The November 1, 2015 deadline[1] is approaching for US financial services providers—including many US fund managers, private funds, and registered investment companies—to file a BE-180 with the US Department of Commerce.

The 2014 Benchmark Survey of Financial Services Transactions Between US Financial Services Providers and Foreign Persons (Form BE-180) is a five-year benchmark survey conducted by the US Department of Commerce to gather data about transactions between US financial services providers and foreign persons.[2] The BE-180 survey was introduced in 2009, but was only required to be filed by certain US financial service providers that received a notice from the Bureau of Economic Analysis (BEA). In contrast, for the 2014 version,all US financial services providers that meet the reporting threshold will be required to file Form BE-180.[3]

WHO MUST REPORT?

Because the term “financial services providers” is quite broad, many different entities will be required to report. As set forth in the instructions to Form BE-180, investment advisors, managers, funds, trusts, and other financial vehicles (including mutual funds, pension funds, real estate investments trusts (REITS), investors, and stock quotation services) are considered to be financial services providers. In addition, the instructions provide that companies in the securities, commodity contracts, and other financial investment industries (including security and commodity futures brokers, dealers, exchanges, traders, underwriters, investment bankers, and providers of securities custody services) are considered to be financial services providers.

A US financial services provider must make a BE-180 filing if, during the 2014 calendar year, (a) its sale of financial services to foreign persons exceeded $3 million or (b) its purchase of financial services from foreign persons exceeded $3 million. Sales and purchases are not combined for purposes of calculating the $3 million threshold. Fees, commissions, and other charges are covered by the BE-180.[4]

For purposes of determining whether a US financial services provider has reached the reporting thresholds, the definition of “financial services” includes the following:

  • Brokerage services related to equity transactions
  • Other brokerage services
  • Underwriting and private placement services related to equity transactions
  • Underwriting and private placement services related to debt transactions
  • Financial management services
  • Credit-related services, except credit card services
  • Credit card services
  • Financial advisory and custody services
  • Securities lending services
  • Electronic funds transfer services
  • Other financial services

HOW DOES THE BE-180 APPLY TO PRIVATE FUND MANAGERS/PRIVATE FUNDS?

A US private fund manager may have a BE-180 filing requirement due to a number of arrangements with foreign persons. For example, if its management fees and/or incentive allocations from non-US funds exceeded $3 million in the aggregate during 2014, the private fund manager will have to make a BE-180 filing. A US private fund that pays management fees and/or makes incentive allocations exceeding $3 million in the aggregate to foreign investment managers will also have a BE-180 filing requirement. Similarly, payments by a US private fund for brokerage services received from a foreign broker-dealer and payments by a US private fund manager to a foreign sub-adviser or placement agent would have to be considered in determining whether reporting thresholds have been met. Importantly, these examples are not the only BE-180 reporting triggers for private fund managers and private funds. Accordingly, private fund managers and private funds must consider—and include in their calculation of the $3 million threshold—the sale or purchase of all of the financial services listed in the section above.

HOW DOES THE BE-180 APPLY TO REGISTERED FUNDS AND ADVISERS?

A US registered investment company and/or its US investment adviser may have a BE-180 filing requirement due to its arrangements with foreign persons. For example, a US registered investment company that has a foreign investment adviser would have to include the management fees it pays to the foreign investment adviser in determining whether it exceeded the $3 million threshold. A US registered investment company will also need to consider payments it made to foreign broker-dealers or other foreign financial service providers and include such payments in its calculation of the $3 million threshold and on the BE-180 (if the threshold was met). A US registered investment adviser may also have a BE-10 filing requirement if, among other reasons, it made payments to a foreign sub-adviser in excess of the $3 million threshold. Registered investment companies and investment advisers should review the financial services listed in the section above and carefully consider whether they have purchased or sold any of those services to or from foreign persons.

FILING DEADLINES AND EXTENSION REQUESTS

The original filing deadline was October 1, 2015, but the BEA has provided an automatic extension until November 1, 2015, for filers that have never made a BE-180 filing.[5] An additional sixty (60) day extension is available for filers that send a written request via e-mail to be-180extension@bea.gov or contact the BEA at +1.202.606.5588.

The BE-180 and instructions for its completion are available on the BEA website.