# Presentation: 919333

## Report of US Ownership 

- of Foreign Securities
- Including Selected
- Money Market Instruments

**W. Griever **
**W. Carlucci**
**D. Kuntz**
**R. McGee**

**S. Kessel**
**T. Grob**
**K. Aberbach**
**M. Harris**

**November 12, 2003**

## U.S. Portfolio Investment Surveys

**William Griever**

## 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

## Survey History

- First survey in 1974
- Measured foreign investment in U.S. securities
- Congressional concern over growing foreign       influence
- Existing data lacked detail

## Survey History

- Liability surveys continued at 5-year intervals
- Correct amounts foreign held
- Improve geography
- Foreign ownership increasing
-      Dec. 1974 -   4.8%
-      June 2002 - 12.2%

## Asset Surveys

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

## Asset Survey Results

- Measured U.S. holdings of foreign securities 60% above estimates
- $870 billion vs. $540 billion
- Showed need for future surveys

## Asset Under-Count

- Worldwide problem
- Measured portfolio investment flows 1991-1994
-        Assets        $400 billion per year
-        Liabilities  $500 billion per year
- Countries had concentrated on measuring liabilities

## First CPIS 

- Organized by the IMF, at year-end 1997
- 29 countries participated
- World measured additional $750 billion
- U.S. measured an additional $300 billion

## Problems Remain

- Worldwide, at year-end 1997
-        Assets          $7.7 trillion
-        Liabilities    $9.3 trillion
- Difference 18%
- Implied more needed to be done

## CPIS 2001

- 67 countries
- All of the major industrial countries
- Most of the major offshore financial centers
- Short-term securities included

## Problems Remain

- Worldwide, at year-end 2001
-        Assets          $12.6 trillion
-        Liabilities    $15.0 trillion
- Difference 16%
- Implies more needs to be done

## The Future

- Internationally-coordinated annual surveys
- Annual U.S. surveys
- U.S. benchmark surveys every 5 years
- U.S. “Large Reporters” surveys intervening years

## Data Uses

- Why care about these data?
-           U.S. is the world’s largest net debtor
-           Level of U.S. net debt is increasing rapidly
- A cause for concern?

## U.S. Debt Position	

## Debt Components

## Data Uses

- Financial industry analysts
- International organizations
- U.S. Gov’t policy makers, data compilers
- Academic researchers
- Correct liabilities country attribution

## Country Attribution

- Country attribution of U.S. liabilities skewed                   towards major financial centers
- Country attribution on asset surveys accurate
- Can use counter-party asset data to improve geography of U.S. liabilities data

## Country Attribution

## Data Uses	

- Asset data can be used to estimate other countries’ liabilities
- Combined CPIS asset results yield net liability positions by country
- Cross-check of reported country liability positions
- Improved geography of all countries’ liabilities

## Who Must Report

**William Carlucci**

## Who Must Report

- Proper classification of U.S. and foreign
- Reporting organization
- Owners of securities
- Securities
- Categories of reporters
- U.S.-resident custodians
- U.S.-resident end-investors
- Reporting panels
- Schedule 2 and Schedule 3 reporters
- Schedule 3 only reporters

## Proper Classification of U.S. and Foreign

- Definition of United States
- The fifty states of the United States
- The District of Columbia
- The Commonwealth of Puerto Rico
- American Samoa, Baker Island, Guam, Howland Island, Jarvis Island, Johnston Atoll, Kingman Reef, Midway Island, Navassa Island, Northern Mariana Islands, Palmyra Atoll, U.S. Virgin Islands, and Wake Island

## Proper Classification of U.S. and Foreign

- Definition of U.S. resident
- Any individual, corporation, or other organization located in the United States, including :
- branches
- subsidiaries
- foreign entities located in the United States.
- Corporations incorporated in the United States are  U.S. residents even if they have no “physical presence” in the United States.

## Proper Classification of U.S. and Foreign

- Examples of U.S. residents
- General Motors Corporation (includes GMAC)
- BP America Inc.
- Societe Generale New York Branch
- KfW International Finance, Inc.

- Examples of foreign residents
- GMAC Canada
- BP p.l.c.
- Bank of New York Tokyo Branch
- Tyco International, Ltd.
- International Bank for Reconstruction and Development (IBRD; World Bank)

## Proper Classification of U.S. and Foreign

- How to determine residency
- Country where legally incorporated, otherwise legally organized, or licensed
- Tax forms
- W-8 forms are filed by foreign residents
- W-9 forms are filed by U.S. residents
- Mailing address

## Proper Classification of U.S. and Foreign

- Citizenship does not determine residency
- International and regional organizations are foreign residents, even if located in the    United States
- IBRD; World Bank
- Inter-American Development Bank (IDC)
- International Finance Corporation (IFC)
- Appendix E of instructions provides a complete list

## Proper Classification of U.S. and Foreign

- Reporting organization
- Report foreign securities held or managed by _all_ U.S.-resident parts of your organization
- U.S.-resident branches
- U.S.-resident offices
- U.S.-resident subsidiaries

## Proper Classification of U.S. and Foreign

- Owners of securities
- U.S.-resident clients
- U.S-resident parts of your organization
- Securities
- Issued by foreign organizations
- Issued by foreign parts of your organization

## Categories of Reporters

- U.S.-resident custodians
- U.S.-resident organizations that hold foreign securities in custody for other U.S. residents
- Invest in foreign securities for their own account

## Categories of Reporters

- U.S.-resident end-investors
- U.S.-resident organizations that invest in foreign securities on behalf of other U.S. residents
- Invest in foreign securities for their own account

## Categories of Reporters

- Examples of U.S.-resident end-investors
- Managers of private and public pension funds
- Managers of mutual funds, country funds, unit-investment funds, exchange-traded funds, collective-investment trusts
- Insurance companies
- Foundations
- Institutions of higher learning (e.g., university endowments)
- Trusts and estates

## Reporting Panels

- Schedule 2 and Schedule 3 reporters
- Required to file in the same manner as they did on the December 31, 2001 report
- Schedule 3 only reporters
- Required to file Schedule 3 in the same manner as they did on the December 31, 2001 report
- Data that was reported on Schedule 2 in December 31, 2001 submission will now be reported on Schedule 3 for the annual reports

## Schedule 2 and Schedule 3 ReportersExemption Levels

- No Schedule 2 exemption level.
- Securities entrusted to U.S. resident custodians should be reported on Schedule 3 if the fair (market) value of the foreign securities aggregated over accounts owned and/or managed equals $100 million or more as of December 31.
- This exemption level applies to _each_ U.S.-resident custodian used.

