Technical Topics

1
Report of US Ownership of Foreign
Securities Including Selected Money Market
Instruments
William Griever William Hunter Debra Kuntz Diane
Iacopelli Julia Warren-Cagle
2
U.S. Portfolio Investment Surveys
William Griever
3
Survey Perspective

• Part of an integrated system
• Used in conjunction with monthly flow data
• Surveys are detailed, accurate, but not timely
• Monthly data very timely, but less accurate
• Used together to create ongoing estimates

4
Survey History

• First survey in 1974
• Measured foreign investment in US securities
• Congressional concern over growing foreign
  influence
• Existing data lacked detail

5
Survey History

• Liability surveys continued at 5-year intervals
• Correct amounts foreign held, geography
• Foreign ownership increasing
• 1974 - 4.8
• 2000 - 10.2

6
Asset Surveys

• First in 1994
• Levels of foreign holdings had been modest
• 9 billion per year 1980-1989
• 65 billion per year 1990-1994
• Assets were believed to be under-counted

7
Asset Survey Results

• Measured US holdings of foreign securities 60
  above estimates
• 870 billion vs. 540 billion
• Showed need for future surveys

8
Asset Under-Count

• Worldwide problem
• Measured portfolio investment 1991-1994
• Assets 400 billion per year
• Liabilities 500 billion per year

9
First CPIS

• Organized by the IMF, at year-end 1997
• 29 countries participated
• World measured additional 750 billion
• US measured an additional 300 billion

10
Problems Remain

• Worldwide, at year-end 1997
• Assets 7.7 trillion
• Liabilities 9.3 trillion
• Implies more needs to be done

11
CPIS 2001

• 60 countries
• All of the major industrial countries
• All of the major offshore financial centers
• Short-term securities included

12
The Future

• Coordinated international efforts
• Annual surveys
• External Debt Reporting System (SDDS)
• CPIS

13
Data Uses

• Financial industry analysts
• International organizations
• USG - BoP, country exposure, IIP
• Reduced net debtor position
• Current account sustainability
• Academic research

14
The Government are sic extremely fond of
amassing great quantities of statistics. These
are raised to the nth degree, the cube roots are
extracted, and the results are arranged into
elaborate and impressive displays. What must be
kept in mind, however, is that in every case, the
figures are first put down by a village watchman,
and he puts down anything he damn well
pleases! Sir Josiah Stamp, Her
Majestys Collector of Inland Revenue
15
Who Must Report?
Diane Iacopelli
16
Who Must Report

• U.S.- Resident Custodians
• U.S.- Resident Investors

17
U.S. Residency

• U.S. Resident
• Any individual, corporation or other organization
  located in the United States.
• This includes branches, subsidiaries and
  affiliates of foreign entities located in the
  United States.
• Corporations incorporated in the United States
• Citizenship does not determine residency for this
  report.
• Exclude International and regional
  organizations even if they are located in the
  United States.

18
U.S. Residency

• How to determine residency
• Tax forms
• W-9 forms are filed by U.S. residents
• W-8 forms are filed by non-U.S. residents
• When tax forms are not available use the mailing
  address

19
U.S. Residency

• Examples of U.S. residents
• Bayerische Landesbank NY Branch
• BP America Inc
• Examples of non-U.S. residents
• Bank of New York Tokyo Branch
• GMAC Canada
• International Bank for Reconstruction and
  Development (IBRD)

20
U.S.- Resident Custodian

• Organizations that manage the safekeeping of
  foreign securities for
• Their own account
• The account of other entities located in the
  United States

21
U.S.- Resident Custodians

• Each U.S. resident custodian should file one
  consolidated report for
• Their own custody accounts
• The custody accounts for which safekeeping
  services are provided

22
U.S.- Resident Custodians

• U.S.-resident custodians should exclude custody
  accounts managed by their foreign affiliates or
  subsidiaries.
• U.S. affiliates or subsidiaries of foreign
  custodians should exclude custody accounts
  managed by their foreign parents.
• U.S.-resident custodians should exclude foreign
  securities where the beneficial owner of the
  security is a foreign person.

23
U.S.-Resident Custodians

• Schedule 2 Reporting
• U.S.-resident custodians should report all
  foreign securities whose custody they manage for
  themselves or for other U.S. persons.
• U.S.-resident custodians, including
  broker/dealers, should report all foreign
  securities that they manage for themselves or for
  other U.S. persons using a foreign subcustodians
  directly to manage.
• U.S.-resident custodians should report all
  foreign securities whose safekeeping is entrusted
  to central securities depositories- both domestic
  (Depository Trust Company) and foreign
  (Euroclear).

