Posts Tagged ‘Regulation’

FATCA Frequently Asked Questions End-of-Year Update

Posted by William Byrnes on December 31, 2013

On December 27, 2013 the IRS issued a new FATCA FAQ (FAQ #29) to explain Notice 2013-43 (Revised Timeline and Other Guidance Regarding the Implementation of FATCA).

Q29.

Why did my registration status change to Registration Incomplete and how do I submit the registration again?

Notice 2013-43 stated that after January 1, 2014 the FI will need to submit a final registration. If an FI submitted a registration prior to this date, the registration status will be systemically updated to Registration Incomplete on December 31, 2013. The registration system will be unavailable during this time.Beginning on January 1, 2014, you can login to your FATCA account, and resubmit your registration by selecting “Registration – Edit/Complete/Submit” under the Available Account Options on your home page. You will be asked if you want to change your status to Initiated. Select yes, and review each page of the registration, making any necessary updates, and clicking the “next” button at the bottom of each page to continue. When you get to Part 4 of the registration, complete the information, and click on the Submit button. Your registration status will then be updated to Registration Submitted. You can go back at any time to update information.

Read my previous FATCA coverage of the recent end of year releases regarding the new FFI Agreement, Registration Portal, GIIN issuance, among related topics > herein <

FATCA Compliance Program and Manual

Fifty contributing authors from the professional and financial industry provide expert analysis within the LexisNexis® Guide to FATCA Compliance (2^nd Edition): many perspectives – one voice crafted by the primary author William Byrnes. The second edition has been expanded from 25 to 34 chapters, with 600 pages of regulatory and compliance analysis.

The previous 25 chapters have been substantially updated, including many more practical examples to assist a compliance officer contextualize the regulations, IGA provisions, and national rules enacted pursuant to an IGA. The nine new chapters include by example an in-depth analysis of the categorization of trusts pursuant to the Regulations and IGAs, operational specificity of the mechanisms of information capture, management and exchange by firms and between countries, insights as to the application of FATCA and the IGAs within new BRIC and European country chapters. Chapter 7 has been drafted for a financial institution’s compliance officer, Chapter 9 for the trust department compliance officer, and Chapter 10 for the insurance firm’s compliance officer. Chapter 7 provides a new section analyzing the compliance risks with the IRS’ released FFI agreement.

The LexisNexis® Guide to FATCA Compliance (2^nd Edition) comprises 34 Chapters grouped in three parts: compliance program (Chapters 1–4), analysis of FATCA regulations (Chapters 5–16) and analysis of FATCA’s application for certain trading partners of the U.S. (Chapters 17–34), including intergovernmental agreements as well as the OECD’s TRACE initiative for global automatic information exchange protocols and systems.

See: http://www.lexisnexis.com/store/catalog/booktemplate/productdetail.jsp?pageName=relatedProducts&prodId=prod19190327&ORIGINATION_CODE=00247

Posted in FATCA | Tagged: BRIC, FATCA, Foreign Account Tax Compliance Act, Internal Revenue Service, IRS, Regulation, Regulatory compliance | Leave a Comment »

Final FATCA FFI Agreement released by IRS

Posted by William Byrnes on December 27, 2013

On December 26 the IRS released Rev Proc 2014-10: FFI Agreement for Participating FFI and Reporting Model 2 FFI. The final FFI agreement contains a number of changes to provisions of the draft FFI agreement that required correction or clarification. The Rev Proc provides four areas of such changes and clarifications that occur in the final FFI agreement.

First, several of the cross-references in the FFI agreement (notably, in section 2 of the FFI agreement) are modified in anticipation of the publication of two sets of temporary regulations to which the updated cross-references relate. Both sets of temporary regulations are expected to be published in early 2014.

Second, the FFI agreement contains revisions to correct minor technical errors in the draft FFI agreement.

