There are people out there with components of technology that are far better than we can build. So long as you are comfortable that you can integrate those, that you can actually give a ‘best of breed’ offering to your clients, you can drive down the cost of infrastructure systems. We have to challenge ourselves and ask ‘how can we do things differently?’.
How is FATCA compliance varying, and what is the potential for other similar regulatory measures against the backdrop of mega-fines being dished out?
Collins: FATCA is just part of the new world. It’s now essential we know everything about every one of our clients. It’s expensive and time- consuming, but is something that we just have to implement.
It’s a huge project for pretty much every bank around the world and there’s a big technology component, but once we get the technology change and we have all the information we need about every customer’s nationality and a report into various countries around the world, that eventually will make us better banks and it will be a base of information that we’ll be able to use in a more positive way going forward.
Whiley: Bermuda reacted quickly to FATCA and negotiated an Inter- Governmental Agreement (IGA) with the US and UK governments. The model 2 IGA with the US better serves Bermuda with the reduced costs of compliance and provided the financial institutions within Bermuda the benefits of a finalised IGA. Bermuda has not had to introduce extensive legislation or guidance notes. As a result, we have the reporting guidelines and have been able to move forward as a jurisdiction with registration of foreign financial institutions on the Internal Revenue Service portal.
As a service provider to foreign financial institutions we have been able to assist with the operational challenges posed by FATCA by providing our clients with a FATCA reporting portal that monitors our clients’ state of compliance. For the funds we administer, and the investment managers we serve, SS&C GlobeOp is ahead of the game in providing a robust reporting solution.
58 Bermuda Finance | 2014
“In addition to the growth from the ILS sector we are now seeing more interest in Bermuda from global fund groups and asset managers.” John Whiley
Looking a few years ahead, I believe Bermuda is going to be in a strong position with its model 2 IGA, while other model 1 IGA jurisdictions are going to have the bureaucracy of having to manage all that data and report it to the US upon request. The costs for these jurisdictions in the early days of compliance are going to be prohibitive and will likely create a bottleneck among domiciles slower in the take-up of regulatory compliance, and that should make Bermuda the stronger jurisdiction.
Maiato: Bermuda has done a good job of getting ahead with respect to FATCA. We were talking to clients several years ago about FATCA and a lot of the banks did stand up and take action pretty immediately. Looking at where we are versus other jurisdictions, our financial institutions are ahead of the game—they’ve thought about and gone down the road of putting in new systems and new processes to be FATCA-compliant. Many of them are already thinking about the next wave of common reporting standards.
Swan: From the BMA’s perspective there is not a lot to say about FATCA because it is not within our remit. However, we were pleased to see that more than 1,200 Bermuda companies registered. More broadly, we see that there is a proliferation of regulation coming down the pipeline. It is important for companies and regulators alike to leverage these new regulations.
Perhaps FATCA launches into anti-money laundering (AML), which does fall under our remit. We all need to consider how to facilitate multiple
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