DMS Governance is pleased to share the recent article published by Vanora Madigan in the Irish Funds, Funds Focus Newsletter.
Article Summary
As a result of the UK vote to leave the European Union (EU), business must address crucial challenges and questions before formal separation negotiations begin. The long-term consequences of how the UK will fit into the Alternative Investment Fund Manager Directive (AIFMD) and the Undertaking for Collective Investment in Transferable …
DMS Governance is pleased to share the recent article published by Vanora Madigan in the Irish Funds, Funds Focus Newsletter.
Article Summary
As a result of the UK vote to leave the European Union (EU), business must address crucial challenges and questions before formal separation negotiations begin. The long-term consequences of how the UK will fit into the Alternative Investment Fund Manager Directive (AIFMD) and the Undertaking for Collective Investment in Transferable …
Francine Balbina, Executive Director of DMS Governance, Brazil speaks on the topic of compliance and changes in the offshore regulations in Brazil during her interview with Dukascopy TV in Brazil.
NEW YORK, Nov. 7, 2016 — DMS Governance Ltd. (DMS), the world’s leading fund governance firm continues to expand its U.S. business with the key legal and fund governance appointment in its New York office of William H. Woolverton, former Senior Managing Director and General Counsel at Gottex Fund Management (Gottex).
Mr. Woolverton, who will serve as Managing Director – U.S. and Head of U.S. Legal, has exemplary experience working on fund governance and administration issues with a particular emphasis on managing legal and compliance issues for a wide variety of public and private investment funds. He has also worked with boards of directors and CEOs of investment management firms on governance best practices and day to day corporate governance issues. At Gottex, he was responsible for managing fund administration and governance of all onshore and offshore funds and oversaw the management of external legal relationships. Prior to this he spent over 15 years at Putnam Investments where he managed a staff of more than 100 legal and compliance professionals and before that he was a senior lawyer at Alliance Capital Management Corporation. During his career in the investment management industry he led the development of both regulated and alternative asset investment products, and managed acquisitions and strategic investments.
“Bill’s strong legal and investment funds background makes him the perfect fit for DMS where he will be a key leadership addition to the New York team. We are delighted to welcome him to our firm,” commented Anne Storie, DMS Chief Executive Officer.
As Managing Director – U.S., Mr. Woolverton will have the capacity to serve as an independent director on the boards of investment funds and related structures providing guidance and independent oversight to ensure adherence to governance and compliance requirements. His field of expertise means that he will provide thought leadership to the investment funds industry through DMS roundtables, seminars and industry conferences.
Mr. Woolverton is a magna cum laude and Phi Beta Kappa graduate of Amherst College and attended King’s College, Cambridge University as a Keasbey Fellow, where he was awarded a B.A. (honours) and M.A. degrees. He earned his law degree at Columbia University School of Law and is a Member of the Massachusetts and New York Bar. He is also a member of the Corporate Governance Committee, Business Law Section, American Bar Association. He is a former member of the Investment Company Institute (Federal Legislation Committee and SEC Rules Committee).
DMS Governance is pleased to share the recent article published by Roman Ipfling and Kevin A. Phillip in Global Tax Weekly, a leading industry expert thought leadership journal.
For further assistance with FATCA and CRS solutions, please contact Roman Ipfling or Kevin A.Phillip.
DMS Governance (DMS), the world’s largest fund governance firm is pleased to introduce two new senior hires to its New York Business Development team, Daniel Forbes as Executive Director and David O’Flaherty as Business Development Director. Prior to joining DMS Daniel was a regulatory lawyer with Dublin-based global law firm Dillon Eustace, where he ran their New York office. Daniel will be responsible for overseeing business development and client relations across multiple product lines and has extensive experience in AIFMD and UCITS compliant products. Daniel will play a key role in enhancing the governance capabilities of DMS both onshore and offshore.
Daniel is a regular speaker at industry seminars and conferences, where he frequently discusses the impact of EU regulatory issues on the US asset-management community.
