SEBI-registered intermediaries having US clients have been given a December 31 as deadline to register with the US authorities and comply with the Foreign Accounts Tax Compliance Act (FATCA).

The intermediaries are exchanges, depositories, brokers, mutual funds, portfolio managers, alternative investment funds, depository participants, collective investment schemes and custodians.

FATCA requires foreign financial institutions to disclose the financials of their US clients, including US nationals not resident in the US, to the US revenue authorities.

With India and the US having reached an Inter-Governmental Agreement (IGA) to implement FATCA, India is now treated as having an IGA effective April 11.

Hence, all Indian financial institutions have to obtain a Global Intermediary Identification Number (GIIN) by December.

The time limit would also be applicable to Indian financial institutions having overseas branches in Model-1 jurisdictions (31 countries including Australia, Canada, Germany, the Netherlands, the UK and South Africa). The extension is also applicable to those jurisdictions where an agreement under Model 1 has been reached (40 countries including Brazil, Singapore, Cyprus, South Korea, Sweden, and the UAE).

Registration should be done only after the formal IGA is signed, said SEBI. Overseas branches of Indian financial institutions in a jurisdiction having IGA-2 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 the US authorities within the stipulated time period and obtain a GIIN to avoid potential withholding under FATCA, it said.

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.

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