Section 11. FFI Group.

.01 FFI Group.

(A) In General. With respect to a participating FFI other than a reporting Model 2 FFI, each FFI that is a member of an FFI group must have the chapter 4 status of a participating FFI, deemedcompliant FFI, or exempt beneficial owner as a condition for any member of such FFI group obtaining chapter 4 status as a participating FFI or registered deemed-compliant FFI. In addition, the participating FFI and each FFI (other than a certified deemed-compliant FFI or exempt beneficial owner) that is a member of the participating FFI’s FFI group must comply with the requirements of a participating FFI or registered deemedcompliant FFI as a condition for the participating FFI maintaining its chapter 4 status as a participating FFI. An FFI and its FFI group may register on the FATCA registration website.

(B) Special Rule for a Reporting Model 2 FFI. A reporting Model 2 FFI that has a related entity or branch will not cease to be a reporting Model 2 FFI, provided that the reporting Model 2 FFI continues to comply with the requirements of the applicable Model 2 IGA with respect to such related entities and branches.

.02 Lead FI.

(A) Designation of the Lead FI. If the participating FFI designates a lead FI to initiate its FATCA registration, the participating FFI must authorize the lead FI to fulfill the responsibilities described in section 11.02(B) of this agreement. If an FFI group has in place a consolidated compliance program as described in §1.1471– 4(f)(2)(ii), the FI that is designated as the compliance FI for the FFI group must act as the lead FI for each member of the FFI group that participates in such consolidated compliance program.

(B) Responsibilities of the Lead FI. A participating FFI or U.S. financial institution that is designated as the lead FI by

January 17, 2017 518 Bulletin No. 2017–3

one or more FFIs that are members of an FFI group agrees to meet the following responsibilities with respect to such FFIs in addition to its other obligations under this agreement:

(1) Identify itself as the lead FI as part of the registration process and to delete its status as lead FI upon termination of such status;

(2) Identify all FFIs that have designated the participating FFI as their lead FI as part of the participating FFI’s registration process;

(3) Monitor the information regarding members of the FFI group for which it is acting as a lead FI by accessing the FATCA registration website every six months to review the information provided and, if needed, update the information provided with respect to any members of the FFI group for which it is acting as a lead FI;

(4) Inform the IRS within 90 days of an acquisition or sale of a member of the FFI group for which it is acting as a lead FI by updating the information on the FATCA registration website to add or delete (or instruct the member to delete) such member;

(5) Inform the IRS within 90 days of a change affecting the chapter 4 status of any member of the FFI group for which it is acting as a lead FI, including when any member of the FFI group for which it is acting as a lead FI ceases to comply with (or that does not otherwise comply with) the requirements of either a participating FFI or a registered deemed-compliant FFI by updating such member FFI’s chapter 4 status on the FATCA registration website; and

(6 ) With respect to a lead FI of an FFI group that is a group of related entities as defined in an applicable Model 2 IGA, inform the IRS within the time period prescribed under §1.1471–4(e)(3)(iv) that a member of the FFI group for which it is acting as a lead FI ceases to be a related entity, or a branch of a member of the FFI group ceases to be a related branch, and designate on the FATCA registration website the status for which such member FFI or branch will register.

Section 12. Expiration, Modification, Termination, Default, and Renewal of this Agreement.

.01 Term of Agreement. This agreement begins on its effective date and ex

pires on December 31, 2018 unless terminated under section 12.03 of this agreement. This agreement may be renewed as provided in section 12.08 of this agreement.

.02 Modification. This agreement may be modified by the IRS before the expiration date indicated in section 12.01 of this agreement. This agreement will only be modified through published guidance. Any modification imposing additional requirements on participating FFIs will in no event become effective until the later of 120 days after the IRS issues published guidance of such modification or the beginning of the next calendar year following such published guidance.

.03 Termination of Agreement. This agreement may be terminated by either the IRS or the participating FFI prior to the end of its term by delivery of a notice of termination to the other party in accordance with section 12.06 of this agreement.

(A) In General. The IRS will not terminate this agreement unless there has been a significant change in circumstances (as defined in section 12.04 of this agreement) or an event of default (as defined in section 12.05 of this agreement), and the IRS determines, in its sole discretion, that the significant change in circumstances or the event of default warrants termination of this agreement. The IRS will not terminate this agreement in the event of default if the participating FFI can establish to the satisfaction of the IRS that all events of default for which it has received a notice (described in section 12.06 of this agreement) have been cured within the specified time period agreed to with the IRS.

(B) Reporting Model 2 FFI. In the case of a reporting Model 2 FFI, the reporting Model 2 FFI will not be treated as a nonparticipating FFI unless the U.S. Competent Authority has provided the Competent Authority of a Model 2 IGA jurisdiction in which the reporting Model 2 FFI is located notice of significant noncompliance with the terms of this agreement, as modified by the applicable Model 2 IGA, and the matter is not resolved within the 12-month period following the notice of significant non-compliance.

(C) Survival of Obligations. The termination of this agreement shall not affect any of the participating FFI’s due dili

gence, withholding, information reporting, tax return filing, compliance obligations, or other obligations as a participating FFI arising in or with respect to a calendar year (or a portion of a calendar year) for which this agreement was in effect.

.04 Significant Change in Circum- stances. For purposes of this agreement, a significant change in circumstances includes—

(A) An acquisition of all, or substantially all, of a participating FFI’s assets in any transaction in which the participating FFI is not the surviving legal entity;

(B) A change in U.S. federal law that affects the validity of any provision of this agreement, materially affects the provisions contained in this agreement, or materially affects the participating FFI’s ability to perform its obligations under this agreement;

(C) A ruling of any court that materially affects the validity of any provision of this agreement;

(D) A case in which a participating FFI (other than a reporting Model 2 FFI) maintains a limited branch that cannot fulfill the requirements for participating FFI or deemed-compliant FFI status after the expiration of the transitional rule for limited branches under §1.1471–4(e)(2)(v) or a participating FFI (other than a reporting Model 2 FFI) is a member of an expanded affiliated group that includes a limited FFI after the expiration of the transitional rule for limited FFIs under §1.1471–4(e) (3)(iv); and

(E) A significant change in a participating FFI’s business practices or applicable foreign law that materially affects the participating FFI’s ability to meet its obligations under this agreement.

.05 Event of Default. For purposes of this agreement, an event of default occurs if a participating FFI fails to perform any material duty or obligation required under this agreement or if the IRS determines that a participating FFI has failed to substantially comply with the requirements of this agreement. In addition to the occurrences enumerated in §1.1471–4(g)(1), an event of default also includes the occurrence of the following:

(A) The participating FFI fails to inform the IRS within 90 days of any significant change in circumstances; or

Bulletin No. 2017–3 519 January 17, 2017

registration website that the reporting Model 2 FFI shall comply with the terms of any renewed agreement, including any modified terms pursuant to section 12.02 of this agreement.

.10 Final Certification after a Termi- nation of the FFI Agreement. Upon a termination of this agreement, a participating FFI must provide to the IRS the certification of compliance described in section 8.03(B) of this agreement covering the period from the end of the most recent certification period (or, if the first certification period has not ended, the effective date of the FFI agreement) to the date of termination (the “short certification period”) within six months of the date of termination, irrespective of whether a periodic review has been completed for such period.