Investment Management Quiz
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Questions and Answers

What does an Intergovernmental Agreement (IGA) simplify for Financial Institutions?

  • Client confidentiality agreements
  • Tax exemptions for all clients
  • Reporting and compliance obligations (correct)
  • Investment strategies for funds

    • Which of the following is an example of a Financial Institution registered with the US IRS?

  • Bank of America
  • JP Morgan Chase
  • Wells Fargo Bank
  • BPI Direct BanKO (correct)

    • In which Model of the IGA do FFIs report to the local country authority?

  • Model I (correct)
  • Model A
  • Model II
  • Model B

    • What is the purpose of the Global Intermediary Identification Number (GIIN)?

    <p>It serves as proof of registration with the US IRS</p> Signup and view all the answers

    What characterizes the first 13 characters of a GIIN?

    <p>They are system generated</p> Signup and view all the answers

    Which of the following countries is associated with Model I under the IGA?

    <p>Philippines</p> Signup and view all the answers

    What do the 14th and 15th characters in a GIIN indicate?

    <p>The role of the Financial Institution</p> Signup and view all the answers

    Which of the following codes indicates a Lead Entity in a GIIN?

    <p>LE</p> Signup and view all the answers

    What does the term 'US Person' include?

    <p>Passport holder and Dual</p> Signup and view all the answers

    If a client has US indicia of place of birth but is already a Non-US Person, what are the documentary requirements?

    <p>All of the Above</p> Signup and view all the answers

    Does having US indicia ensure that the client is a US Person?

    <p>No, it is not a guarantee</p> Signup and view all the answers

    Is the client's documentation sufficient if they worked in the US for 6 years and submitted a Certificate of Loss of Nationality?

    <p>No, additional proof of residency is needed</p> Signup and view all the answers

    What is the first step in identifying if an entity is a US or Non-US entity?

    <p>Obtain the Entity’s US TIN</p> Signup and view all the answers

    Which form should a Specified US Entity submit to comply with FATCA?

    <p>IRS Form W-9</p> Signup and view all the answers

    For a Non-US Foreign Financial Institution (FFI) incorporated in the Philippines, what must they obtain?

    <p>Entity’s GIIN</p> Signup and view all the answers

    Which classification requires an entity to obtain its GIIN?

    <p>FFI in a Partner Jurisdiction</p> Signup and view all the answers

    Which of the following would qualify as passive income?

    <p>Dividends from stocks</p> Signup and view all the answers

    What is NOT considered passive income according to the provided description?

    <p>Income from selling handmade crafts</p> Signup and view all the answers

    Which document is mentioned as necessary for NFFE – Passive with Controlling US Person?

    <p>BPI FATCA Form</p> Signup and view all the answers

    What must a corporate officer do concerning the BPI FATCA Form?

    <p>Certify the correctness of data</p> Signup and view all the answers

    Which of the following issues could arise during FATCA compliance review?

    <p>Erroneous Entity FATCA classification</p> Signup and view all the answers

    Which financial asset transaction is considered under passive income?

    <p>Futures and options trading</p> Signup and view all the answers

    What must be obtained from financial institutions in relation to FATCA?

    <p>GIIN</p> Signup and view all the answers

    Which scenario describes a passive income generating activity?

    <p>Investment in stocks for dividends</p> Signup and view all the answers

    What document should be obtained to verify if an entity is a Specified US Entity?

    <p>IRS Form W-9</p> Signup and view all the answers

    Which classification requires an entity to accomplish a separate FATCA Self Certification Form?

    <p>Non-Financial Foreign Entity (NFFE) - Passive with Controlling US Person</p> Signup and view all the answers

    What is required for a FFI that is incorporated outside of the Philippines?

    <p>Entity's GIIN</p> Signup and view all the answers

    Which of the following is classified as a Non-US/Foreign Financial Institution?

    <p>FFI with GIIN incorporated in the Phils.</p> Signup and view all the answers

    What classification includes entities that are tax-exempt under US federal income tax?

