“The proposed approaches across the globe simply won’t work. They won’t mesh. They won’t interact. They will cause conflicts,” Pearson said at the meeting. “Washington, we have a problem,” he said.
Patrick Pearson, a European Commission official, warned that many of the US rules “won’t work”.
The Financial Times
European hedge funds face arguably the worst – whether to break their local rules or those in the US. The way new OTC trading rules in each jurisdiction are written, it appears they will be subject to both, but will only be able to comply with one or the other… “If you put a European hedge fund in a situation where it has to choose between complying with US or European rules, it may avoid the swap transaction altogether because it will not want to risk being non-compliant,” says Wayne Pestone, chief regulatory officer at FXall in Washington, DC. “Putting hedge funds in this position just doesn’t make any sense.”
There is a lack of clarity on the various steps that need to be taken and the delays in implementation have led to further confusion. Imposing additional overseas (i.e., US) rules could be duplicative and also lead to jurisdictional conflicts. Non-US regulators may also be concerned about such an approach. Cost could be another important factor.
The US Foreign Account Tax Compliance Act (FATCA) has been described as “a kind of US backward imperialism”
FATCA Act could violate American banks… “there is concern about possible violations to the American legal orders (bank secrecy, taxation, consumer protection) with the implementation of the law”
This is only a bit of many recent news articles that I quickly put together in a few minutes. More stateside Americans seriously need to spend more time reading international media!