Bermuda (PRWEB) November 20, 2014
As part of an initiative to better understand client requirements in accordance with FATCA regulation, software development company, Blue Bison recently conducted a FATCA Readiness Self-Assessment Survey among financial institutions across seven jurisdictions – including Bermuda and Cayman – which revealed some interesting results.
More than half (52%) of respondents reported that the greatest challenge when preparing for FATCA is actually understanding the requirements such is the complexity and ambiguity of the regulations.
As a result, almost a third (30%) of respondents are still unsure as to the specific impact of the new reporting requirements on their respective firms, although most agree that FATCA will negatively impact their relationships with US clients, with many US citizens being rejected by banks and financial institutions which could lead to legal challenges.
The survey set out to measure the state of readiness for FATCA within the financial services industry and to identify the point companies have reached within the FATCA adoption process. Questions were directed in three key areas, namely, strategy & planning; people, policies & processes; and tools & technology. Based upon their answers, respondents were provided with an aggregate score as to where they are on a scale of one to five with an interpretation of their results and suggestions as to what they need to do next. The higher the score the more prepared the firm is for FATCA monitoring and reporting.
Across all jurisdictions the largest segments were scored as at two or three on the scale indicating that FATCA preparations had commenced or are in progress. This suggests that most firms have reviewed their processes and registered with the US Internal Revenue Service, but have not extended into entity classification and client contact. Of the jurisdictions polled, Switzerland scored highest in terms of overall readiness with Bermuda and Cayman scoring below the average.
Commenting on the research, Richard Parker of Blue Bison said: “Financial institutions are getting to grips with FATCA ahead of withholding and reporting coming into effect from January 2015. However, it is evident that many firms underestimate the volume of work involved and intend to use manual processes and forms for individual and entity classification. As FATCA is likely to be just the start of further inter-jurisdictional tax regulation such as the OECD Common Reporting Standard, there is a risk that some firms will be overwhelmed with client monitoring and reporting requirements”.
The Foreign Account Tax Compliance Act (FATCA) requires foreign financial institutions to report information related to the ownership by US persons of assets held overseas. Initial reporting of US persons and controlling entities becomes due on 31 May 2015.
To receive a copy of the survey, or for further information please contact:
Blue Bison Software by Ignition
About Blue Bison
Blue Bison was established in 2002 in the Cayman Islands. The company established a strong track record of providing Governance, Risk and Compliance (GRC) software solutions to the offshore financial services sector and was acquired by the Ignition Group of Technology companies in April 2013.
The team offers clients the technological skills as well as the industry and market knowledge to ensure that solutions are in line with current and future business needs. As part of The Ignition Group, Blue Bison is able to offer 24x7x365 service via a SSAE 16 approved Service Desk to provide comprehensive application support.
Blue Bison provides client service directly from Bermuda, Cayman, Canada, India and EMEA and our expanding Partner Channel extends our capabilities globally.