Financial services providers, including banks, broker-dealers, investment advisors and investment funds, may be required to file a report with the U.S. Bureau of Economic Affairs (BEA) by October 1, 2015 with respect to their cross-border business activities during their 2014 fiscal year. This report is part of a statistical survey that is conducted by the federal government every five years. Unlike previous surveys, all covered U.S. financial services providers are required to file the 2014 report, whether or not they have been contacted by the BEA. Thus, many financial services firms will for the first time be required to file this report. The report, which is known as form BE-180, is due by October 1, 2015. Failure to file a required report may subject the financial services firm to a civil penalty ranging from $2,500 to $25,000. Willful failure to submit the report may result in a criminal fine of up to $10,000 and imprisonment of the responsible individual for up to one year.
What is a “financial services provider”?
The definition of financial services provider used by the BEA is quite broad. It includes all businesses within Sector 52 – Finance and Insurance, U.S., 2012, of the North American Industry Classification System (NAICS), as well as holding companies that own or influence, and are principally engaged in making management decisions for, these companies (part of NAICS, Sector 55 – Management of Companies and Enterprises). Financial services include, among others, the following:
- Depository credit intermediation and related activities (including commercial banking, savings institutions, credit unions, and other depository credit intermediation);
- Non-depository credit intermediation (including credit card issuing, sales financing, and other non-depository credit intermediation);
- Activities related to credit intermediation (including mortgage and nonmortgage loan brokers, financial transactions processing, reserve, and clearinghouse activities, and other activities related to credit intermediation);
- Securities and commodity contracts intermediation and brokerage (including investment banking and securities dealing, securities brokerage, commodity contracts and dealing, and commodity contracts brokerage);
- Other financial investment activities (including miscellaneous intermediation, portfolio management, investment advice, and all other financial investment activities);
- Insurance and employee benefit funds (including pension funds, health and welfare funds, and other insurance funds); and
- Other investment pools and funds (including open-end investment funds, trusts, estates, and agency accounts, real estate investment trusts, and other financial vehicles).
Which financial services providers must file form BE-180?
Form BE-180 must be filed by U.S. financial service providers if either their receipts from, or their payments to, foreign persons for financial services exceeded $3 million in fiscal year 2014. The reporting threshold of $3 million applies separately to sales and purchases, which may result in a U.S. person being obligated to file a BE-180 only for sales, only for purchases, or for both sales and purchases.
The BE-180 reporting requirement covers the following types of financial services transactions (sales or purchases):
- Brokerage services related to equity transactions
- Other brokerage services
- Underwriting and private placement services
- Financial management services (including fees for mutual funds, pension funds, exchange-traded funds, private equity funds, corporate portfolio, individual portfolio, hedge funds, trusts, and other)
- 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
Where can I find form BE-180?
At the time of this article, the BEA has not yet published the form BE-180 for the 2014 survey. According to the final rule establishing the reporting requirement, the 2014 BE-180 will collect data on equity- and debt-related underwriting transactions separately, while the 2009 BE-180 survey collected this information as a combined amount. The BEA is also redesigning the format and wording of the survey form. Based on our recent conversations with BEA personnel, BEA plans to publish the 2014 form in August.