## Schedule 3 Only ReportersExemption Levels

- “Schedule 3 Only” reporters are exempt from reporting Schedule 2.
- Securities entrusted to U.S. resident custodians should be reported on Schedule 3 if the fair (market) value of the foreign securities aggregated over accounts owned and/or managed equals        $100 million or more as of December 31.
- This exemption level applies to _each_ U.S.-resident custodian used.

## Schedule 3 Only ReportersExemption Levels

- Securities held directly with foreign-resident custodians, including:
- foreign-resident offices of U.S. banks
- foreign-residents of U.S. broker/dealers
- foreign-resident central securities depositories
- should be reported on Schedule 3 if the fair (market) value of the foreign securities aggregated over accounts owned and/or managed equals $100 million or more as of December 31.

## Schedule 3 Only ReportersExemption Levels

- Securities held directly, managed directly, or held with U.S.-resident central securities depositories, (for which no U.S.-resident custodian is used), should be reported on Schedule 3 if the fair (market) value of the foreign securities aggregated over accounts owned and/or managed equals   $100 million or more as of December 31.

## Reporting Panels

- Schedule 2 and Schedule 3 reporters
- U.S.-resident custodians
- Schedule 2, report detailed information on foreign securities that:
- hold in custody for U.S.-resident clients
- invest in for own account
- entrust to foreign-resident custodians or central securities depositories
- entrust to U.S.-resident central securities depositories

## Reporting PanelsSchedule 2 and Schedule 3 ReportersU.S.-Resident Custodians Schedule 2 Reporting

**U.S. resident **
**(including the reporting **
**custodian’s own portfolio)**

**U.S.-resident**
**custodian**

**U.S.-resident central**
**securities depository**

**Foreign-resident**
**custodian or central**
**securities depository**

**The “Schedule 2 and **
**Schedule 3” reporter submits**
**detailed data on**
**Schedule 2.**

## Reporting Panels

- Schedule 2 and Schedule 3 reporters
- U.S.-resident end-investors
- Schedule 2, report detailed information on foreign securities not entrusted to U.S.-resident custodians; that is when the end-investor:
- holds the foreign securities directly
- employs foreign-resident custodians or foreign central securities depositories
- employs U.S.-resident central securities depositories

## Reporting PanelsSchedule 2 and Schedule 3 ReportersU.S.-Resident End-Investors Schedule 2 Reporting

**U.S. resident **
**(including the reporting **
**end-investor’s own **
**portfolio)**

**U.S.-resident**
**end-investor**
**(including managers)**

**U.S.-resident central**
**securities depository**

**Foreign-resident**
**custodian or central**
**securities depository**

**The “Schedule 2 and **
**Schedule 3” reporter submits**
**detailed data on**
**Schedule 2.**

## Reporting Panels

- Schedule 2 and Schedule 3 reporters
- U.S.-resident custodians and end-investors
- Schedule 3, report summary information for foreign securities entrusted to the safekeeping of a U.S.-resident custodian (excluding U.S.-resident central securities depositories)

## Reporting PanelsSchedule 2 and Schedule 3 ReportersSchedule 3 Reporting

**U.S. resident **
**(including the reporting **
**organization’s own **
**portfolio)**

**U.S.-resident**
**custodian or**
**end-investor**
**(including managers)**

**U.S.-resident**
**subcustodian**

**The “Schedule 2 and **
**Schedule 3” reporter submits**
**summary data on**
**Schedule 3 for each U.S.-resident**
**custodian using the**
**appropriate custodian codes.**

**The “Schedule 2 and**
**Schedule 3” reporter**
**submits detailed**
**data on Schedule 2.**

## Reporting Panels

- Schedule 3 only reporters
- U.S.-resident custodians and end-investors
- Schedule 3, report summary information for all foreign securities, regardless of where they are held in custody

## Reporting Panels

- Schedule 3 only reporters
- U.S.-resident custodians and end-investors
- Separate Schedule 3 report for foreign securities entrusted to each U.S.-resident custodian using the appropriate custodian code
- Consolidated Schedule 3 report for foreign securities entrusted to foreign-resident custodians and central securities depositories using custodian code 77
- Consolidated Schedule 3 report for foreign securities held directly or those entrusted to U.S.-resident central securities depositories using custodian code 88

## Reporting PanelsSchedule 3 Only Reporters

**U.S. resident **
**(including the reporting **
**organization’s own **
**portfolio)**

**U.S.-resident**
**custodian or**
**end-investor**
**(including managers)**

**Foreign-resident**
**custodian or central**
**securities depository**

**The “Schedule 3 only” **
**reporter submits **
**summary data on**
**Schedule 3 using**
**custodian code 77**.

## Reporting PanelsSchedule 3 Only Reporters

**U.S. resident **
**(including the reporting **
**organization’s own **
**portfolio)**

**U.S.-resident**
**custodian or**
**end-investor**
**(including managers)**

**The “Schedule 3 only” **
**reporter submits summary data on**
**Schedule 3 for each U.S.-resident**
**custodian using the**
**appropriate custodian codes.**

**The “Schedule 3 only”**
**reporter submits**
**summary data on**
**Schedule 3 using**
**custodian code 88.**

**U.S.-resident**
**subcustodian**

## What Must be Reported on the

- Report of U.S. Ownership of Foreign Securities, Including Selected Money Market Instruments (SHCA)

**Debra Kuntz**

## Foreign Securities

- Securities issued by foreign entities, including:
- foreign-resident organizations
- foreign subsidiaries of U.S. organizations
- foreign branches of U.S. banks
- U.S. corporations that have re-incorporated, i.e., are now incorporated under the laws of a foreign country
- international and regional organizations

## Foreign Securities

- Information that does not contribute to determining if a security is foreign:
- place of issue or location of trades
- currency of issue
- nationality of parent organization
- guarantor

## Foreign SecuritiesExample 1

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

## Foreign SecuritiesExample 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.

## Foreign SecuritiesExample 2

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

## Foreign SecuritiesExample 2 Answer

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

## Foreign SecuritiesExample 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?

## Foreign SecuritiesExample 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.

## Type of Reportable Foreign Securities

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

## Equity

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

## EquityDirect Investment

- Direct investment is defined as ownership or control of 10% or more of an organization’s voting stock.

