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To catch tax evaders, Sebi and other regulators are planning to put in place a common reporting standard (CRS) for all financial institutions under their purview to facilitate an automatic exchange of suspicious trades and other information through a global pool.
The CRS would also prescribe the standard due diligence procedures that must be followed by all financial institutions (FIs) to identify reportable accounts.
The FIs that would be required to report under the CRS would include banks and custodians, as also other entities like brokers, certain collective investment vehicles or funds and select insurance companies.
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The reportable accounts would include those by individuals and entities (which includes trusts and foundations), while the new standard would also require the FIs to "look through passive entities to report on the individuals that ultimately control these entities".
According to a senior official, Sebi has written to various stakeholders under its jurisdiction with regard to the requirement of FIs to report under CRS.
