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3
Survey Perspective
• Part of an integrated system
• Used in conjunction with monthly flow data
• Surveys are detailed, accurate, but not timely
• Monthly data very timely, but less accurate
• Used together to create ongoing estimates
4
Survey History
• First survey in 1974
• Measured foreign investment in U.S. securities
• Congressional concern over growing foreign
influence
• Existing data lacked detail
5
Survey History
• Liability surveys continued at 5-year intervals
• Correct amounts foreign held
• Improve geography
• Foreign ownership increasing
• Dec. 1974 - 4.8%
• June 2002 - 12.2%
6
Asset Surveys
• First in 1994
• Levels of U.S. foreign security holdings had been
modest
• $ 9 billion per year 1980-1989
• $65 billion per year 1990-1994
• Assets were believed to be under-counted
7
Asset Survey Results
• Measured U.S. holdings of foreign securities 60%
above estimates
• $870 billion vs. $540 billion
• Showed need for future surveys
8
Asset Under-Count
• Worldwide problem
• Measured portfolio investment flows 1991-1994
• Assets $400 billion per year
• Liabilities $500 billion per year
• Countries had concentrated on measuring liabilities
9
First CPIS
• Organized by the IMF, at year-end 1997
• 29 countries participated
• World measured additional $750 billion
• U.S. measured an additional $300 billion
10
Problems Remain
• Worldwide, at year-end 1997
• Assets $7.7 trillion
• Liabilities $9.3 trillion
• Difference 18%
• Implied more needed to be done
11
CPIS 2001
• 67 countries
• All of the major industrial countries
• Most of the major offshore financial centers
• Short-term securities included
12
Problems Remain
• Worldwide, at year-end 2001
• Assets $12.6 trillion
• Liabilities $15.0 trillion
• Difference 16%
• Implies more needs to be done
13
The Future
• Internationally-coordinated annual surveys
• Annual U.S. surveys
• U.S. benchmark surveys every 5 years
• U.S. “Large Reporters” surveys intervening years
14
Data Uses
• Why care about these data?
• U.S. is the world’s largest net debtor
• Level of U.S. net debt is increasing rapidly
• A cause for concern?
17
Data Uses
• Financial industry analysts
• International organizations
• U.S. Gov’t policy makers, data compilers
• Academic researchers
• Correct liabilities country attribution
18
Country Attribution
• Country attribution of U.S. liabilities skewed
towards major financial centers
• Country attribution on asset surveys accurate
• Can use counter-party asset data to improve
geography of U.S. liabilities data
20
Data Uses
• Asset data can be used to estimate other countries’
liabilities
• Combined CPIS asset results yield net liability positions
by country
• Cross-check of reported country liability positions
• Improved geography of all countries’ liabilities
22
Who Must Report• Proper classification of U.S. and foreign
– Reporting organization– Owners of securities– Securities
• Categories of reporters– U.S.-resident custodians– U.S.-resident end-investors
• Reporting panels– Schedule 2 and Schedule 3 reporters– Schedule 3 only reporters
23
Proper Classification of U.S. and Foreign
• Definition of United States– The fifty states of the United States– The District of Columbia– The Commonwealth of Puerto Rico– American Samoa, Baker Island, Guam, Howland
Island, Jarvis Island, Johnston Atoll, Kingman Reef, Midway Island, Navassa Island, Northern Mariana Islands, Palmyra Atoll, U.S. Virgin Islands, and Wake Island
24
Proper Classification of U.S. and Foreign
• Definition of U.S. resident– Any individual, corporation, or other organization
located in the United States, including :• branches • subsidiaries• foreign entities located in the United States.
– Corporations incorporated in the United States are U.S. residents even if they have no “physical presence” in the United States.
25
Proper Classification of U.S. and Foreign
• Examples of U.S. residents– General Motors
Corporation (includes GMAC)
– BP America Inc.
– Societe Generale New York Branch
– KfW International Finance, Inc.
• Examples of foreign residents– GMAC Canada
– BP p.l.c.
– Bank of New York Tokyo Branch
– Tyco International, Ltd.
– International Bank for Reconstruction and Development (IBRD; World Bank)
26
Proper Classification of U.S. and Foreign
• How to determine residency
– Country where legally incorporated, otherwise legally organized, or licensed
– Tax forms• W-8 forms are filed by foreign residents• W-9 forms are filed by U.S. residents
– Mailing address
27
Proper Classification of U.S. and Foreign
• Citizenship does not determine residency
• International and regional organizations are foreign residents, even if located in the United States– IBRD; World Bank– Inter-American Development Bank (IDC)– International Finance Corporation (IFC)– Appendix E of instructions provides a complete list
28
Proper Classification of U.S. and Foreign
• Reporting organization
– Report foreign securities held or managed by all U.S.-resident parts of your organization
• U.S.-resident branches
• U.S.-resident offices
• U.S.-resident subsidiaries
29
Proper Classification of U.S. and Foreign
• Owners of securities
– U.S.-resident clients
– U.S-resident parts of your organization
• Securities
– Issued by foreign organizations
– Issued by foreign parts of your organization
30
Categories of Reporters
• U.S.-resident custodians
– U.S.-resident organizations that hold foreign securities in custody for other U.S. residents
– Invest in foreign securities for their own account
31
Categories of Reporters
• U.S.-resident end-investors
– U.S.-resident organizations that invest in foreign securities on behalf of other U.S. residents
– Invest in foreign securities for their own account
32
Categories of Reporters
• Examples of U.S.-resident end-investors– Managers of private and public pension funds– Managers of mutual funds, country funds, unit-
investment funds, exchange-traded funds, collective-investment trusts
– Insurance companies– Foundations– Institutions of higher learning (e.g., university
endowments)– Trusts and estates
33
Reporting Panels
• Schedule 2 and Schedule 3 reporters
– Required to file in the same manner as they did on the December 31, 2001 report
• Schedule 3 only reporters– Required to file Schedule 3 in the same manner
as they did on the December 31, 2001 report– Data that was reported on Schedule 2 in
December 31, 2001 submission will now be reported on Schedule 3 for the annual reports
34
Schedule 2 and Schedule 3 Reporters
Exemption Levels
• No Schedule 2 exemption level. • Securities entrusted to U.S. resident custodians
should be reported on Schedule 3 if the fair (market) value of the foreign securities aggregated over accounts owned and/or managed equals $100 million or more as of December 31.
• This exemption level applies to each U.S.-resident custodian used.
35
Schedule 3 Only ReportersExemption Levels
• “Schedule 3 Only” reporters are exempt from reporting Schedule 2.
• Securities entrusted to U.S. resident custodians should be reported on Schedule 3 if the fair (market) value of the foreign securities aggregated over accounts owned and/or managed equals $100 million or more as of December 31.
• This exemption level applies to each U.S.-resident custodian used.
36
Schedule 3 Only ReportersExemption Levels
• Securities held directly with foreign-resident custodians, including: – foreign-resident offices of U.S. banks
– foreign-residents of U.S. broker/dealers
– foreign-resident central securities depositories
– should be reported on Schedule 3 if the fair (market) value of the foreign securities aggregated over accounts owned and/or managed equals $100 million or more as of December 31.
