By Ras Sipko, KOGER – For the past four years, alternative fund managers with US investors have been coming to terms with the far-reaching effects of the Foreign Account Tax Compliance Act or FATCA. Some 60-plus countries have signed up to cooperate with the IRS in order to enforce FATCA and this year the compliance burden is set to grow yet again. On 31st May 2017, fund managers will have to submit their first filing under the OECD Common Reporting Standards initiative, which can best be thought of as global FATCA or 'GATCA'.
Creating an internal programme to comply with FATCA/GATCA is the first massive hurdle for many firms. This includes, at a minimum, creating business procedures for the following critical items:
Collection of data & documents
- Organising and gathering all relevant account holder information.
- Tracking and storing government documentation.
Categorisation of in-scope accounts
- Tracking aggregate balance of the account holder and underlying beneficial owners.
- Incorporating depository accounts, custodial accounts, equity or debt instruments, and certain insurance and annuity contracts.
Identification of US indicia
- Collecting and storing indicia; that is, characteristics or identifiers which indicate country of origin or resident status in order to identify responsible parties for tax withholding.
Further review and reporting
- Internal reporting on all types of acquired data.
- Reporting to governmental agencies.
Against this complex backdrop of increased global regulation and compliance, KOGER USA has developed an efficient, scalable `cure' to remedy the solution. Known as KURE (KOGER Universal Regulatory Engine), it helps clients to coordinate the management of all aspects of compliance, providing an automated approach that reduces many labour intensive manual tasks.
KURE is able to increase efficiency by offering:
- Complete tracking of underlying investments and beneficial owners, in even the most complex fund structures.
- Automatic extraction of indicia such as citizenship details, Tax IDs, GIINs, and other relevant fields from existing holder records.
- Automatic extraction of all parameters and data from government forms.
- Dynamic adjustment of compliance status based on indicia documents' expiration dates and real-time monitoring of asset levels.
Key features of the KURE AML/KYC module include:
- Custom risk scoring: We customise the system to store the specific risk assessment criteria and use the same risk level assignment paradigm as is used by your specific organisation uses.
- Risk-level-based document tracking: Assigned risk level dictates what specific documentation is required and monitored for receipt.
- Scalability for any sanction/PEP list provider on the market: Whether free or purchased, our flexible solution can interface with any single list or multiple lists one chooses to utilise.
- Ability to interface with other third party fund administration systems: KURE can serve as a central repository for all of your clients' compliance-related data, regardless of whether or not their funds are administered by Koger products.
- Report withholding and automated email notification of outstanding documents: The system automatically withholds reports from recalcitrant investors and informs them of outstanding document requests.
- A team of analysts, business users, and programmers constantly monitors industry trends and regularly enhances the system to be in sync with the latest regulatory changes and reporting standards.
We at KOGER® believe that the KURE application, now, more than ever, provides a uniquely scalable, flexible, and unified solution for efficient management and increased automation of both your anti-tax-evasion-law compliance and operational due diligence responsibilities.