Please note: The NSSMC clarified FATCA requirements for non-bank financial institutions that must perform the obligations of financial agents

In order to facilitate the work of capital markets participants, the NSSMC (National Securities and Stock Market Commission) clarified the issue of attribution/excluding of financial institutions from the list of financial agents, exempted from providing information on affiliated accounts in accordance with the Agreement between the Government of Ukraine and the Government of the United States of America to improve the implementation of tax rules and the application of the Provisions of the U.S. Foreign Account Tax Compliance Act (FATCA).

Therefore, the NSSMC’s Resolution On the Establishment Of the List Of Non-bank Financial Institutions Obliged To Perform the Obligations Of Financial Agents №578 dated 06.10.2020, registered in the Ministry of Justice of Ukraine on November 17, 2020 under №1134/35417, established a list of non-bank financial institutions, which are obliged to perform the obligations of financial agents in accordance with the requirements of international agreements containing Provisions on the exchange of information for tax purposes, consent to be bound by the Verkhovna Rada of Ukraine or inter-departmental agreements concluded on their basis, and must provide information on affiliated accounts in accordance with the Agreement, etc.

This list includes non-bank financial institutions that are the professional participants in the capital markets and have licenses issued by the Commission, namely:

– financial instruments trading – sub-brocker activities;

– financial instruments trading – brokerage activities;

– financial instruments trading – financial instruments portfolio management activities;

– depository activity – depository activity of a depository institution;

– other than those meeting the criteria set out in paragraph “A” of Section 3 of Annex 2 of the FATCA Agreement.

In particular, Annex 2 of the FATCA Agreement includes the business entities (legal entity or legal form), that are exempted from compliance or financial institutions that are considered to fulfill the requirements, as applicable, and accounts excluded from the definition of financial accounts.

Accordingly, the non-banking financial institutions referred to in this Resolution meet the criteria specified in Annex 2 of the Agreement, are considered financial institutions that fulfill the requirements of the FATCA Agreement, as applicable, and are not included in the list established by this Resolution.

The text of the clarification can be found on the official website of the Regulator at the link.