Key Takeaway:
- U.S. resident issuers including Investment advisers, hedge and private fund managers should review whether they have any filing obligations under Treasury International Capital (“TIC”) Benchmark Form SHL (“Form SHL”). The survey, which is for data current through June 28, 2024, must be submitted by August 30, 2024.
Form SHL is a five-year mandatory benchmark survey filing commissioned by the Department of the Treasury and administered by the Federal Reserve Bank of New York (“FRBNY”) applicable to all U.S.-resident issuers with foreign resident ownership (unless the total fair (market) value of the reportable U.S. securities owned by foreign residents is less than $200 million). For purposes of the consolidation rules, U.S. investment managers must aggregate all U.S. resident parts of their organization including the amount of securities issued to non-U.S. residents by all the U.S. funds that they manage.
The data collected will be used by the U.S. Government in the computation of the U.S. balance of payments accounts, the U.S. international investment position, and in the formulation of international economic and financial policies. The data also will be used to provide aggregate information to the public on these foreign “portfolio investments” and to meet international reporting commitments. All information submitted is confidential and used for statistical and analytical purposes only.
The survey consists of two parts: Schedule 1 which requires certain identifying information of the reporting entity and a summary of Schedule 2; and Schedule 2 which requires more detailed information on the securities and on the non-U.S. holder including type and country of residence.
If you have been contacted by the FRBNY then you must report on Schedule 1 regardless of whether the holdings meet the $200 million reporting threshold. Investment managers should also coordinate with any U.S. resident custodian to ensure that there is no duplicate reporting.
Failure to report may result in fines up to $25,000 as well as injunctive relief compelling compliance and criminal penalties.
The full instructions to Form SHL including the definition of reportable securities, examples targeted at investment advisers and flowcharts can be viewed here.
Investment managers are also reminded to review any filing obligations relating to “direct investments” under the Bureau of Economic Analysis which can also be found here.
