The U.S. Treasury Department's proposed rule implementing the Foreign Account Tax Compliance Act, published Wednesday, yielded some concessions to critics but still requires new work by financial institutions.

FATCA , passed in 2010, requires foreign institutions to start reporting detailed information about foreign account holders to the Internal Revenue Service. The 388-page proposed rule gives a graduated road map for full compliance, culminating in 2017 when foreign financial institutions would be required to report not...