24
U.S.-Resident Custodians

• Schedule 3 reporting
• Report all foreign securities entrusted, from
  their own account or the account of others, to
  another U.S.-resident custodian.

25
U.S.-Resident Investors

• Organizations that
• Invest in foreign securities for their own
  account (for trading, investment, or any other
  purpose)
• Invest on behalf of others, including funds such
  as
• Managers of mutual funds,
• Managers of insurance company policy holder
  assets,
• Managers of pension funds

26
U.S.-Resident Investors

• Examples of U.S.-resident Investors include
• Managers of public and private pension funds
• Managers of mutual funds, country funds,
  unit-investment funds, exchange-traded
  funds,collective-investment trusts, or any other
  similarly pooled,commingled funds
• Insurance companies
• Foundations
• Institutions of higher learning (e.g., university
  endowments)
• Financial and non-financial organizations
• Trusts and estates

27
U.S.-Resident Investors

• Each U.S.-resident investor should file one
  consolidated report for
• Their own investment accounts
• The investment accounts of all their affiliates
  in the United States
• The U.S. funds under their own management
• The U.S. funds under the management of their
  affiliates in the United States

28
U.S.-Resident Investors

• U.S.-resident investors should exclude
  investment accounts managed by their foreign
  affiliates or subsidiaries for other U.S.
  persons.
• U.S. affiliates or subsidiaries of foreign
  investors should exclude the investment accounts
  managed by their foreign parents.

29
U.S.-Resident Investors

• Schedule 2 reporting
• Report securities held directly
• Report securities entrusted to a foreign
  custodian or to a U.S. (Depository Trust
  Company) or foreign (Euroclear) central
  securities depository.

30
U.S.-Resident Investors

• Schedule 3 reporting
• Report foreign securities entrusted to U.S.-
  resident custodians.

31
Who Must Report
U.S.-resident investor employs a U.S.-resident
custodian
U.S.-resident investor
U.S.-resident custodian
Files Schedules 1 and 3
Files Schedules 1 and 2
32
Who Must Report
A U.S-resident custodian entrusts foreign
securities to another U.S.-resident custodian
U.S.-resident investor
Files Schedules 1 and 3 Note On Schedule 3
reports Custodian A
U.S. resident custodian A
U.S.-resident custodian B
Files Schedules 1 and 3 Note On Schedule 3
reports Custodian B
Files Schedules 1 and 2
33
Who Must Report
A U.S.-resident custodian subcontracts with a
foreign subcustodian
U.S.-resident investor
Files Schedules 1 and 3
Foreign Local subcustodian
U.S.-resident custodian
Does not report
Files Schedules 1 and 2
34
Who Must Report
A U.S.-resident investor employs a foreign
custodian
U.S.-resident investor
Foreign Custodian
Files Schedules 1 and 2
Does not report
35
What Must be Reported on the
Report of U.S. Ownership of Foreign Securities,
Including Money Market Instruments
Debra Kuntz
36
Foreign Securities

• Securities issued by foreign entities, including
• international and regional organizations
• foreign-resident organizations
• foreign subsidiaries of U.S. organizations
• foreign branches of U.S. banks

37
Foreign Securities

• Information that does not contribute to
  determining if a foreign security
• place of issue or trading
• currency of issue
• nationality of parent organization
• nationality of guarantor

38
Foreign SecurityExample 1

• Euro denominated 2-year note issued by a Daimler
  Chrysler affiliate incorporated in the United
  States.
• Is this security reportable?

39
Foreign SecuritiesExample 1 Answer

• Euro denominated 2-year note issued by a Daimler
  Chrysler affiliate incorporated in the United
  States.
• Is this security reportable?
• No. The security was issued by a
  U.S.-resident entity.

40
Foreign SecuritiesExample 2

• U.S. dollar-denominated 2-year note issued by
  Daimler Chrysler incorporated in Germany.
• Is this security reportable?

41
Foreign SecuritiesExample 2 Answer

• U.S. dollar-denominated 2-year note issued by
  Daimler Chrysler incorporated in Germany.
• Is this security reportable?
• Yes. This security was issued by a
  foreign-resident entity. The currency
  denomination does not factor into the decision of
  whether the security is foreign or not.

