AEoI reporting only applies to Reporting Financial Institutions. Most Financial Institutions will be Reporting Financial Institutions, however there are some exemptions for example for government entities and central banks which, whilst they fall within the definition of being Financial Institutions, are exempt from AEoI reporting obligations.
Financial Institutions are defined as entities which fall into one of the following four categories.
- Activity based investment entities - primarily conducting business on behalf of customers such as trading in money market instruments, commodities trading, portfolio management and otherwise administering funds.
- Managed investment entities – if managed by a Financial Institution and they meet the financial assets test (broadly that it’s gross income is primarily attributable to investing, reinvesting or trading in financial assets).
The broad definition of Financial Institutions, particular taking into account the investment entity category described above, means that there are many thousands of small trusts, charities, partnerships, investment companies and securitisation vehicles which are classified as Financial Institutions and potentially could have reporting requirements.