Questions and answers are grouped together according

to the sections of the instructions to which they relate.

New FAQs are so marked on the left margin in red.

 

 

GENERAL REPORTING CRITERIA

 

Q.               What does “report purchases or sales of long-term securities (debt or equity) from the viewpoint of the foreign resident” mean?

 

A.                “Viewpoint of the foreign resident” refers to which column to use when reporting.  A sale by your institution or a domestic customer to a foreign resident is reported on TIC Form S as a purchase (columns 1, 3, 5, 7, 9, or 11) by a foreign resident.  A purchase by your institution or a domestic customer from a foreign resident is reported on TIC Form S as a sale (columns 2, 4, 6, 8, 10, or 12) by a foreign resident.

 

 

Q.                What value should be used to report long-term securities transactions?

 

A.               The figures reported on TIC Form S for purchases and sales of long-term securities should represent the total gross U.S. dollar amount of money debited or credited (i.e., the cost of purchases plus commissions, etc., or the proceeds of sales less commissions, tax, etc.).

 

For example, if a foreign resident located in France purchases a $50 million U.S. Treasury note from a U.S.-resident broker/dealer, and the total cost to the foreign resident is $52 million ($50 million plus $2 million for fees) the U.S.-resident broker/dealer should report on TIC Form S $52 million opposite France, column 1 (Purchases of U.S. Treasury and Financing Bank Bonds and Notes).  Alternately, if a foreign resident located in France sells a $100 million U.S. Treasury note to a U.S.-resident broker/dealer, and receives $98 million from the sale ($100 million less $2 million for fees), the U.S.-resident broker/dealer should report on TIC Form S the gross amount of $98 million opposite France, column 2 (Sales of U.S. Treasury and Financing Bank Bonds and Notes).

 

 

WHO MUST REPORT

 

Q.                Should purchases and sales of long-term securities executed by your foreign offices for their customers be reported?

 

A.                No.  Purchases and sales of long-term securities (debt and equity) between foreign residents (e.g., between your London office and its foreign customers) are not reportable.  However, a U.S. resident who is purchasing or selling long-term securities directly with foreign residents (including their own foreign offices) should report those transactions on TIC Form S. 

 

 

Q.               Who should report redemptions of U.S. and foreign long-term debt?

 

A.              Refer to the TIC Form S Fact Sheets on reporting responsibilities.  The TIC Form S Fact Sheets can be found with the Final Instructions for Form S, clarification of Reporting Responsibilities: http://www.treas.gov/tic/srptresp.805.pdf .

 

 

CONSOLIDATION RULES

 

Q.               How should bank holding companies consolidate their TIC Form S?

 

A.               Bank holding companies should report all their transactions in long-term securities with foreign residents for the parent holding company and its nonbanking subsidiaries, other than brokers and dealers and insurance underwriting subsidiaries.  Brokers and dealers, and insurance subsidiaries should each submit a separate TIC Form S report including all their offices and subsidiaries located in the United States.  Banking subsidiaries should each also file a separate TIC Form S report including all their offices and International Banking Facilities (IBFs) located in the United States.

 

 

Q.              How should fund managers consolidate their TIC Form S?

 

A.                A U.S. fund manager (e.g., managers of mutual funds, money market funds, investment trusts, hedge funds, or pension funds) should report all transactions (purchases and sales of long-term securities (debt or equity)) with foreign residents for all of the U.S.-resident funds they manage on a consolidated basis.

 

 

WHAT MUST BE REPORTED

 

Q.               How should Separate Trading of Registered Interest and Principal Securities (STRIPS) be reported?

 

A.                Separate Trading of Registered Interest and Principal Securities (STRIPS) are U.S. Treasury securities that are stripped by private institutions and re-issued as zero-coupon securities.  For the purpose of reporting on TIC Form S, these should be classified as U.S. Treasury securities and Federal Financing Bank Bonds and Notes, in columns 1 and 2, as appropriate.

