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TMCNet:  Blanket approach to FATCA could miss unit-level intricacies

[December 14, 2012]

Blanket approach to FATCA could miss unit-level intricacies

Dec 14, 2012 (Datamonitor via COMTEX) -- Some firms are applying FATCA strategies across a number of business units. While this provides scope for clear group-level compliance, operating intricacies will make implementation difficult at unit level. An IT solution that ensures regulatory compliance and a strong relationship between the project team and separate business units will enhance the translation of FATCA into day-to-day business.
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In some larger firms, project teams are developing strategies from above specific business units in an attempt to create group-wide FATCA strategies that clearly demonstrate compliance from the highest level. This is wise when the US authorities are hunting for any sign of non-compliance. However, this also poses a challenge.

Transposing a FATCA strategy developed by a standalone team directly onto a wealth management unit ignores local (i.e. unit-level) operating intricacies. Granted, deviating from a company-wide approach will increase complexity, but in collaboration with a FATCA IT solution and organized two-way communication, local implementation can be more effective.

Firstly, an IT solution that manages and prescribes client onboarding and existing client due diligence required under FATCA and automates client documentation and client indicia identification will make sure that relationship managers remain compliant in their day-to-day business and help maintain the FATCA compliance of a wider firm.

Secondly, in translating a FATCA strategy to the front office workforce, the project team must also function as a forum whereby individual cases can be brought to light and approaches and responses adequately formulated in line with both the interests of the client and the compliance commitments of the firm. Designated employees should become intermediaries between front office staff and FATCA project teams. A designated representative of a wealth management unit should ideally work with the project team from the beginning to build up a strong communication relationship that can be called on in the future when ambiguity arises.

For more information about this topic please consult the Datamonitor report FATCA: Global Wealth Manager Responses (November 2012, CM00213-006) or contact Edward Felmingham at efelmingham@datamonitor.com.

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