37
Schedule 3 Only ReportersExemption Levels
• Securities held directly, managed directly, or held with U.S.-resident central securities depositories, (for which no U.S.-resident custodian is used), should be reported on Schedule 3 if the fair (market) value of the foreign securities aggregated over accounts owned and/or managed equals $100 million or more as of December 31.
38
Reporting Panels
• Schedule 2 and Schedule 3 reporters• U.S.-resident custodians
– Schedule 2, report detailed information on foreign securities that:• hold in custody for U.S.-resident clients• invest in for own account• entrust to foreign-resident custodians or central
securities depositories• entrust to U.S.-resident central securities
depositories
39
Reporting PanelsSchedule 2 and Schedule 3 Reporters
U.S.-Resident Custodians Schedule 2 Reporting
U.S. resident (including the reporting
custodian’s own portfolio)
U.S.-residentcustodian
U.S.-resident centralsecurities depository
Foreign-residentcustodian or centralsecurities depository
The “Schedule 2 and Schedule 3” reporter submits
detailed data onSchedule 2.
40
Reporting Panels
• Schedule 2 and Schedule 3 reporters• U.S.-resident end-investors
– Schedule 2, report detailed information on foreign securities not entrusted to U.S.-resident custodians; that is when the end-investor:• holds the foreign securities directly• employs foreign-resident custodians or foreign
central securities depositories• employs U.S.-resident central securities
depositories
41
Reporting PanelsSchedule 2 and Schedule 3 Reporters
U.S.-Resident End-Investors Schedule 2 Reporting
U.S. resident (including the reporting
end-investor’s own portfolio)
U.S.-residentend-investor
(including managers)
U.S.-resident centralsecurities depository
Foreign-residentcustodian or centralsecurities depository
The “Schedule 2 and Schedule 3” reporter submits
detailed data onSchedule 2.
42
Reporting Panels
• Schedule 2 and Schedule 3 reporters
• U.S.-resident custodians and end-investors
– Schedule 3, report summary information for foreign securities entrusted to the safekeeping of a U.S.-resident custodian (excluding U.S.-resident central securities depositories)
43
Reporting PanelsSchedule 2 and Schedule 3 Reporters
Schedule 3 Reporting
U.S. resident (including the reporting
organization’s own portfolio)
U.S.-residentcustodian orend-investor
(including managers)
U.S.-residentsubcustodian
The “Schedule 2 and Schedule 3” reporter submits
summary data onSchedule 3 for each U.S.-resident
custodian using theappropriate custodian codes.
The “Schedule 2 andSchedule 3” reporter
submits detaileddata on Schedule 2.
44
Reporting Panels
• Schedule 3 only reporters
• U.S.-resident custodians and end-investors
– Schedule 3, report summary information for all foreign securities, regardless of where they are held in custody
45
Reporting Panels
• Schedule 3 only reporters• U.S.-resident custodians and end-investors
– Separate Schedule 3 report for foreign securities entrusted to each U.S.-resident custodian using the appropriate custodian code
– Consolidated Schedule 3 report for foreign securities entrusted to foreign-resident custodians and central securities depositories using custodian code 77
– Consolidated Schedule 3 report for foreign securities held directly or those entrusted to U.S.-resident central securities depositories using custodian code 88
46
Reporting PanelsSchedule 3 Only Reporters
U.S. resident (including the reporting
organization’s own portfolio)
U.S.-residentcustodian orend-investor
(including managers)
Foreign-residentcustodian or centralsecurities depository
The “Schedule 3 only” reporter submits summary data onSchedule 3 using
custodian code 77.
47
Reporting PanelsSchedule 3 Only Reporters
U.S. resident (including the reporting
organization’s own portfolio)
U.S.-residentcustodian orend-investor
(including managers)
The “Schedule 3 only” reporter submits summary data onSchedule 3 for each U.S.-resident
custodian using theappropriate custodian codes.
The “Schedule 3 only”reporter submitssummary data onSchedule 3 using
custodian code 88.
U.S.-residentsubcustodian
What Must be Reported on the
Report of U.S. Ownership of Foreign Securities, Including Selected Money
Market Instruments (SHCA)
Debra Kuntz
49
Foreign Securities
• Securities issued by foreign entities, including:– foreign-resident organizations– foreign subsidiaries of U.S. organizations– foreign branches of U.S. banks– U.S. corporations that have re-incorporated, i.e.,
are now incorporated under the laws of a foreign country
– international and regional organizations
50
Foreign Securities
• Information that does not contribute to determining if a security is foreign:
– place of issue or location of trades
– currency of issue
– nationality of parent organization
– guarantor
51
Foreign SecuritiesExample 1
• Euro denominated 2-year note issued by a Daimler Chrysler affiliate incorporated in the United States.
• Is this security reportable?
52
Foreign SecuritiesExample 1 Answer
• Euro denominated 2-year note issued by a Daimler Chrysler affiliate incorporated in the United States.
• Is this security reportable?
• No. The security was issued by a U.S.-resident entity.
53
Foreign SecuritiesExample 2
• U.S. dollar-denominated 2-year note issued directly in the United States by Daimler Chrysler incorporated in Germany.
• Is this security reportable?
54
Foreign SecuritiesExample 2 Answer
• U.S. dollar-denominated 2-year note issued directly in the United States by Daimler Chrysler incorporated in Germany.
• Is this security reportable?
• Yes. This security was issued by a foreign-resident entity. The currency of denomination and place of issue do not factor into the decision of whether the security is foreign or not.
55
Foreign SecuritiesExample 3
• U.S. dollar-denominated asset-backed security issued by Company B incorporated in Hong Kong and guaranteed by the parent, Company A, incorporated in the United States.
• Is this security reportable?
56
Foreign SecuritiesExample 3 Answer
• U.S. dollar-denominated asset-backed security issued by Company B incorporated in Hong Kong and guaranteed by the parent, Company A, incorporated in the United States.
• Is this security reportable?
• Yes. This security was issued by a foreign-resident entity. The location of the guarantor does not factor into the decision of whether the security is foreign or not.
57
Type of Reportable Foreign Securities
• Equity
• Short-Term Debt
• Long-Term Debt
• Asset-Backed Securities
58
Equity
• Instruments representing an ownership interest in foreign-resident organizations.
• However, ownership interests representing direct investment are not reported.
59
EquityDirect Investment
• Direct investment is defined as ownership or control of 10% or more of an organization’s voting stock.
60
Equity
• Reportable equity securities include:
– common stock
– restricted stock
– preferred stock
– depositary receipts/shares
– shares/units in foreign-resident funds
– limited partner ownership in foreign-resident limited partnerships
61
Equity• Security type =1 (common stock)
– all common stock, including restricted stock– depositary receipts/shares where the underlying
security is common stock• Security type = 2 (preferred stock)
– all preferred stock, including restricted stock• participating preference shares• nonparticipating preference shares
– convertible preferred stock– depositary receipts/shares where the underlying
security is preferred stock
62
Equity
• Security type = 3 (funds)
– shares/units in foreign-resident funds• Security type = 4 (other equity)
– limited partner ownership in foreign-resident limited partnerships
– all other foreign equity not specified in security types 1, 2, and 3
63
EquityRestricted Stock
• Where possible, report the restricted shares with the same security ID (e.g., ISIN, CUSIP) as the non-restricted shares.
