Complying with the incoming FATCA (Foreign Account Tax Compliance Act) legislation from the US could cost investment banks five times as much as complying with the UK’s new CASS regulations on client money and assets.
The warning comes from financial markets consultancy Crossbridge, which cites an example of one banking client that has assigned 40% of its entire global operations change budget to dealing with challenges posed by FATCA.
Louise Courtman, associate partner at Crossbridge, said: “FATCA is a huge issue for the banking sector, and one that will far outweigh the costs and challenges of CASS compliance.
“It makes sense for banks to start applying FATCA due diligence now to all new clients that they take on.”
©2011 funds europe