‘We had to exit Americans because of Fatca’: UTI International

Praveen JagwaniUTI International (Singapore) chief executive officer Praveen Jagwani says the asset manager had to remove American investors because of the compliance burden
Foreign Account Tax Compliance Act (Fatca) brings. The regulation requires financial institutions to use enhanced due diligence to identify US citizens that have invested in either non-US financial accounts or non-US entities. Fatca, which will become effective this year, was launched with the intention to keep US citizens from hiding income. Asset managers face severe consequences if they fail to enter an agreement with the Internal Revenue Service. The intent behind Fatca is to keep US persons from hiding income and assets overseas. Speaking at a recent Funds Global Asia roundtable in Singapore, Jagwani says Fatca is the single most difficult act of regulation for the asset management industry. “We offer a Guernsey-domiciled Indian equity fund and because of six American investors, our compliance cost has gone up significantly,” Jagwani says. “In order not to penalise the remaining investors, we have unfortunately had to decide to exit the American investors.” UTI International is a subsidiary of one of India’s largest asset managers, UTI Asset Management Company. Margaret Harwood-Jones, managing director and global head of investors and intermediaries, Standard Chartered, another roundtable participant, says there is no place in the world where businesses can hide from the impact of any foreign regulation. “Even when it is only half a dozen investors buried somewhere in a particular fund, they have to be fully identified and properly treated in order to comply with Fatca,” Harwood-Jones says. “The obligation to report, to comply with the plethora of new regulation is important yet onerous indeed.” ©2014 funds europe

Executive Interviews

INTERVIEW: Put your money where your mouth is

Jun 10, 2016

At Kempen Capital Management, they believe portfolio managers should invest in their own funds. David Stevenson talks to Lars Dijkstra, CIO of the €42 billion manager.

EXECUTIVE INTERVIEW: ‘Volatility is the name of the game’

May 13, 2016

Axa Investment Managers chief executive officer, Andrea Rossi, talks to David Stevenson about bringing all his firm’s subsidiaries under one name and the opportunities that a difficult market...


ROUNDTABLE: Beyond the hype

Oct 13, 2016

The use of smart beta investing continues to grow. Our panel, made up of both providers and users, discusses what the strategy actually means, how it should be used and the kind of pitfalls that may arise when using this innovative investment technique.

MIFID II ROUNDTABLE: Following the direction of travel

Sep 07, 2016

Fund management firms Aberdeen and HSBC Global meet with specialist providers to speak about how the industry is evolving towards MiFID II.