Treatment of Global Bearer Certificates

SIFMA provides comments to the U.S. Department of Treasury and the Internal Revenue Service (IRS) expressing the urgent need for guidance under Section    163(f) of the  Internal Revenue Code, as amended by the Hiring Incentives to Restore Employment (HIRE) Act of 2010. In 1982, Congress passed the Tax Equity and Fiscal Responsibility Act (TEFRA), which establishes U.S. tax rules with respect to the issuance of debt instruments in bearer form.

SIFMA requests guidance as to whether notes in global bearer form deposited with an international central securities depositary will be treated as held in a “dematerialized book entry system” within the meaning of Section 163(f)(3), or whether such a system needs to be specified by the Secretary of Treasury as a system that “shall be treated as a book-entry system.”