Assurance

Formal QI Periodic Reviews

As required by Section 10.05 of the QI Agreement, Responsible Officers of Qualified Intermediaries, if they are not eligible for a waiver, are required to designate a reviewer to perform a QI Periodic Review. The periodic review includes:

• Procedures related to Account Documentation: This involves testing whether the QI has obtained account documentation that meets the requirements of the QI Agreement, as well as those required under FATCA regulations.

• Procedures related to Withholding Rate Pools: This entails testing whether the QI has correctly assigned account holders to the appropriate withholding rate pools and whether, with respect to a partnership or trust described in section 4.05 of the QI Agreement, the QI has applied the highest rate of withholding applicable to each type of reportable amount.

• Procedures related to Withholding Responsibilities: This involves testing whether the QI has applied the correct rate of withholding to U.S. sourced income earned and whether the QI has properly backup withheld or withheld under chapter 4 when required.

• Procedures related to Return Filing (1042) and Information Reporting (1042-S, 8966): This includes reconciling original and amended Forms 1042 and 1042-S filed by the QI with those received from the QI's withholding agents and testing, for a sample of Forms 8966, whether the QI has accurately reported the information.

• Procedures related to Significant Changes in Circumstances

The result of the Periodic Review is a report that conforms to the formal requirements outlined in Section 10.05 of the QI Agreement and contains the factual information required to be provided by the QI Responsible Officer under Appendix I, Part IV of the QI Agreement.

Other Operational Tax Reviews and Sanity Checks

FATCA Review

Under FATCA, some Foreign Financial Institutions are obliged by the FFI Agreement to perform a periodic certification in which the FFI confirms that they have conducted a periodic review of the sufficiency of the compliance program and their compliance with the requirements of the FFI Agreement / FATCA regulations. The FATCA Review is part of PQS's service offering and is usually performed in a very tailored form, as the FATCA review is not as formalized as, for example, the QI Periodic Review.

CRS Review

The PQS CRS Review serves as preparation for reviews/audits conducted by authorities, such as CRS audits by the ESTV (Federal Tax Administration). As with the FATCA review, PQS offers tailor-made reviews with a scope and scale adapted to each client’s specific needs.

Many of our clients are interested in our Advisory Services after performing a review or sanity check.

SEC Reviews

As part of their SEC registration, investment advisers are subject to the provisions of the Investment Advisers Act of 1940.

Compliance Review

The purpose of the SEC Compliance Review is to assess compliance with SEC requirements and identify potential deficiencies in the fulfilment of the adviser’s obligations.

Annual Review

SEC-registered investment advisers must conduct an Annual Review each year to assess the adequacy of their policies and procedures, as well as the effectiveness of their implementation. As an external reviewer, we perform such Annual Reviews and use gap analyses to identify areas where gaps remain and where targeted improvements can be made.

Ongoing/Continuous Assurance

Financial institutions are subject to constant change – whether in relation to processes, personnel, or operational procedures. This dynamic environment often means that the results of a review or sanity check have only a limited lasting impact. When we support financial institutions again after a few years, we frequently find that previously identified errors still exist or have reoccurred.

To address this challenge, we perform periodic and continuous sanity checks for financial institutions in a compact format, for example on an annual basis. These checks are limited in scope but highly effective in practice. Instead of reviewing, for example, 100 accounts every five years, 20 accounts are tested annually over the same five-year period.

This approach enables the financial institution to monitor and improve its processes and controls on an ongoing basis. At the same time, it can rely on PQS as an experienced, dependable, and long-term partner.

We also utilize this approach in our Operational Tax Compliance Service.