Qualified Intermediary

Helping financial institutions of all sizes reduce risk and improve profitability while safeguarding regulatory compliance. We enable banks, who act as Qualified Intermediaries (under chapter III of IRS), to comply with documentation and withholding requirements relating to income received from US securities.

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Why Temenos Qualified Intermediary

Temenos Qualified Intermediary provides Temenos Core Banking clients with a fully automated solution designed to help foreign financial institutions subject to Qualified Intermediary (QI) agreement with US IRS.

Under Chapter III (IRS) rules, financial institutions that act as QI are required to comply with tax withholding rules related to income sourced from US securities received by their customers and customer portfolios. Temenos Qualified Intermediary addresses the challenges of QI by helping entities meet their obligations with a comprehensive solution for all aspects of due diligence, withholding, and capturing the data set essential for downstream reporting.

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Fully automated Qualified Intermediary solution

Supports the fundamental processes, in conjunction with complementary Temenos Core Banking modules, from identification of US-sourced securities income to due diligence, tax withholding, and payment in line with US IRS requirements.

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US tax database to support downstream reporting processes

A comprehensive data store of the detailed information pertaining to banks’ customers and portfolios required for QI report generation. This includes: corporate events, customer/portfolio classifications, income codes, exemption codes, and recipient codes as per both Chapter III and IV, tax types with corresponding tax rates and amounts.

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Replace manual processes and reduce costs of compliance

Remove inefficiencies associated with manual processing, helping you better serve your customers, reduce the headline costs related to compliance processes, and avoid penalties related to incorrect withholding.

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Leading-edge technology

Built on Temenos Core Banking, our solution provides scalable, best-in-class capabilities. This includes advanced API-first technology, which empowers banks to innovate rapidly and connect to ecosystems, and enables developers to build custom connectivity or apps.

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Exhaustive and detailed due diligence process

Examines existing account holders and portfolios to determine whether income from US income transactions is subject to withholding under either Chapter III (QI) or Chapter IV (FATCA) of IRS regulations. This involves identifying transactions with US-sourced income, viewing individual client characteristics, processing self-certification documentation, and applying tax withholding in accordance with the Double Taxation Avoidance Agreement (DTAA) between the US and relevant operating country.

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Flexible rules-based approach to determine QI status

Fully configurable, you can specify the rules, data elements, and documentation required to determine the QI status of your customers and customer portfolios.

Key features of Temenos Qualified Intermediary

In conjunction with Temenos Core Banking modules Securities, Tax, FATCA, and Document Validation, our solution supports the fundamental processes a Qualified Intermediary needs to perform to comply with IRS rules:

  • Application of the required identification and due diligence procedures with respect to your customers and customer portfolios.
  • Determine whether income from US income transactions is subject to withholding under either Chapter III (QI) or Chapter IV (FATCA) of IRS.
  • Where chapter III withholding applies: withhold and pay tax on income from US securities to the IRS, subject to relevant tax treaties between the customer’s tax residence and the US.
  • Capture all data required to support reporting purposes, including customer and customer portfolio classification and subsequent withholding statuses.

Flexible component-based implementation

Modular design enables “progressive renovation” by providing the option to implement in phases. You can implement the module either independently (with Temenos Core Banking) to interact with existing third-party wealth management and tax systems, or in any combination with the other Temenos Core Banking modules highlighted.

A comprehensive solution

Supports key aspects of determining QI status. Our solution addresses the challenges faced by Qualified Intermediaries with a comprehensive approach that helps you meet your compliance obligations in line with IRS rules.

Tax/regulatory solutions for global compliance

Temenos Qualified Intermediary is part of our Regulatory Compliance product suite, providing complementary tax and compliance solutions to support our global client base.