June 14, 2019

Mandatory Reporting of Foreign Ownership of U.S. Securities Due August 2019

Holland & Knight Alert
Ronald A. Oleynik | Sulan He

The U.S. Department of the Treasury is currently collecting data from all U.S. persons1 for its five-year mandatory benchmark survey of foreign ownership of U.S. securities as of June 30, 2019. U.S. issuers and U.S. asset managers advising foreign investment funds may be required to file Selected Money Market Instruments (Form SHL) this year, even if they are not required to do so in non-benchmark years.2


This mandatory survey is conducted under the authority of the International Investment and Trade in Services Survey Act (IITSSA).3 The reports generated from the survey are primarily used for 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. These reports will be available to the general public at an aggregated level so that neither the reporting persons nor the foreign ownership of specific U.S. securities can be identified.

Who Is Required to Report?

  • All U.S. issuers and asset managers who have received a copy of report package from the Federal Reserve Bank of New York (FRBNY)4 are required to complete at least Schedule 1 of Form SHL, even if they need only report "exempt" on Schedule 1.5
  • All U.S. issuers and U.S. persons who manage the safekeeping of U.S. securities for foreign persons, whether or not they have been mailed the report package by FRBNY, must complete both Schedule 1 and Schedule 2 of Form SHL if the securities they issue or manage in the aggregate exceed the reporting threshold.
  • The reporting threshold is met if the total market value of reportable U.S. securities owned by foreign residents is $100 million or more as of June 30, 2019.
  • For the purpose of the survey, foreign residents include residents of foreign countries, international organizations with extraterritorial status, foreign subsidiaries of U.S. entities and foreign-resident branches of U.S. banks, offshore and other non-U.S. funds, and entities or individuals that file an IRS Form W-8.

Reportable Securities

This survey will collect information on foreign resident holdings of U.S. securities, including equities (including shares in funds), short-term debt securities (including selected money market instruments), long-term debt securities and U.S. asset-backed debt securities as of June 30, 2019.

Structure of Form SHL

Form SHL consists of two schedules. Schedule 1 requires the basic identifying information of the SHL reporters and a summary of financial information. Schedule 2 requires a more detailed reporting of foreign ownership of U.S. securities, including the name and type of issuer, the type of securities, the currency of denomination, the country and type of foreign holder, and the market value of the securities.

Reporting Dates and Preparation

Persons required to complete the survey should submit the data to FRBNY by Aug. 30, 2019. Failure to provide timely and accurate data can result in potential civil penalty and criminal liability.

Form SHL, instructions and other information regarding Form SHL are available on the Treasury Department website.

For more information or further explanation of how to comply with the reporting requirement, please contact the authors or another member of Holland & Knight's International Trade Group.


1 Any individual, branch, partnership, associated group, association, estate, trust, corporation or other organization (whether or not organized under the laws of any state), any government (including a foreign government, the U.S. government, a state or local government, and any agency, corporation, financial institution, or other entity or instrumentality thereof, including a government-sponsored agency), who resides in the United States or is subject to the jurisdiction of the United States is deemed as a U.S. person. 84 Fed. Reg. 26936.

2 In non-benchmark years, the Annual Report of Foreign Holdings of U.S. Securities, Including Selected Money Market Instruments (Form SHLA) will require reports from only the largest U.S. -resident custodians and issuers. Such entities will be contacted individually by the Federal Reserve Bank of New York.

3 22 U.S.C. 3101 et seq.

4 FRBNY is acting as fiscal agent for the Treasury Department for the purpose of Form SHL.

5 84 Fed. Reg. 26936.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.

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