March 30, 2015

VIA EMAIL

Christopher Stein 

Balance of Payments Division

Bureau of Economic Analysis

Department of Commerce

Washington, DC 20230

Paul Bugg

PRA Desk Officer for BEA

Paperwork Reduction Project 0608-0062

Office of Management and Budget

Washington, DC 20503

Re: International Services Surveys: BE-180, Benchmark Survey of Financial 

Services Transactions Between U.S. Financial Services Providers and Foreign 

Persons; Bureau of Economic Analysis; RIN 0691-AA84

Dear Mr. Stein and Mr. Bugg: 

Managed Funds Association (“MFA”)1appreciates the opportunity to provide comments 

to the Bureau of Economic Analysis (“BEA”) regarding its proposed changes to the entities that 

must submit the BE–180, Benchmark Survey of Financial Services Transactions Between U.S. 

Financial Services Providers and Foreign Persons (“Form BE-180”).2 The proposal would amend 

existing regulations to require that all entities subject to the reporting thresholds submit the Form, 

whether or not the BEA contacts them individually. If the BEA adopts the changes as proposed,

the Form BE-180 would differ from other BEA surveys, which only require persons subject to the 

reporting thresholds to respond if the BEA contacts them. 

 

1 The Managed Funds Association (“MFA”) represents the global alternative investment industry and its 

investors by advocating for sound industry practices and public policies that foster efficient, transparent, and fair 

capital markets. MFA, based in Washington, DC, is an advocacy, education, and communications organization 

established to enable hedge fund and managed futures firms in the alternative investment industry to participate 

in public policy discourse, share best practices and learn from peers, and communicate the industry’s 

contributions to the global economy. MFA members help pension plans, university endowments, charitable 

organizations, qualified individuals and other institutional investors to diversify their investments, manage risk, 

and generate attractive returns. MFA has cultivated a global membership and actively engages with regulators 

and policy makers in Asia, Europe, the Americas, Australia and all other regions where MFA members are 

market participants.

2

80 F.R. 4228 (Jan. 27, 2015). The Form requires responses from U.S. financial service providers that, during 

their 2014 fiscal year, had financial transactions totaling $3 million or more on a consolidated basis directly with 

non-U.S. persons. 
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The proposal also requests comment on: (i) whether the information is necessary for the 

proper performance of the functions of the BEA, including whether the information will have 

practical utility; (ii) the accuracy of the BEA’s burden estimate; (iii) ways to enhance the quality, 

utility, and clarity of the information collected; and (iv) ways to minimize the burden of the 

collection of information on respondents. 

The BEA Should Maintain the Existing Filing Requirements of Form BE-180 

We appreciate the important role of the BEA and its data collection in understanding and 

analyzing the scope of transactions with foreign entities, and we recognize the value of this 

information for various policy-making determinations. In our view, however, the information that 

hedge fund managers would report to the BEA would be of limited usefulness relative to the 

burden to obtain and submit the information. Hedge funds engage in transactions with a wide 

range of global counterparties, and generally do not compile the information in the manner 

required to be reported in the Form in the normal course of their business activities. 

Because such reporting would impose substantial costs and burdens on individual hedge

fund managers, we respectfully recommend that the BEA maintain its existing reporting 

requirements for Form BE-180, whereby only entities that the BEA individually contacts are 

required to submit the Form, and entities that the BEA does not contact have no reporting 

responsibilities. We outline the reasons for our views below.

Discussion

Hedge funds are private pools of investor capital that are managed by a separate entity, 

called an investment manager.3 Investors in hedge funds include taxable U.S. investors, taxexempt U.S. investors, and non-U.S. investors. In order to satisfy the requirements of each of 

these types of investors, and to provide the most favorable tax treatment for their investments, a 

U.S. fund manager generally will manage investor capital through both U.S.-domiciled funds and 

non-U.S.-domiciled funds.

4 Other structures often also include entities referred to as specialpurpose vehicles (SPVs).5

 The U.S. investment manager, or an affiliate of the manager, operates 

and controls each of the funds, and typically organizes them in structures that are appropriate to 

the needs of the manager and fund investors.

