Background - November 17, 2003

The Adjustment data. Also in (CSV) format.

Methodology used to estimate the adjustments.  (PDF) (11/18/03).

The TIC Form S gathers data, primarily from securities brokers and dealers, on cross-border purchases, sales, and redemptions of long-term securities. However, it does not capture acquisitions of equities through merger-related stock swaps.

Use of the TIC Form S data without considering the effect of stock swaps may lead to a significant underestimate of cross-border equity flows. To assist TIC users, the Federal Reserve Board has estimated monthly stock swaps for January 2000 - September 2003. For further details, see the note above on "Methodology." Estimates for future months will be published at the time of the release of the TIC Form S data.

Examples of how the adjustments can be made

The stock swaps are presented as equity purchases. Thus, to adjust U.S. net purchases of foreign equities to include the stock swaps, the user would add U.S. acquisitions of foreign stocks through stock swaps. Similarly, to adjust foreign net purchases of U.S. equities, the user would add foreign acquisitions of U.S. stocks through stock swaps. The stock swaps estimates apply to Grand Total, with no geographic detail.

Data for May 2000 are used to illustrate how the data for adjustments can be used. U.S. transactions in foreign equities reported to the TIC system totaled net sales of $8,306 million. Stock swaps totaled $12,487 million; thus, accounting for stock swaps would result in net U.S. purchases of foreign equities $4,181 million. Similarly, foreign purchases of U.S. stocks totaled $6,313 million in May 2000 and foreign acquisitions of U.S. stocks through stock swaps totaled $7,132 million; thus, accounting for stock swaps would increase reported foreign net purchases of U.S. equities to $13,445 million.