Compliance with the U.S. Foreign Account Tax Compliance Act (FATCA) and its requirements has presented a challenge for the financial industry in terms of how to track and determine grandfathered status. Complicating this is the fact grandfathered status is not static. Significant changes to a grandfathered instrument may cause that instrument to lose grandfathered status under the Act and associated regulations.
The FATCA service provides foreign financial institutions and withholding agents with instrument level-detail to help determine withholding obligations. This service flags the FATCA status of instruments as: liable, grandfathered or exempt. Information is provided to identify instruments that lose grandfathered status, together with the date of the change in status.