• If the restricted shares are valued at zero, report the market value for restricted stock using the non-restricted shares price.
64
EquityPreferred Stock
• Differentiated participating and nonparticipating preference shares on the December 31, 2001 report.
• All preferred stock should now be classified as equity, security type = 2 (equity, preferred stock).
65
EquityDepositary Receipts/Shares
• Reportable depositary receipts/shares are those where the underlying security was issued by a foreign resident.
• Although the depositary receipt/share is usually issued by a U.S.-resident organization, it represents an ownership interest in the foreign-resident company.
• ADRs, ADSs, GDRs, IDRs are considered foreign securities for this report.
66
EquityDepositary Receipts/Shares
• Issuers of depositary receipts/shares should not report the holdings of the underlying foreign securities.
• U.S.-resident holders of the depositary receipts/shares should report these holdings.
67
Equity Depositary Receipts/Shares
Example
• U.S. Company A has issued $100 million of ADRs representing an ownership interest in a Swiss company. U.S. Company B purchases these ADRs.
• What should Company A and B report?
68
EquityDepositary Receipts/Shares Example
Answer
• U.S. Company A has issued $100 million of ADRs representing an ownership interest in a Swiss company. U.S. Company B purchases these ADRs.
• What should Company A and B report?• Company B should report the holdings of $100
million of ADRs. Company A would not report equity ownership in the Swiss company.
69
EquityDepositary Receipts/Shares
• Report the following based on the depositary receipt/share:– security id– security description– depositary
receipt/share indicator– currency of
denomination– market value– number of shares held
• Report the following based on the underlying security:– security type– name of issuer– country of issuer
70
EquityForeign-Resident Funds
• Report U.S. residents’ ownership of shares/units of funds legally established outside of the United States as equity.
• Examples of funds:– closed-end and open-end mutual funds– money market funds– exchange-traded funds– index-linked funds– investment trusts
71
EquityForeign-Resident Funds
• Classification of the fund as “foreign” is not based on the securities that the fund invests in.
• Example:
– A fund organized in Bermuda that only purchases U.S. Treasury securities is a foreign-resident fund.
– A fund organized in the United States that only purchases Japanese Treasury securities is a U.S.-resident fund.
72
Foreign-Resident Funds
• Report U.S.-resident funds’ ownership of foreign securities.
• Ownership of shares of U.S.-resident funds is excluded, however, the foreign securities owned by these funds are reportable.
73
Equity Exclusions
• Exclude from equity:
– convertible debt
– convertible debt is reported, but should be classified as debt on this report.
74
Equity Exclusions
• Exclude from equity:
– general partner ownership of foreign-resident limited partnerships
– all other direct investment
75
Short-Term and Long-Term Debt (excluding asset-backed
securities)
• Instruments that usually give the holder the unconditional right to financial assets.
76
Term
• Determine term, (short-term or long-term), based on the original maturity of the security.
• Original maturities of one year or less are short-term.
• Original maturities of greater than one year are long-term.
77
Term
• Debt with multiple call options (multiple maturity dates) is long-term if any of the maturity dates is greater than one year from the date of issue.
• Perpetual debt is long-term.
78
Term Examples
• A Japanese Treasury bill issued on November 15, 2003 and matures on February 15, 2004 is short-term.
• A German 30-year bond that matures on March 26, 2004 is long-term.
79
Short-Term Debt
• Reportable short-term debt includes the following instruments where the original maturity is one year or less:
– commercial paper
– negotiable certificates of deposit, bank notes and deposit notes
– foreign government securities (e.g., Japanese Treasury bills)
– bankers’ and trade acceptances
80
Short-Term Debt
• Security type = 5 (short-term commercial paper)
– short-term commercial paper– short-term financial paper– short-term asset-backed commercial paper
• Security type = 6 (short-term negotiable CDs)
– short-term negotiable certificates of deposit– short-term bank notes– short-term deposit notes
81
Short-Term Debt
• Security type = 8 (other short-term debt)
– short-term foreign government securities
– short-term bankers’ and trade acceptances
– short-term notes
– all other foreign short-term debt not specified in security types 5, 6, and 7
82
Long-Term Debt
• Reportable long-term debt includes the following instruments where the original maturity is greater than one year:– bonds– notes– debentures– stripped and zero coupon securities– convertible debt– negotiable certificates of deposit
83
Long-Term Debt
• Security type = 9 (stripped and zero coupon long-term debt)
– long-term zero coupon bonds and notes– long-term stripped securities where the host
security is not an asset-backed security (both the IO and PO components)
• Security type = 10 (convertible long-term debt)
– long-term convertible debt– long-term zero coupon convertible debt
84
Long-Term Debt
• Security type = 12 (other long-term debt)
– long-term CDs, bank notes and deposit notes– Brady bonds– covered bonds (e.g., Pfandbrief)– debt securities backed by a sinking fund– all other foreign long-term debt not specified in
security types 9, 10, and 11
85
Long-Term DebtStripped Securities
• Reportable stripped securities are those where the issuer of the stripped security is a foreign-resident entity.
• Residency of the stripped security is not determined by the issuer of the underlying security.
86
Long-Term DebtStripped Securities
• Foreign securities that are the underlying securities for stripped securities, should be reported by the U.S. holder.
• Stripped securities issued by a U.S.-resident entity should not be reported, even if the underlying security is foreign.
87
Long-Term DebtStripped Securities Example
• U.S. Company A owns $100 million of German bonds. U.S. Company A issues stripped securities where these German bonds are the underlying securities. U.S. Company B purchases these stripped securities.
• What should Company A and B report?
88
Long-Term DebtStripped Securities Example Answer
• U.S. Company A owns $100 million of German bonds. U.S. Company A issues stripped securities where these German bonds are the underlying securities. U.S. Company B purchases these stripped securities.
• What should Company A and B report?• Company A reports the ownership of $100 million of
German bonds. The stripped securities are not reported by either company.
89
Debt Exclusions
• Exclude from short-term and long-term debt:– shares/units in foreign-resident funds, even if
the foreign fund invests in debt.
– investments in foreign-resident funds are reported, but should be classified as equity on this report.
90
Debt Exclusions
• Exclude from short-term and long-term debt:
– loans
– trade credits
– accounts receivable
– derivatives
– non-negotiable certificates of deposit
91
Debt Exclusions
• Exclude from short-term and long-term debt:
– asset-backed securities
– these securities are reported, but should be classified as asset-backed securities on this report.
92
Asset-Backed Securities
• Securitized interest in a pool of assets, which give the purchaser a claim against the cash flows generated by the underlying assets.
93
Asset-Backed Securities
• Reportable asset-backed securities are those where the issuer securitizing the assets is a foreign resident.
• The underlying asset is not a factor in determining whether the ABS is a foreign security.
