Common Reporting Standards Come Into Effect For Many Offshore Funds On January 1, 2016

On January 1, 2016, the new standard for automatic exchange of information between tax authorities developed by the OECD (the “Common Reporting Standard”) becomes effective in the Cayman Islands, Bermuda, the British Virgin Islands, Guernsey, Jersey and a number of other jurisdictions that are part of the “Early Adopters Group.” 

Starting on this date, all persons opening new accounts with financial institutions located in one of such jurisdictions are required to provide certain “self-certifications” that allow such financial institutions to perform due diligence and determine the investors’ tax residency. Due diligence procedures for identifying existing individual accounts with balances of at least $1 million will have to be completed by December 31, 2016, while due diligence with respect to all other investors must be completed by December 31, 2017. The first exchange of information with respect to certain accounts is expected to take place in 2017.