David is the former US-based financial services specialist for IDA Ireland, and will be working with the team to identify business relationships and strategic partnerships that ensure that DMS maintains its dominance in the fund governance sector.
Anne Storie, CEO comments “Following the continued growth of DMS Governance, and working to continue to redefine the fund industry, these two new appointments will further strengthen DMS’ presence globally.”
Welcoming Daniel and David are Managing Directors John D’Agostino and Mike Garvey and Director and Relationship Manager Sara Pereda. The team is supported by Business Development Coordinators Karla Wexler and Margaret O’Connell. Relationship and Marketing Manager Alison Sims divides her time between New York and the Cayman Islands with Javier Chaos supporting the team as net developer.
Daniel comments “Having such an experienced and vibrant group of people will help DMS further expand its already substantial worldwide presence“.
DMS Governance Ltd. (DMS), the world’s leading fund governance firm, together with ABR Dynamic Funds, LLC (ABR) have announced the launch of the ABR Dynamic Blend Equity and Volatility Fund hosted on the DMS UCITS Corrib ICAV platform. The ABR UCITS seeks to provide investors with participation in an equity bull market while also potentially providing positive absolute returns in an extended period of market crisis.
“DMS is very pleased to have partnered with a manager of the caliber of ABR to facilitate their European fund and distribution strategy. This demonstrates their commitment and confidence in DMS’s product and people and we look forward to a successful and long standing relationship,” stated Derek Delaney, Managing Director of DMS Europe.
“We are delighted to partner with DMS in meeting the increasing demand for innovative liquid alternatives among a growing audience of sophisticated European investors,” commented Taylor Lukof, ABR’s Chief Executive Officer. “We are confident that DMS will help us deliver a level of service consistent what our U.S. investors have come to expect from our firm.”
UCITS V has created a regulatory passport for investment managers to access European investors and strengthens investor protection through Depositary strict liability regime and remuneration rules and sanctions regime broadly in line with AIFMD and its delegated acts.
DMS has developed a proprietary UCITS V compliant ICAV platform fully supported by top tier service providers to provide investment managers with solutions for their UCITS requirements to support the regulatory and fund governance challenges that UCITS presents for U.S. and international investment managers doing business in Europe.
For further information please contact Michael Buckley at mbuckley@dmsgovernance.com or Taylor Lukof, CEO of ABR Dynamic Funds, LLC at tlukof@abrfunds.com
About ABR Dynamic Funds, LLC
ABR is an innovative, global R&D firm with a focus on liquid alternative index creation and product development. The firm develops systematic strategies across all asset classes which can deliver favorable performance throughout various market conditions and in a wide range of market cycles. These models are licensed by ABR for the creation of proprietary indexes with its partners and the delivery of investable solutions to its clients. For more information, please visit www.abrfunds.com.
About DMS
DMS Governance Ltd. (DMS) is the worldwide leader in fund governance with more than 225 professionals representing leading investment funds with assets under management exceeding $330 billion. DMS excels in delivering high quality Fund Governance, International Tax Compliance, AIFMD, UCITS, Banking, Custody, Trust, Corporate and Outsourcing solutions across a diverse range of investment fund structures and strategies.
Prior to the much heralded roll out of the Alternative Investment Fund Management Directive (AIFMD) in 2013, Luxembourg was staunchly entrenched as the leading domicile for regulated mutual funds (UCITS) and private equity funds in Europe. It lagged in terms of attractiveness to alternative fund managers, with Cayman and BVI being the offshore domiciles of choice and Ireland stealing a march once AIFMD delivered a widely accepted European alternative product.
In recent times Luxembourg has taken numerous measures to enhance its offering for managers in the alternative investment space. The most recent measure is the introduction of the Reserved Alternative Investment Fund (“RAIF”). The RAIF was passed into Law in July 2016 and its unique features greatly enhance the product offering for managers structuring alternative funds in Luxembourg.
