United States: Foreign Security Ownership Reporting On Form SHC And Changes To BEA Reporting


The Department of the Treasury is conducting its mandatory (every five years) survey of foreign securities ownership by U.S. residents1 as of December 31, 2016, on its Treasury International Capital System (TIC) Form SHC.2 Respondents must file Form SHC through the Federal Reserve Bank of New York (FRBNY) by March 3, 2017.

TIC Form SHC Layout and Who Must File

TIC Form SHC consists of three schedules. Schedule 1 requires certain identifying and summary information and must be filed by (i) any person who receives a letter from the FRBNY and (ii) any person who is required to report on Schedule 2 or Schedule 3 even if that person did not receive a letter from the FRBNY. Schedule 2 requires U.S. resident end-investors3 and U.S. resident custodians to report each reportable4 foreign5 security that they directly hold and manage the safekeeping of, or hold through a foreign custodian, if the fair value of those reportable foreign securities6 is equal to or exceeds $200 million as of December 31, 2016. U.S. resident end-investors that hold their reportable foreign securities through unaffiliated U.S. resident custodians would not be required to report those securities on Schedule 2. Schedule 3 requires U.S. resident end-investors or custodians to report summary amounts of reportable foreign securities entrusted to an unaffiliated U.S. custodian if the fair value amount of foreign reportable securities entrusted to that custodian equals or exceeds $200 million as of December 31, 2016.

U.S.-organized investment advisers are required to file one consolidated report relating to the holdings of all U.S. funds they manage or sponsor, and U.S.-resident managed accounts that they manage that own foreign reportable securities. Therefore, investment advisers must use the consolidated amount of reportable securities as measured across their U.S. fund clients for determining whether they satisfy the $200 million threshold for Schedules 2 and 3. If the investment adviser is not organized in the United States, each U.S.-organized fund would need to be separately analyzed to determine whether it equals or exceeds the $200 million reporting threshold for Schedules 2 and 3.

Many U.S. investment advisers that advise funds organized in a master-feeder structure will be required to report foreign master fund interests owned by a domestic feeder fund. Other examples of securities that investment advisers may be required to report include (i) ownership of reportable foreign securities held by U.S.-organized funds through non-U.S. custodians on Schedule 2, (ii) reportable foreign securities acquired in a private placement that an investment adviser holds on behalf of its clients in book entry or certificated form that are transferrable only with the consent of the issuer on Schedule 2 and (iii) foreign reportable securities held by U.S. fund clients reported on Schedule 3 by a U.S. custodian. Reportable foreign securities owned by a master fund organized outside of the United States would not have to be reported even if a domestic feeder fund invests in the master fund, although the domestic feeder's investment in the foreign master fund may be reportable.

Persons that are required to file Form SHC should begin completing their Form SHC in preparation for the March 3, 2017, deadline and ensure that they have the requisite 10-digit Reporter Identification Number assigned by the FRBNY as soon as possible.7 Further information regarding Form SHC, the TIC Form SHC itself and the instructions are available here, and other resources are available at the Form SHC reporting center here. Persons reporting fewer than 100 positions on Schedule 2 may file with the FRBNY on paper. Persons reporting 100 or more positions on Schedule 2 must submit their reports electronically through the Federal Reserve Reporting Central System.

BEA Changes

The Department of Commerce's Bureau of Economic Analysis (BEA) recently announced the effectiveness of a change to its forms for reporting foreign direct investment in the United States and U.S. direct investment abroad (the "Direct Investment Surveys"). Starting with quarterly and other reports due in 2017, persons reporting on the Direct Investment Surveys are no longer required to report data regarding private funds8 or holding companies,9 unless the private fund or holding company directly or indirectly holds a direct investment in an "operating company" (i.e., a company that is not a private fund or a holding company). To determine whether a private fund is required to be reported, consult either the flowchart for analysis of U.S. investment in foreign private funds (available here) or the flowchart for foreign investment in U.S. private funds (available here), as applicable.


1 TIC defines a "U.S. resident" as "[a]ny individual, corporation, or other organization located in the United States, including branches, subsidiaries, and affiliates of foreign entities located in the United States. The residency of an entity is determined by where a corporation or subsidiary is incorporated and where a branch is licensed, not by the physical office of the counterparty." TIC Glossary (June 2014), http://ticdata.treasury.gov/Publish/ticglossary-june2014.pdf.

2 Requirements to file other Treasury forms, such as TIC-S, TIC SLT and TIC SHL, continue to apply.

3 An end-investor is an organization that either invests in securities on its own or on behalf of others, such as investment managers. A U.S. manager is required to report for the other U.S. parts of its organization, including the U.S. funds that it manages.

4 The only securities that must be reported are foreign securities (i.e., those issued by entities organized outside of the United States of America or by certain international organizations). Reportable foreign securities consist of equity interests, short-term debt securities, long-term debt securities and asset-backed securities other than direct investments. Derivative contracts, such as futures, forwards, swaps, options and warrants, and "direct investments" (i.e., ownership interests of 10 percent or more of the voting securities), are not reportable securities in Form TIC SHC. Limited partner interests in a limited partnership are not deemed to be "direct investments" because such interests lack voting rights.

5 American depositary receipts are "looked through" (i.e., they should be attributed to the country of residence of the issuer of the security underlying the depositary receipt/share). Also, neither the country in which the security is traded or issued, nor the currency in which it is denominated, impacts whether the security is a foreign security. If either the issuer or holder of securities within a "direct investment" relationship is a depository institution, securities firm, bank holding company or financial holding company, then intercompany holdings are not "direct investments" and thus are reportable on Form SHC.

6 As opposed to the case for Form SLT, securities are not excluded from reporting solely because they are held by a U.S. custodian.

7 If you do not know the Reporter Identification Number for your entity, contact FRBNY staff at 212-720-6300 or 646-720-6300.

8 "Private funds" are defined by the BEA as an issuer that would be required to register as an investment company but for Section 3(c)(1) or 3(c)(7) of the Investment Company Act of 1940, as amended.

9 A "holding company" is a company whose primary activity is holding the securities or financial assets of other companies.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.