SIX Financial Information has joined the growing band of market data vendors preparing to meet the reference data requirements of the US Foreign Account Tax Compliance Act (Fatca). While Fatca regulation is not expected to be finalised until next year, ahead of the act coming into effect on 1 January 2014, SIX Financial Information is enhancing the reference data structure of its Valordata Feed with a view to completing and testing its data provision once regulatory requirements are clearly defined.
In essence, Fatca requires foreign financial institutions (FFIs) with US clients to carry the burden of tax reporting to the US Internal Revenue Service (IRS). Banks are expected to enter contracts with the IRS ahead of the compliance deadline, with failure to comply potentially costing FFIs 30% withholding tax on all payments from US sources.
SIX Financial Information has delivered early elements of its Fatca data solution in the latest release of Valordata Feed. These include the structures and labels required to mark institutions and instruments affected by Fatca. The implementation of rule sets to classify instruments that fall within Fatca and any sources needed to populate the structures will only be done after the IRS has issued final regulations and relevant sources become available.
Jacob Gertel, senior project manager of legal and compliance data at SIX Financial Information, explains: “We decided to provide Fatca data as it is our strategy to provide customers with the data required to meet regulatory, tax and compliance requirements. Instrument data for Fatca will be based on our existing data coverage of close to 11 million instruments. We are awaiting more details about the implementation of Fatca, but our goal is to get corporate data, such as data covering participating FFIs, from the IRS, if it is available.”
Ivo Bieri, head of business development at SIX Financial Information, adds: “We are gradually incorporating structural changes into Valordata Feed to give our clients sufficient adjustment time and ensure that when Fatca comes into effect we can focus purely on accuracy and quality of data.”
SIX Financial Information will deliver data required for Fatca compliance as part of Valordata Feed’s regulation, tax and compliance stream. The data will also be accessible via the Telekurs iD display service, although Gertel expects most customers to select the Valordata Feed option.