## Equity

- Reportable equity securities include:
- common stock
- restricted stock
- preferred stock
- depositary receipts/shares
- shares/units in foreign-resident funds
- limited partner ownership in foreign-resident limited partnerships

## Equity

- Security type =1 (common stock)
- all common stock, including restricted stock
- depositary receipts/shares where the underlying security is common stock
- Security type = 2 (preferred stock)
- all preferred stock, including restricted stock
- participating preference shares
- nonparticipating preference shares
- convertible preferred stock
- depositary receipts/shares where the underlying security is preferred stock

## Equity

- Security type = 3 (funds)
- shares/units in foreign-resident funds
- Security type = 4 (other equity)
- limited partner ownership in foreign-resident limited partnerships
- all other foreign equity not specified in security types 1, 2, and 3

## EquityRestricted Stock

- Where possible, report the restricted shares with the same security ID (e.g., ISIN, CUSIP) as the non-restricted shares.
- If the restricted shares are valued at zero, report the market value for restricted stock using the non-restricted shares price.

## EquityPreferred Stock

- Differentiated participating and nonparticipating preference shares on the December 31, 2001 report.
- All preferred stock should now be classified as equity, security type = 2 (equity, preferred stock).

## EquityDepositary Receipts/Shares

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

## EquityDepositary Receipts/Shares

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

## Equity Depositary Receipts/Shares Example

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

## EquityDepositary Receipts/Shares Example Answer

- U.S. Company A has issued $100 million of ADRs representing an ownership interest 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.

## EquityDepositary Receipts/Shares

- Report the following based on the depositary receipt/share:
- security id
- security description
- depositary receipt/share indicator
- currency of denomination
- market value
- number of shares held

- Report the following based on the underlying security:
- security type
- name of issuer
- country of issuer

## EquityForeign-Resident Funds

- Report U.S. residents’ ownership of shares/units of funds legally established outside of the United States as equity.
- Examples of funds:
- closed-end and open-end mutual funds
- money market funds
- exchange-traded funds
- index-linked funds
- investment trusts

## EquityForeign-Resident Funds

- Classification of the fund as “foreign” is not based on the securities that the fund invests in.
- Example:
- A fund organized in Bermuda that only purchases U.S. Treasury securities is a foreign-resident fund.
- A fund organized in the United States that only purchases Japanese Treasury securities is a U.S.-resident fund.

## Foreign-Resident Funds

- Report U.S.-resident funds’ ownership of foreign securities.
- Ownership of shares of U.S.-resident funds is excluded, however, the foreign securities owned by these funds are reportable.

## Equity Exclusions

- Exclude from equity:
- convertible debt
- convertible debt is reported, but should be classified as debt on this report.

## Equity Exclusions

- Exclude from equity:
- general partner ownership of foreign-resident limited partnerships
- all other direct investment

## Short-Term and Long-Term Debt (excluding asset-backed securities)

- Instruments that usually give the holder the unconditional right to financial assets.

## 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.

## Term

- 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.
- Perpetual debt is long-term.

## Term Examples

- A Japanese Treasury bill issued on November 15, 2003 and matures on February 15, 2004 is short-term.
- A German 30-year bond that matures on       March 26, 2004 is long-term.

## Short-Term Debt

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

## Short-Term Debt

- Security type = 5 (short-term commercial paper)
- short-term commercial paper
- short-term financial paper
- short-term asset-backed commercial paper
- Security type = 6 (short-term negotiable CDs)
- short-term negotiable certificates of deposit
- short-term bank notes
- short-term deposit notes

## Short-Term Debt

- Security type = 8 (other short-term debt)
- short-term foreign government securities
- short-term bankers’ and trade acceptances
- short-term notes
- all other foreign short-term debt not specified in security types 5, 6, and 7

## Long-Term Debt

- Reportable long-term debt includes the following instruments where the original maturity is greater than one year:
- bonds
- notes
- debentures
- stripped and zero coupon securities
- convertible debt
- negotiable certificates of deposit

## Long-Term Debt

- Security type = 9 (stripped and zero coupon long-term debt)
- long-term zero coupon bonds and notes
- long-term stripped securities where the host security is not an asset-backed security (both the IO and PO components)
- Security type = 10 (convertible long-term debt)
- long-term convertible debt
- long-term zero coupon convertible debt

## Long-Term Debt

- Security type = 12 (other long-term debt)
- long-term CDs, bank notes and deposit notes
- Brady bonds
- covered bonds (e.g., Pfandbrief)
- debt securities backed by a sinking fund
- all other foreign long-term debt not specified in security types 9, 10, and 11

## Long-Term DebtStripped Securities

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

## Long-Term DebtStripped Securities

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

## Long-Term DebtStripped Securities Example

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

## Long-Term DebtStripped Securities Example Answer

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

## Debt Exclusions

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

## Debt Exclusions

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

## 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.

## 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.

## 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.

## Asset-Backed Securities

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

## 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
- other assets

## Asset-Backed Securities

- Security type = 7 (short-term asset-backed securities)
- short-term asset-backed securities
- Security type = 11 (long-term asset-backed securities)
- long-term asset-backed securities
- long-term stripped securities where the host security is an asset-backed security (including the IO and PO components and the tranches)

## Asset-Backed Securities Exclusions

- Exclude from asset-backed securities:
- asset-backed commercial paper
- Brady bonds
- securities backed by a sinking fund
- covered bonds (e.g., Pfandbrief)
- These securities are reported but should be classified as short-term or long-term debt on this report.

## Repurchase AgreementsSecurity Lending Arrangements

- Repurchase agreements/securities lending arrangements and reverse repurchase agreements/securities borrowing arrangements involve the temporary transfer of a security for cash or another security.

## Repurchase AgreementsSecurity 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.

## BREAK

## Review of Schedules 

**Richard McGee**

## Review of Schedules Schedule 1

- Schedule 1: Reporter 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

## Review of SchedulesSchedule 1

- Reporter Identification Number (Line 1)
- 10 digit number, including leading zeros, issued by FRBNY.
- Contact FRBNY staff at 212-720-6300 if you do not know your identification number.
- Do not report tax ID in this field

## Review of SchedulesSchedule 1

- Reporting Status (Line 3)
- Only Schedule 2(s).
- Only Schedule 3(s).
- Schedule 2(s) and Schedule 3(s).

## Review of SchedulesSchedule 1

- Industrial Classification Code (Line 4)
- 9  categories.
- Choose classification code that best describes your organization.
- If two or more codes are appropriate choose the one that represents the largest portion of your organization’s day-to-day operations.

## Review of SchedulesSchedule 1

- Name of Service Provider or Vendor Used (Line 10)
- The institution that provided your data or prepared the electronic files.
- Technical Contact (Line 11 - 14)
- Provide the name of the person who can answer questions regarding the electronic submission of your data.
- This person should be familiar with the file format(s) used and how the data was extracted from your databases or applications.

