The first Infoline conference “Operational Taxes for Banks” took place in London in June. Now a second conference with the same title followed in Zurich, Switzerland in November 2018. In our view, the main topic of this conference was clearly DAC 6, which will be the “next big issue” from a regulatory perspective. It seemed to SDS as if the importance of this topic has not yet been fully recognised by all institutions. We see two reasons why this might be the case.
AEoI, FATCA, CRS
During the last few years, the international financial service sector had to extensively deal with the most important operative tax and regulatory challenges according to CRS. In addition, corresponding technologies which meet the comprehensive CRS requirements have been implemented.
Almost exactly 10 years after the bankruptcy of Lehmann Brothers triggered the financial crisis, the Annual Post Trade Forum – which was already held for the 4th time – took place in Berlin. On 13-14th Sept, 2018, around 80 professionals from the securities services industry and financial market authorities across Europe and beyond met in the inspiring atmosphere of the Crowne Plaza to discuss a rich list of current hot topics. The presentations offered room to exchange opinions and the schedule provided enough time for a well-organised, relaxed walking tour through Berlin in the evening. We joined the event as sponsor and participants.
The tax issue will in the near future remain an essential factor in the efforts of the financial industry towards achieving better regulatory compliance. Fragmented system environments, legacy systems which are difficult to maintain and a business segment-oriented silo architecture often pose an obstacle for an overall view of the customer as well as a reliable, correct tax treatment of his assets and transactions. Can the calculation, with-holding and certification of taxes by the financial service sector represent a future-oriented scenario for a central software solution?
It is an unpleasant truth which people often tend to overlook: The master data is often not as good as one would like it to be. Specifically for CRS and FATCA reporting, very high data quality is required to generate correct and complete reports to the tax authorities. In practice, the data gaps that often remain can be time-consuming and expensive to correct. With our software solution i:Reg, these gaps are detected in time and can be eliminated by the financial institutions.
The GEOS management circle took place on 27 April 2018.
The 11 th Financial Centre Meeting in Frankfurt – “the best Financial Centre Meeting ever” (quote: Jens Zinke, Managing Director of WM Group).
For years, we have been hearing only one thing in software development: “We have to become agile!”. Nevertheless, many companies are still developing their software products in sequential and linear processes, in which the requirements to the product are placed at the beginning of the software development process and testing is located at the far end. For this reason, this procedure with its clearly defined phases for all stakeholders can be understood and managed easily.
One of the repercussions of the crisis in 2008 was and is the re-regulation of the financial markets. This wave, which in the industry is often referred to as “regulatory tsunami”, has peaked in the last few years. The most prominent example for this is MiFID II/MiFIR, which entailed projects with a duration of many years. Even though there is a legitimate reason to assume that this wave of re-regulation is over for the time being, and supervisory authorities and politicians like to consider and analyse the effectiveness now before new adaptations are carried out, in 2018 a not to be underestimated number of old and new topics are also to be addressed.
One of the most significant challenges for international banking groups in connection with the automatic data exchange is the enormous variety of county-specific requirements, which in parts significantly deviate from both standards FATCA and CRS or even go beyond them. On top of that, numerous countries have started to adjust their provisions for the upcoming reporting year, whereby additional need for adjustment arises.