Regulatory and statutory filing at the click of a button

TCSPs face a complex landscape of regulatory filing requirements that vary depending on the jurisdictions in which they operate and the services they provide. Key requirements often include:

• AEOI Reporting (CRS & FATCA): Reporting financial account information of tax residents in participating jurisdictions.
• Beneficial Ownership Reporting: Disclosing the ultimate beneficial owners of the entities they manage to relevant authorities.
• Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) Reporting: Submitting Suspicious Activity Reports (SARs) and other related filings.
• Economic Substance Reporting: In certain jurisdictions, providing information to demonstrate that entities are conducting core income-generating activities within that jurisdiction.
• Specific jurisdictional filings: Various other reports mandated by local regulations. eFileConnect is designed to help TCSPs navigate these diverse requirements by providing a centralised platform to manage data, track deadlines, and generate compliant filings for various regulatory regimes.

While often used interchangeably, there’s a subtle distinction.

Regulatory reporting generally refers to the process of gathering and preparing information that regulatory bodies require. This encompasses identifying the necessary data, ensuring its accuracy, and structuring it in accordance with the regulator’s specifications.

Regulatory filing is the actual submission of this prepared information to the relevant regulatory authorities through their designated channels.

Quantios eFileConnect assists with both aspects by providing tools to collect and manage the necessary data for reporting and then facilitates the secure and compliant electronic filing of this information.

AEOI filing involves several critical steps:

• Identifying Reportable Accounts: Determining which financial accounts held by the entities managed by the TCSP are subject to AEOI reporting rules based on the account holder’s tax residency.
• Collecting Required Information: Gathering data on the account holder, the beneficial owners, and the financial account itself, including balances, interest, dividends, and other income.
• Data Validation and Formatting: Ensuring the collected data is accurate and formatted according to the specific requirements of the relevant jurisdiction (e.g., XML schema for CRS).
• Secure Transmission: Submitting the report electronically to the designated tax authority.

Quantios eFileConnect simplifies this complex process by providing features such as automated data collection templates, built-in validation checks, support for various reporting formats, and secure electronic submission capabilities, reducing manual effort and minimising the risk of errors.

The two main pillars of AEOI compliance are:

1. Due Diligence: Establishing and implementing procedures to identify the tax residency of account holders and beneficial owners. This includes reviewing documentation and applying the relevant due diligence rules.
2. Reporting: Collecting and reporting the required information on reportable accounts to the relevant tax authorities in the prescribed format and within the specified deadlines.

Quantios eFileConnect supports both pillars by providing tools to manage client data in a manner that facilitates due diligence processes and by streamlining the reporting process through automated data mapping, validation, and secure electronic filing.

Failure to comply with regulatory reporting and filing requirements can have severe consequences for TCSPs, including:

• Significant Financial Penalties: Regulatory bodies can impose substantial fines for late filing, inaccurate reporting, or failure to report altogether.
• Reputational Damage: Non-compliance can severely harm a TCSP’s reputation, leading to a loss of client trust and business.
• Legal Repercussions: In some cases, non-compliance can lead to legal action, including potential criminal charges.
• Increased Scrutiny: Regulatory authorities are likely to subject non-compliant TCSPs to more frequent and rigorous audits.

Quantios eFileConnect helps TCSPs mitigate these risks by providing a robust and reliable platform for managing regulatory obligations, ensuring timely and accurate filings.

“Regulatory filing & exemptions” refers to the rules and procedures for submitting required information to regulatory bodies, along with any specific circumstances under which certain entities, accounts, or individuals may be exempt from these filing obligations. These exemptions vary depending on the regulation and jurisdiction. eFileConnect is designed to be flexible and adaptable to different regulatory requirements. While the software itself doesn’t determine eligibility for exemptions (which remains the responsibility of the TCSP), it can help manage and track data related to potentially exempt entities or accounts.

Not exactly, but they are closely related.

The Automatic Exchange of Information (AEOI) is the overarching global framework for exchanging tax information between jurisdictions.

The Common Reporting Standard (CRS) is one of the primary mechanisms for implementing AEOI. Developed by the OECD, CRS specifies the financial account information to be exchanged, the necessary financial institutions to report to, and the due diligence procedures they must follow.

FATCA (Foreign Account Tax Compliance Act), a US regulation, is another significant component of AEOI for participating countries. Therefore, CRS is a key standard under the broader umbrella of AEOI. eFileConnect is designed to support reporting under both the CRS and other relevant AEOI frameworks, such as FATCA.

In 2024, the OECD published a new set of requirements and introduced a new schema, CRS v3.0

Read more about the impact of CRS 3.0 on trust and corporate services, focusing on the new requirements under AEOI.

The specific information reported under AEOI (primarily CRS and FATCA) generally includes:

• Identifying Information of the Reportable Person(s): This includes name, address, date and place of birth, and tax identification number(s) (TINs).
• Identifying Information of the Financial Account: This includes the account number, the name, and the identifying number of the reporting financial institution.
• Account Balance or Value: The balance or value of the account at the end of the relevant reporting period.
• Income and Proceeds: Depending on the type of account, this may include interest, dividends, gross proceeds from the sale or redemption of financial assets, and other income generated within the account.

eFileConnect provides structured data fields and templates to ensure all necessary information is captured accurately for AEOI reporting.