Third, revisions are made to further clarify the FFI agreement and conform it to the temporary chapter 4 regulations. By example, as contemplated in Notice 2013-69, the FFI agreement provides that, with respect to calendar years 2015 and 2016, participating FFIs that are required to report foreign reportable amounts paid to nonparticipating FFIs shall report this information on Form 8966.

Finally, the FFI agreement also provides for a two-year transition period during which a reporting Model 2 FFI may elect to apply the due diligence procedures described in the FFI agreement in lieu of those in Annex I of an applicable Model 2 IGA and the FFI agreement is also revised to reflect that this election is made by the reporting Model 2 FFI and not the reporting Model 2 IGA jurisdiction. Read my previous FATCA coverage > herein <

FATCA Compliance Program and Manual

See: http://www.lexisnexis.com/store/catalog/booktemplate/productdetail.jsp?pageName=relatedProducts&prodId=prod19190327&ORIGINATION_CODE=00247

Posted in FATCA, Uncategorized | Tagged: BRIC, FATCA, FFI, Foreign Account Tax Compliance Act, Foreign function interface, Internal Revenue Service, LexisNexis, Regulation | Leave a Comment »

Better Late than Never: SEC Implements the Switch

Posted by William Byrnes on January 10, 2012

As anticipated, the SEC will delay implementation of the RIA transition. On June 22, the SEC approved rules that will transition thousands of advisors from SEC to state regulation, but the new rules won’t be effective until June 28, 2012, almost a year later than initially expected.

Under the regulatory structure in place before the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, investment advisors with $25 million or more in assets under management (AUM) were regulated by the SEC, and those with less than $25 million in AUM were regulated by the states. Dodd-Frank changed the registration threshold so that advisors with between $25 and $100 million in AUM—so-called “midsize advisors”—will be required to withdraw their registration from the SEC and register with state regulators.

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of the planned switch and in Advisor’s Journal, see Disarray at the SEC is Complicating the “Switch” (CC 11-83), Hedge Funds Must Now Register with the SEC under the New Wall Street Reform Act (CC 10-45) & Dodd-Frank Wall Street Reform and Consumer Protection Act (CC 10-35).

Posted in Wealth Management | Tagged: Consumer Protection Act, Dodd-Frank, Dodd–Frank Wall Street Reform and Consumer Protection Act, Hedge fund, Registered Investment Advisor, Regulation, SEC, Wall Street | Leave a Comment »

New York Insurance and Banking: United at Last

Posted by William Byrnes on April 3, 2011

Why is this Topic Important to Wealth Managers? This topic discusses the new regulatory agency that will have an effect on most life insurance companies doing business in New York. Because the new regulatory agency will oversee insurance and banking, it is likely that changes in the insurance compliance law are just around the corner. After the financial crisis of 2008, it appears New York is taking action to prevent future disruptions in the market. Wealth managers should be aware of the new agency as changes to insurance regulation and compliance are sure to result from the creation of this organization.

New York State is in the process of creating a new Department of Financial Regulation (DFR) which is designed to harnesses the regulatory powers and expertise of the Banking and Insurance Departments, as well as the Consumer Protection Board, by combining the functions of each, to make the State’s oversight of financial services responsive to the 21st century needs of the industry and its consumers.

This new State agency, created pursuant to legislation submitted as part of the 2011-2012 State Executive Budget, consolidates the functions, operations and staff of the Banking and Insurance Departments, along with related segments of the Consumer Protection Board, into a single State agency.

Consolidation of these agencies and activities within a single agency platform is intended to afford the State the ability to unify the State’s regulation of financial services and to more rapidly and capably respond to changing market practices and consumer preferences, thereby ensuring the industry’s continued integrity while shielding consumers from abuses.

In addition to enhancing and refining the State’s regulatory oversight of the industry, the consolidation will provide the State with the opportunity to reduce overall spending with the use of shared services.

The Superintendent of the Department of Financial Regulation will be appointed by the Governor, with the consent of the Senate. The Department’s main offices will be located in Albany and New York City.

