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Comments Regarding Code Sections 871(m) and 1441

In its role as the foundation for secure markets, OCC submitted a letter to the IRS and Treasury commenting on proposed regulations issued under Code sections 871(m) and 1441 relating to the exemption from withholding tax for dividend equivalents paid to qualified derivatives dealers (QDD). The letter requests that the concept of a QDD be modified so that it also applies when a Canadian clearing member is engaged in principal trading solely on behalf of the firm. The letter also requests clarification regarding an issue that could cause such members to face potential excessive withholding tax under the proposed regulations.