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Trade Talk - Fall 2010

Table of Contents


In this issue...

A message from our CEO

A growing number of global financial institutions and governments are looking to invest north of the 49th parallel.

Bernanke to the rescue

U.S. Federal Reserve Chairman Ben Bernanke appears set to push ahead with the start of the next round of quantitative easing (QE) – “printing” more money to buy bonds and lower yields in the process.  Given all of the recent hooplah that has accompanied that growing expectation, a few rounds of QE by the U.S. Federal Reserve would seem to be the cure for everything from the stock market, the bond market, commodity prices and maybe the common cold, for that matter.

Economic update

We continue to expect a broad sustained global economic expansion over the next several years with the fastest growth in those countries in the strongest financial position (largely in the developing world) and the slowest growth likely in those countries with a debt hangover (largely in the developed world).  The fundamental trend of rising global productivity and incomes due to wider dispersion of modern technology should persist.  Because there is likely to be only a gradual decline in high unemployment in the debt hangover countries, we expect rising trade tensions, but not a full-scale “jobs trade war.”

FATCA: New U.S. tax rules to compel disclosure of U.S. account holder information to the IRS

The U.S. government has passed new tax rules that compel non-U.S. financial institutions and other entities to document and disclose information about their U.S. account holders to the U.S. Internal Revenue Service (IRS) or face a 30 per cent withholding tax.  These new rules are intended to help the U.S. government better assess the income and value of U.S. persons’ foreign holdings for the purposes of collecting income tax.

Pension benefit payment survey: acting on your feedback

In May 2010, nearly 300 pension plan sponsors and third-party benefit administrators completed CIBC Mellon’s semi-annual pension benefit payments survey.  Respondents were very positive about our client service levels and our Pensioner Information Network.  Most importantly for CIBC Mellon, respondents identified several opportunities for us to further enhance our products and services, and we will be making a number of improvements to our systems based on this feedback.

Q&A: HST administration, accounting and elections

On July 1, 2010, the new harmonized sales tax (HST) came into effect in Ontario and British Columbia.  The HST requires a number of changes to tax-filing practices among certain financial institutions, pension plans and some trusts. In this Q&A, Peter Maden, vice president, institutional and pension accounting, answers common HST-related questions for our pension clients and outlines how CIBC Mellon is supporting them in complying with new HST rules.

This issue by:

Thomas S. Monahan
Avery Shenfeld
Richard Hoey
Simon Lee
Laura Barker
Peter Maden


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Trade Talk® is provided for general information and reference purposes only and none of CIBC Mellon Global Securities Services Company, CIBC Mellon Trust Company, CIBC, The Bank of New York Mellon Corporation nor any of their affiliates make any representations or warranties as to its accuracy or completeness, nor do any of them take any responsibility for third parties to which reference may be made. Readers should be aware the content of this publication should not be regarded as legal, tax, accounting, investment, financial or other professional advice nor is it intended for such use, and the statements contained herein, are not an offer or solicitation to buy or sell any products (including financial products) or services mentioned and should not be construed as such. The contents may not be comprehensive or up-to-date, and no responsibility is taken for updating any information contained within this document. Information contained in this document is subject to change without notice. This document must not be reproduced either in whole or in part, without the express written permission of CIBC Mellon. CIBC Mellon assumes no liability (direct or consequential or any other form of liability) for any errors in or reliance upon this information. Trademarks, service marks and logos belong to their respective owners. ® Copyright CIBC Mellon 2014 All rights reserved.

Table of contents A message from our CEO Bernanke to the rescue Economic update FATCA: New U.S. tax rules to compel disclosure of U.S. account holder information to the IRS Pension benefit payment survey: acting on your feedback Q&A: HST administration, accounting and elections
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