94
Asset-Backed Securities
• Reportable asset-backed securities include:
– collateralized mortgage obligations (CMOs)
– collateralized bond obligations (CBOs)
– collateralized loan obligations (CLOs)
– collateralized debt obligations (CDOs)
95
Asset-Backed Securities
• Reportable asset-backed securities include:– other securities backed by:
• mortgages• credit card receivables• automobile loans• consumer and personal loans• commercial and industrial loans• other assets
96
Asset-Backed Securities
• Security type = 7 (short-term asset-backed securities)
– short-term asset-backed securities• Security type = 11 (long-term asset-backed securities)
– long-term asset-backed securities– long-term stripped securities where the host
security is an asset-backed security (including the IO and PO components and the tranches)
97
Asset-Backed Securities Exclusions
• Exclude from asset-backed securities:– asset-backed commercial paper– Brady bonds– securities backed by a sinking fund– covered bonds (e.g., Pfandbrief)
• These securities are reported but should be classified as short-term or long-term debt on this report.
98
Repurchase AgreementsSecurity Lending Arrangements
• Repurchase agreements/securities lending arrangements and reverse repurchase agreements/securities borrowing arrangements involve the temporary transfer of a security for cash or another security.
99
Repurchase AgreementsSecurity Lending Arrangements
• The security lender should report the foreign security as if no repo or security lending arrangement occurred.
• The security borrower should exclude the foreign security.
102
Review of Schedules Schedule 1
• Schedule 1: Reporter Contact Identification and Summary Financial Information
• Required to be filed by all organizations who received the report
• Contains basic information about the institution • Contains summary financial information reported
on Schedule 2 and 3
103
Review of SchedulesSchedule 1
• Reporter Identification Number (Line 1)
– 10 digit number, including leading zeros, issued by FRBNY.
– Contact FRBNY staff at 212-720-6300 if you do not know your identification number.
– Do not report tax ID in this field
104
Review of SchedulesSchedule 1
• Reporting Status (Line 3)
– Only Schedule 2(s).
– Only Schedule 3(s).
– Schedule 2(s) and Schedule 3(s).
105
Review of SchedulesSchedule 1
• Industrial Classification Code (Line 4)– 9 categories.– Choose classification code that best describes
your organization.– If two or more codes are appropriate choose the
one that represents the largest portion of your organization’s day-to-day operations.
106
Review of SchedulesSchedule 1
• Name of Service Provider or Vendor Used (Line 10)– The institution that provided your data or prepared the
electronic files.
• Technical Contact (Line 11 - 14)– Provide the name of the person who can answer questions
regarding the electronic submission of your data.
– This person should be familiar with the file format(s) used and how the data was extracted from your databases or applications.
107
Review of SchedulesSchedule 1
• Valuation Techniques (Line 15)– Describe the valuation techniques used by each
reporting unit.– Did your organization report securities with a
zero market value. If so, why? – How are inactively traded securities valued?– How are securities with internally generated
IDs valued?
108
Review of SchedulesSchedule 1
• Schedule 2 & Schedule 3 Summary Information– Total number of Schedule 2 & Schedule 3 records. – Total US$ fair market value of all equity. – Total US$ fair market value of all short-term debt.– Total US$ fair market value of all long-term debt.– Total US$ fair market value of all ABS.
109
Review of SchedulesSchedule 1
• Certifier Information and Signature– Someone from within your organization must sign
the Schedule 1 certifying its accuracy.– If the data was prepared by a third party vendor
someone from within your organization is responsible for certifying your data submission.
110
Review of SchedulesSchedule 2
• Schedule 2: Details of Securities
• Filed by U.S.-resident custodians and U.S.-resident end-investors
• Provides details of each foreign security
• Total of all Schedule 2 US$ market values should equal the summary financial information reported on Schedule 1
111
Review of SchedulesSchedule 2
• Sequence Number (Line 2)– Sequence numbers should be sequential (i.e.,
1,2,3) for each Schedule 2 record submitted. – If multiple divisions of an organization are
preparing Schedule 2 records and it is burdensome to create sequential sequence numbers for the consolidated report, then each reporting unit should have unique sequence numbers.
112
Review of Schedules Schedule 2
• Reporting Unit Fields (Lines 3a & 3b)
– Reporting Unit Code - If data is being collected from multiple databases or reporting systems, report the internal code used in your organization to identify the database or system.
– Name of Reporting Unit - Enter a description or name of the reporting unit or division that is reporting the information.
113
Review of Schedules Schedule 2
• Security ID Fields (Lines 4 & 6)– Security ID - The security ID code used to
identify the reported security. ISIN codes and CUSIPs are strongly preferred.
– Security ID System - Enter the appropriate code from appendix C in this field. For example, if the security ID is an ISIN a 4 should be entered in this field.
114
Review of Schedules Schedule 2
• Text Descriptions (Lines 5 & 9)
– Security Description - A brief description of the security reported. (Line 5)
– Name of Issuer - The full legal name of the organization that issued the security. (Line 9)
115
Review of SchedulesSchedule 2
• Security Type (Line 7)– Equity securities have the following categories:
• common stock (1)• preferred stock (2)• funds (including shares or unit trusts) (3)• other: any other type of equity security not
listed above (4)
116
Review of Schedules Schedule 2
• Security Type (Line 7)– Short-term debt has four categories:
• short-term commercial paper (5)
• short-term negotiable CDs (6)
• short-term asset-backed securities (7)
• all other short-term debt or selected money market instruments (8)
– Examples are foreign treasury bills, short-term notes, and stripped securities with a maturity of one year or less.
117
Review of SchedulesSchedule 2
• Security Type (Line 7)
– Long-term debt has four categories:• stripped and zero coupon long-term debt (9)• convertible long-term debt (10)• long-term asset-backed securities (11)• all other long-term debt (12)
– Examples are long-term negotiable cds, Brady bonds.
118
Review of SchedulesSchedule 2
• Depositary Receipt Share - Indicates whether or not an equity security is a depositary receipt. (Line 8)
• Intentionally Left Blank - This field corresponds to a previous data item no longer collected. Leave this field blank or enter a null value. (Line 10)
119
Review of SchedulesSchedule 2
• Country & Currency Fields (Lines 11 &12)
– Country of Issuer - Enter the country code found in Appendix D that corresponds to the country of residence of the entity that issued the security.
– Currency of Denomination - Enter the ISO code from Appendix F that corresponds to the currency in which the security being reported is denominated.
120
Review of SchedulesSchedule 2
• Ownership Code (Line 13)
– An ownership code must be supplied for each security.
– A single security ID can have different ownership codes.
– Security IDs with like information but differing ownership codes must be reported on individual Schedule 2 reports and cannot be aggregated.
121
Fair (Market) Value
• Report the fair (market) value of securities as of close of business December 31.
• The fair (market) value follows the definition of FAS 115.
• Fair value is the amount at which an asset could be bought or sold in a current transaction between willing parties, other than in a forced or liquidation sale.
• If a quoted market price is available for an instrument, the fair (market) value is the product of the number of trading units times that market price.
122
Fair (Market) Value
• For Securities that do not regularly trade, the estimate of fair value should be based on the best information available in the circumstances.
