04.01 – General Requirements

The Agreement sets out that Financial Institutions are responsible for the identification and reporting of Financial Accounts held by Specified US Persons.

A Financial Institution can rely on a third party service provider to fulfil its obligations under the legislation, but the obligations remain the responsibility of the Financial Institution and so any failure will be seen as a failure on the part of the Financial Institution.

Example 1

A fund may use a transfer agent, or other person such as a FA to fulfil its due diligence requirements or a company may use a business process outsourcing provider to fulfil its due diligence requirements. However, in the event of any irregularities or failure to meet the legislative requirements the Financial Institution, in this case, the fund, will be held accountable.

A Financial Institution will need to follow one or more of the following three processes for identification of account holders:

  • Indicia search
    • the Financial Institution can identify Reportable Account’s by searching for US indicia by reference to documentation or information held or collected by maintaining or the opening of an account; this may include for example information held for compliance with UK AML/KYC rules.
  • Self certification
    • by obtaining a self certification from an account holder or Controlling Person of a Passive NFFE where applicable.
  • Publicly available information (for entities only)
    • a Financial Institution may be able to determine, using information publically available, the FATCA status of an entity account holder