Whilst a RAIF itself isn’t approved by the Luxembourg regulator, the CSSF, the service providers to the vehicle are regulated. The RAIF fits perfectly with the AIFMD regulatory environment as only authorized AIFMs will be permitted to manage RAIFs. “Time to market” for Specialized Investment Funds (“SIF”) has been one of the main challenges faced by the Luxembourg funds industry and the RAIF is designed to resolve this by eliminating the double layer of regulatory approval with regulation being focused on the AIFM. This allows mangers to focus on market opportunities and generate alpha.
As a leading European hosting platform provider for AIFM and UCITS managers, DMS has been leading discussions with managers and investors considering the RAIF as a suitable vehicle for fund launches and replacing existing fund vehicles such as the SIF. DMS is already seeing strong interest from its global client base in the RAIF and in response, DMS are delighted to announce that we have now established a fully serviced RAIF platform in Luxembourg.
Benefits of a RAIF structure
In summary it offers significant structuring flexibility and replicates many of the structural features of existing regimes.
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DMS Governance Ltd. (DMS), the world’s leading fund governance firm is pleased to introduce two new senior hires to its London team.
Based in Mayfair, the team led by Matthew Brown, welcomes Laurent Leclercq as Head of Distribution and Gavin Devitt as Director.
Laurent comes to DMS from global merchant bank Argenthal Private Capital where he was responsible for their overall strategy in Europe. At DMS, Laurent will concentrate primarily on advising on the funding and distribution of European products. He will be aided by his 18 years of investment management experience, and has a particular focus on European mutual funds, hedge funds, absolute returns strategies and structured products. He brings to DMS an extensive experience in the Swiss, France, Nordics, Benelux, UK and Channel Islands private wealth and institutional markets.
Gavin’s focus at DMS will be establishing and maintaining partnerships and business relations, drawing on his extensive financial and hedge fund experience. Prior to joining DMS, Gavin honed his skills at IFS State Street as a Senior Associate and at Citco Fund Services as a Senior Fund Accountant.
Welcoming Laurent and Gavin are Executive Directors Matthew Brown and David Morrissey.
“We are extremely pleased to welcome Laurent and Gavin to the DMS London team. Their knowledge and experience will be an invaluable asset to DMS as we continue to grow our European presence” commented Matthew, Executive Director.
Guidance Notes for the Common Reporting Standard
The British Virgin Islands International Tax Authority (“ITA”) released guidance notes for the Common Reporting Standard (“CRS”).
1. ITA clarified that there are separate notification and reporting requirements:
2. The UK FATCA/CDOT reporting requirements will transition into CRS since the UK and all of the Crown Dependencies and Overseas Territories (“CDOT”) will adopt the CRS and exchange information for the year 2016 for the first time in 2017.
According to the guidance there are items that would be reportable under the CDOT arrangement for 2017 which are not within the CRS, and terms within the CRS which would lead to more reporting than under the CDOT arrangement. The rule to follow will be that wherever the IGA or the CRS requires more reporting in the transition year of 2017, then the “more” should be reported. There will be no need for duplicate reporting.
The practical effect of this approach results in the following reporting:
There will be no need for duplicate reporting.
3. Investment Managers and Advisors that provide only provide investment advisory or management services will be regarded as not having any financial accounts and therefore, not required to report, as long as they meet the “solely because” test in the definition of a Financial Account in the CRS.
4. The CRS self-certification forms are accessible on the ITA website.
On 25th November, the Central Bank of Ireland (CBI) announced a welcome change to their requirements for Loan Originating Qualifying Investor Alternative Investment Funds (LQIAIFs) which will take effect from 3rd January 2017.
Notwithstanding the huge economic, industry and investor appetite for direct lending funds, there has to date been limited use of the Irish LQIAIF product which came into existence in mid-2014. The reason for this is what many perceived to be overly restrictive rules which were placed on the manager of such products. For example managers of Irish direct lending funds were obliged to limit their operations to the business of issuing loans, participating in loans, participating in lending and to operations directly arising therefrom, to the exclusion of all other commercial business.
The Central Bank has now confirmed that LQIAIFs will be entitled to invest in debt and equity securities of entities or groups to which the LQIAIF lends. In addition, debt and equity securities may be held for treasury, cash management or hedging purposes. These are key changes that will make the product more user friendly for international investment managers who wish to originate loans and raise capital through an Irish regulated investment fund.