42
Foreign SecuritiesExample 3

• U.S. dollar-denominated asset-backed security
  issued by Company B incorporated in Hong Kong and
  guaranteed by the parent, Company A, incorporated
  in the United States.
• Is this security reportable?

43
Foreign SecuritiesExample 3 Answer

• U.S. dollar-denominated asset-backed security
  issued by Company B incorporated in Hong Kong and
  guaranteed by the parent, Company A, incorporated
  in the United States.
• Is this security reportable?
• Yes. This security was issued by a
  foreign-resident entity. The location of the
  guarantor does not factor into the decision of
  whether the security is foreign or not.

44
Type of Reportable Foreign Securities

• Equity
• Short-Term Debt
• Long-Term Debt
• Asset-Backed Securities

45
Equity

• All instruments representing an ownership
  interest in foreign-resident organizations.
• However, ownership interests representing direct
  investment are not reported.

46
EquityDirect Investment

• Direct investment is defined as ownership or
  control of 10 or more of an organizations
  voting stock.

47
Equity

• Reportable equity securities include
• common stock
• restricted stock
• participating preference shares
• depositary receipts/shares
• shares/units in foreign mutual funds

48
EquityDepositary Receipts

• Reportable depositary receipts are those where
  the underlying security was issued by a foreign
  resident.
• Although the depositary receipt is usually issued
  by a U.S.-resident organization, it represents
  shares in the foreign company.
• ADRs, GDRs, IDRs, etc. are considered foreign
  securities for this report.

49
EquityDepositary Receipts

• Issuers of depositary receipts should not report
  the holdings of the underlying foreign
  securities.
• U.S.-resident holders of the depositary receipts
  should report these holdings.

50
Equity Depositary Receipts Example

• U.S. Company A has issued 100 million of ADRs
  representing ownership in a Swiss company. U.S.
  Company B purchases these ADRs.
• What should Company A and B report?

51
EquityDepositary Receipts Example Answer

• U.S. Company A has issued 100 million of ADRs
  representing ownership in a Swiss company. U.S.
  Company B purchases these ADRs.
• What should Company A and B report?
• Company B should report the holdings of 100
  million of ADRs. Company A would not report
  equity ownership in the Swiss company.

52
Equity

• Exclude from equity
• nonparticipating preference shares
• convertible debt
• These securities are reported, but should be
  classified as debt on this report.

53
Term

• Determine term, (short-term or long-term), based
  on the original maturity of the security.
• Original maturities of one year or less are
  short-term.
• Original maturities of greater than one year are
  long-term.

54
Term of Callable Debt

• Debt with multiple call options (multiple
  maturity dates) is long-term if any of the
  maturity dates is greater than one year from the
  date of issue.

55
Term Examples

• A Japanese Treasury bill that was issued on
  November 15, 2001 and matures on February 15,
  2002 is short-term.
• A German 30-year bond that matures on March
  26, 2002 is long-term.

56
Short-Term Debt

• Reportable short-term debt includes the following
  instruments where the original maturity is one
  year or less
• foreign government securities (e.g., Japanese
  Treasury bills)
• bankers and trade acceptances
• commercial paper
• negotiable certificates of deposit
• STRIPs

57
Short-Term DebtSTRIPs

• Reportable STRIPs are those where the issuer of
  the STRIP is a foreign-resident entity.
• Residency of the STRIP is not determined by the
  issuer of the underlying security.

58
Short-Term DebtSTRIPs

• Foreign securities that are the underlying
  securities for STRIPs, should be reported by the
  U.S. holder.
• STRIPs issued by a U.S.-resident entity should
  not be reported, even if the underlying security
  is foreign.

59
Short-Term DebtSTRIPs Example

• U.S. Company A owns 100 million of German bonds.
  U.S. Company A issues STRIPs where these German
  bonds are the underlying securities. U.S.
  Company B purchases these STRIPs.
• What should Company A and B report?

60
Short-Term DebtSTRIPs Example Answer

• U.S. Company A owns 100 million of German bonds.
  U.S. Company A issues STRIPs where these German
  bonds are the underlying securities. U.S.
  Company B purchases these STRIPs.
• What should Company A and B report?
• Company A reports the ownership of 100 million
  of German bonds. The STRIPs are not reported by
  either company.