    <p>US Entity Others</p> Signup and view all the answers

    What is NOT required from a Non-Financial Foreign Entity (NFFE) - Active?

    <p>FATCA Self Certification Form</p> Signup and view all the answers

    Which classification of entity is not allowed to open accounts?

    <p>Non-Participating Foreign Financial Institution (NPFFI)</p> Signup and view all the answers

    Which document is needed for entities classified as FFI GIIN not needed?

    <p>IRS Form W-8 BEN E</p> Signup and view all the answers

    What FATCA classification does Deutsche Bank AG fall under?

    <p>FFI in a Partner Jurisdiction</p> Signup and view all the answers

    Which entity is classified as a US Entity Others under FATCA?

    <p>Delta Airline</p> Signup and view all the answers

    What classification applies to the University of Oxford in terms of FATCA?

    <p>NFFE Active</p> Signup and view all the answers

    Which of the following organizations is classified as NFFE Active?

    <p>World Health Organization</p> Signup and view all the answers

    What does the classification 'FFI GIIN not Needed' indicate about Rural Bank of Laguna?

    <p>It is a non-US financial institution with only low-value accounts.</p> Signup and view all the answers

    Which classification applies to the U.S Embassy?

    <p>US Entity Others</p> Signup and view all the answers

    How is Globe Telecoms classified under FATCA?

    <p>NFFE Active</p> Signup and view all the answers

    What FATCA classification does the United Nations hold?

    <p>NFFE Active</p> Signup and view all the answers

    Study Notes

    Management

    • Involves investing, administering, or managing funds on behalf of others.
    • BPI offers various financial services: BPI Direct, Banko, BPI Wealth, BPI Capital.

    Intergovernmental Agreement (IGA)

    • An agreement between a jurisdiction and the US to facilitate FATCA implementation.
    • Simplifies reporting and compliance obligations for Financial Institutions (FFIs).
    • Two models:
      • Model I: FFIs report to local authorities, which then report to the US IRS (e.g., UK, Canada, Philippines).
      • Model II: FFIs report directly to the US IRS (e.g., Hong Kong, Japan).

    Global Intermediary Identification Number (GIIN)

    • A 19-character identification string proving a Financial Institution's registration with the US IRS.
    • System-generated first 13 characters; the subsequent characters indicate the FFI's role (e.g., Lead Entity, Branch).
    • The last three digits signify the institution’s country of tax residence.

    FFIs Registered with the US IRS

    • GIINs are assigned to various institutions like Bank of the Philippine Islands and BDO Unibank.
    • Incorrect FATCA classifications can lead to non-compliance issues.

    FATCA Classification – US Person Definition

    • A US Person includes residents and citizens, such as passport holders and green card holders.
    • Certain documentation needed for clients with US indicia living abroad.

    Financial Institution Classification Requirements

    • Entities must provide specific documents based on their FATCA classification (e.g., IRS Form W-9 for US entities).
    • Different classifications include Specified US Entity, Non-Financial Foreign Entity (NFFE), and Foreign Financial Institution (FFI).

    Passive Income Definition

    • Passive income includes dividends, interest, rents, royalties, and gains from asset transactions.
    • Categorization affects FATCA classification for entities.

    Issues Noted During FATCA Compliance Review

    • Common issues include missing FATCA forms, incorrect classifications, and inadequate documentation for US TIN.
    • Compliance is critical for maintaining lawful operations among various entities.

    Activity Outcomes on FATCA Classification

    • Entities evaluated range from Mercury Drug (NFFE Active) to JP Morgan and Chase Co (US Entity Others).
    • Classification depends on the nature and engagement of the entity in business activities or services.

    Additional Compliance Activities

    • Assessments require reviewing Articles of Incorporation to determine FATCA classification.
    • Understanding entity roles within FATCA prevents erroneous classifications and compliance issues.

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    Description

    Test your knowledge on the principles and practices of managing funds and investments. This quiz covers various strategies and examples in the realm of financial management, helping you understand how to invest and administer funds effectively.

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