## Review of SchedulesSchedule 1

- Valuation Techniques (Line 15)
- Describe the valuation techniques used by each reporting unit.
- Did your organization report securities with a zero market value. If so, why?
- How are inactively traded securities valued?
- How are securities with internally generated IDs valued?

## Review of SchedulesSchedule 1

- Schedule 2 & Schedule 3 Summary Information
- Total number of Schedule 2 & Schedule 3 records.
- Total US$ fair market value of all equity.
- Total US$ fair market value of all short-term debt.
- Total US$ fair market value of all long-term debt.
- Total US$ fair market value of all ABS.

## Review of SchedulesSchedule 1

- Certifier Information and Signature
- Someone from within your organization must sign the Schedule 1 certifying its accuracy.
- If the data was prepared by a third party vendor someone from within your organization is responsible for certifying your data submission.

## Review of SchedulesSchedule 2

- Schedule 2: Details of Securities
- Filed by U.S.-resident custodians and U.S.-resident end-investors
- Provides details of each foreign security
- Total of all Schedule 2 US$ market values should equal the summary financial information reported on Schedule 1

## Review of SchedulesSchedule 2

- Sequence Number (Line 2)
- 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 burdensome to create sequential sequence numbers for the consolidated report, then each reporting unit should have unique sequence numbers.

## Review of Schedules Schedule 2

- Reporting Unit Fields (Lines 3a & 3b)
_**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.
_**Name of Reporting Unit**_ - Enter a description or name of the reporting unit or division that is reporting the information.

## Review of Schedules Schedule 2

- Security ID Fields (Lines 4 & 6)
_**Security ID**_ - The security ID code used to identify the reported security. ISIN codes and CUSIPs are strongly preferred.
_**Security ID System**_ - Enter the appropriate code from appendix C in this field. For example, if the security ID is an ISIN a 4 should be entered in this field.

## Review of Schedules Schedule 2

- Text Descriptions (Lines 5 & 9)
_**Security Description**_ - A brief description of the security reported. (Line 5)
_**Name of Issuer**_ - The full legal name of the organization that issued the security. (Line 9)

## Review of SchedulesSchedule 2

- Security Type (Line 7)
- Equity securities have the following categories:
- common stock (1)
- preferred stock (2)
- funds (including shares or unit trusts) (3)
- other: any other type of equity security not listed above (4)

## Review of Schedules Schedule 2

- Security Type (Line 7)
- Short-term debt has four categories:
- short-term commercial paper (5)
- short-term negotiable CDs (6)
- short-term asset-backed securities (7)
- all other short-term debt or selected money market instruments (8)
- Examples are foreign treasury bills, short-term notes, and stripped securities with a maturity of one year or less.

## Review of SchedulesSchedule 2

- Security Type (Line 7)
- Long-term debt has four categories:
- stripped and zero coupon long-term debt (9)
- convertible long-term debt (10)
- long-term asset-backed securities (11)
- all other long-term debt (12)
- Examples are long-term negotiable cds, Brady bonds.

## Review of SchedulesSchedule 2

_**Depositary Receipt Share**_ - Indicates whether or not an equity security is a depositary receipt. (Line 8)
_**Intentionally Left Blank**_ - This field corresponds to a previous data item no longer collected. Leave this field blank or enter a null value. (Line 10)

## Review of SchedulesSchedule 2

- Country & Currency Fields (Lines 11 &12)
_**Country of Issuer**_ - Enter the country code found in Appendix D that corresponds to the _**country of residence**_ of the entity that issued the security.
_**Currency of Denomination**_ - Enter the ISO code from Appendix F that corresponds to the currency in which the security being reported is denominated.

## Review of SchedulesSchedule 2

- Ownership Code (Line 13)
- An ownership code must be supplied for each security.
- A single security ID can have different ownership codes.
- Security IDs with like information but differing ownership codes must be reported on individual Schedule 2 reports and cannot be aggregated.

## Fair (Market) Value

- Report the fair (market) value of securities as of close of business December 31.
- The fair (market) value follows the definition of FAS 115.
- Fair 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.
- If a quoted market price is available for an instrument, the fair (market) value is the product of the number of trading units times that market price.

## Fair (Market) Value

- For Securities that do not regularly trade, the estimate of fair value should be based on the best information available in the circumstances.
- The estimate of fair value should consider prices for similar assets and the results of valuation techniques to the extent available in the circumstances.
- Examples of valuation techniques include discounted cash flow, matrix pricing, option-adjusted spread models and fundamental analysis.

## Fair (Market) Value

- US$ Fair (Market) Value of Security Held (Line 14a)
- Enter the _US$_ fair (market) value.
- Fair (Market) Value of Security Held Denominated in Currency of Issue (Line 14b)
- Enter the fair (market) value of the security in the currency of original issue.
- If the currency is denominated in US$ then enter the US$ fair (market) value. In these cases line items 14a  and 14b will be equal.

## 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.

## Fair (Market) Value

- Fair (market) value is calculated as:
- Equity
- Number of Shares * Price
- Short and long-term debt
- Face Value * Price
- Asset-backed securities
- Remaining Principal Outstanding * Price

## Foreign Exchange Conversion

- Converting foreign currency to U.S. dollar
- If the exchange rate is stated as foreign currency per U.S. dollar then you must divide to get the U.S. dollar equivalent.
- If the exchange rate is stated as U.S. dollar per foreign currency then you must multiply to get the U.S. dollar equivalent.

## Foreign Exchange Conversion Example 1 

- Exchange rate quoted in units of foreign currency per US$.
- The exchange rate as of 12/31/03 should be used when reporting.
- Japanese denominated security with a fair (market) value of ¥300,000.
- If the closing exchange rate were ¥105.75/US$.
- Divide the foreign currency value by the foreign exchange rate and round to the US$ value.
- ¥300,000/105.75 = US$2,836.879 (US$2,837).

## Foreign Exchange Conversion Example 2 

- Exchange rate quoted in units of US$ per foreign currency.
- The exchange rate as of 12/31/03 should be used when reporting.
- British  pound denominated security with a fair (market) value of £2,000.
- If the closing exchange rate were $1.45/UK£.
- Multiply the foreign currency value by the foreign exchange rate and round to the US$ value.
- £2,000 * 1.45 = $2,900.

## Reporting an Equity Security

- Security type must be either 1, 2, 3 or 4.
- Depositary share indicator, line item 8, must be completed.
- Number of Shares Held, line item 16, must be provided.
- Line items 17 through 23 pertain to debt securities and should be left blank or null.