The Department’s main responsibilities will be carried out through two major programs: regulation and consumer protection. Read the analysis at AdvisorFYI

Posted in Compliance, Insurance | Tagged: Consumer protection, Financial services, Government agency, insurance, New York, New York State, Regulation, United States | Leave a Comment »

Reporting Interest: Payments to Foreigners Could Face New Disclosure

Posted by William Byrnes on March 29, 2011

Why is this Topic Important to Wealth Managers? This topic presents a discussion on information reporting regarding nonresident aliens and domestic interest income. Because some wealth managers work with international clients, or a family in which at least one family member like a spouse or child is foreign, it is helpful to discuss the new proposed reporting requirements as issued by the Department of the Treasury. Having a better understanding of the reported information that will end up in the hands of the IRS will hopefully help wealth managers focus on compliance, as well as wealth preservation and growth.

The Internal Revenue Service recently released new proposed regulations regarding reporting interest payments made to nonresident aliens. A nonresident alien is an individual who is neither a citizen of the United States nor a resident of the United States.[1] We will discuss in a later blogticle this week about how to determine if someone is either a US taxpayer or instead is a non-resident alien (not a US taxpayer).

The new proposed rules require the payor to make an information return on Form 1042-S, “Foreign Person’s U.S. Source Income Subject to Withholding” on interest payments aggregating $10 or more each year paid to a nonresident alien, that is otherwise reportable on a Form 1099 (interest income). [2]

The payor shall generally prepare and file Form 1042-S at the time and in the manner prescribed by the code and the regulations, for the calendar year in which the interest is paid. [3]

The IRS and Treasury Department first published, in 2001, a notice of proposed rulemaking which provided that U.S. bank deposit interest paid to any nonresident alien individual must be reported annually to the IRS. [4] Then in 2002, the Treasury Department and the IRS withdrew these regulations and proposed narrower regulations that would require reporting only on interest payments to nonresident alien individuals that are residents of certain designated countries or, at the option of the payor, on interest payments to all nonresident alien recipients of bank deposit interest. [5]

Under regulations currently in effect, reporting of U.S. bank deposit interest is required only if the interest is paid to a U.S. person or a nonresident alien individual who is a resident of Canada. [6]

The newest proposed regulations published this month withdraw previous regulations and provide proposed regulations that extend the information reporting requirement to include bank deposit interest paid to nonresident alien individuals who are residents of any foreign country.

The Treasury Department notes this extension is appropriate for several reasons: Read the analysis at AdvisorFYI

Posted in Tax Policy | Tagged: Alien (law), Deposit account, Internal Revenue Service, IRS tax forms, Regulation, Report, Treasury Department, United States | Leave a Comment »

NCOIL Warns a Federal Insurance Charter Would Hurt the States

Posted by William Byrnes on February 28, 2011

Federal interference in the regulation of the insurance industry could be around the corner, but the states are not going to cede their authority without a fight.

State legislators fear that “important funds and jobs could be lost if Congress authorizes a federal insurance charter and creates a new bureaucracy to regulate insurance.” According to a letter sent by NCOIL (The National Conference of Insurance Legislators) to every member of the 112th Congress, a federal insurance charter could cost states as much as $16 billion in revenue annually—representing lost fees and taxes generated for the states by insurance business. ….

Although the FIO itself is not given regulatory authority by the Wall Street Reform Act, the studies mandated by the Act may signal that the Feds are interested in expanding their reach into the insurance industry. And, it would be naïve to think that the FIO studies will find that federal regulation of insurance companies is absolutely unnecessary—given the role of insurance companies like AIG in the financial crisis. Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of the Federal Insurance Office in Advisor’s Journal, see The Federal Insurance Office (CC 10-55).

Posted in Insurance | Tagged: Financial services, insurance, Insurance policy, Regulation, Regulators | Leave a Comment »

New Dodd-Frank Study Calls for Stringent Standards

Posted by William Byrnes on February 21, 2011

The Securities and Exchange Commission (SEC) submitted to Congress a staff study recommending a uniform fiduciary standard of conduct for broker-dealers and investment advisers — no less stringent than currently applied to investment advisers under the Investment Advisers Act of 1940– when those financial professionals provide personalized investment advice about securities to retail investors.