 

 

Q.              How should purchases and sales of Depositary Receipts (DRs) be reported on TIC Form S?

 

A.               The purchases and sales of DRs where the underlying security is a foreign security should be reported as purchases and sales of foreign securities.  Conversely, purchases and sales of DRs where the underlying security is a U.S. security should be reported as purchases and sales of U.S. securities.

 

 

Q.              Are transactions (purchases and sales) with foreign residents in partnership interests reported on TIC Form S?

 

A.               Yes.  Purchases and sales by foreign residents of limited partnership interests are reportable as equity.  Purchases of the partnership interests by foreign residents should be reported on TIC Form S in column 7 (Purchases of Domestic Stocks) or column 11 (Purchases of Foreign Stocks).  Sales of the partnership interests by foreign residents should be reported on TIC Form S in column 8 (Sales of Domestic Stocks) or column 12 (Sales of Foreign Stocks).  The location of the partnership’s incorporation determines whether the partnership should be classified as domestic or foreign.

 

 

Q.              Are transactions (purchases and sales) with foreign residents in options and warrants reported on TIC Form S?

 

A.               Options, rights, warrants, and other derivatives as defined by FAS 133 should be reported on the TIC Form D: Report of Holdings of, and Transactions in, Derivatives Contracts with Foreign Residents.  That includes the vast majority of traded options, rights, and warrants on long-term securities.  Exceptions:  options, rights, warrants, and other derivatives that are written by a company, indexed to an ownership interest in the company, and not readily convertible to cash (often because they are convertible to a security that has a restriction on immediate sale) are excluded from the definition of a derivative under FAS 133.  These are reported on TIC Form S as an equity security.

For additional information on TIC Form D refer to http://www.ustreas.gov/tic/forms.html.

 

Note: If an embedded derivative has not been bifurcated from the host, then the security should be reported without separating the embedded derivative.  However, if the embedded derivative is bifurcated from its host contract, then only the value of the host contract should be reported.

 

 

Q.                What should be reported when an option or warrant is exercised?

 

A.               If an option or warrant is exercised, report the sale by a foreign resident of the option or warrant in column 6 or 10 and the purchase of the underlying long-term security in column 5, 7, 9 or 11, as appropriate.

 

 

NEW   Q.         How should convertible securities be reported?

 

A.         Convertible securities should be reported based upon the current form of the security.  Therefore, a long-term debt security that is convertible into equity should be reported as a long-term debt security.  Upon conversion, report this event as a sale of a long-term debt security and a purchase of equity. (See also the section below on “EXCHANGE OF LONG-TERM SECURITIES”.)

 

 

NEW   Q.         How should hybrid securities be reported?

 

A.         Hybrid security transactions are reportable on the TIC Form S.  Because these securities have both equity and debt characteristics, it is often unclear whether to report them as equity or debt transactions.  Please contact staff at the Federal Reserve Bank of New York for guidance on how to report specific hybrid securities.

 

 

Q.              What do fund managers and investment managers (e.g., managers of mutual funds, money market funds, investment trusts, hedge funds, pension funds) report on TIC Form S?

 

A.               Refer to the TIC Form S Fact Sheet 5 (What Transactions to Report - U.S.-Resident Fund Mangers and Investment Managers).  The TIC Form S Fact Sheets can be found at http://www.treas.gov/tic/srptresp.805.pdf , with the Final Instructions for Form S, clarification of Reporting Responsibilities. 

 

 

EXCLUSIONS FROM REPORTING

 

Q.                Should custodians report the holdings of long-term securities held for customers on TIC Form S?

 

A.                No.  Custodial holdings of long-term securities should not be reported on TIC Form S.  TIC Form S is used to report transactions in long-term securities, not holdings.  However, custodians have the responsibility to report redemptions of securities under certain circumstances.   Refer to the TIC Form S Fact Sheet 6 (What Transactions to Report - U.S.-Resident Custodians).  The TIC Form S Fact Sheets can be found at http://www.treas.gov/tic/srptresp.805.pdf .