The Common Reporting Standard (“CRS”) is an internationally agreed standard for automatic exchange of financial account information (“AEOI”) on financial account information, endorsed by the OECD and the Global Forum for Transparency and Exchange of Information for Tax Purposes.
The CRS framework requires financial institutions in participating jurisdictions to apply specific due diligence procedures in order to identify and report to the respective competent tax authority the financial accounts held by tax residents of participating jurisdictions on an annual basis. This information will then be exchanged amongst the participating jurisdictions. More than 100 jurisdictions, including major financial centers such as the British Virgin Islands, the Cayman Islands, Dubai, Hong Kong, Ireland, Luxembourg, Singapore and Switzerland have endorsed the CRS and will commence the AEOI in either 2017 or 2018.
China, Hong Kong and Singapore are scheduled to commence reporting in 2018 with respect to 2017 account information. Due diligence procedures for new accounts will start 1 January 2017.
Hong Kong and Singapore will conclude bilateral Competent Authority Agreements (“CAA”) which specify the type of information to be exchanged between two jurisdictions, the time and manner of exchange as well as the confidentiality and data safeguards to be respected for the exchange of information.
The State Administration of Taxation has recently released the Discussion Draft on the Administrative Measures on the Due Diligence Procedures for Non-residents Financial Account Information in Tax Matters that set forth detailed procedures for domestic financial intuitions to collect financial account information held by foreign individuals and entities. China is anticipated to implement the CRS from 1 January 2017 and facilitate the first AEOI under the CRS by September 2018. To note is that the Discussion Draft stipulated that non-compliance by a financial institution could affect its tax payment credit rating and for more severe violations, tax authorities could recommend that the respective relevant bodies in China take further actions (i.e. suspend or revoke business licenses, disqualify the qualifications of directors/senior management or order the financial institution to take disciplinary measures against the responsible directors/senior management).
Hong Kong has signed agreements with Japan and the United Kingdom to commence the AEOI with these two tax jurisdictions in 2018. The Government has stressed that it will expand Hong Kong’s network of AEOI with partners with which we have signed a comprehensive avoidance of double taxation agreement (“CDTA”) or a tax information exchange agreement (“TIEA”). The Government will commence AEOI discussions with all other CDTA/TIEA partners committed to adopting AEOI, and seek to conclude as many Competent Authority Agreements as practicable within 2017.
The Inland Revenue Authority of Singapore (“IRAS”) signed CAAs with nine countries (Australia, UK, Japan, Republic of Korea, South Africa, Norway, Italy, Canada and Finland) on the automatic exchange of financial account information based on the CRS as of 23 November 2016. Singapore and these nine countries will commence the AEOI under the CRS by September 2018. Singapore Reporting Financial Institutions have to submit the first report under the CRS by 31 May 2018 to IRAS but apply due diligence procedures starting 1 January 2017.
The 6th Annual Investment Summit in Brazil this past September was a great success and we are pleased to share a short video of the conference, featuring our host and Executive Director, Francine Balbina.
DMS Governance is pleased to share the recent article published by Samantha Fletcher Watts in the Irish Funds Newsletter.
Article:
Cybersecurity is a hot topic definitely here to stay for the foreseeable future but alongside the systems and IT infrastructure it governs, this is a topic that evolves and develops on a daily basis. There are numerous drivers of cyber attacks, political, hactivism, a new hacker cutting their cyber teeth and sometimes is just a lottery. Cyber attacks and incidents also come in many forms and many remain unidentified for long periods of time, particularly where they involve the theft of data. The data remains and a copy is taken therefore nothing is missed.
There are fund structures which utilize the sponsoring entity concept to comply with the U.S. Foreign Account Tax Compliance Act (“FATCA”) whereby the sponsoring entity agrees to perform all required due diligence, withholding, reporting and other requirements for FATCA purposes on behalf of its sponsored entities. The sponsored entities can use the Global Intermediary Identification Number (“GIIN”) of the sponsoring entity. From 1 January 2017 onwards, certain sponsored entities will no longer be able to rely on the GIIN of the sponsoring entity and the sponsoring entity will be required to obtain separate GIINs for certain of its sponsored entities.
