India has joined MCAA on Automatic Exchange of Financial Account Information on 3rd June 2015. In terms of the MCAA, all countries which are a signatory to MCAA, are obliged to exchange a wide range of financial information.
Additionally, Governments of India and USA have signed an agreement to improve international tax compliance and to implement the FATCA in India.
Further, for combating the problem of offshore tax evasion, avoidance and stashing of unaccounted money abroad, it requires cooperation amongst tax authorities. Hence, the G20 and OECD countries worked together and have developed a Common Reporting Standard (CRS) on Automatic Exchange of Information (AEOI).
As per above agreements and towards compliance with tax information sharing laws, such as FATCA/CRS, financial institutions of the “source” jurisdiction are required to collect and report information to their tax authorities about account holders “resident” in other countries, such information having to be transmitted “automatically’ on yearly basis. The information to be exchanged relates not only to individuals but also to shell companies and trusts having beneficial ownership or interest in the “resident” countries. This also mandates all financial intermediaries to seek additional personal, tax and beneficial owner information and certain certifications and documentation from account holders. They are also obliged to share information of your account with relevant tax authorities and other competent authorities.
Vide SEBI Circular CIR/MIRSD/2/2013 dated 24th January 2013, SEBI has issued guidelines on identification of Beneficial Ownership and mandated all Intermediaries to identify and verify such beneficiary owners.
Vide AMFI Circular dated 18th September 2015, following information has been made mandatory w.e.f. 1st November 2015 for new investors to the respective Fund/from 1st January 2016 for the existing investors
What does an investor need to do to comply ?
The following information is mandated as part of the above requirements. All investors [both Individuals and Entities] are required to fill-up this additional information in the relevant Declaration form that contains FATCA-CRS Declaration, Supplementary KYC Information and UBO Declaration and submit to CAMS/CAMS serviced Mutual Fund AMC branches.
q Additional KYC Information
q Ultimate Beneficiary Ownership [UBO] declaration from Non-Individuals
Accordingly, following information is mandated as part of the above requirements:
q Country of Birth/Incorporation
q Place of Birth/Incorporation
q Address Type [Residential or Business, Residential, Business, Registered Office] for the KYC registered address
q Applicant Income Slab details
q Net Worth details
q Information about PEP [Politically Exposed Person & its relatives]
q Information on specific Corporate services [applicable for Non-Individuals]
q Information about Ultimate Beneficiary Owner(s)/Controlling Person(s) [applicable for select category of Non-Individuals]
q If your [investor] tax residency is other than India, then following information for all countries in which you are resident for tax purposes is required:
q Country of Tax Residency [also include USA, where the individual is a citizen/green card holder of the USA]
q Tax Identification Number [If not available, kindly provide its functional equivalent]
q Identification Type [TIN or Other, to be specified)]
How is CAMS facilitating investors to comply with the new requirements ?
As a service partner to 17 Mutual Funds, CAMS has developed multiple options for investors to submit their declarations / information.
CAMS has enabled online updation facility in www.camsonlone.com. Updation is allowed after due authentication, including a One Time PIN. CAMS is the only Registrar to have enabled the online updation facility.
Forms are also available at the counters or can be downloaded from www.camsonline.com
CAMS has created a central database for the updated PANs, with concurrence of all its Serviced AMCs, thus enabling one time submission of Forms. This immensely benefits the investor as he /she does not have to repeat the process while investing into a new fund, thus making investing into Mutual funds a hassle free experience.
Large distributors have been provided standardized format to electronically submit the updation.
This concerted effort has resulted in CAMS receiving over 100,000 investors in the first 3 days.
CAMS also propose to provide updates on complied investors to the Distributor community through mail back and web servicing modes, to avoid duplication of efforts.
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