61
Long-Term Debt

• Reportable long-term debt includes the following
  instruments where the original maturity is
  greater than one year
• bonds
• notes
• debentures
• convertible debt
• nonparticipating preference shares
• negotiable certificates of deposit

62
Debt Exclusions

• Exclude from short-term and long-term debt
• shares/units in foreign mutual funds, even if the
  foreign fund invests in debt.
• Investments in foreign mutual funds are reported,
  but should be classified as equity on this report.

63
Debt Exclusions

• Exclude from short-term and long-term debt
• loans
• trade credits
• accounts receivable
• derivatives
• non-negotiable certificates of deposit

64
Debt Exclusions

• Exclude from short-term and long-term debt
• asset-backed securities
• These securities are reported, but should be
  classified as asset-backed securities on this
  report.

65
Asset-Backed Securities

• Securitized interest in a pool of assets, which
  give the purchaser a claim against the cash flows
  generated by the underlying assets.

66
Asset-Backed Securities

• Reportable asset-backed securities are those
  where the issuer securitizing the assets is a
  foreign resident.
• The underlying asset is not a factor in
  determining whether the ABS is a foreign security.

67
Asset-Backed Securities

• Reportable asset-backed securities include
• collateralized mortgage obligations (CMOs)
• collateralized bond obligations (CBOs)
• collateralized loan obligations (CLOs)
• collateralized debt obligations (CDOs)

68
Asset-Backed Securities

• Reportable asset-backed securities include
• other securities backed by
• mortgages
• credit card receivables
• automobile loans
• consumer and personal loans
• commercial and industrial loans
• commercial paper
• other assets

69
Repurchase AgreementsSecurity Lending
Arrangements

• Repos and securities lending arrangements both
  involve the temporary transfer of a security for
  cash or another security. The transaction is
  reversed on a specified future date.
• Reverse repurchase agreements and securities
  borrowing arrangements are the reverse.

70
Repurchase AgreementsSecurity Lending
Arrangements

• The security lender should report the foreign
  security as if no repo or security lending
  arrangement occurred.
• The security borrower should exclude the foreign
  security.

71
Exemption Levels
Julia Warren-Cagle
72
Exemption Levels

• Schedule 1
• There is NO exemption level for Schedule 1.
• All recipients of this report must file Schedule
  1.

73
Exemption Levels

• Schedule 2
• U.S.-resident custodians and investors are exempt
  from filing schedule 2 if the total fair (market)
  value of reportable foreign securities is less
  than 100 million (aggregated over all accounts).

74
Exemption Levels

• Schedule 2 (Custodian)
• Example Company ABC is an U.S.- resident
  custodian. The value of their own foreign
  securities as of 12/31/01 is 70 million. The
  value of the foreign securities they have in
  safekeeping for other U.S. persons as of 12/31/01
  is 10 million. Should company ABC file Schedule
  2 reports?

75
Exemption Levels

• Schedule 2 (Custodian)
• Answer Company ABC is exempt from filing
  schedule 2 because there total holdings of
  foreign securities is 80 million.

76
Exemption Levels

• Schedule 2 (Investor)
• Example Company M is an U.S.- resident
  investor. The value of their own foreign
  securities as of 12/31/01 is 50 million. The
  value of the foreign securities they entrusted
  directly to Company CB (foreign custodian) is
  20 million. Should company M file Schedule 2
  reports?

77
Exemption Levels

• Schedule 2 (Investor)
• Answer Company M is exempt from filing schedule
  2 because their total holdings of foreign
  securities is 70 million.

78
Exemption Levels

• Schedule 2 (Custodian and Investor)
• Example 1 Company A is an U.S.-resident
  custodian and investor. The value of their own
  foreign securities as of 12/31/01 is 20 million.
  The value of the foreign securities held in
  custody for other U.S. persons as of 12/31/01 is
  40 million. Should company A file Schedule 2
  reports?

79
Exemption Levels

• Schedule 2 (Custodian and Investor)
• Answer 1 Company A is exempt from filing
  schedule 2 because their total holdings of
  foreign securities is 60 million.

80
Exemption Levels

• Schedule 2 (Custodian and Investor)
• Example 2 Company B is an U.S.-resident
  custodian and investor. The value of their own
  foreign securities as of 12/31/01 is 20 million.
  The value of the foreign securities held in
  custody for other U.S. persons as of 12/31/01 is
  85 million. Should company B file Schedule 2
  reports?

