Guidance still being updated
The 1 July 2014 effective date for the implementation of FATCA has passed and Citco has been busy implementing our compliance solution.
All new investor subscriptions as of 1 July must be accompanied by a completed IRS tax form or self-certification statement with the appropriate FATCA representations. Most funds have now registered with the IRS, with Citco’s assistance where appropriate.
Due to the late release of instructions for tax forms by the IRS, as well as the ongoing finalisation of many intergovernmental agreements, ensuring FATCA compliance has been iterative and challenging.
For example, recent clarification from the Cayman Islands authorities sets out guidance on the acceptable documentation standards under the US and UK FATCA regimes. This confirms that US tax forms (W-8/W-9) and/or self-certifications can be used by Cayman-domiciled funds to establish the status of investors under US FATCA, while self-certifications appear to be sufficient under UK FATCA.
We expect that self-certifications will be appropriate across the majority of non-US jurisdictions in the context of the future OECD Common Reporting Standard, given that they provide an all encompassing statement of a tax payer’s residence status (e.g. dual tax residence).
Citco continues to enhance procedures for investor on-boarding and has generally opted to perform compliance of new investors at no additional cost to the fund. We have also commenced the remediation process for pre-existing investors.
In particular, we are seeking to avoid making multiple requests for documentation during on-boarding to investors with several investments in Citco-administered funds. We suggest that the most efficient approach is for investors to complete the relevant electronic forms that have been created through our partnership with Comply Exchange.
19th September 2014