Inter-Governmental Agreement with United States of America under Foreign Accounts Tax Compliance Act - Registration
Summary
The circular informs regulated entities about the Inter-Governmental Agreement between India and the US to implement FATCA. It outlines registration deadlines for Indian Financial Institutions to obtain a Global Intermediary Identification Number from US authorities. The document directs stock exchanges and depositories to disseminate this information to their respective members.
Text
India and the US have reached an agreement in substance on the terms of an Inter- Governmental Agreement (IGA) to implement Foreign Accounts Tax Compliance Act (FATCA) and India is now treated as having an IGA in effect from April 11, 2014.
Indian Financial Institutions would have time upto December 31, 2014 to register with US authorities and obtain a Global Intermediary Identification Number (GIIN). Registration should be done only after the formal IGA is signed.
Overseas branches of Indian Financial Institutions in a jurisdiction having IGA agreement or in a jurisdiction that does not have an IGA but permits financial institutions to register and agree to a Foreign Financial Institution (FFI) agreement, may register with US authorities within the stipulated time period and obtain a GIIN in accordance with the requirements to avoid potential withholding under FATCA.
Overseas branches of Indian Financial Institutions in a jurisdiction that does not have an IGA and does not permit financial institutions to register and agree to an FFI agreement may not register and their overseas branches would eventually be subject to withholding under FATCA.
If registration of the parent intermediary/ head office is a pre-requisite for a branch to register, such intermediaries may register as indicated at (a) and (b) above.
The Stock Exchanges and Depositories are advised to bring the contents of this Circular to the notice of the Stock Brokers, Depository Participants, as the case may be, and also disseminate the same on their websites.
This Circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 (SEBI Act).
Source: SecMarx — Inter-Governmental Agreement with United States of America under Foreign Accounts Tax Compliance Act - Registration. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.