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Implementation of the Updated CRA Guidance on FATCA/CRS

January 14, 2020

Straight Talk – January 14, 2020

Implementation of the Updated CRA Guidance on FATCA/CRS

Simon Lee

On Friday November 22, 2019, the Canadian Revenue Agency (CRA) released a revised draft Foreign Account Tax Compliance Act (FATCA) and Common Standard Reporting (CRS) guidance (the revised draft guidance) to industry associations and requested comments to be provided to them by December 20, 2019. The guidance was then distributed by the industry associations to a number of industry representatives to provide comments.

The revised draft guidance contains a number of changes including accounts opened without valid self-certifications for FATCA or CRS on or after January 1, 2020, would be subject to a penalty of up to $2,500 per account per regime. For instance, if a financial institution (FI) opened an account without self-certifications for both FATCA and CRS it would be penalized up to $5,000 per account.

In addition, the International Revenue Service (IRS) has published an announcement stating that a foreign financial institution (FFI) that is significantly non-compliant would be notified by the IRS and required to correct its errors (e.g. no U.S. TIN for an account reported to them) before the IRS takes any further action, such as removing the FFI’s Global Intermediary Identification Number (GIIN) from the IRS FFI List. An FFI that no longer has a valid GIIN will be subject to FATCA withholding at 30 per cent on certain U.S. source payments made to them.

Due to the changes to the CRA documentation requirements, CIBC Mellon will open a new account for an account holder only when it receives all the required tax documentation for the account commencing January 1, 2020. CIBC Mellon will continue to support ongoing, open communication with clients and industry stakeholders regarding the asset servicing implications of FATCA and CRS. We encourage interested client stakeholders to review our recently-updated FATCA information resources on our website. CIBC Mellon continues to participate in industry association meetings and provide input for the industry consultation sessions with the CRA.

To learn more, refer to CIBC Mellon’s resources on FATCA and CRS or contact your relationship manager.

In This Edition:

  • Canada’s Office of the Superintendent of Financial Institutions Releases January 2020 Edition of “The OSFI Pillar” Newsletter
  • The Canadian Securities Administrators Release Consultation Paper on Access Equals Delivery Model
  • Upcoming Bank of Canada Interest Rate Announcement and Monetary Policy Report

Canada’s Office of the Superintendent of Financial Institutions Releases January 2020 Edition of “The OSFI Pillar” Newsletter

Canada’s Office of the Superintendent of Financial Institutions has released the latest edition of its newsletter, The OSFI Pillar. The January 2020 edition includes feature articles on reinsurance and OSFI’s Culture and Conduct Risk group as well as a summary of recent guidelines, public statements and other information.

Access a copy of the newsletter on OSFI’s website.

The Canadian Securities Administrators Release Consultation Paper on Access Equals Delivery Model

The Canadian Securities Administrators (CSA) recently published CSA Consultation Paper 51-405 Consideration of an Access Equals Delivery Model for Non-Investment Fund Reporting Issuers (the consultation paper), which solicits views on the suitability of introducing an “access equals delivery” model in the Canadian market.

The CSA notes that under this model, delivery of a document would be effected by the issuer alerting investors that the document is publicly available on the System for Electronic Document Analysis and Retrieval (SEDAR) and the issuer’s website.

The CSA requests comments in writing by March 9, 2020. For more information, view the CSA’s news release.

Upcoming Bank of Canada Interest Rate Announcement and Monetary Policy Report

On Wednesday, January 22 at 10 a.m. ET, the Bank of Canada (BoC) will announce its decision on the target for the overnight rate. At that time, the BoC will be posting a press release that provides a brief explanation of the factors influencing its decision, together with its Monetary Policy Report (MPR).

The BoC’s MPR will provide the next full update of its outlook for inflation and growth in the Canadian economy, and the BoC’s assessment of risks.

For more information, see the BoC’s website.




Straight Talk is provided for general information purposes only and CIBC Mellon Global Securities Services Company, CIBC Mellon Trust Company, CIBC, The Bank of New York Mellon Corporation and their affiliates make no 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, accounting, investment, financial, tax or other professional advice nor is it intended for such use.