 

 

NEW   Q.         Is a clearing firm responsible for filing a TIC Form S?

 

A.                  No.  A clearing firm is not responsible for filing the TIC Form S.  Typically the firm that

             executed the securities transaction is obligated to report the data.  Since the clearing firm

             is not principal to the trade, it has no reporting obligation.  For additional information, refer

             to the TIC Form S Fact Sheets.  The TIC Form S Fact Sheets can be found at

             http://www.treas.gov/tic/srptresp.805.pdf.

 

 

Q.                Should securities involved in repurchase and securities lending arrangements be reported on TIC Form S?

 

A.                No.  Transactions whereby the ownership of a security is transferred in return for collateral under condition that the security or a similar security will revert to its original owner at a future date, should not be reported on TIC Form S.  Funds lent or borrowed as part of these transactions should be reported on the TIC B or TIC CQ-1 reports.

Additional information is available on the TIC website on TIC B (http://www.treas.gov/tic/forms-b.html) and on TIC CQ-1

(http://www.treas.gov/tic/forms-c.html).

 

 

OTHER ACCOUNTING RULES

 

Q.                 How are figures to be rounded?

 

A.               The amounts reported in any cell must be rounded to the nearest million dollars.  Amounts of less then $500,000 should be rounded to zero.  Amounts that are at least $500,000 but less than $1 million should be rounded to $1 million.  Do not round figures until all data for each cell for all business areas have been totaled.

 

 

Q.               How should purchases and sales of long-term foreign currency-denominated securities (debt and equity) by foreign residents be reported?

 

A.               Securities denominated in foreign currencies should be converted to U.S. dollar equivalents using the spot exchange rate at the close of business on the as-of-date of the report. The amount of the purchase or sale should then be reported opposite the country of the counterparty.

 

 

EXEMPTION LEVEL AND REPORTING FREQUENCY

 

Q.               Am I required to file if my reportable total purchases and total sales of long-term securities by foreign residents falls below the $50 million exemption level?

 

A.               Yes.  Once the $50 million exemption is met you must continue to file on a monthly basis for each subsequent month of that year and the following year even if you no longer meet the $50 million reporting threshold.

 

 

LOCATION OF PURCHASER OR SELLER

 

Q.               How should international or regional organizations (World Bank, IMF, United Nations etc.) located in the United States be classified?  These organizations are typically created by a treaty between sovereign states and have a multi- country membership.

 

A.                These entity types are classified as foreign residents.  Reportable TIC Form S transactions undertaken by these entities should be reported opposite the appropriate International and Regional organization row (e.g., International, European Regional, Latin American Regional).  In addition, securities issued by international organizations are considered foreign securities.

 

Note: Pension funds of U.S.-resident international organizations are considered U.S.-resident entities, and thus reportable TIC Form S transactions undertaken by these pension funds should be reported as transactions of U.S. residents.   

 

 

REPORTING OF NEW ISSUES

 

Q.              What should a U.S. lead manager/bookrunner of a new offering of foreign long term securities report?

 

A.             For an initial offering of foreign long-term securities (debt or equity issued by entities that   

             are established under the laws of a foreign country), a U.S. lead manager/bookrunner  

             should report the following in column 10 (Sales by Foreigners of Foreign Bonds) or,  

           column 12 (Sales by Foreigner of Foreign Stock), as appropriate:

·         The U.S. dollar amount of the issue sold directly to them.

·         The U.S dollar amount of the issue sold to the manager’s own U.S.-resident  

        customers.

·         The U.S. dollar amount of the issue sold to U.S. members of the underwriting  

        group.

·         The U.S. dollar amount of the issue that remains unsold and retained by the 

        manager at the end of the offering.

 

            Any subsequent sale of the foreign securities directly with foreign residents by U.S. persons (e.g., broker/dealers) would be reported in column 9, (Purchases by Foreigners of Foreign Bonds) or, column 11, (Purchases by Foreigners of Foreign Stocks). 

