Citco updates Æxeo Investor for US tax act

Due diligence and form filling for FATCA begins in earnest as July 2014 deadline approaches – but Citco can help

This year will see implementation of the most meaningful component of the US Foreign Account Tax Compliance Act, or FATCA as it is better known.

From July 1, 2014 all new investors will be subject to enhanced due diligence in order to be rendered FATCA-compliant. For most investors, this will generally mean that they will have to complete and submit more extensive IRS tax forms (W-8BEN, W-8IMY, W-9, etc.). Any investor deemed as non-compliant will be considered recalcitrant and potentially subject to withholding on their investment.

Additionally, many offshore funds will need to register with the IRS as Foreign Financial Institutions or FFIs. Registering as an FFI entails completing an extensive diligence exercise on the fund’s existing investor base to appropriately classify each investor. Many countries are also in process with, or have already concluded, one of two models of intergovernmental agreements (IGAs) with the USA. Depending on the form of IGA agreed, these will also have an impact on how FATCA applies to the funds in these jurisdictions.

Dedicated FATCA team

Since the enactment of FATCA, Citco has been offering its FATCA pre-existing service to assist clients with meeting their FATCA obligations. Our dedicated FATCA team undertakes a detailed analysis of the data necessary to comply with the requirements, such as legal entity classification, investor classification, gap analysis and remediation. We also work with our clients on the development and implementation of a compliance program to support FATCA, based on the final rules and IGAs.

In order to facilitate the implementation of FATCA for new investors on-boarding from July 1, 2014, Citco has partnered with Comply Exchange. The Comply Information Exchange platform facilitates the on-line submission of appropriate information and allows completion of the new IRS Forms W-8 and W-9 for investors.

We have also enhanced our proprietary transfer agency system, Æxeo Investor, to ensure appropriate data capture and monitoring, as well as facilitating the required reporting under FATCA.

We continue to closely monitor developments with FATCA and the potential impact of ongoing negotiations on the IGAs and will issue regular bulletins on this subject.

27th February 2014

Our contacts

Greg Fenlon

Greg Fenlon

Head of Alternative Investor Services, Fund Services

T+1 212 401 9600