USA: Section 871(m) - U.S. Withholding for Certain Equity Derivatives

This Custody News provides general information about the potential impact of new U.S. withholding requirements effective beginning next year. The withholding tax applies to certain U.S. equity derivatives - including structured products linked to U.S. equities and other derivatives such as options, forwards, and futures - provided the derivative exceeds certain threshold tests as set forth in U.S. regulations. The applicable Internal Revenue Code Section is 871(m).