Indian Financial Institutions given time upto December 31, 2014 to register with US authorities and obtain a GIIN-Sebi

SEBI has given, its registered intermediaries having USA clients, December 31 as deadline to register with the US authorities and comply with the Foreign Accounts Tax Compliance Act (FATCA).

Indian Financial Institutions would have time upto December 31, 2014 to register with US authorities and obtain a Global Intermediary Identification Number (GIIN), said Sebi.

The intermediaries are exchanges, depositories, brokers, mutual funds, portfolio managers, alternative investment funds, depository participants, collective investment schemes and custodians.

The Government of India has advised that India and the United States of America (US) have reached an agreement in substance on the terms of an Inter- Governmental Agreement (IGA) to implement FATCA and India is now treated as having an IGA in effect from April 11, 2014.

FATCA requires foreign financial institutions to disclose the financials of their US clients, including US nationals not resident in the US, to the US revenue authorities.

The time limit would also be applicable to Indian financial institutions having overseas branches in Model-1 jurisdictions. The extension is also applicable to those jurisdictions where an agreement under Model 1 has been reached.

The Government has further advised that if registration of the parent intermediary/ head office is a pre-requisite for a branch to register, such intermediaries may register as indicated above.

Registration should be done only after the formal IGA is signed. However, the IGA may be signed in due course, said SEBI. Overseas branches of Indian financial institutions in a jurisdiction having IGA-2 agreement or in a jurisdiction that does not have an IGA but permits financial institutions to register and agree to a foreign financial institution (FFI) agreement, may register with the US authorities within the stipulated time period and obtain a GIIN to avoid potential withholding under FATCA, it said.

Overseas branches of Indian financial institutions in a jurisdiction that does not have an IGA and does not permit financial institutions to register and agree to an FFI agreement may not register and their overseas branches would eventually be subject to withholding under FATCA.

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