The investment management industry faces an uphill struggle to be ready for commencement of the US Foreign Account Tax Compliance Act (FATCA) on 1 January 2013 – as a recent KPMG report recently discovered.
The report’s findings reveal that just 32% of the fund managers surveyed expect to be ready for the January 2013 live date, and 42% have not yet even assessed the time needed to comply.
Fortunately for hedge funds, FATCA is unlikely to fundamentally challenge firms’ business models in the same way that it will other sectors of the investment management industry. Nevertheless, compliance will be necessary and it will require a significant amount of work.
What is FATCA?
The FATCA legislation was signed into law in early 2010 in a bid to prevent US investors from using offshore entities to disguise their identity and thus avoid paying US taxes.
The FATCA rules are designed to compel...