As we previously reported, the U.S. Commerce Department’s Bureau of Economic Analysis (BEA) has issued its five-year benchmark survey of financial services transactions between U.S. providers and foreign persons. The survey form is now available and is due by October 1, 2015. In May 2015, BEA published a final rule on the BE-180 Benchmark Survey of Financial Services Transactions Between U.S. Financial Services Providers and Foreign Persons. For the first time, the Survey is mandatory for all entities subject to the reporting requirement, regardless of whether they are individually contacted by BEA. Given the broad scope of the potential respondent universe, U.S. financial services providers should carefully evaluate whether they may be required to file responses, even if they have not previously responded to BEA surveys.

The BE-180 Survey and Reporting Requirements

The BE-180 Survey gathers comprehensive information on transactions between U.S. financial service providers and foreign persons in order to evaluate the magnitude and impact of U.S. international financial services transactions. Responses are required from any U.S. financial services provider or intermediary that has engaged in sales to or purchases from foreign persons exceeding $3 million during the 2014 fiscal year. The $ 3 million threshold applies separately to sales and purchases; mandatory reporting requirements may apply only to sales, only to purchases, or to both sales and purchases. In addition, any party specifically contacted by BEA must file a response, although detailed financial data is not required if the $ 3 million threshold is not met.

Like other BEA surveys, the BE-180 Survey covers transactions with affiliated and unaffiliated foreign entities, including foreign funds. To determine the scope of this requirement, U.S. reporters should focus on the country in which the counterparty is incorporated or organized, not the country where the parties or assets are located. In particular, the BE-180 covers the sales or purchases of the following types of financial services:

  1. Brokerage services related to equity transactions;
  2. Other brokerage services;
  3. Underwriting and private placement services (related to debt or equity transactions);
  4. Financial management services;
  5. Credit-related services, except credit card services;
  6. Credit card services;
  7. Financial advisory and custody services;
  8. Securities lending services;
  9. Electronic funds transfer services; and
  10. Other financial services (including asset pricing services, security exchange listing fees, demand deposit fees, exist fees, and others).

The financial management category, in particular, may apply to asset managers. BEA’s instructions specify that asset managers should report fees (including incentive allocations) for transactions in which the manager has the authority to direct the use or investment of funds or other assets. This includes the management of foreign commodity pools, mutual funds, hedge funds, private equity funds, and trusts.

The survey form requires reporting total annual sales to and purchases from foreign persons on an aggregated basis per foreign country for each type of financial service. The report covers the company’s 2014 fiscal year, and only one form is required per consolidated U.S. entity. The survey may be filed electronically. The forms, instructions, and additional information are available on the BEA website at https://www.bea.gov/ssb/be180.

Filing Deadline

The BE-180 filing deadline is October 1, 2015. However, in recognition of the potential burden required by this survey since the form was only recently released, BEA has granted the following automatic extensions:

  1. File by November 1, 2015 if the U.S. Reporter was notified of the BE-180 Survey by BEA and has a BE-180 identification number below 140012490.
  2. File by December 1, 2015 if the U.S. Reporter was notified of the BE-180 Survey by BEA and has a BE-180 identification number above 140012490.
  3. File by November 1, 2015 if the U.S. Reporter was NOT notified of the BE-180 Survey by BEA and does NOT have a BE-180 identification number.

In addition, BEA will consider additional extension requests for up to 30 days (for scenarios 1 and 2 above) or up to 60 days (for scenario 3 above) if requested by November 1, 2015.

Conclusion

The scope of the BE-180 Survey is quite broad and may require responses from many financial institutions and asset managers that have not previously submitted BEA survey responses. The survey potentially covers a U.S. investment company’s provision of management, advisory, or brokerage services to its foreign funds, as well as a U.S. fund’s purchase of management, advisory, or brokerage services from a foreign entity. Because the BE-180 form requires compilation of a significant amount of data, companies should begin preparing BE-180 Survey responses well in advance of the deadlines.