• The estimate of fair value should consider prices for similar assets and the results of valuation techniques to the extent available in the circumstances.
• Examples of valuation techniques include discounted cash flow, matrix pricing, option-adjusted spread models and fundamental analysis.
123
Fair (Market) Value
• US$ Fair (Market) Value of Security Held (Line 14a)– Enter the US$ fair (market) value.
• Fair (Market) Value of Security Held Denominated in Currency of Issue (Line 14b)– Enter the fair (market) value of the security in the
currency of original issue. – If the currency is denominated in US$ then enter
the US$ fair (market) value. In these cases line items 14a and 14b will be equal.
124
Fair (Market) Value
• If the fair (market) value is determined to be zero list the reason why on line 15 of Schedule 2.
• Examples of zero fair (market) value are:– Securities that are thinly or never traded.– Stock is impaired or security in default.– Organization that issued the security is in
receivership.
125
Fair (Market) Value
• Fair (market) value is calculated as:– Equity
• Number of Shares * Price– Short and long-term debt
• Face Value * Price– Asset-backed securities
• Remaining Principal Outstanding * Price
126
Foreign Exchange Conversion
• Converting foreign currency to U.S. dollar
– If the exchange rate is stated as foreign currency per U.S. dollar then you must divide to get the U.S. dollar equivalent.
– If the exchange rate is stated as U.S. dollar per foreign currency then you must multiply to get the U.S. dollar equivalent.
127
Foreign Exchange Conversion Example 1
• Exchange rate quoted in units of foreign currency per US$. – The exchange rate as of 12/31/03 should be used when
reporting.
– Japanese denominated security with a fair (market) value of ¥300,000.
– If the closing exchange rate were ¥105.75/US$.
– Divide the foreign currency value by the foreign exchange rate and round to the US$ value.
– ¥300,000/105.75 = US$2,836.879 (US$2,837).
128
Foreign Exchange Conversion Example 2
• Exchange rate quoted in units of US$ per foreign currency.– The exchange rate as of 12/31/03 should be used when
reporting.
– British pound denominated security with a fair (market) value of £2,000.
– If the closing exchange rate were $1.45/UK£.
– Multiply the foreign currency value by the foreign exchange rate and round to the US$ value.
– £2,000 * 1.45 = $2,900.
129
Reporting an Equity Security
• Security type must be either 1, 2, 3 or 4.• Depositary share indicator, line item 8, must be
completed.• Number of Shares Held, line item 16, must be
provided.• Line items 17 through 23 pertain to debt securities
and should be left blank or null.
130
Reporting a Debt Security Other Than Asset-Backed
• Security type must be either 5, 6, 8, 9, 10 or 12.
• The face value in the currency of denomination must be reported. Face value should be the same currency reported in line items 12 and 14b.
• Face value should be rounded to the nearest whole currency unit.
• If the security is traded in units, report the face value by multiplying each unit by the number of units held.
• An issue date (Line 18) and a maturity date (Line 19) must be reported.
131
Reporting an Asset-Backed Security
• Security type should be either 7 or 11.• The original face value in the currency of
denomination must be reported. Original face value should be the same currency reported in line items 12, 14b and 21.
• Original face value is the amount that would still be outstanding if no principal had been repaid.
132
Reporting an Asset-Backed Security
• Remaining principal outstanding in currency of denomination must be reported. Same currency as 12, 14b and 20.
• The remaining principal outstanding will only equal the original face value if no principal has been repaid.
133
Reporting an Asset-Backed Security
• Original face value and remaining principal outstanding should be rounded to the nearest whole currency unit.
• If the security is traded in units, report the original face value and remaining principal outstanding by multiplying each unit by the number of units held.
• An issue date and a maturity date must be reported.
134
Review of Schedules Schedule 3 for “Schedule 2 and
Schedule 3” Reporters• Multiple Schedule 3 records can be reported.
• A custodian code from Appendix G must be reported in line 3.
• If your organization’s U.S.-resident custodian does not appear in Appendix G, lines 9 through 14 of the Schedule 3 must be completed.
135
Review of Schedules Schedule 3 for “Schedule 2 and
Schedule 3” Reporters• The aggregate fair market value of the securities
entrusted to the custodian indicated in line 3 must be provided on lines 4 through 7.
• Your organization must indicate whether it is reporting as an end investor or a U.S.-resident custodian (Line 8).
• Schedule 3 Only reporters are required to submit up to two additional Schedule 3 reports using custodian code 77 or 88 (Line 3).
136
Review of Schedules Schedule 3 for Schedule 3 Only
Reporters• Reporting custodian code 77
– Submit a separate Schedule 3 containing summary data on foreign securities held directly with foreign-resident custodians.
– This includes:• foreign-resident offices of U.S. banks
• foreign-resident offices of U.S. broker/dealers
• foreign-resident central securities depositories
137
Review of Schedules Schedule 3 for Schedule 3 Only
Reporters
• Reporting custodian code 88
– Submit a separate Schedule 3 containing summary data on foreign securities:• held directly by the reporting organization• entrusted to U.S.-resident central securities
depositories
139
Reporting Criteria
• Custodians should report foreign securities held in custody for other U.S. residents.
• Custodians should report their own foreign securities.
140
Securities to be Included
• Report all securities issued by foreign-resident entities, including international and regional organizations, held by U.S. residents.
• Report all American Depositary Receipts (ADRs) that represent ownership of foreign corporations that are held by U.S. residents.
141
Securities to be Included
• Report all foreign securities, even if the security is restricted.
• Report all U.S. held foreign securities that have been entrusted to a foreign-resident custodian.
142
Securities to be Included
• Report all U.S. held foreign securities that have been entrusted to a U.S.-resident central securities depository (such as the Depository Trust Company) or foreign-resident central securities depository (such as Euroclear).
143
Security IDs
• Whenever possible, report securities using the ISIN or CUSIP Code.
• If unavailable, use appropriate SEDOL, CINS, Common, or other exchange-assigned code.
• Use internal codes only if no other code exists for the security.
144
FRBNY Calculations
• FRBNY calculates implicit prices, factor values, and exchange rates based on market values and quantity fields submitted by reporters.
– Helps FRBNY determine the quality of market values and quantities.
145
How FRBNY Calculates Prices
• An implicit price for equity is calculated by dividing the US$ fair (market) value (line 14a) by the number of shares (line 16).
146
How FRBNY Calculates Prices Example 1
• If the US$ fair (market) value is $10,000,000 and the number of shares is 100,000, what is the implicit price?
147
How FRBNY Calculates Prices Example 1 Answer
• If the US$ fair (market) value is $10,000,000 and the number of shares is 100,000, what is the implicit price?
• Implicit Price = US$ fair (market) value/ Number of shares
• $100 = $10,000,000 / 100,000
148
How FRBNY Calculates Prices
• An implicit price for non-ABS debt is calculated by dividing the fair (market) value in currency of denomination (line 14b) by the face value in currency of denomination (line 17).
149
How FRBNY Calculates Prices Example 2
• If the fair (market) value in currency of denomination is $1,000,000 and the face value in currency of denomination is $900,000, what is the implicit price?
