The automatic exchange of financial account information has become one of the most operationally demanding compliance obligations facing private fund managers today. With the Common Reporting Standard 2.0 (CRS 2.0) now in effect from 1 January 2026, the regulatory bar for fund managers has been raised further.
This article outlines the key changes under CRS 2.0 and what fund managers need to know as they assess their readiness.
Overview of the Changes
CRS 2.0 represents the first substantial revision to the Common Reporting Standard since its introduction in 2016. Rather than replacing the existing framework, it expands its scope, strengthens due diligence requirements, and aligns the regime more closely with the taxation of digital assets, in step with the OECD’s Crypto-Asset Reporting Framework (CARF) and the European Union’s DAC8 directive.
For funds, the practical effect is that CRS reporting will become both broader in scope and more evidence-driven. Annual filings will now require additional data points that were not previously mandated, including:
- Whether the account holder’s interest constitutes equity or debt in an Investment Entity
- Whether the account is new or pre-existing
- Whether a valid self-certification is held on file, rather than simply requested
- Whether the account is jointly held, and the number of joint holders
- The role of equity interest holders in a Professionally Managed Investment Entity (PMIE)
These are not incremental adjustments to a reporting form. They require funds and their administrators to maintain more granular, accurate data on every investor, feeder, nominee and intermediary within the structure, and to be able to demonstrate – on request – how that data was validated.
From Annual Filing to Continuous Evidence
The most significant shift under CRS 2.0 is one of approach: CRS compliance can no longer be treated as an annual filing exercise. Tax authorities are increasingly focused on the full compliance lifecycle, encompassing onboarding, ongoing monitoring, remediation of missing or invalid self-certifications, and the audit trail supporting each of these stages.
This trend is already being formalised in several jurisdictions. Luxembourg’s expectation that CRS Reporting Financial Institutions maintain a “register of actions” – a documented record of classification decisions, due diligence steps and remediation follow-ups, reflects the direction the wider market is taking. Jersey’s updated technical guidance, together with the move toward mandatory nil returns in jurisdictions such as Guernsey, points to the same conclusion: regulators expect visibility into process, not only outcomes.
It should also be noted that outsourcing FATCA/CRS reporting to an administrator does not transfer regulatory responsibility. Fund managers remain accountable for demonstrating oversight of their service providers and for evidencing that appropriate policies and procedures are in place at the fund level, irrespective of where day-to-day execution sits.
Areas of Particular Focus
Several areas warrant close attention as fund managers assess their readiness:
- Self-certifications. The regulatory focus has shifted from whether a self-certification was collected to whether it is valid, complete and defensible. A number of tax authorities now require funds to actively flag missing or invalid self-certifications, and certain jurisdictions (Guernsey among them) can impose penalties directly on investors who fail to provide one. This places additional demands on onboarding workflows to identify and resolve gaps proactively.
- Data granularity. Capturing account type, joint-holder information and PMIE equity-holder roles requires systems capable of holding and reporting this data accurately from the outset, rather than compiling it retrospectively at year-end.
- Digital assets. Funds with cryptoasset exposure, or entities within the structure that engage with digital assets, should assess classification and data-sourcing requirements separately under DAC8/CARF, in addition to their existing CRS obligations.
- Documentation and audit readiness. As tax authorities apply increasingly sophisticated checks – supported by a rising number of desktop and in-person reviews – the written policies, procedures and evidentiary trail underlying a filing carry as much weight as the filing itself.
What Fund Managers Should Do Now
Given the scope of these changes, fund managers should be reviewing their current CRS processes well ahead of upcoming filing deadlines. This includes:
- Assessing whether onboarding and review procedures capture the expanded CRS 2.0 data fields
- Reviewing the completeness and validity of self-certifications already on file, and remediating any gaps
- Confirming that written policies and procedures (including those governing outsourced functions) are up to date and can be evidenced if requested by a tax authority
- Establishing or reviewing documentation practices, such as a register of actions, in jurisdictions where this is expected
- Assessing classification and reporting obligations separately for any digital-asset exposure within the fund structure
Institutions that engage with these requirements early will have more time to test processes, address data quality issues, and avoid last-minute remediation as filing deadlines approach.
How Linnovate Can Help
Linnovate supports fund managers across the full CRS lifecycle, from investor onboarding and due diligence through to reporting and audit preparation, for private equity, venture capital, private credit and real estate funds across multiple jurisdictions.
Our fund administration and regulatory compliance services, supported by our proprietary RAISE platform, help clients build the expanded CRS 2.0 data requirements into onboarding from the outset, maintain a clear and retained audit trail for self-certification due diligence, and keep documentation aligned with what tax authorities increasingly expect.
If you would like to discuss what CRS 2.0 means for your fund’s structure and reporting obligations, our team is here to help.
This article is for general informational purposes only and does not constitute tax or legal advice. Fund managers should consult their tax advisors regarding their specific CRS and FATCA obligations.
