Under amended Treasury International Capital Form B (“TIC Form B”), U.S. financial institutions, including advisers to private funds, may have Form B reporting obligations. The TIC Form B provides the U.S. government with information on cross-border portfolio investment flows. The information is used by the government on an aggregate basis to prepare the U.S. Balance of Payments accounts, the U.S. international investment position and the formulation of U.S. international financial and monetary policies.
U.S. resident investment advisers may have reporting requirements on their own behalf and on behalf of their customers (including the private funds managed by them) on certain of the TIC Form B reports. The determination whether a financial institution has a reporting requirement depends on the nature of liabilities and/or claims of the financial institution (or its customers) and whether the threshold for each particular report is met.1 Reportable “claims” may include management fees due to a U.S. investment adviser from an offshore fund, deposit balances due from banks in any maturity (including non-negotiable CDs), negotiable certificates of deposit of any maturity, broker balances, loans and loan participations of any maturity, resale agreements and similar financing agreements, short-term negotiable and non-negotiable securities (with a maturity of one year or less), money market instruments (with a maturity of one year or less) and accrued interests receivables. Reportable “liabilities” may include fees payable by a U.S. investment adviser to foreign services providers, unpaid withdrawal proceeds due to a non-U.S. investor from a U.S. fund, non-negotiable deposits of any maturity (including non-negotiable CDs), brokerage balances, loans of any maturity, short-term non-negotiable securities (with a maturity of one year or less), repurchase agreements and similar financing agreements and accrued interests payable.
The first filing deadline for the monthly TIC Form B reports is January 15, 2014 and the first filing deadline for the quarterly TIC Form B reports is January 20. Going forward, the monthly reports will be due no later than fifteen (15) calendar days after the end of each month and quarterly reports will be due no later than twenty (20) calendar days after the end of each quarter.
The Treasury Department and the New York Federal Reserve Bank have not yet issued updated Frequently Asked Questions to reflect the new reporting requirements; therefore, there remain a number of open interpretative issues on the application of certain Form B instructions as they relate to U.S. financial institutions.
If you have any questions, including questions regarding whether or not you may have a reporting requirement, please contact your primary attorney in Seward & Kissel’s Investment Management Group
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1 The reporting threshold for each of Form BC, Form BL-1, Form BL-2 and Form BQ-1 is $25 million in reportable claims/liabilities with one particular country or $50 million across all geographic regions. The Form BQ-2 is divided into two parts, which each have their own threshold calculations of $25 million in reportable claims/liabilities with one particular country or $50 million across all geographic regions.
