Don't Delay, Do Fatca Compliance Today

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Experts on the US Foreign Account Tax Compliance Act (Fatca) spot hurdles including governments' agreements, data security and incomplete parts of the rules, but say that shouldn't delay anyone from getting prepared

We cannot claim this is the most scientific and rigorously conducted survey, but the response to a poll question in our September 6 webcast, "The Impact of Fatca on Data Operations," with about 500 attendees participating, yielded a 60-40 split on respondents' firms' preparedness to comply.

The two-thirds majority either had plans being implemented or counted themselves as completely prepared to comply. But that still leaves a third of those respondents who are either still drafting compliance plans or haven't started to do anything yet. Jacklyn Osborne, Americas chief data officer at HSBC said, in reaction to the poll results during the webcast, that she was "surprised" that 15% had not started considering Fatca compliance measures.

That's in line with what Steve Young, chief executive at consultancy Citisoft, who champions a metadata repository as a way to address Fatca compliance, thinks about the progress being made. "Some firms are well progressed, while others are still unclear as to how they will address the requirements," he says.

Differences in intergovernmental agreements between countries concerning Fatca compliance mean there are multiple parts to that compliance for international firms, Young explains. That is just one hurdle for those making plans or who haven't started yet.

During the webcast, Amir Halfon, chief technologist, financial services at MarkLogic, an unstructured data services provider, pointed to privacy and security concerns that have arisen due to Fatca compliance. Young also raised this issue.

While there is a lot that the US Internal Revenue Service still has to define under Fatca for firms to consider for preparedness, the lack of specifics shouldn't tempt firms to hold off on compliance efforts, Young counsels. "Anyone who is using a potential delay as a contingency plan is being very naive," he says. "Relying on predicting governments and legislators is not an approach I would recommend."

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