Decisive action required in countdown to ‘Global FATCA’

Fund administrators and investment managers must understand new reporting standards prior to their introduction in two months time according to Justin Hayes, product manager at Linedata

The OCED’s Common Reporting Standards will be implemented in countries such as UK, Ireland, France and Germany and Hayes believes that financial institutions must act quickly in order to fully understand the new regulations.

“Early preparation will be critical especially for smaller and mid-sized firms, who will feel the most pressure on resources and costs.” he said. “They will need to be in a position to hit the ground running in January or face the onerous task of retrospectively reporting on unprecedented volumes of investor information when crunch time hits at the end of next year.”

Following a recent review of the first round of reporting in the US, missing documentation and incorrect categorisation of clients were common mistakes of the new standards that have been dubbed the ‘Global FATCA’.

Hayes has also indicated of potential penalties if firms do not comply with the new regulations.

“Penalties for non-compliance will be set by the individual member states, and as well as the reputational damage firms could also face financial fines or even jail time if fraud is suspected,” he adds. “Financial institutions will need to have solid and robust procedures in place to make sure they comply with CRS or face the consequences. “