A sponsoring entity must register its sponsored entities that are covered by a Model 1 Intergovernmental Agreement (“IGA”) (i.e. Cayman Islands, BVI, etc.) by the later of 31 December 2016 or 90 days after an U.S. reportable investors is first identified. Sponsored entities domiciled in jurisdictions that are either covered by a Model 2 IGA or not covered by any IGA have to obtain a GIIN by 31 December 2016.
In order for a sponsored entity to receive an approved GIIN which is published on the IRS Foreign Financial Institution List on 1 January 2017, the application must be submitted and approved in the FATCA Online Registration System by 23 December 2016. To facilitate this requirement, the FATCA Online Registration System includes a feature to allow sponsoring entity financial institutions to add sponsored entities to its application.
Additionally, a sponsored that entity that obtains its own GIIN should update IRS Forms W-8 and self-certifications and send the updated document to all relevant counterparties for purposes of FATCA documentation.
Algumas estruturas de fundos de investimentos utilizam o conceito de sponsoring entity para cumprir as regras de U.S. Foreign Account Tax Complice Act (“FATCA”) pelo qual a sponsoring entity concorda em realizar todos os requisitos de due diligence, retenções devidas, relatório e outras obrigações para fins FATCA em nome das entidades patrocinadas . As entidades patrocinadas podem usar o Global Intermediary Identification Number (“GIIN”) da entidade patrocinadora. A partir de 1 de Janeiro de 2017, as sponsored entities não poderão utilizar o número de GIIN da entidade patrocinadora (sponsoring entity) e a entidade patrocinadora será obrigada a obter GIINs separados para algumas das suas entidades patrocinadas.
A sponsoring entity deverá registrar as entidades patrocinadas, que fazem parte do Modelo 1 do Acordo Intergovernamental (“IGA”) (isto é, Ilhas Cayman, BVI, etc.) até 31 de dezembro de 2016 ou 90 dias após algum investidor americando ser identificado pela primeira vez . As entidades patrocinadas domiciliadas em jurisdições que são cobertas por um IGA Modelo 2 ou não cobertas por qualquer IGA têm de obter um GIIN até 31 de Dezembro de 2016.
Para que uma entidade patrocinada receba um GIIN, que será publicado na Lista de Instituições Financeiras Estrangeiras do IRS em 1 de Janeiro de 2017, o pedido deve ser apresentado e aprovado no Sistema de Registo Online de FATCA até 23 de Dezembro de 2016. Para facilitar este processo, O Sistema de Registro Online da FATCA inclui um recurso para permitir que entidades financeiras patrocinadoras adicionem entidades patrocinadas à sua aplicação.
Adicionalmente, uma entidade patrocinada que obtenha seu próprio GIIN deve atualizar os Formulários W-8 do IRS e auto-certificações (self certification) e enviar os documentos atualizado para todas as contrapartes relevantes para fins de atualização da documentação de FATCA.
We are busy preparing for our first Investment Funds Summit in New York to be held on 19th January 2017, at the Kimpton Eventi. To learn more about this exclusive invite only event….
John D’Agostino will be speaking at the Context Summits Alternative Lending Summit on 30th January 2017 in Miami.
The Cayman Islands Government issued the second tranche of the Common Reporting Standard (“CRS”) regulations at the end of December 2016. Updated Guidance Notes will be issued in Q1 2017 by the Cayman Islands Tax Information Authority (“TIA”) to assist with the implementation of the regulations. Furthermore, TIA stated in the industry advisory, that after 2017 all CRS Participating Jurisdictions “will be subject to an in-depth peer review process facilitated by the OECD”.
