Reuters DataScope suite, which will deliver files and reports for clients via FTP infrastructure in the DataScope product. Files will be updated to ensure clients are compliant with the latest developments. Thomson Reuters DataScope, the strategic data delivery platform for non-streaming content globally, is a full cross-asset offering with intelligently linked data for all Thomson Reuters DataScope content including reference data, corporate actions, legal entity data, end-of-day/intraday pricing and evaluated pricing services.
The launch of Thomson Reuters FATCA GO further establishes Thomson Reuters credentials in the FATCA space, following the development of Thomson Reuters for FATCA Solution launched in January. Thomson Reuters for FATCA Solution combines Thomson Reuters content and assets from its Governance, Risk & Compliance, and Tax & Accounting businesses. It offers modules for On-Boarding, featuring US indicia search; Self-Assessment, including W-8 and W-9 form preparation and collection; and Tax Information Reporting, which enable organizations to identify, maintain and validate their customer records to assist in FATCA compliance.