100930 – Financial Institutions: Non-Reporting Financial Institutions: Owner Documented Financial Institutions

The Owner Documented Financial Institution (ODFI) is a concept found in the US FATCA Regulations (s 1.1471-5(f)(3)) which can be used for FATCA purposes (see FATCA Guidance at paragraph 2.25) where it is beneficial for the Financial Institution.

In general, ODFI classification is intended to apply to closely held passive investment vehicles that are Investment Entities by virtue of being managed by a Financial Institution, where meeting the obligations under the US Agreement would be onerous given the size of the entity. It is, however, quite limited in its effect as it is necessary for all Reportable Accounts of the ODFI to be maintained by the ODFI. The single largest benefit to the ODFI is that they do not have to register with the IRS to obtain a Global Intermediary Identification Number (GIIN) as the Financial Institution managing the Investment Entity can report for the ODFI using its own GIIN.

ODFI is not a Non-reporting Financial Institution category under either the DAC or the CDOT regime. However, a similar outcome can be obtained where the ODFI for FATCA purposes employs the Financial Institution undertaking the ODFI’s reporting obligations under FATCA as a third party service provider. This service provider can carry out the ODFI’s reporting obligations under the DAC and CDOT regimes.