150
How FRBNY Calculates Prices Example 2 Answer
• If the fair (market) value in currency of denomination is $1,000,000 and the face value in currency of denomination is $900,000, what is the implicit price?
• Implicit Price = Fair (market) value in currency of denomination / Face value in currency of denomination
• 1.11 = $1,000,000 / $900,000
151
How FRBNY Calculates Prices
• An implicit price for asset-backed securities is calculated by dividing the fair (market) value in currency of denomination (line 14b) by the remaining principal outstanding in currency of denomination (line 21).
152
How FRBNY Calculates Prices Example 3
• If the fair (market) value in currency of denomination is ¥ 100,000 and the remaining principal outstanding in currency of denomination is ¥ 110,000, what is the implicit price?
153
How FRBNY Calculates Prices Example 3 Answer
• If the fair (market) value in currency of denomination is ¥ 100,000 and the remaining principal outstanding in currency of denomination is ¥ 110,000, what is the implicit price?
• Implicit Price = Fair (market) value in currency of denomination / Remaining principal outstanding in currency of denomination.
• 0.909 = ¥ 100,000 / ¥ 110,000
154
How FRBNY Calculates Factor Values
• The factor value for asset-backed securities is calculated by dividing the remaining principal outstanding in currency of denomination (line 21) by the original face value in currency of denomination (line 20).
155
Calculation of Factor ValuesExample
• If the original face value in currency of denomination is £900,000 and the remaining principal outstanding in currency of denomination is £700,000, what is the factor value?
156
Calculation of Factor ValuesExample Answer
• If the original face value outstanding in currency of denomination is £900,000 and the remaining principal outstanding in currency of denomination is £700,000, what is the factor value?
• Factor Value = Remaining principal outstanding in currency of denomination / Original face value in currency of denomination.
• .78 = £ 700,000 / £ 900,000
157
How FRBNY Calculates Exchange Rates
• The implicit exchange rate is calculated by dividing the US$ Fair (Market) Value (line 14a) by the Fair (Market) Value in Currency of Denomination (line 14b).
158
Calculation of Exchange Rates Example
• If the US$ Fair (Market) Value is $100,000 and the Fair (Market) Value in Currency of Denomination is £80,000, what is the exchange rate?
159
Calculation of Exchange Rates Example Answer
• If the US$ Fair (Market) Value is $100,000 and the Fair (Market) Value in Currency of Denomination is £80,000, what is the exchange rate?
• Exchange Rate = US$ Fair (Market) Value / Fair (Market) Value in Currency of Denomination.
• 1.25 = $100,000 / £ 80,000
160
Common Reporting Errors
• Securities reported with an amount held equal to zero.
• Securities reported with inaccurate security types (zero-coupon bonds reported as all other long-term debt).
161
Common Reporting Errors
• Failure to report remaining principal outstanding for asset-backed securities.
• Incorrectly reporting preferred stock as debt. (All preferred stock should be reported as equity).
• Failure to report foreign securities owned by U.S.-resident funds.
162
U.S.-Resident Funds Example 1
• If a U.S.-resident fund owns foreign securities, are these securities reportable?
163
U.S.-Resident Funds Example 1 Answer
• If a U.S.-resident fund owns foreign securities, are these securities reportable?
• Yes. The foreign securities are reportable because the fund is incorporated in the U.S.
164
U.S.-Resident Funds Example 2
• If shares of a Caribbean fund, which is incorporated in the U.S., are purchased by a U.S.-resident are they reportable?
165
U.S. Resident Funds Example 2 Answer
• If shares of a Caribbean fund, which is incorporated in the U.S., are purchased by a U.S.-resident are they reportable?
• No. Since the fund is incorporated in the U.S., the shares held by U.S. residents are not reportable.
166
Common Reporting Errors
• Incorrectly calculated foreign currency market values.
• Defaulting currency to match country of issuer.
• Identifying securities as U.S. or foreign based on the first two letters in ISIN or first letter in CINS ID.
168
Identify Securities Examples
Question:
Is ISIN US902118AU26reportable?
Answer:
Yes, because it is issued by Tyco International which is incorporated in Bermuda.
169
Identify Securities Examples
Question:
Is ISIN US902118AU26reportable?
Answer:
Yes, because it is issued by Tyco International which is incorporated in Bermuda.
Is ISIN
US01F0626485
reportable?
170
Identify Securities Examples
Question:
Is ISIN US902118AU26reportable?
Answer:
Yes, because it is issued by Tyco International which is incorporated in Bermuda.
Is ISIN
US01F0626485
reportable?
No, because it is issued by the Federal National Mortgage Association (Fannie Mae).
172
Identify Securities Examples
Question:
Is ISIN XS0077101433reportable?
Answer:
No, because it is issued by the Federal Home Loan Mortgage Corporation
173
Identify Securities Examples
Question:
Is ISIN XS0077101433reportable?
Answer:
No, because it is issued by the Federal Home Loan Mortgage Corporation.
Is ISIN XS001087137reportable?
174
Identify Securities Examples
Question:
Is ISIN XS0077101433reportable?
Answer:
No, because it is issued by the Federal Home Loan Mortgage Corporation.
Is ISIN XS001087137reportable?
Yes, because it is issued by the Inter-American Development bank.
175
Common Reporting Errors
• Failure to report securities issued by reincorporates, such as Tyco, Transocean, and Ingersoll-Rand.
• Failure to report securities issued by companies that are thought to be domestic, but are foreign incorporated, such as Schlumberger and Carnival Corp.
How We Review Your Data
Report of U.S. Ownership of Foreign Securities, Including Money Market
Instruments (SHCA)
Tim Grob
177
Four Levels of Review
• Reporter level– Analyzing your data for reasonability– Trend analysis
• Security level– Comparing attributes of reported securities to one another, and to
commercial data sources.• Macro level
– Additional comparisons on a broader level• Schedule 2/3 Comparison
– Comparing schedule 3 data to schedule 2 data
178
Reporter Level Review
Reasonability Comparisons
– Schedule 1 -vs- schedule 2 comparison
– Schedules 1, 2 & 3 comparison to prior year (reporting trends)
– Ownership code
– Market values
– Face values
– Number of shares
179
Reporter Level Review
Reasonability Analysis• Ensuring all schedule 2 data was reported, to
include:
– Security IDs
– Ownership code
– Number of shares held
– Face Value held
– Remaining principal (ABS)
180
Reporter Level Review
Reasonability• Currency/Exchange Rate Analysis
– Currency is US$ but US market value (item 14a) does not equal the market value in the currency of denomination (item 14b).
– Currency is not US$ and the exchange rate is not 1, but the US$ market value equals the market value in the currency of denomination.
– For each security, an implicit exchange rate is calculated, which should be the December 31, 2003 exchange rate for the currency.
181
Reporter Level Review
Reasonability• Country of Issuer• Country of Issuer is U.S.
– Are these coded incorrectly or should these have been excluded from your report?
– Are securities issued by international and regional organizations miscoded, and reported with the U.S. as the country of issuer?
– Are securities issued by a U.S. protectorate (Puerto Rico, etc.)? If so, exclude from report.