## Reporting a Debt Security Other Than Asset-Backed

- Security type must be either 5, 6, 8, 9, 10 or 12.
- The face value in the currency of denomination must be reported. Face value should be the same currency reported in line items 12 and 14b.
- Face value should be rounded to the nearest whole currency unit.
- If the security is traded in units, report the face value by multiplying each unit by the number of units held.
- An issue date (Line 18) _**and**_ a maturity date (Line 19) must be reported.

## Reporting an Asset-Backed Security 

- Security type should be either 7 or 11.
- The original face value in the currency of denomination must be reported. Original face value should be the same currency reported in line items 12, 14b and 21.
- Original face value is the amount that would still be outstanding if no principal had been repaid.

## Reporting an Asset-Backed Security

- Remaining principal outstanding in currency of denomination must be reported. Same currency as 12, 14b and 20.
- The remaining principal outstanding will only equal the original face value if no principal has been repaid.

## Reporting an Asset-Backed Security

- Original face value and remaining  principal outstanding should be rounded to the nearest whole currency unit.
- If the security is traded in units, report the original face value and remaining principal outstanding by multiplying each unit by the number of units held.
- An issue date _**and**_ a maturity date must be reported.

## Review of Schedules Schedule 3 for “Schedule 2 and Schedule 3” Reporters

- Multiple Schedule 3 records can be reported.
- A custodian code from Appendix G must be reported in line 3.
- If your organization’s U.S.-resident custodian does not appear in Appendix G, lines 9 through 14 of the Schedule 3 must be completed.

## Review of Schedules Schedule 3 for “Schedule 2 and Schedule 3” Reporters

- The aggregate fair market value of the securities entrusted to the custodian indicated in line 3 must be provided on lines 4 through 7.
- Your organization must indicate whether it is reporting as an end investor or a U.S.-resident custodian (Line 8).
- Schedule 3 Only reporters are required to submit up to two additional Schedule 3 reports using custodian code 77 or 88 (Line 3).

## Review of Schedules Schedule 3 for Schedule 3 Only Reporters

- Reporting custodian code 77
-  Submit a separate Schedule 3 containing summary data on foreign securities held directly with foreign-resident custodians.
- This includes:
- foreign-resident offices of U.S. banks
- foreign-resident offices of U.S. broker/dealers
- foreign-resident central securities depositories

## Review of Schedules Schedule 3 for Schedule 3 Only Reporters

- Reporting custodian code 88
-  Submit a separate Schedule 3 containing summary data on foreign securities:
- held directly by the reporting organization
- entrusted to U.S.-resident central securities depositories

## Key Issues for Reporters

**Sarit Kessel**

## Reporting Criteria

- Custodians should report foreign securities held in custody for other U.S. residents.
- Custodians should report their own foreign securities.

## Securities to be Included

- Report all securities issued by foreign-resident entities, including international and regional organizations, held by U.S. residents.
- Report all American Depositary Receipts (ADRs) that represent ownership of foreign corporations that are held by U.S. residents.

## Securities to be Included

- Report all foreign securities, even if the security is restricted.
- Report all U.S. held foreign securities that have been entrusted to a foreign-resident custodian.

## Securities to be Included

- Report all U.S. held foreign securities that have been entrusted to a U.S.-resident central securities depository (such as the Depository Trust Company) or foreign-resident central securities depository (such as Euroclear).

## Security IDs

- Whenever possible, report securities using the ISIN or CUSIP Code.
- If unavailable, use appropriate SEDOL, CINS, Common, or other exchange-assigned code.
- Use internal codes only if no other code exists for the security.

## FRBNY Calculations

- FRBNY calculates implicit prices, factor values, and exchange rates based on market values and quantity fields submitted by reporters.
- Helps FRBNY determine the quality of  market values and quantities.

## How FRBNY Calculates Prices

- An implicit price for equity is calculated by dividing the US$ fair (market) value (line 14*a*) by the number of shares (line 16).

## How FRBNY Calculates Prices Example 1

- If the US$ fair (market) value is $10,000,000 and the number of shares is 100,000, what is the implicit price?

## How FRBNY Calculates Prices Example 1 Answer

- If the US$ fair (market) value is $10,000,000 and the number of shares is 100,000, what is the implicit price?
- Implicit Price = US$ fair (market) value/ Number of shares
- $100 = $10,000,000 / 100,000

## How FRBNY Calculates Prices

- An implicit price for non-ABS debt is calculated by dividing the fair (market) value in currency of denomination          (line 14b) by the face value in currency of denomination (line 17).

## How FRBNY Calculates Prices Example 2

- If the fair (market) value in currency of denomination is $1,000,000 and the face value in currency of denomination is $900,000, what is the implicit price?

## How FRBNY Calculates Prices Example 2 Answer

- If the fair (market) value in currency of denomination is $1,000,000 and the face value in currency of denomination is $900,000, what is the implicit price?
- Implicit Price = Fair (market) value in currency of denomination / Face value in currency of denomination
- 1.11 = $1,000,000 / $900,000

## How FRBNY Calculates Prices

- An implicit price for asset-backed securities is calculated by dividing the fair (market) value in currency of denomination (line 14b) by the remaining principal outstanding in currency of denomination (line 21).

## How FRBNY Calculates Prices Example 3

- If the fair (market) value in currency of denomination is **¥** 100,000 and the remaining principal outstanding in currency of denomination is **¥** 110,000, what is the implicit price?

## How FRBNY Calculates Prices Example 3 Answer

- If the fair (market) value in currency of denomination is **¥** 100,000 and the remaining principal outstanding in currency of denomination is **¥** 110,000, what is the implicit price?
- Implicit Price = Fair (market) value in currency of denomination / Remaining principal outstanding in currency of denomination.
- 0.909 = **¥** 100,000 / **¥** 110,000

## How FRBNY Calculates Factor Values

- The factor value for asset-backed securities is calculated by dividing the remaining principal outstanding in currency of denomination (line 21) by the original face value in currency of denomination (line 20).

## Calculation of Factor ValuesExample

- If the original face value in currency of denomination is £900,000 and the remaining principal outstanding in currency of denomination is £700,000, what is the factor value?

## Calculation of Factor ValuesExample Answer

- If the original face value outstanding in currency of denomination is £900,000 and the remaining principal outstanding in currency of denomination is £700,000, what is the factor value?
- Factor Value = Remaining principal outstanding in currency of denomination / Original face value in currency of denomination.
- .78 = £ 700,000 / £ 900,000

## How FRBNY Calculates Exchange Rates

- The implicit exchange rate is calculated by dividing the US$ Fair (Market) Value (line 14a) by the Fair (Market) Value in Currency of Denomination (line 14b).

## Calculation of Exchange Rates Example

- If the US$ Fair (Market) Value is $100,000 and the Fair (Market) Value in Currency of Denomination is £80,000, what is the exchange rate?

