Complying with the common reporting standard : a Maltese perspective

Abstract

Purpose – The study deals with the procedures needed in a participating jurisdiction to adhere to the new requirements of this new automatic exchange of information regime. Apart from providing a comprehensive understanding of the requirements imposed by the Common Reporting Standard, the study also intends to evaluate the opinion of those concerned in the implementation of the CRS within financial institutions and governmental agencies, so as to formulate an understanding of the procedures required while identifying any problems which they might encounter in due course. Design – To achieve the research objectives, an in-depth qualitative study was carried out. For this purpose, 13 interviews were carried out consisting of 6 financial institutions, 5 professional service providers and 2 regulatory bodies. This enabled the author to obtain the opinion of the stakeholders mostly affected by this new global initiative. Findings–The study shows that there are numerous elements that reporting financial institutions need to consider while designing and implementing the necessary procedures for the proper adherence with the Common Reporting Standard. This suggests that, apart from gaining adequate knowledge on the requirements, financial institutions need to plan at an early stage so as to minimise potential future difficulties. In addition, Competent Authorities also need to build the necessary administrative and IT infrastructures that allow the exchange of such information. Conclusion– Based on the results from interviews conducted, this new regime will have a significant impact on the majority of financial institutions. It was concluded that procedural and system changes are, in certain instances, inevitable and thus proper planning is crucial and this should be done at the earliest stage possible. With regard to infrastructures required from Competent Authorities, minimal difficulties are expected to be encountered mainly due to the fact that the government holds adequate and sufficient human resources to complete the task. Value – The findings provide extensive information on the implications which might be faced by reporting financial institutions and competent authorities in due course. In this respect this study may provide further guidance to those stakeholders currently planning their way forth.