MF houses must provide FATCA details of each client: BSE
Mutual Fund houses will have to mandatorily provide compliance details for the new global tax avoidance law FATCA with regard to each client on the stock exchange’s mutual fund trading platform.
In a circular, BSE said for each and every transaction mutual fund houses have been asked “to upload FATCA details of the client.”
BSE has a mutual fund trading platform, BSE STAR MF. It became operational for transactions in mutual fund schemes for all investors in December 2009.
Under the FATCA (Foreign Account Tax Compliance Act) of the US, India and other signatory countries have agreed that all their financial institutions will follow enhanced KYC (Know Your Client) procedures to identify accounts of the US and other foreign taxpayers on an annual basis.
Earlier, fund houses were asked to mandatorily provide additional KYC informations pertaining to gross annual income and net worth of new investors by November 1, as also their ‘beneficial ownership’ details.
Further, funds have been asked to make focused and sustained efforts to obtain the missing KYC information from existing investors or complete the ‘in person verification’ requirements by December 31 to ensure that KYC obligations are met but without causing inconvenience to bona-fide investors.
In case investors fail to adhere to the norms, fund houses have been asked to reject all purchase and switch transactions.
