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GoldenSource, SIX Provide FATCA Solution for Big UK Bank

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GoldenSource has secured its first customer for the US Foreign Account Tax Compliance Act (FATCA) solution it has developed using its enterprise data management (EDM) platform and Connections service. The customer, a UK-based global universal bank, has also signed a contract with SIX Financial Information to provide data for the FATCA solution.

The GoldenSource Connections service was introduced to the market this summer and manages interfaces between the company’s EDM platform and vendors of FATCA-related data. Using Connections, entity, instrument and customer data from an array of vendors can be pre-mapped into the GoldenSource data model, providing a consolidated and validated FATCA data set, as well as cross-reference data integrity across multiple vendors.

At the moment, the GoldenSource solution supports FATCA data from SIX Financial Information, Thomson Reuters DataScope and Interactive Data. Neill Vanlint, managing director at GoldenSource, explains that Connections is used to load vendor data onto the EDM platform, which maintains golden copies of FATCA attributes around customers and counterparties, and distributes the data to downstream systems.

He doesn’t rule out adding further data vendors to the service, but notes that the three included so far are among the largest providers of FATCA data and that SIX Financial Information reacted quickly to the call from solution providers for FATCA data and was first to market with rich content including FATCA data at instrument level.

Vanlint points out: “The market is realising that FATCA is not just a customer-centric problem. It also requires instruments to be flagged, as well as securities that are grandfathered within the scope of FATCA.”

While the deadline for FATCA reporting has been postponed by six months to July 2014, Vanlint reports an avalanche of interest in the GoldenSource solution and says large financial institutions, where FATCA is a big issue, have been the first to mobilise. With about 45 customers worldwide, Vanlint suggests about half will have to respond to FATCA requirements and that new EDM customers may also select Connections to support FATCA compliance.

SIX Financial Information has signed other clients for its FATCA data across Europe, although it says it is experiencing a slight slowdown as a result of the postponement of the regulation, the client interest is still high.

Harald Rudolph, senior product manager at SIX Financial Information, explains the company’s approach to FATCA, saying: “We have been working on our FATCA data service for about two years in cooperation with clients and industry experts. FATCA data will be offered as a separate module to our clients in order to improve straight through processing.”

SIX Financial Information is delivering the FATCA reference data module through its Valordata Feed and has developed the solution within the Valordata Feed data model. This enables links between FATCA entity types and Foreign Financial Institutions (FFIs), as well as links to tax status at the level of individual instruments to support tax withholding.

As well as covering the data points required by FATCA, Valordata Feed can link the Global Intermediary Identification Numbers, which the US Internal Revenue Service is introducing to identify FFIs, with other company identifiers such as the Legal Entity Identifier and the DUNS Number.

Recognising the volume issues raised by FATCA as so many instruments are involved, SIX Financial Information is easing the implementation burden by using test data to work with clients ahead of full-scale implementation. The test data can be used to address issues such as grandfathered obligations, which can move into the scope of the regulation as a result of material modification, by making these obligations visible in the FATCA data.

Jacob Gertel, senior project manager of legal and compliance data at SIX Financial Information, picks up on the postponement of the FATCA implementation deadline, saying customer uptake has slowed a little in the short-term, but he adds: “Financial institutions are realising that FATCA is approaching fast and some are not as advanced as they wish to be. We started working on FATCA early and can use our expertise to help clients be compliant.”

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