 

Note:  Foreign securities are securities issued by entities that are established under the laws of a foreign country and all securities issued by international organizations, such as the International Bank for Reconstruction and Development (IBRD or World Bank), and the Inter-American Development Bank (IADB), even if these organizations are located in the United States.

 

Foreign securities may be issued in the United States or in foreign countries, and may be denominated in any currency, including U.S. dollars.  Neither the country in which the securities are issued, nor the currency in which the securities are denominated, is relevant in determining whether securities are foreign or U.S. securities.

 

 

Q.               What should U.S. members of an underwriting group led by a foreign manager/bookrunner report on TIC Form S for new offerings of foreign long-term securities?

 

U.S. members of an underwriting group led by a foreign manager/bookrunner should report the amount of issue taken from the manager/bookrunner in column 10 (Sales by Foreigners of Foreign Bonds) or, column 12 (Sales by Foreigners of Foreign Stock), as appropriate. The amount taken should be reported opposite the country location of the foreign lead manager/bookrunner.  In addition the U.S. members should report sales made directly to foreign residents in column 9 (Purchases by Foreigners of Foreign Bonds) or, column 11, (Purchases by Foreigners of Foreign Stocks).

 

 

Q.               Should initial offerings of foreign securities sold only to foreign residents be reported by the underwriters?

 

A.                No.  However, any portion of the initial offering that is unsold and retained by domestic members of the underwriting group is reported by the U.S. members as sales by foreign residents of foreign securities (column 10 or column 12).  Subsequent sales of these securities to foreign residents are reportable as purchases by foreign residents of foreign securities (column 9 or column 11).

 

 

Q.               What should a U.S. lead manager/bookrunner report of a new offering of U.S. long-term securities purchased by foreign residents?

 

A.                A U.S. lead manager/bookrunner of new U.S.-issued long-term securities should report the following in column 3 (Purchases by Foreigners of Bonds of U.S. Gov’t. Corporations and Federally-Sponsored Agencies), column 5 (Purchases by Foreigners of U.S. Corporate and Other Bonds) or column 7 (Purchases by Foreigners of U.S. Stock), as appropriate:

·         The amount of the issue taken by foreign members of the underwriting group.

·         The amount of the issue taken by the manager’s own foreign customers.

 

The other U.S. members of the underwriting group should report the amount of the issue sold to their foreign customers as purchases by foreigners in the appropriate column.  

 

Note:  U.S. securities are securities issued by U.S.-resident entities and that are established under U.S. law.  U.S. securities may be issued in the United States or in foreign countries, and may be denominated in any currency, including the euro, yen, or U.S. dollars.  Neither the country in which the securities are issued, nor the currency in which the securities are denominated, is relevant in determining whether securities are foreign or U.S. securities.

 

 

Q.                 How should private offerings of long-term securities be reported?

 

A.                Any U.S. resident acting on its own behalf or on the behalf of its customers as intermediary should report the private placement of U.S. securities with foreign-resident investors as purchases of U.S. securities and the placement of foreign securities with U.S.-resident investors as sales of foreign securities.

 A U.S. issuer of a private placement of securities (bearer or registered form) that has been placed by a foreign intermediary (e.g., broker, dealer or other persons) outside the United States should report these placements or purchases on TIC Form S as a purchase by foreigners.

 

 

TIC FORM S MEMORANDUM

 

Q.                 Is the European Central Bank a Foreign Official Institution?

 

A.                 Yes.  Data reported on TIC Form S for the European Central Bank (row 1350-1) in columns 1 through 8 should also be reported on the TIC Form S Memorandum in the appropriate column.  A list of Foreign Official Institutions can be found at: http://www.ustreas.gov/tic/forms.html.

 

 

Q.                Should TIC Form S Memorandum be filed if the total purchases and total sales of long-term domestic securities by Foreign Official Institutions are zero?

 

A.                  No.

 

 

EXCHANGE OF LONG-TERM SECURITIES

 

Q.               How should the exchange by a foreign resident of long-term securities for short-term securities be reported?  How should the exchange by a foreign resident of short-term securities for long-term securities be reported?

