Every five years, the US Department of the Treasury (“Treasury”) and the Federal Reserve Bank of New York (“FRBNY”) jointly conduct a survey of foreign holdings of US issuers of securities. Data for the survey is gathered on Form SHL. US issuers of securities include private funds and their managers. The filing is due on August 29, 2014.
Filing is required for:
- Any firm or fund that has been contacted by Treasury/FRBNY and asked to complete Form SHL; or
- Foreign shareholders (or equivalent) holding $100 million or more in reportable US securities. For US fund managers, this includes:
- Foreign investors in the manager’s US funds;
- Offshore feeder funds’ investments into US master funds;
- The reportable US securities owned by an offshore fund that are not held at a US custodian (e.g., any securities held at a foreign custodian or privately placed US reportable securities that are not required to be held at a custodian pursuant to the SEC’s custody rule);
- Reportable US securities include:
-Stock, whether common, preferred or restricted;
-US-resident fund shares, whether open-end or closed-end, REITs, money market, index funds and unit investment trusts;
-All other equity interests, including shares or units in unincorporated entities (e.g., limited partnerships);
-Asset-backed securities; and
For purposes of determining whether the $100 million threshold has been met, fund managers must include all US-resident parts of their organization, including any US investment funds. This calculation, as well as all data on Form SHL, must be as of close of business on June 30, 2014.
Form SHL overview:
- The Form includes two schedules:
- Schedule 1 contains basic identifying details about the filer and a summary of the data provided. A firm that has been contacted by Treasury/FRBNY but does not meet the $100 million threshold need only complete Schedule 1;
- Schedule 2 requires detailed information for each security being reported, including issuer name, type of instrument, currency denomination and market value.
- The form may be submitted electronically or on paper (electronic filing is required for those submitting more than 200 Schedule 2 records); and
- All filers, whether on paper or electronic, must obtain a 10 digit Reporter ID by contacting FRBNY by phone at 212-720-6300 or 646-720-6300 or by emailing SHLA.Help@ny.frb.org.
- If you have been contacted by the Treasury/FRBNY or think you may meet the threshold, obtain your Reporter ID as soon as possible;
- Review your US funds to determine whether any investors are foreign persons, which may involve your fund administrator;
- Review holdings information in US securities to determine whether the $100 million threshold has been met (remember to aggregate the holdings of offshore funds with your onshore funds for purposes of calculating the threshold), which may involve gathering needed data from your custodians;
- Ask your legal counsel or compliance consulting firm regarding any interpretation issues with respect to Form SHL/its instructions. The above is an overview only and firms should read the form and instructions in their entirety.