## Calculation of Exchange Rates Example Answer

- If the US$ Fair (Market) Value is $100,000 and the Fair (Market) Value in Currency of Denomination is £80,000, what is the exchange rate?
- Exchange Rate = US$ Fair (Market) Value / Fair (Market) Value in Currency of Denomination.
- 1.25 = $100,000 / £ 80,000

## Common Reporting Errors

- Securities reported with an amount held equal to zero.
- Securities reported with inaccurate security types (zero-coupon bonds reported as all other long-term debt).

## Common Reporting Errors

- Failure to report remaining principal outstanding for asset-backed securities.
- Incorrectly reporting preferred stock as debt.  (All preferred stock should be reported as equity).
- Failure to report foreign securities owned by U.S.-resident funds.

## U.S.-Resident Funds Example 1

- If a U.S.-resident fund owns foreign securities, are these securities reportable?

## U.S.-Resident Funds Example 1 Answer

- If a U.S.-resident fund owns foreign securities, are these securities reportable?
- Yes.  The foreign securities are reportable because the fund is incorporated in the U.S.

## U.S.-Resident Funds Example 2

- If shares of a Caribbean fund, which is incorporated in the U.S., are purchased by a U.S.-resident are they reportable?

## U.S. Resident Funds Example 2 Answer

- If shares of a Caribbean fund, which is incorporated in the U.S., are purchased by a U.S.-resident are they reportable?
- No.  Since the fund is incorporated in the U.S., the shares held by U.S. residents are not reportable.

## Common Reporting Errors

- Incorrectly calculated foreign currency market values.
- Defaulting currency to match country of issuer.
- Identifying securities as U.S. or foreign based on the first two letters in ISIN or first letter in CINS ID.

## Identify Securities Examples

**Question:**
- Is ISIN
- US902118AU26
- reportable?

## Identify Securities Examples

**Question:**
- Is ISIN
- US902118AU26
- reportable?

**Answer:**
- Yes, because it is issued by Tyco International which is incorporated in Bermuda.

## Identify Securities Examples

**Question:**
- Is ISIN
- US902118AU26
- reportable?

**Answer:**
- Yes, because it is issued by Tyco International which is incorporated in Bermuda.

- Is ISIN
- US01F0626485
- reportable?

## Identify Securities Examples

**Question:**
- Is ISIN
- US902118AU26
- reportable?

**Answer:**
- Yes, because it is issued by Tyco International which is incorporated in Bermuda.

- Is ISIN
- US01F0626485
- reportable?

- No, because it is issued by the Federal National Mortgage Association (Fannie Mae).

## Identify Securities Examples

**Question:**
- Is ISIN
- XS0077101433
- reportable?

## Identify Securities Examples

**Question:**
- Is ISIN
- XS0077101433
- reportable?

**Answer:**
- No, because it is issued by the Federal Home Loan Mortgage Corporation

## Identify Securities Examples

**Question:**
- Is ISIN
- XS0077101433
- reportable?

**Answer:**
- No, because it is issued by the Federal Home Loan Mortgage Corporation.

- Is ISIN
- XS001087137
- reportable?

## Identify Securities Examples

**Question:**
- Is ISIN
- XS0077101433
- reportable?

**Answer:**
- No, because it is issued by the Federal Home Loan Mortgage Corporation.

- Is ISIN
- XS001087137
- reportable?

- Yes, because it is issued by the Inter-American Development bank.

## Common Reporting Errors

- Failure to report securities issued by reincorporates, such as Tyco, Transocean, and Ingersoll-Rand.
- Failure to report securities issued by companies that are thought to be domestic, but are foreign incorporated, such as Schlumberger and Carnival Corp.

## How We Review Your Data 

- Report of U.S. Ownership of Foreign Securities, Including Money Market Instruments (SHCA)

**Tim Grob**** **

## Four Levels of Review 

**Reporter level**
- Analyzing your data for reasonability
- Trend analysis
**Security level**
- Comparing attributes of reported securities to one another, and to commercial data sources.
**Macro level**
- Additional comparisons on a broader level
**Schedule 2/3 Comparison**
- Comparing schedule 3 data to schedule 2 data

## Reporter Level Review 

**Reasonability Comparisons**
- Schedule 1 -vs- schedule 2 comparison
- Schedules 1, 2 & 3 comparison to prior year (reporting trends)
- Ownership code
- Market values
- Face values
- Number of shares

## Reporter Level Review

**Reasonability Analysis**
- Ensuring all schedule 2 data was reported, to include:
- Security IDs
- Ownership code
- Number of shares held
- Face Value held
- Remaining principal (ABS)

## Reporter Level Review

**Reasonability**
- Currency/Exchange Rate Analysis
- Currency is US$ but US market value (item 14a) does not equal the market value in the currency of denomination (item 14b).
- Currency is not US$ and the exchange rate is not 1, but the US$ market value equals the market value in the currency of denomination.
- For each security, an implicit exchange rate is calculated, which should be the December 31, 2003  exchange rate for the currency.

## Reporter Level Review

**Reasonability**
- Country of Issuer
- Country of Issuer is U.S.
- Are these coded incorrectly or should these have been excluded from your report?
- Are securities issued by international and regional organizations miscoded, and reported with the U.S. as the country of issuer?
- Are securities issued by a U.S. protectorate (Puerto Rico, etc.)?  If so, exclude from report.

## Reporter Level Review

**Reasonability**
- Country of Issuer
- Country of Issuer is Canada
- Has the amount of securities issued by Canadian entities changed substantially since the last reporting cycle?
- Were Canadian securities coded as US securities on your system and so were incorrectly excluded from your report?

## Reporter Level Review

**Reasonability**
- American Depositary Receipts (ADRs)
- Comparison of the reported market value and proportion of ADRs relative to total equity
- Did you report any ADRs?
- Did you previously? If so, has your position changed significantly?

## Reporter Level Review

**Reasonability**
- Ownership Code Analysis
- Have the market values and proportions of the total market value of securities reported as owner and as custodian, changed substantially?
- Are you reporting any securities as owner?

