MF investos have to give info under FATCA from Nov
Come November 1, mutual fund investors will have to provide details and declaration pertaining to Foreign Account Tax Compliance Act (FATCA) and common reporting standards (CRS) for all new accounts opened, failing which fund houses are likely to reject their applications. While some fund houses have already started this process sometime ago, a greater number of fund houses are telling investors about the same now. For instance, DSP BlackRock MF and Mirae MF have recently informed investors that the details are mandatory for new accounts with effect from November 1.
“With respect to uniform implementation of FATCA and CRS, investors may note that with effect from November 1, 2015, details as per FATCA / CRS declaration shall be mandatorily provided for all new accounts / folios opened, without which the applications shall not be accepted,” a Mirae MF notice said.
The information reported will depend on the classification of customers under FATCA and CRS. Investors will be expected to provide details such as country of tax residence, tax identification number from such a country, country of birth and country of citizenship. CRS is a global level common standard for automatic exchange of financial account information.
Accordingly, Indian financial institutions will be required to perform enhanced KYC procedures to identify accounts of US and other foreign taxpayers, as defined, and report on such accounts on an annual basis.
Separately, MF distributors are also asking investors to fill in details to comply with the new norms. “For accounts opened between July 1, 2014, and October 31, 2015, and certain pre-existing accounts opened till June 30, 2014, MF houses are reaching out to the investors to seek the requisite information which has to be submitted by the investors before December 31. If not, the account will be treated as reportable account,” said a DSP BlackRock MF notice.