There has been a great deal of speculation recently regarding how far businesses have progressed with their FATCA preparedness, but few hard facts to back up the anecdotal evidence provided by practitioners such as myself. It was interesting, therefore, to see a survey carried out by Thompson Reuters called "FATCA - How Ready Are You?" which polled almost 200 compliance personnel to ascertain what is really going on behind the scenes at a cross section of financial institutions around the world.
And it seems the answer is "not a lot" for a fair few respondents!
51% of respondents admitted that whilst they had heard of FATCA, they were not aware of the impact of it on their business, and 48% expect to miss the implementation deadline of 1st January 2013 (only 21% actually expressed confidence that they would be ready in time). 2 of the compliance officers questioned said that they had not heard of FATCA, which should surely lead to a questioning of their career choice.
59% of compliance officers questioned said their company had a project team in place to assess what was needed, but that leaves a worrying 41% which as yet seem to be doing very little by way of a structured process to get their house in order. Given that some businesses are likely to face a major uphill battle to gather the information required from clients in order to meet the new stringent requirements, let alone analyse the data, this seems to be leaving it perilously late in the day to get started.
One of the other very interesting facts to emerge from the report is the extent to which the new regulations are likely in practice to impact the number of businesses willing to deal with US persons. 16% of those polled said that they would not accept new business from US clients in the future, and a further 8% said that not only would they not accept new business from US persons, but they would also close any existing arrangements with US persons. In effect, this means that almost a quarter of financial services businesses in the future are likely to decline to deal with US individuals, which represents a very real diminution in choice for those affected.
The full report can be found at http://accelus.thomsonreuters.com/content/fatca-survey-results
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