## Reporter Level Review

**Reasonability**
- Key Securities Analysis
- Largest securities by market value
- Implicit exchange rates, implicit prices, country of issuer, etc.
- Securities reported with zero quantities
- If reported correctly, these securities do not need to be reported, and should be excluded from future reports

## Reporter Level Review

**Reasonability**
- Reporter Queries
- We focus on areas that were reporting problems in prior data submissions, such as:
- keywords in descriptions, such as rights, warrants, repurchase, repo, etc.
- debt prices far above par
- issue dates after as-of date
- maturity dates prior to as-of date
- additional comparisons to other reporters’ data

## Reporter Level Review

- Reasonability
- Consistency of data reported, throughout the reporter’s submission
- Example: You report data for Stock A with two different implicit prices, which is correct?
- Stock A reported with implied price of $59.50
- Stock A reported with implied price of $60.15

## Security Level Review 

- Search for Reincorporated Organizations
- Entities that were formerly incorporated in the United States but are now incorporated elsewhere.
- Please view the list of Reincorporates in your packet

## Security Level Review 

- Data embedded in the security description, e.g., security type or  maturity date,  are compared to data in the relevant fields.
- Term of debt is calculated using issue and maturity dates and compared to the reported term and the security description.
- Issuer should not be a U.S. resident.
- Total amount held reported across all reporters is compared to the total amount outstanding for a given security.

## Macro Level Review 

- Comparisons of various “cuts” of the aggregate data.
- Equity by country and security type
- Long-term debt by country and currency
- Short-term debt by country and currency
- Long-term debt by country and type of security
- Short-term debt by country and type of security

## Macro Level Review 

- Comparisons of various “cuts” of the aggregate data
- ADRs by country
- Debt by maturity date
- Debt by coupon
- Published data can be found at  http://www.ustreas.gov/tic/fpis.html

## Schedule 2/3 Review 

-  (Market Values
- by security type,
- from Schedule 2s
- and 3s) reported by
- each custodian

-  (Market values attributed) to each custodian on Schedule 3 by its customers.

- > =

## Want to Know More?

- If you’d like more details about how we analyze your data, please contact us to arrange a meeting.

## Benchmark (SHCA)/TIC Comparison 

**Kenneth Aberbach**

## Reports Used for Comparison

- U.S. Ownership of Foreign Securities (SHCA or Claims)
- TIC Reports
- TIC BQ-1 Customer Claims
- TIC BQ-2 Customer and own claims denominated in foreign currency
- TIC BC Own Claims
- http://www.ustreas.gov/tic/

## Differences

- TIC - Face Value
- SHCA - Face Value and Market Value
- TIC - Aggregate per country
- SHCA - Detailed information on each security

## Differences

- TIC - Long-term and short-term negotiable CDs are combined
- SHCA - Long-term and short-term negotiable CDs are separated by security type
- TIC - USD or USD equivalent
- SHCA - Market Value in both USD and currency of denomination. Face value in currency of denomination that FRBNY converts to USD.

## Differences

- There may be more than one TIC report filed per institution.
- One consolidated SHCA report filed per institution
- For example: A U.S. entity sends in separate TIC reports for the Bank Holding Company, Bank, and Broker Dealer but would send in one consolidated SHCA report.

## Compare - Overview

- Negotiable certificates of deposits
- Commercial Paper
- Other short-term negotiable securities
- Foreign currencies

## Compare - Overview

- Securities held in custody
- Securities owned by the reporter

## CompareShort-Term Negotiable CDs

**SHCA (per country)**
- Security Type 6 (Item 7)
- Currency = USD (Item 12)
- Ownership code 2, 3, 4 and 5 (item 13)
- Sum of face value (Item 17)

**TIC BQ-1 (per country)**
- Negotiable CDs (column 2)
- Note: Long term CDs (original maturity of over one year) are also included in this column but would be coded as Sec. Type 12 on SHCA

- < =

## CompareShort-Term Negotiable CDs

**SHCA (per country)**
- Security Type 6 (Item 7)
- Currency **not =** USD (Item 12)
- Ownership code 2, 3, 4 and 5 (item 13)
- Sum of face value (Item 17)

**TIC BQ-2 (per country)**
- Other Customers’ Claims (column 6)
- Note - CDs are just one of many items that can be reported in this column.

- < =

## Compare Short-Term Negotiable CDs Memo Item 

**SHCA **
- Security Type 6 (Item 7)
- Currency **not =** USD (Item 12)
- Ownership code 2, 3, 4 and 5 (item 13)
- Sum of face value (Item 17)

**TIC BQ-2**
- Negotiable CDs (row line 8110-8, column 6)

- < =

## CompareOther Short -Term Negotiable Securities

**SHCA (per country)**
- Security Types 5, 7 and 8 (Item 7)
- Currency = USD (Item 12)
- Ownership code 2, 3, 4 and 5 (item 13)
- Sum of face value (Item 17)

**TIC BQ-1 (per country)**
- All Short-Term Negotiable Securities (column 3)

- =

## Compare Commercial Paper Memo Item 

**SHCA **
- Security Type 5 (Item 7)
- Currency = USD (Item 12)
- Ownership code 2, 3, 4 and 5 (item 13)
- Sum of face value (Item 17)

**TIC BQ-1**
- Commercial Paper (row line 8161-2, column 3)

- =

## CompareOther Short-Term Negotiable Securities

**SHCA (per country)**
- Security Types 5, 7 and 8 (Item 7)
- Currency **not =** USD (Item 12)
- Ownership code 2, 3, 4 and 5 (item 13)
- Sum of face value (Item 17)

**TIC BQ-2 (per country)**
- Other Customers’ Claims (column 6)
- Note - As mentioned before there are other items reportable in this column.

- < =

## Compare Other Short-Term Negotiable Securities Memo Item 

**SHCA**
- Security Type 5, 7 or 8 (Item 7)
- Currency **not =** USD (Item 12)
- Ownership code 2, 3, 4 and 5 (item 13)
- Sum of face value (Item 17)

**TIC BQ-2**
- Short-Term Negotiable Securities (row line 8120-5, column 6)

- =

## CompareOwn Short-Term Securities 

**SHCA (per country)**
- Security Type 5 or 6 or 7 or 8 (Item 7)
- Currency = USD (Item 12)
- Ownership code 1 (item 13)
- Sum of face value (Item 17)

**TIC BC (per country)**
- Negotiable CDs and All Short Term Negotiable Securities (column 2 + column 4)
- Note: Long term CDs (original maturity of over one year) are also included in column 2 but would be coded as Sec. Type 12 on SHCA

- < =

## CompareOwn Short-Term Securities 

**SHCA (per country)**
- Security Type 5 or 6 or 7 or 8 (Item 7)
- Currency **not =** USD (Item 12)
- Ownership code 1 (item 13)
- Sum of face value (Item 17)

**TIC BQ-2 (per country)**
- Other Claims (column 4)
- Note: Short-term securities are just one of many items that can be reported in this column.

