From Deacons

The Common Reporting Standard or CRS is the standard for automatic exchange of financial account information developed by the OECD which provides for systematic and periodic automatic exchange between governments of such information reported by financial institutions. In summary, for holders of interests in Cayman Islands investment funds, information on their shareholding (or equivalent) will be transmitted to their home tax jurisdiction through the reporting required (should such home tax jurisdiction have agreed to comply with the CRS).

The Cayman Islands is one of 61 countries that have agreed to implement CRS with more than 30 countries expecting to follow.

Cayman Islands investment funds should be actively taking steps to establish policies and procedures to identify reportable accounts, apply due diligence and maintain information for the appropriate time to ensure compliance with CRS.

The first priority is to ensure new subscriptions into the investment fund on or after 1 January 2016 identify the relevant applicant and capture the necessary information – procedures in this regard should be reviewed now, particularly the subscription agreement.

For entities currently complying with the US and UK initiative FATCA, similar procedures will apply for the CRS, but specific advice should always be taken.

It is expected that investment funds will engage either their current fund administrator to provide the CRS services, or alternatively an accounting firm would also be well placed to service such investment funds.

For more on this story go to: http://www.deacons.com.hk/news-and-insights/publications/start-preparing-the-common-reporting-standard-regulations-enacted-into-cayman-islands-law.html