Section 913 of Title IX of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 required SEC to conduct a study to evaluate:

The effectiveness of existing legal or regulatory standards of care (imposed by current authorities) for providing personalized investment advice and recommendations about securities to retail customers; and
Whether there are legal or regulatory gaps, shortcomings, or overlaps in legal or regulatory standards in the protection of retail customers relating to the standards of care for providing personalized investment advice about securities to such customers that should be addressed by rule or statute.

In the study, the SEC notes that investment advisers and broker-dealers are regulated extensively under different regulatory regimes. But, the study claims, many retail investors do not understand and are confused by the roles played by investment advisers and broker-dealers. The study finds that “many investors are also confused by the standards of care that apply to investment advisers and broker-dealers” when providing personalized investment advice about securities. Read the analysis at http://www.advisorfyi.com/2011/01/new-dodd-frank-study-calls-for-stringent-standards/

Posted in Uncategorized, Wealth Management | Tagged: Broker-dealer, Dodd–Frank Wall Street Reform and Consumer Protection Act, Investment, Investment Advisers Act of 1940, Regulation, Standard of care, U.S. Securities and Exchange Commission, United States Congress | Leave a Comment »

FINRA Positions Itself to Oversee Advisers

Posted by William Byrnes on December 8, 2010

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Buzz about the Financial Industry Regulatory Authority, Inc. (FINRA) taking responsibility for regulation of investment advisers has been circulating for a couple of years now—but the talk is suddenly sounding less like gossip and a lot more like a plan. Last week, FINRA’s chief executive, Richard Ketchum, sent a letter to the SEC touting the benefits of appointing a self-regulatory organization (SRO) to oversee advisors. Although Ketchum’s letter does not directly ask the SEC to cede some of its regulatory authority over advisers to FINRA, hints abound.

The Dodd-Frank Wall Street Reform and Consumer Protection Act, passed earlier this year, mandates an SEC study of its investment advisor examinations and whether delegation of advisor regulation to an SRO would improve examinations. Read this complete article at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of FINRA in Advisor’s Journal, see FINRA Proposes Eliminating Industry Insiders from Arbitration Panels (CC 10-80).

We invite your questions and comments by posting them below, or by calling the Panel of Experts.

Posted in Compliance, Wealth Management | Tagged: Business, Chairman, Financial adviser, Financial Industry Regulatory Authority, Investor, Regulation, U.S. Securities and Exchange Commission, United States | Leave a Comment »

The Federal Insurance Office

Posted by William Byrnes on September 28, 2010

Although regulation of insurance generally has been left to the states, the Wall Street Reform Act may foreshadow future federal oversight of the industry. The Act creates the Federal Insurance Office (FIO) within the Treasury, which will monitor all components of the insurance industry—excluding the health, crop, and long-term care sectors.

Today’s analysis by our Experts William Byrnes and Robert Bloink is located at AdvisorFX Journal The Federal Insurance Office

Posted in Insurance | Tagged: Business, Federal Insurance Office, Financial services, Health, insurance, Long-term care, Regulation, Wall Street | Leave a Comment »

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Posts Tagged ‘Regulation’

FATCA Frequently Asked Questions End-of-Year Update

Final FATCA FFI Agreement released by IRS

Better Late than Never: SEC Implements the Switch

New York Insurance and Banking: United at Last

Reporting Interest: Payments to Foreigners Could Face New Disclosure

NCOIL Warns a Federal Insurance Charter Would Hurt the States

New Dodd-Frank Study Calls for Stringent Standards

FINRA Positions Itself to Oversee Advisers

The Federal Insurance Office

William Byrnes (Texas A&M) tax & compliance articles

William Byrnes

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Posts Tagged ‘Regulation’

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