FATCA and CRS are crucial global regulatory frameworks aimed at increasing tax transparency and preventing tax evasion. TAINA, which offers a fully automated FATCA and CRS validation platform, recently offered a guide to the regulations and their importance in fund administration.
The Foreign Account Tax Compliance Act (FATCA), introduced by the United States, requires foreign financial institutions to report financial accounts held by U.S. taxpayers to the Internal Revenue Service (IRS). Meanwhile, the Common Reporting Standard (CRS), developed by the Organisation for Economic Co-operation and Development (OECD), mandates financial institutions to share account information across participating jurisdictions.
For fund administrators, ensuring compliance with these regulations is essential. This involves several key responsibilities, including identifying reportable accounts, fulfilling reporting obligations, and assisting clients in managing their FATCA and CRS duties to mitigate compliance risks.
When selecting a fund administrator, it is vital to assess their ability to manage FATCA and CRS compliance effectively, TAINA explained. One of the primary considerations is their level of regulatory expertise. Since tax laws frequently evolve, administrators must stay updated on the latest requirements and be well-versed in jurisdiction-specific regulations. A deep understanding of global compliance standards ensures they can efficiently navigate complex tax landscapes.
Additionally, a strong compliance framework is necessary to meet regulatory obligations. Fund administrators should have established processes, including automated due diligence systems, to ensure accurate and timely reporting to tax authorities.
Technology also plays a significant role in modern compliance. With the vast amount of financial data involved, fund administrators must utilise scalable and efficient solutions to streamline operations.
Global operations require seamless coordination across multiple jurisdictions, making it essential for fund administrators to have a well-integrated global presence.
A client-centric approach further distinguishes a reliable fund administrator. Beyond fulfilling basic compliance needs, administrators should act as strategic partners, offering tailored solutions to help clients navigate evolving tax regulations.
By partnering with an experienced fund administrator, investment funds can mitigate risks, streamline compliance processes, and demonstrate transparency to stakeholders.
TAINA, a leader in compliance technology, offers an award-winning FATCA and CRS validation and reporting platform designed to enhance compliance efficiency. The platform automates key processes, ensuring accuracy and reducing manual workload for fund administrators.
Key features of TAINA’s platform include:
- Automation for accuracy and efficiency
- Scalability and adaptability
- Built-in regulatory expertise
- Enhanced client experience
- Cost savings and risk mitigation
By leveraging TAINA’s platform, fund administrators can transform tax compliance from a regulatory burden into a strategic advantage. Ensuring seamless adherence to FATCA and CRS not only protects financial institutions from penalties but also strengthens their reputation in the global investment landscape.
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