SEBI issues reporting requirements under FATCA

SEBI issues reporting requirements under FATCA

March 23, 2018 Corporate 0

The Securities and Exchange Board of India (“SEBI”) vide a Circular (IMD / FPIC / CIR / P / 2018 / 53) dated 21st March, 2018 on its website, informed about the due diligence and reporting requirements (“Requirements”), to be followed by all intermediaries including Reporting Financial Institutions (“RFI”), under the Income Tax Rules, 1962 (“Rules”), Foreign Account Tax Compliance Act (“FATCA”) and Common Reporting Standards (“CRS”) issued by the Central Board of Direct Taxes (“CBDT”).

The present Circular provides for instructions and guideline for the Designated Depository Participants (“DDPs”)/ Custodians of Securities for proper implementation of the afore mentioned reporting requirements.

Key Highlights:

The RFIs will be required to comply with the following:

  • Obtaining valid self-certifications / FATCA and CRS declaration forms with documentary evidence as part of the account opening documentation in relation to FATCA / CRS.
  • Developing a framework for carrying out due diligence procedures and for maintaining reporting information.
  • Furnishing relevant information in Form 61B of the Rules within timelines as provided under sub-rules (7), (8) and (9) of Rule 114G of the Rules
  • Certify to SEBI on an annual basis regarding compliance with the provisions of Rules 114F to 114H of the Rules..

Background:

India had signed an Inter-Governmental Agreement (IGA) with the United States of America for Improving International Tax Compliance and implementing the FATCA. India had also signed a multilateral agreement to automatically exchange information in Tax Matters under the CRS, formally referred to as the Standard for Automatic Exchange of Financial Account Information (AEoI).

In this regard, the Government of India had amended the Rules, by inserting Rules 114F (definitions), 114G (Information to be maintained and reported) and 114H (due diligence requirement), for operationalization of the IGA and CRS.

Consequently, the Reserve Bank of India had, vide a notification dated 25th August, 2015 (please refer to the attached document “RBI_FATCA”), directed all concerned financial institutions to refer to the amended Rules and comply with the reporting requirements under them.

In this regard, SEBI had issued circulars No. CIR/MIRSD/2/2015 dated 26th August, 2015 and No. CIR/MIRSD/3/2015 dated 10th September, 2015, regarding such due diligence and reporting requirements to be followed by financial institutions. This circular is issued in continuation of the previous circulars.

Please refer to the hyperlinked source below for further details.

SourceSecurities and Exchange Board of India

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