Markit, a leading, global financial information services company, and Compliance Technologies International (CTI), a leader in cutting-edge global tax withholding and information return reporting technology, consulting, and outsourcing services, today launched the FATCA Service Bureau, a new service designed to help financial institutions of all types comply with the Foreign Account Tax Compliance Act (FATCA).
The FATCA Service Bureau unites the capabilities of Markit Counterparty Manager and CTI's specialised tax validation and reporting systems to offer a best-of-breed solution that combines sophisticated document management, automated tools for Internal Revenue Service (IRS) registration and e-tax form submission. For the thousands of funds and other financial institutions required to register as a Foreign Financial Institution (FFI) under FATCA requirements, the FATCA Service Bureau provides tax domain expertise and operational efficiency in a low-cost solution.
Jeff Gooch, Managing Director and Global Head of Processing at Markit, said: "FATCA compliance is another process-intensive requirement placed upon the financial industry that demands an automated solution. Combining the know-your-customer functionality, document management and reporting tools offered by Markit with CTI's unparalleled domain expertise gives the global fund industry an efficient way to manage FATCA compliance."
Cyrus Daftary, Co-Founder and Executive Director at CTI, said: "Working with Markit to expand our outsourcing operations into the FATCA Service Bureau makes it easy for funds and financial institutions to have their FATCA compliance needs met by our team of experts. We focus our attention on their FATCA compliance needs, so these institutions can focus on their business."
The FATCA Service Bureau will perform all aspects of FATCA compliance on behalf of its customers as a fully- outsourced service provider, including the following:
- Determine correct FATCA classification
- Perform gap analysis on account documentation
- Validate tax forms and other account documentation
- Generate withholding statements and blended withholding rates for Chapter 3 requirements
- Complete the FFI agreement and verify the FFI EIN
- Issue FATCA reporting to the IRS and relevant investors
FATCA requires FFIs invess invested in US assets to document their clients such that they can affirm to the IRS that they are not aiding US persons in evading US taxes. It further requires FFIs to report the identities of their US investors and report financial information each year to the IRS. It is estimated that the law will impact over 300,000 financial institutions and their funds across virtually every asset class.
Markit Counterparty Manager is the service formerly known as Markit Document Exchange. Markit renamed the service to reflect better the tools it offers to help clients streamline counterparty interactions and manage information sharing within financial markets and with regulators.