182
Reporter Level Review
Reasonability• Country of Issuer• Country of Issuer is Canada
– Has the amount of securities issued by Canadian entities changed substantially since the last reporting cycle?
– Were Canadian securities coded as US securities on your system and so were incorrectly excluded from your report?
183
Reporter Level Review
Reasonability • American Depositary Receipts (ADRs)• Comparison of the reported market value and
proportion of ADRs relative to total equity
– Did you report any ADRs?
– Did you previously? If so, has your position changed significantly?
184
Reporter Level Review
Reasonability
• Ownership Code Analysis
– Have the market values and proportions of the total market value of securities reported as owner and as custodian, changed substantially?
– Are you reporting any securities as owner?
185
Reporter Level Review
Reasonability
• Key Securities Analysis
– Largest securities by market value• Implicit exchange rates, implicit prices,
country of issuer, etc.
– Securities reported with zero quantities• If reported correctly, these securities do not
need to be reported, and should be excluded from future reports
186
Reporter Level ReviewReasonability
• Reporter Queries
We focus on areas that were reporting problems in prior data submissions, such as:
• keywords in descriptions, such as rights, warrants, repurchase, repo, etc.
• debt prices far above par• issue dates after as-of date• maturity dates prior to as-of date• additional comparisons to other reporters’ data
187
Reporter Level Review
• Reasonability– Consistency of data reported, throughout the
reporter’s submission – Example: You report data for Stock A with two
different implicit prices, which is correct?
– Stock A reported with implied price of $59.50– Stock A reported with implied price of $60.15
188
Security Level Review
Search for Reincorporated Organizations• Entities that were formerly incorporated in the
United States but are now incorporated elsewhere. • Please view the list of Reincorporates in your
packet
189
Security Level Review
• Data embedded in the security description, e.g., security type or maturity date, are compared to data in the relevant fields.
• Term of debt is calculated using issue and maturity dates and compared to the reported term and the security description.
• Issuer should not be a U.S. resident.• Total amount held reported across all reporters is
compared to the total amount outstanding for a given security.
190
Macro Level Review
Comparisons of various “cuts” of the aggregate data.
• Equity by country and security type• Long-term debt by country and currency• Short-term debt by country and currency • Long-term debt by country and type of security• Short-term debt by country and type of security
191
Macro Level Review
Comparisons of various “cuts” of the aggregate data
• ADRs by country • Debt by maturity date• Debt by coupon
• Published data can be found at http://www.ustreas.gov/tic/fpis.html
192
Schedule 2/3 Review
(Market Values
by security type,
from Schedule 2s
and 3s) reported by
each custodian
(Market values attributed) to each custodian on Schedule 3 by its customers.
193
Want to Know More?
• If you’d like more details about how we analyze your data, please contact us to arrange a meeting.
195
Reports Used for Comparison
• U.S. Ownership of Foreign Securities (SHCA or Claims)
• TIC Reports– TIC BQ-1 Customer Claims– TIC BQ-2 Customer and own claims denominated
in foreign currency– TIC BC Own Claims
http://www.ustreas.gov/tic/
196
Differences
• TIC - Face Value– SHCA - Face Value and Market Value
• TIC - Aggregate per country– SHCA - Detailed information on each security
197
Differences
• TIC - Long-term and short-term negotiable CDs are combined– SHCA - Long-term and short-term negotiable
CDs are separated by security type
• TIC - USD or USD equivalent– SHCA - Market Value in both USD and currency
of denomination. Face value in currency of denomination that FRBNY converts to USD.
198
Differences
• There may be more than one TIC report filed per institution.
• One consolidated SHCA report filed per institution– For example: A U.S. entity sends in separate
TIC reports for the Bank Holding Company, Bank, and Broker Dealer but would send in one consolidated SHCA report.
199
Compare - Overview
• Negotiable certificates of deposits
• Commercial Paper
• Other short-term negotiable securities
• Foreign currencies
201
CompareShort-Term Negotiable CDs
• SHCA (per country)– Security Type 6 (Item
7)
– Currency = USD (Item 12)
– Ownership code 2, 3, 4 and 5 (item 13)
– Sum of face value (Item 17)
• TIC BQ-1 (per country)– Negotiable CDs
(column 2)
– Note: Long term CDs (original maturity of over one year) are also included in this column but would be coded as Sec. Type 12 on SHCA
202
CompareShort-Term Negotiable CDs
• SHCA (per country)– Security Type 6 (Item
7)
– Currency not = USD (Item 12)
– Ownership code 2, 3, 4 and 5 (item 13)
– Sum of face value (Item 17)
• TIC BQ-2 (per country)– Other Customers’
Claims (column 6)
– Note - CDs are just one of many items that can be reported in this column.
203
Compare Short-Term Negotiable CDs
Memo Item
• SHCA – Security Type 6 (Item
7)
– Currency not = USD (Item 12)
– Ownership code 2, 3, 4 and 5 (item 13)
– Sum of face value (Item 17)
• TIC BQ-2 – Negotiable CDs (row
line 8110-8, column 6)
204
CompareOther Short -Term Negotiable
Securities• SHCA (per country)
– Security Types 5, 7 and 8 (Item 7)
– Currency = USD (Item 12)
– Ownership code 2, 3, 4 and 5 (item 13)
– Sum of face value (Item 17)
• TIC BQ-1 (per country)– All Short-Term
Negotiable Securities (column 3)
205
Compare Commercial Paper Memo Item
• SHCA – Security Type 5 (Item
7)
– Currency = USD (Item 12)
– Ownership code 2, 3, 4 and 5 (item 13)
– Sum of face value (Item 17)
• TIC BQ-1 – Commercial Paper
(row line 8161-2, column 3)
206
CompareOther Short-Term Negotiable
Securities• SHCA (per country)
– Security Types 5, 7 and 8 (Item 7)
– Currency not = USD (Item 12)
– Ownership code 2, 3, 4 and 5 (item 13)
– Sum of face value (Item 17)
• TIC BQ-2 (per country)– Other Customers’
Claims (column 6)
– Note - As mentioned before there are other items reportable in this column.
207
Compare Other Short-Term Negotiable
Securities Memo Item
• SHCA – Security Type 5, 7 or 8
(Item 7)
– Currency not = USD (Item 12)
– Ownership code 2, 3, 4 and 5 (item 13)
– Sum of face value (Item 17)
• TIC BQ-2 – Short-Term Negotiable
Securities (row line 8120-5, column 6)
208
CompareOwn Short-Term Securities
• SHCA (per country)– Security Type 5 or 6 or
7 or 8 (Item 7)
– Currency = USD (Item 12)
– Ownership code 1 (item 13)
– Sum of face value (Item 17)
• TIC BC (per country)– Negotiable CDs and All
Short Term Negotiable Securities (column 2 + column 4)
– Note: Long term CDs (original maturity of over one year) are also included in column 2 but would be coded as Sec. Type 12 on SHCA
209
CompareOwn Short-Term Securities
• SHCA (per country)– Security Type 5 or 6 or
7 or 8 (Item 7)
– Currency not = USD (Item 12)
– Ownership code 1 (item 13)
– Sum of face value (Item 17)
• TIC BQ-2 (per country)– Other Claims
(column 4)
– Note: Short-term securities are just one of many items that can be reported in this column.
