Markit, a decade old London company originally formed to create a daily valuation service for traders of contracts for differences, said the new tool, the FATCA Service Bureau “combines US tax law expertise, client documentation review, IRS registration and tax form validation and reporting”.
The Foreign Account Tax Compliance Act will require what it refers to as “foreign financial institutions (FFIs)”, which are invested in US assets to document their clients in order to confirm to the Inland Revenue Service they are not aiding US investors to avoid US taxes. The Act also requires FFIs to report the identities of their US investors and report financial information each year to the IRS.
Markit said that it is estimated that the law will impact more than 300,000 financial institutions and their funds “across almost every asset class”.
The FATCA Service Bureau provides companies with “sophisticated document management, automated tools for IRS registration and e-tax form submission”, Markit said in a statement.
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.”