Key Provisions of the second tranche CRS regulations:
All Cayman Islands Financial Intuitions (“CFI”) – Cayman Reporting Financial Institution (“CRFI”) and Non-Reporting Financial Institution (“NRFI”) – are required to submit a Notification to TIA by 30 April 2017 via the Cayman AEOI Portal. In addition to the Principal Point of Contact, the notification must also include an individual that is authorized to provide the required information of any changes to TIA with respect to the notification.
Note: Entities that were classified as Non-Reporting Entities under Annex II of the US – Cayman IGA, i.e. Investment Manager, Investment Advisors, General Partners, etc. may be classified as CRFIs for CRS purposes and would also have to file a notification with TIA.
The regulations implement a Nil Return filing requirement for CRS. All CRFIs are required to report via the Cayman AEOI Portal by 31 May 2017 either:
Currently, CRFIs would be required to submit a separate return with respect to each Reportable Jurisdiction for which it has Reportable Accounts under the CRS.
For 2017 onwards, CRFIs will report on UK Reportable Persons pursuant to the CRS Regulations instead of the UK Regulations.
The Cayman Islands have adopted the “wider approach” regarding CRS due diligence since additional countries might join the list of CRS Participating Jurisdictions. According to the wider approach, a CRFI must identify the tax status of all account holders and relevant controlling persons, not solely those persons that appear to be Reportable Persons.
A CRFI must establish, implement and comply with written policies and procedures to comply with the CRS Regulations. These policies and procedures have to address the obligations regarding due diligence, record keeping, notification and reporting to the TIA via the Cayman AEOI Portal as well as information regarding appointment of any third parties and cooperation with the TIA’s compliance measures.
The CRS penalties have increased from up to $5,000 under the regulations for US/UK FATCA to up to $50,000 for any offence by a CFI or up to $20,000 for an offence by any other person.
Note: It is also an offense under the regulations for any person to provide a false self-certification to a CFI. CFIs and their agents should therefore be aware that a person’s false self-certification may give rise to an obligation to make a suspicious activity report.
Please contact the DMS ITC Group with your questions and ask for further details about our services and how we can assist you to ensure compliance of your entities with FATCA and CRS.
ROMAN IPFLING
Director | BIO
ripfling@dmsgovernance.com
(p) +1.345.749.2426
KEVIN A. PHILLIP
Executive Director | BIO
kphillip@dmsgovernance.com
(p) 1.345.749.2590
Managing Director of DMS Bank & Trust (DMS Bank), Colm O’Driscoll is delighted to share the recent news that, once again, the Cayman Islands have been confirmed as the world’s number one specialized banking centre.
The established industry publication The Banker magazine recently announced the results of its 2016 survey and, for the eighth consecutive year, the Cayman Islands has maintained the top spot in this highly-regarded, global survey. Jersey and Guernsey were ranked second and third respectively in the specialized financial centres list, with the Bahamas and Bermuda closing out the top five places in the survey. The publication is part of the Financial Times Group, a globally recognized and respected finance publication and its IFC rankings are based on data ranging from financial markets indicators to economic potential and business environment factors. The ranking focuses on the level of international business and the value for institutions seeking to expand their international operations.
Other recent banking accolades have seen DMS Bank receive the High Performance in Correspondent Banking Award from BNY Mellon for the third time. DMS Bank is a specialist, boutique bank that provides banking services to hedge funds, private equity funds, fund of hedge funds and investment management companies.
Jean-Pierre Saint Victor, Managing Director & Client Executive of BNY Mellon Treasury Services Division comments “On behalf of BNY Mellon, I want to congratulate DMS Bank on winning our STP Award for the third straight year. Due to your care and attention to detail, we were able to process 92% of your payments on a straight-through basis, with no returns or exceptions. DMS Bank has been a prized and valued client of BNY Mellon and we look forward to extending our relationship.”
DMS Bank is licensed and regulated by the Cayman Islands Monetary Authority (CIMA), under the Cayman Islands Banks & Trust Companies Law (2013 Revision). We partner exclusively with global, top tier financial institutions to provide clients with a comprehensive range of tailored service solutions including banking, custody, trading and cash management facilities.
Please contact Colm O’Driscoll and Benjamin Marler to further discuss your banking needs.