210
Compare Own Short-Term Negotiable
CDs Memo Item
• SHCA – Security Type 6 (Item
7)
– Currency not = USD (Item 12)
– Ownership code 1 (item 13)
– Sum of face value (Item 17)
• TIC BQ-2 – Negotiable CDs (row
line 8110-8, column 4)
211
Compare Own Other Short-Term
Negotiable Securities Memo Item
• SHCA – Security Type 5, 7 or 8
(Item 7)
– Currency not = USD (Item 12)
– Ownership code 1 (item 13)
– Sum of face value (Item 17)
• TIC BQ-2 – Short-Term Negotiable
Securities (row line 8120-5, column 4)
212
Compare Data by currency
• SHCA – Security Type 5, 6, 7 or
8 (Item 7)
– Currency = CAD (Canadian Dollar, Item 12)
– Ownership code 1 (item 13)
– Sum of face value (Item 17)
• TIC BQ-2 – Denominated in
Canadian Dollars (row line 8500-1, column 4)
– Note: Short-term securities are just one of many items that can be reported in this column.
213
Compare Data by currency
• SHCA – Security Type 5, 6, 7
or 8 (Item 7)
– Currency = EUR (Euros, Item 12)
– Ownership code 1 (item 13)
– Sum of face value (Item 17)
• TIC BQ-2 – Denominated in Euros
(row line 8500-2, column 4)
– Note: Short-term securities are just one of many items that can be reported in this column.
214
Compare Data by currency
• SHCA – Security Type 5, 6, 7
or 8 (Item 7)
– Currency = GBP (Sterling, Item 12)
– Ownership code 1 (item 13)
– Sum of face value (Item 17)
• TIC BQ-2 – Denominated in
Sterling (row line 8500-3, column 4)
– Note: Short-term securities are just one of many items that can be reported in this column.
215
Compare Data by currency
• SHCA – Security Type 5, 6, 7
or 8 (Item 7)
– Currency = JPY (Yen, Item 12)
– Ownership code 1 (item 13)
– Sum of face value (Item 17)
• TIC BQ-2 – Denominated in Yen
(row line 8500-4, column 4)
– Note: Short-term securities are just one of many items that can be reported in this column.
216
Compare Data by currency
• SHCA – Security Type 5, 6, 7 or
8 (Item 7)
– Currency = CAD (Canadian Dollar, Item 12)
– Ownership code 2, 3, 4 and 5 (item 13)
– Sum of face value (Item 17)
• TIC BQ-2 – Denominated in
Canadian Dollars (row line 8500-1, column 6)
– Note: Short-term securities are just one of many items that can be reported in this column.
217
Compare Data by currency
• SHCA – Security Type 5, 6, 7
or 8 (Item 7)
– Currency = EUR (Euros, Item 12)
– Ownership code 2, 3, 4 and 5 (item 13)
– Sum of face value (Item 17)
• TIC BQ-2 – Denominated in Euros
(row line 8500-2, column 6)
– Note: Short-term securities are just one of many items that can be reported in this column.
218
Compare Data by currency
• SHCA – Security Type 5, 6, 7
or 8 (Item 7)
– Currency = GBP (Sterling, Item 12)
– Ownership code 2, 3, 4 and 5 (item 13)
– Sum of face value (Item 17)
• TIC BQ-2 – Denominated in
Sterling (row line 8500-3, column 6)
– Note: Short-term securities are just one of many items that can be reported in this column.
219
Compare Data by currency
• SHCA – Security Type 5, 6, 7
or 8 (Item 7)
– Currency = JPY (Yen, Item 12)
– Ownership code 2, 3, 4 and 5 (item 13)
– Sum of face value (Item 17)
• TIC BQ-2 – Denominated in Yen
(row line 8500-4, column 6)
– Note: Short-term securities are just one of many items that can be reported in this column.
221
Technical TopicsWhat to File Electronically
Electronically:• Schedule 2
– Required if submitting more than 200 records
– Optional if submitting 200 or fewer records
On paper:• Schedule 1• Schedule 3• Schedule 2
– Optional if submitting 200 or fewer records
222
Technical Topics:Media Requirements
• High Density IBM Compatible Diskette
• Standard CD
• Standard Windows PC ASCII Text Files With a .txt extension
• Labeled With Reporter Name & ID
• Accompanied by Dump of Data and Copy Command Used to Create the Diskette/CD
223
Technical Topics:Unacceptable Media
• No IBM Mainframe Tapes/Cartridges - 3480/3490, Round (Reel) Tapes
• No EBCDIC Files
• No Compressed Files
224
Technical Topics:File Formats
Use Either of Two File Formats:
• Positional
• Semi-colon Delimited
225
Technical TopicsCorrect Positional File Example
Filler (space)Sequence Number
Filler (space)Reporting Unit
Filler (space)Name of Reporting Unit
Reporter ID
225
226
Technical TopicsCorrect Positional File Example
Number of Shares HeldFiller (space)
Face Value (Non-ABS)Debt Only - NULL
226
227
Technical TopicsCorrect Positional File Example
Number of Shares Held -NULLFiller (space)
Face Value (Non-ABS) Debt Only Filler (space)
Issue DateFiller (space)
Maturity Date
227
228
Technical TopicsIncorrect Positional File Example
Reporting Unit Description field begins in the incorrect position, 22. The correct position is 24.
228
229
Technical TopicsCorrect Delimited File Example
Reporter IDDelimiterSequence Number
DelimiterReporting UnitDelimiter
Name of Reporting Unit
229
230
Technical TopicsCorrect Delimited File Example
Fair Market ValueReason for Zero - NULLNumber of Shares Held
Delimiters for 7 NULL Debt& ABS Items
Intentionally Left Blank
230
231
Technical TopicsIncorrect Delimited File Example
Delimiters for 7 NULL Debt& ABS Items are missing
231
232
Technical TopicsPositional & Delimited Files Example
Number of sharesFace Value (Non-ABS) Debt Only
232
233
Technical TopicsTips & Traps
• Files Must be Plain Text - Uncompressed
– No .xls (Excel) files
– No COBOL packed decimal fields
• Files Must be ASCII
• Diskette or CD Only
234
Technical Topics Tips & Traps
• Incorrect Date Format
– Correct format MMDDYYYY. For example, the date May 3, 2003 would be reported as 05032003.
– Examples of incorrect date formats MM/DD/YY, MM/DD/YYYY, MM-DD-YY, etc.
• Need to Have Leading Zeroes
– Reporter ID, date fields
235
Technical TopicsTips & Traps
• Illegal Characters in the File, such as
• An extended list of tips & traps can be found on the Internet at http://www.treas.gov/tic/forms.html#benchmark, the document is titled “Key Issues for SHCA Software Developers”
236
Technical TopicsContacts
Melissa Harris IT Support Analyst (212) 720-7314
Amador Castelo IT Support Analyst
(212) 720-8592
Susan Ma Team Leader
(212) 720-1989
Howard Brickman Staff Director
(212) 720-7759