- < =

## Compare Own Short-Term Negotiable CDs Memo Item 

**SHCA**
- Security Type 6 (Item 7)
- Currency **not =** USD (Item 12)
- Ownership code 1 (item 13)
- Sum of face value (Item 17)

**TIC BQ-2**
- Negotiable CDs (row line 8110-8, column 4)

- < =

## Compare Own Other Short-Term Negotiable Securities Memo Item 

**SHCA **
- Security Type 5, 7 or 8 (Item 7)
- Currency **not** = USD (Item 12)
- Ownership code 1 (item 13)
- Sum of face value (Item 17)

**TIC BQ-2**
- Short-Term Negotiable Securities (row line 8120-5, column 4)

- =

## Compare Data by currency 

**SHCA **
- Security Type 5, 6, 7 or 8 (Item 7)
- Currency = CAD (Canadian Dollar, Item 12)
- Ownership code 1 (item 13)
- Sum of face value (Item 17)

**TIC BQ-2**
- Denominated in Canadian Dollars (row line 8500-1, column 4)
- Note: Short-term securities are just one of many items that can be reported in this column.

- < =

## Compare Data by currency 

**SHCA**
- Security Type 5, 6, 7 or 8 (Item 7)
- Currency = EUR (Euros, Item 12)
- Ownership code 1 (item 13)
- Sum of face value (Item 17)

**TIC BQ-2**
- Denominated in Euros (row line 8500-2, column 4)
- Note: Short-term securities are just one of many items that can be reported in this column.

- < =

## Compare Data by currency 

**SHCA**
- Security Type 5, 6, 7 or 8 (Item 7)
- Currency = GBP (Sterling, Item 12)
- Ownership code 1 (item 13)
- Sum of face value (Item 17)

**TIC BQ-2 **
- Denominated in Sterling (row line 8500-3, column 4)
- Note: Short-term securities are just one of many items that can be reported in this column.

- < =

## Compare Data by currency 

**SHCA **
- Security Type 5, 6, 7 or 8 (Item 7)
- Currency = JPY (Yen, Item 12)
- Ownership code 1 (item 13)
- Sum of face value (Item 17)

**TIC BQ-2**
- Denominated in Yen (row line 8500-4, column 4)
- Note: Short-term securities are just one of many items that can be reported in this column.

- < =

## Compare Data by currency 

**SHCA **
- Security Type 5, 6, 7 or 8 (Item 7)
- Currency = CAD (Canadian Dollar, Item 12)
- Ownership code 2, 3, 4 and 5 (item 13)
- Sum of face value (Item 17)

**TIC BQ-2**
- Denominated in Canadian Dollars (row line 8500-1, column 6)
- Note: Short-term securities are just one of many items that can be reported in this column.

- < =

## Compare Data by currency 

**SHCA **
- Security Type 5, 6, 7 or 8 (Item 7)
- Currency = EUR (Euros, Item 12)
- Ownership code 2, 3, 4 and 5 (item 13)
- Sum of face value (Item 17)

**TIC BQ-2**
- Denominated in Euros (row line 8500-2, column 6)
- Note: Short-term securities are just one of many items that can be reported in this column.

- < =

## Compare Data by currency 

**SHCA **
- Security Type 5, 6, 7 or 8 (Item 7)
- Currency = GBP (Sterling, Item 12)
- Ownership code 2, 3, 4 and 5 (item 13)
- Sum of face value (Item 17)

**TIC BQ-2 **
- Denominated in Sterling (row line 8500-3, column 6)
- Note: Short-term securities are just one of many items that can be reported in this column.

- < =

## Compare Data by currency 

**SHCA **
- Security Type 5, 6, 7 or 8 (Item 7)
- Currency = JPY (Yen, Item 12)
- Ownership code 2, 3, 4 and 5 (item 13)
- Sum of face value (Item 17)

**TIC BQ-2**
- Denominated in Yen (row line 8500-4, column 6)
- Note: Short-term securities are just one of many items that can be reported in this column.

- < =

## Technical Topics

**Preparing a file of your data**

**Melissa Harris**

## Technical TopicsWhat to File Electronically

_**Electronically**_:
- Schedule 2
- Required if submitting more than 200 records
- Optional if submitting 200 or fewer records

_**On paper**_:
- Schedule 1
- Schedule 3
- Schedule 2
- Optional if submitting 200 or fewer records

## Technical Topics:Media Requirements

- High Density IBM Compatible Diskette
- Standard CD
- Standard Windows PC ASCII Text Files With a .txt extension
- Labeled With Reporter Name & ID
- Accompanied by Dump of Data and Copy Command Used to Create the Diskette/CD

## Technical Topics:Unacceptable Media

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

## Technical Topics:File Formats

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

## Technical TopicsCorrect Positional File Example

**Technical Topics****Correct Positional File Example**

- 225

## Technical TopicsCorrect Positional File Example

**Technical Topics****Correct Positional File Example**

- 226

## Technical TopicsCorrect Positional File Example

**Technical Topics****Correct Positional File Example**

- 227

## Technical TopicsIncorrect Positional File Example

**Technical Topics****Incorrect Positional File Example**

- 228

## Technical TopicsCorrect Delimited File Example

**Technical Topics****Correct Delimited File Example**

- 229

## Technical TopicsCorrect Delimited File Example

**Technical Topics****Correct Delimited File Example**

- 230

## Technical TopicsIncorrect Delimited File Example

**Technical Topics****Incorrect Delimited File Example**

- 231

## Technical TopicsPositional & Delimited Files Example

**Technical Topics****Positional & Delimited Files Example**

- Number of shares

- Face Value (Non-ABS) Debt Only

- 232

## Technical TopicsTips & Traps

- Files Must be Plain Text - Uncompressed
- No .xls (Excel) files
- No COBOL packed decimal fields
- Files Must be ASCII
- Diskette or CD Only

## Technical Topics Tips & Traps

- Incorrect Date Format
- Correct format MMDDYYYY. For example, the date May 3, 2003 would be reported as 05032003.
- Examples of incorrect date formats MM/DD/YY, MM/DD/YYYY, MM-DD-YY, etc.
- Need to Have Leading Zeroes
- Reporter ID, date fields

## Technical TopicsTips  & Traps

- Illegal Characters in the File, such as
- An extended list of tips & traps can be found on the Internet at http://www.treas.gov/tic/forms.html#benchmark, the document is titled “Key Issues for SHCA Software Developers”

## Technical TopicsContacts

_**Melissa Harris **_ 	IT Support Analyst 			        		       	(212) 720-7314
_**Amador Castelo**_  	IT Support Analyst
- 				(212) 720-8592
_**Susan Ma**_  		Team Leader
- 				(212) 720-1989
_**Howard Brickman**_  	Staff Director
- 				(212) 720-7759

## Q & A

## END