 

A.                In the exchange by a foreign resident of long-term securities for short-term securities, the long-term securities should be reported on TIC Form S as a sale by a foreign resident (column 6 or column 10). Conversely, in the exchange by a foreign resident of short-term securities for long-term securities, the long-term securities should be reported on TIC Form S as a purchase by a foreign resident (column 5 or column 9). U.S. dollar-denominated short-term securities held for the account of foreign residents should be reported by the U.S. custodian on TIC BL-2. Information on TIC Form BL-2 can be found at: http://www.treas.gov/tic/forms-b.html .

 

 

Q.               How should the conversion by a foreign resident of long-term U.S. or foreign debt securities into U.S. equity be reported?

 

A.               The conversion by the foreign resident of long-term U.S. debt securities into U.S. equity should be reported as a sale of domestic bonds (column 6) and a purchase of domestic stocks (column 7).  A foreign resident's conversion of long-term foreign debt to U.S. equity should be reported as a sale of foreign bonds (column 10) and purchase of domestic stocks (column 7). 

 

 

Q.               How should the conversion of long-term foreign debt into foreign stock by a U.S. resident be reported?

 

A.               The reporter should show the conversion of long-term foreign debt into foreign stock by a U.S. resident as a purchase by a foreign resident of foreign debt (column 9) and a sale by a foreign resident of foreign stocks (column 12).  

 

 

REVIEW OF DATA AND REQUEST FOR REVISED DATA

 

Q.                 Are TIC Form S data used to validate other statistical data?

 

A.               Yes.  Aggregate TIC Form S data is compared to the data reported on the Report of Foreign Holdings of U.S. Securities, Including Selected Money Market Instruments (Form SHLA/Form SHL) and the Report of U.S. Ownership of Foreign Securities, including Selected Money Market Instruments (Form SHCA/Form SHC).  The total net monthly purchases and sales reported by all reporters on TIC Form S, columns 1 through 8, adjusted for asset-backed security pay downs, stock swaps, and valuation changes, should be closely comparable to the change in holdings reported on successive Forms SHLA/ SHL.  Likewise, the total net of monthly purchases and sales reported by all reporters on TIC Form S, columns 9 through 12, adjusted for valuation changes, should be closely comparable to the change in holdings reported on successive Forms SHCA/SHC.  Information on Form SHLA/Form SHL and Form SHCA/Form SHC can be found at: http://www.treas.gov/tic/fpis.html.

 

 

Q.               How should revised data be submitted?

 

A.               For reporters using the Internet Electronic Submission (IESUB) system to submit TIC Form S data, an International Reports Division analyst should be contacted before revised data are transmitted.  For reporters using paper reports, revised data should be submitted on a report form with the word 'Revised' indicated or on the reporter's letterhead with the report cycle date, name of country to be revised, and revised amount.  All revisions should be signed by an authorized person of your institution. 

 

 

ALTERNATIVE METHODS OF REPORTING

 

Q.             Are faxed reports an acceptable method for submitting TIC Form S data?

 

A.             Yes.  However, electronic submission is encouraged.

 

 

Q.             Can TIC Form S data be submitted via the Internet?

 

A.             Yes.  This option is available through the Federal Reserve System Reporting & Reserves, Internet Electronic Submission (IESUB) system.  Information on requirements and enrollment is available at http://www.reportingandreserves.org/iesub.html.

 

 

Q.             Should each user of IESUB have their own User ID and password?  

 

A.               Yes.  An IESUB User Request form should be completed for each user.  The Authorization Information section of the User Request form should be completed and signed by the person authorized to sign the report for the reporting institution.  This request form can be faxed to FRBNY.

 

 

Q.               Should FRBNY be notified of staff changes of individuals with IESUB security access?

 

A.               Yes.  FRBNY requires that an IESUB User Request form be submitted to delete a user who is no longer authorized by the reporting institution to submit TIC Form S data.