81
Exemption Levels

• Schedule 2 (Custodian and Investor)
• Answer 2 Company B is required to file schedule
  2 because their total holdings of foreign
  securities is 105 million.

82
Exemption Levels

• Schedule 3
• U.S.-resident custodians and investors are exempt
  from filing schedule 3 if the total fair (market)
  value of reportable foreign securities that are
  held by a U.S.- resident custodian is less than
  100 million.
• This exemption level applies to each
  U.S.-resident custodian.

83
Exemption Levels

• Schedule 3 (Investor)
• Example Company C (U.S. Investor) entrusted 80
  million of foreign securities to Company D (U.S.
  Custodian) as of 12/31/01. Should Company C
  file schedule 3?

84
Exemption Levels

• Schedule 3 (Investor)
• Answer Company C is exempt from filing schedule
  3 because they have entrusted to Company D 80
  million in foreign securities.

85
Exemption Levels

• Schedule 3 (Custodian)
• Example Company E is an U.S.-resident
  custodian. The value of their own foreign
  securities as of 12/31/01 is 50 million. The
  value of the foreign securities held in custody
  for other U.S. persons as of 12/31/01 is 50
  million. The total holdings of 100 million are
  entrusted to Company K (U.S- resident custodian).
  What should Company E file?

86
Exemption Levels

• Schedule 3 (Custodian)
• Answer Company E is required to file schedule 3
  because their total holdings is 100 million and
  all securities are entrusted to the same
  custodian. Please note Company E is required to
  file two separate schedule 3 reports in order to
  identify those securities held in their own
  account verses those securities entrusted to them
  from their clients.

87
Exemption Levels

• Schedule 3
• Example Company G is a U.S.-resident custodian.
  The value of their own foreign securities as of
  12/31/01 is 50 million. Company G entrusted to
  Company X (U.S.-resident custodian) 100 million
  of their clients foreign securities. What
  should company G report?

88
Exemption Levels

• Schedule 3
• Answer Company G is required to file a schedule
  3 because they have total holdings of 100
  million with a U.S.-resident custodian. Company
  G is exempt from filing schedule 2 because their
  own holdings of foreign securities not entrusted
  to another U.S.-resident custodian was below 100
  million.

89
Review of Schedules
Diane Iacopelli
90
Review of Schedules Schedule 1

• Schedule 1 Respondent Contact Identification and
  Summary Financial Information
• Required to be filed by all organizations who
  received the report
• Contains basic information about the institution
• Contains summary financial information reported
  on Schedule 2 and 3

91
Review of SchedulesSchedule 1

• Changes from 1997
• Identification Number changed from 7 digits to 10
  digits
• Industrial Classification Code was streamlined
• Financial Information streamlined. No longer
  broken out between priced and unpriced totals.

92
Review of Schedules Schedule 1
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Review of Schedules Schedule 1
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Review of Schedules Schedule 1
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Review of Schedules Schedule 1
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Review of SchedulesSchedule 1

• Respondent Identification Number
• 10 digit number issued by FRBNY and located above
  respondents name on the report booklet.
• Contact FRBNY staff at 212-720-6300 if you do not
  know your identification number.

97
Review of SchedulesSchedule 1

• Industrial Classification Code
• Bank Depository Institution (i.e., an
  institution that takes deposits) or a bank
  holding company.
• Other Financial Firm Firm that acts as a
  financial intermediary, such as a finance company
  or broker/dealer, which is operated separately
  from an organization in one of the other
  categories listed.
• Non-Financial Firm An organization that conducts
  commercial, industrial or trade activities.
• Other Use this code if none of the categories
  listed describe your firm.

98
Review of SchedulesSchedule 1

• Name of Service Provider or Vendor Used
• Service Provider/Vendor Is an institution which
  provides your data or prepared the electronic
  submission of your report.
• Examples of service providers or vendors are
• DST Systems
• ADP
• Beta Systems

99
Review of SchedulesSchedule 1

• Technical Contact
• Provide the name of the person who can be
  contacted for technical issues regarding the
  electronic submission of your report. This
  person should be familiar with the file formats
  used and how the data is extracted from your
  databases or applications.

