02.25b – Excepted Inter-affiliate FIs

To mirror the categories in the U.S. Regulations certain group companies (likely to be holding companies or treasury centres of international groups) will be regarded as Certified Deemed-Compliant Financial Institutions.

This category applies to an entity that is a member of a participating FFI group if-(A) The entity does not maintain financial accounts (other than accounts maintained for members of its expanded affiliated group);

(B) The entity does not hold an account with or receive payments from any withholding agent other than a member of its expanded affiliated group;

(C) The entity does not make withholdable payments to any person other than to members of its expanded affiliated group that are not limited FFIs or limited branches; and
The entity has not agreed to report under §1.1471-4(d)(1)(ii) or otherwise act as an agent for chapter 4 purposes on behalf of any financial institution, including a member of its expanded affiliated group.

Participating FFI group

A participating FFI group is

  • an expanded affiliated group that includes one or more participating FFIs; or
  • expanded affiliated group in which one or more members of the group is a reporting Model 1 FFI and each member of the group that is an FFI is a registered deemed-compliant FFI, non-reporting IGA FFI, limited FFI, or retirement fund described in §1.1471-6(f) [these are the Exempt Beneficial Owner categories of retirement fund].

Participating FFI

A participating FFI is an FFI that has agreed to comply with the requirements of an FFI agreement, including an FFI described in a Model 2 IGA that has agreed to comply with the requirements of an FFI agreement. The term participating FFI also includes a QI branch of a U.S. financial institution, as long as the branch is not a reporting Model 1 FFI.