EMIR

The European Market Infrastructure Regulation (EMIR) came into force in 2012 and aims to increase transparency and reduce counterparty risk in the OTC derivatives market. EMIR is being implemented in stages and applies to any entity established in the EU that has entered into a derivatives contract, and applies indirectly to non-EU counterparties trading with EU parties.

• Since February 2014, all counterparties need to report details of any new derivative contract (OTC or exchange traded) to a registered Trade Repository.
• Both counterparties must report each trade unless by prior arrangement, one party can report on behalf of both counterparties (delegated reporting).
• The reporting requirement has now been extended to include mark-to market valuations of positions and collateral, and
• From 1 December 2015 the requirement to exchange variation margin for non-centrally cleared contracts will come into force.

Trading Compliance can assist you in meeting your obligations under EMIR and keeping you informed as further requirements come into play. We can review your data and advise on the correct information to be reported. We can also help you to identify the best Trade Repositary to use for your size and scale of business to manage costs effectively.

FATCA (AND SONS OF FATCA)

The Foreign Account Tax Compliance Act (commonly known as FATCA) is US legislation aimed at reducing tax evasion by US citizens. In September 2012 the UK and the US signed an agreement to implement FATCA in the UK, under the terms of which UK Financial Institutions will provide HMRC with information on any US customers or beneficial owners. HMRC will then forward that information to the US Internal Revenue Service.

• In addition to FATCA, there are other agreements in place or in the process of being signed by the UK Government with other countries following the US format.
• These agreements require all UK Financial Institutions to put in place processes to identify, and report on, clients with a tax residence in the relevant countries
• UK has currently signed agreements with Isle of Man, Guernsey, Jersey or Gibraltar
• Another 44 countries have agreed in principle to sign similar tax reporting agreements.

Trading Compliance can assist you with compliance with FATCA and other similar tax reporting agreements, the so-called Sons of FATCA. We can help you register with the IRS and HMRC, and identify and clarify any exemptions from reporting including reporting thresholds for pre-existing accounts.