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Alternative Market Briefing

Participants express concern about FATCA implementation

Friday, October 26, 2012

By Beverly Chandler, Opalesque London:

Speakers at the Opalesque New York Roundtable, sponsored by SunGard, Taussig Capital and Eurex expressed concern about the likely impact of the Foreign Account Tax Compliance Act (FATCA).

Joe Taussig, founder of Taussig Capital commented that there were a few regulatory changes on the horizon in Switzerland that would further impact Swiss sources of hedge fund investment. "One is called FATCA" he said, "which goes into effect at the 1st of next year. It is a train wreck waiting to happen, because there could be tremendous withdrawals out of the U.S. securities. FATCA is already law, so the election won’t change anything, as a matter of fact I cannot see how it is going to change."

Continuing on the FATCA theme, Taussig said: "Giving a full explanation on FATCA may be a little above my pay grade, but as I understand it, every financial institution has to do a Sarbanes-Oxley like pledge that everybody in the daisy chain down to the beneficial owner of the securities isn’t avoiding any U.S taxes."

Taussig said: "If you don’t sign and get everyone else in the daisy chain to sign, you cannot transact U.S. securities. It is that simple. I believe even currencies are included. ......................

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