100
Review of SchedulesSchedule 2

• Schedule 2 Details of Securities
• Filed by U.S.-Resident Custodians and
  U.S.-Resident Investors
• Provides details of the foreign securities
• Total of all Schedule 2s should equal the summary
  financial information reported on Schedule 1

101
Review of SchedulesSchedule 2

• Changes from 1997
• First time collecting short-term securities.
• New items introduced to collect information on
  reporting units
• Changed ADR flag from an alpha character value to
  a numeric value
• Changed issuer type from an alpha character value
  to a numeric value
• Use of ISO standard codes for currency
  information. Changed from a 5 digit numeric value
  to a 3 digit alpha character. (Note, country
  information continues to be 5 digit numeric
  values.)
• Introduced new item to explain zero fair market
  value.
• Some items are in US dollars and foreign currency
  units
• Deleted items on repo and repo/loan amounts

102
Review of Schedules Schedule 2
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Review of Schedules Schedule 2
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Review of SchedulesSchedule 2

• Sequence Number
• Generally sequence numbers should be sequential
  (i.e., 1,2,3) for each Schedule 2 record
  submitted.
• If multiple divisions of an organization are
  preparing Schedule 2 records and it is a large
  burden to create sequential sequence numbers for
  the consolidated report then each reporting unit
  should have unique sequence numbers.

115
Review of Schedules Schedule 2

• Reporting Unit Code
• If data is being collected from multiple
  databases or reporting systems, report the
  internal code used in your organization to
  identify the database or system.
• This will help identify if a particular database
  or reporting system has generated invalid data.

116
Review of Schedules Schedule 2

• Name of Reporting Unit
• Enter a description or name of the reporting unit
  or division which is reporting the information.
• If multiple areas of an organization are
  contributing data this will help to identify any
  area that has reported invalid or problem
  records.
• This will also eliminate the need for requesting
  additional identification numbers.

117
Review of SchedulesSchedule 2

• Security Type
• Equity Securities are broken out into the
  following categories
• Common Stock
• Preferred Stock
• All Mutual Funds (including shares or unit
  trusts)
• Other any other type of equity security not
  listed above

118
Review of Schedules Schedule 2

• Security Type
• Short-Term Debt is broken out into four
  categories
• Short-Term Commercial Paper
• Short-Term Negotiable CDs
• Short-Term Asset-Backed Securities
• All Other Short-Term Debt or Selected Money
  Market Instruments
• Examples are foreign treasury bills, short-term
  notes, and STRIPS with maturity of less than one
  year,

119
Review of SchedulesSchedule 2

• Security Type
• Long-Term Debt is broken out into four
  categories
• Zero Coupon Long-Term Debt
• Covertible Long-Term Debt
• Long-term Asset-Backed Debt
• All Other Long-Term Debt
• Examples are nonparticipating preference shares,
  long-term negotiable cds,

120
Calculations for Fair (Market) Value

• Fair (market) value is the amount at which an
  asset could be bought or sold in a current
  transaction between willing parties, other than
  in a forced or liquidation sale.
• Report the fair (market) value as of close of
  business December 31, 2001.

121
Calculations for Fair (Market) Value

• If the fair (market) value is determined to be
  zero list the reason why on line 15 of schedule
  2.
• Examples of zero fair (market) value are
• Securities that are thinly or never traded
• Stock is impaired or security in default
• Organization that issued the security is in
  receivership

122
Foreign Exchange Conversion Example 1

• Use the closing spot rate as of 12/31/01 to
  convert the foreign currency fair (market) value
  into the U.S.dollar equivalent.
• Exchange rate is quoted in units of foreign
  currency per US
• Japanese denominated security with a fair market
  value of 300,000. The closing spot rate on
  12/31/01 is 105.75/US. Divide the foreign
  currency value by the foreign exchange rate and
  round to the US value.
• 300000/105.7 US2836.879 (US2837)

123
Foreign Exchange Conversion Example 2

• Use the closing spot rate as of 12/31/01 to
  convert the fair (market) value into the
  U.S.dollar equivalent.
• Exchange rate is quoted in US per units
• British pound denominated security with a fair
  market value of 2000. The closing spot rate on
  12/31/01 is US1.45/UK.
• Multiply the the foreign currency value by the
  foreign exchange rate and round to the US value.
  
• 2,000 1.45 US2,900

124
Review of Schedules Schedule 3

• Schedule 3 U.S-Resident Custodians Used
• Can be filed by U.S.-resident custodians or
  U.S.-resident investors
• Provides information on foreign securities
  entrusted to a U.S.-resident custodian.

