The United States Treasury and Internal Revenue Service (IRS) released proposed regulations for the Foreign Account Tax Compliance Act (FATCA) on February 8, 2012, fewer than 11 months from the date U.S. withholding agents must ensure their new customer process is FATCA-compliant, and about 17 months from the FATCA-effective date for foreign financial institutions (FFIs). To date, financial firms have been reluctant to engage in full-fledged FATCA programs. This must change now, considering that global institutions often reserve an 18-month window for substantial technology change.

In order to meet the FATCA deadline, top priority should be given to two areas: classifying existing clients, and enhancing systems for new customers and new counterparties.