Markit to Release Tax Utility Solution
- 18.03.2016 12:15 pm
Markit, a leading global provider of financial information services, today announced the launch of a tax utility. The initial offering supports compliance with US Treasury FATCA obligations. Designed in partnership with Deutsche Bank, HSBC and Morgan Stanley, the service provides tax form validation and secure distribution as well as remediation for preexisting clients.
The tax utility is part of Markit’s broader ecosystem of compliance solutions to support know your customer (KYC), financial regulation, tax and counterparty requirements. Similar to ISDA Amend and the collection of data for Dodd-Frank compliance, the utility leverages Markit’s existing Counterparty Manager database which provides access to 113,000 legal entities across buyside firms and corporates. It enables buyside firms and corporates to upload specific Forms W8 or W9 which are validated through Markit ǀ CTI Tax Solutions and permissioned out to their bank counterparties. Buyside firms and corporates benefit from a centralised repository within Markit Counterparty Manager to communicate any key changes in circumstances which may affect their tax or regulatory status.
To date, over 650 buyside firms and corporates have signed up to the utility and the service has validated over 21,000 tax forms. It is on target to have over 30,000 forms validated in preparation for the June 30th 2016 FATCA deadline.
"The current process for investment banks to collect and validate tax forms separately is highly duplicative,” said David H Burnett, chief operating officer, Global Banking and Markets at HSBC. “We are delighted to work with Markit | CTI Tax Solutions and Counterparty Manager and by joining forces with them, it allows us to leverage greater efficiency and transparency across our FATCA remediation, validation and tax compliance needs.”
“Utilising market utilities and bringing more standardisation to processes is important to realising consistency and efficiencies in the industry,” said Cynthia Chow-Coster, managing director, at Morgan Stanley Wealth Management. “Markit | CTI Tax Solutions and Counterparty Manager provides solutions for document management and tax compliance.”
“Through Counterparty Manager and our Markit | CTI Tax Solutions, we are uniquely positioned to offer clients cost savings and more robust regulatory coverage as they manage their FATCA and other rules like the Common Reporting Standard,” said Jon May, managing director, global head of regulatory and compliance managed services at Markit. “This is a natural extension of our regulatory compliance and tax ecosystem to enable our customers to meet KYC and specific FATCA requirements.”
The tax utility can be accessed through Counterparty Manager and kyc.com. The tax utility will be extended to cover due diligence requirements for CRS in 2016.