125
Review of SchedulesSchedule 3

• Changes from 1997
• First time collecting information on short-term
  foreign securities
• Introduced list of custodian codes
• Changed securities held for item from an alpha
  character value to a numeric value
• Information reported on Schedule 3s should agree
  with the summary information reported on Schedule
  1.

126
Review of Schedules Schedule 3
127
Review of Schedules Schedule 3
128
Technical Topics

• Preparing a computer file of your data

William Hunter
129
Technical TopicsWhat to File Electronically

• On paper
• Schedule 1
• Schedule 3
• Schedule 2 (Only If Submitting 200 or Fewer)

• Electronically
• Schedule 2 (Required If Submitting More Than 200)

130
Technical TopicsAcceptable Media

• High Density IBM Compatible Diskette
• CD - Standard 650 MB
• Standard Windows PC ASCII Text Files
• Labeled With Respondent Name ID
• Accompanied by Dump of Data and Copy Command Used
  to Create the Diskette/CD

131
Technical TopicsUnacceptable Media

• No IBM Mainframe Tapes/Cartridges - 3480/3490,
  Round (Reel) Tapes
• No EBCDIC Files
• No Compressed Files

132
Technical TopicsFile Formats

• Use Either of Two File Formats
• Positional
• Semi-colon Delimited

133
Technical TopicsPositional File Example
134
Technical TopicsPositional File Example
135
Technical TopicsSample Delimited File
136
Technical TopicsSample Delimited File
137
Technical TopicsTips Traps

• New Report Form File Format This Year
• Files Must Be Plain Text - Uncompressed
• No .xls (Excel) Files
• No Zip Files
• No COBOL Packed Decimal Fields
• Files Must Be ASCII
• Diskette or CD Only

138
Technical TopicsContacts

• Susan Ma - Team Leader
• Automation Support
• [phone]
• Bill Hunter - Staff Director
• Automation Support
• [phone]

139
When to Report

• Recipients who are not exempt
• The respondent contact information (Appendix J)
  should have been submitted by November 15, 2001.
• Respondents must submit the entire report
  (Schedule 1, 2 and 3) by February 15, 2002.
• Request for filing extension should be submitted
  before February 15, 2002.
• Any reporter filing over 200 schedule 2 records
  may take an additional 15 days after February 15,
  2002. The Federal Reserve New York Staff should
  be contacted before the report due date.

140
When to Report

• Recipients who may be exempt
• If on December 31, 2001, you are exempt from
  filing Schedule 2 and Schedule 3 records and you
  did not already file the Schedule 1, you must
  submit Schedule 1 by January 31, 2002.

141
Where to Send Report

• Non-exempt recipients reporting Appendix J
  (Contact Information)
• The respondent contact information (Appendix J)
  can be submitted using one of the following
  methods
• E-Mail Submission SHC.Help_at_ny.frb.org
• Fax Submission [phone]
• Non-exempt recipients reporting for February 15,
  2002 Deadline
• Reports should be mailed or sent by courier to
  the following address Federal Reserve Bank of
  New York, Statistics Function, 4th Floor, 33
  Liberty Street, New York, NY 10045-0001

142
Where to Send Report

• Exempt recipients reporting for January 31, 2002
  Deadline
• The respondent can use one of the following
  methods
• Reports can be mailed or sent by courier to the
  Federal Reserve Bank of New York, Statistics
  Function, 4th Floor, 33 Liberty Street, New York,
  NY 10045-0001
• Fax submission to [phone]
• Extension Request
• Letters of extension are due before February 15,
  2001and should be addressed to Mr. Kenneth Lamar,
  Assistant Vice President, Financial Reports
  Department Federal Reserve Bank of New York,
  Statistics Function, 4th Floor, 33 Liberty
  Street, New York, NY 10045-0001.

143
How to Send Report

• Non-Exempt recipients
• Should submit at all times Schedules 1 and 3 on
  paper
• Schedule 2 records can be submitted on paper only
  if the report contains 200 or less records
• Otherwise Schedule 2 records should be submitted
  on diskette(s), or compact disk(s)
• Exempt recipients
• Should submit schedule 1 report on paper

144
Where to Get Help

• Questions can be sent to
• SHC.Help_at_ny.frb.org
• Contact FRBNY staff at phone [phone]
• Forms and Instructions may be printed from the
  Internet at
• http//www.treas.gov/tic/forms.htm

145
The End