Hedge funds engage in a wide range of transactions with numerous entities, including 

prime brokers, counterparties, administrators, custodians, financial institutions, investors, 

investment managers, service providers, and other market participants. Many of these firms are 

 

3 Hedge fund managers generally must register as investment advisers with the SEC and file information about 

their businesses on Form ADV. Most SEC-registered hedge fund managers must also submit extensive 

information to the SEC about hedge funds they manage on Form PF, which is filed on a quarterly or annual 

basis.

4 Typically, a U.S. fund is organized either as a limited partnership or limited liability company, and a non-U.S. 

fund is often organized as a corporation or similar entity. 

5

SPVs are often entities owned by the master fund in the master-feeder structure. SPVs do not typically have 

employees or conduct business activities. As a result, similar to investment funds, information relating to SPVs 

may not be representative of the types of investment flows that the Forms seek to measure.
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global institutions that have complex organizational structures which include both U.S. and nonU.S. legal entities. Hedge funds often engage in a variety of transactions with these types of 

entities, and the particular legal entity with which a fund transacts is often determined by the 

financial institution for a variety of business and regulatory reasons. The Form would require a 

hedge fund manager to report information depending on the domicile of the particular legal entity 

of an institution that is engaged in a transaction. For example, a transaction between a U.S. hedge 

fund and a U.S. entity of a financial institution may not be reported on the Form, whereas a 

transaction with a non-U.S. entity of the institutional may be reported. In the latter instance, a 

manager would need to report a country for each applicable transaction. We believe that in many 

cases, in making these determinations a manager would need to establish a set of assumptions 

regarding how it would report information. In our view, a likely result would be that managers 

would have to report a wide range of transactions and would do so in disparate ways. 

Accordingly, we believe that the information would be dependent on their underlying assumptions 

and the aggregated data would be of limited value to the BEA.

Moreover, it would be challenging for a hedge fund manager to track and report the 

requested transactional information with respect to foreign banks, prime brokers and certain other 

counterparties. The Form would require a manager to identify the legal entity in institutions with

which each transaction occurs, and then assign an applicable country to each transaction. 

Managers generally do not currently collect this type of information, and they would need to 

develop procedures to maintain this data. In some cases, for example, it will not be clear how to 

determine the appropriate country to use for purposes of the Form, as some transactions involve 

entities that have various jurisdictions in which they operate and conduct business. We believe 

requiring managers to perform such an analysis would impose a substantial burden on them due to 

the number of transactions and the complexity of the institutions with which funds typically 

transact. 

Accordingly, managers would need to dedicate valuable internal resources to completing

the Form. The BEA estimates that the average respondent burden would be ten hours, which 

would include time for reviewing instructions, searching existing data sources, gathering and 

maintaining the data needed, and completing and reviewing the collection of information.

6 We 

believe ten hours is a gross underestimation of the average time that it would take a hedge fund 

manager to complete the Form. As described above, a hedge fund manager and its affiliated 

entities often manage multiple hedge funds, which would increase the burden on a manager to 

determine the information that would need to be reported. 

In addition to Form BE-180, we note that hedge fund managers may also be subject to 

reporting on other BEA forms.

7

In evaluating the burden of additional reporting on Form BE-180, 

we encourage the BEA to consider the totality of the time and expense for managers to complete

these forms. For example, we previously estimated the average cost for a manager to complete 

Form BE-10 as between $36,000 and $72,000.

8

 Perhaps more significantly, these Forms require 

 

6

80 F.R. at 4228. 

7

For example, Form BE-10, Form BE-11, Form BE-13 and Form BE-577. 

8 These amounts are based on the BEA’s average respondent burden of 144 hours, and MFA’s estimates of the 

total cost of the personnel time, potential outside accounting and legal time, and incidentals for completing each 

Form BE-10, to be between $250 and $500 per hours. MFA’s estimates are based on the typical internal 
March 30, 2015

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managers to dedicate valuable internal resources that are otherwise being used for the benefit of 

fund investors. Much of the information provided by hedge fund managers on Form BE-180 and 

other BEA forms does not provide substantial value-added information, and MFA believes that

the time and cost burdens imposed by the various forms far outweigh any benefit to the BEA. 

For these reasons, we respectfully recommend that the BEA maintain its existing reporting 

requirements for Form BE-180, whereby only entities that the BEA individually contacts are 

required to submit the Form, and entities that the BEA does not contact have no reporting 

responsibilities.

The BEA Should Not Extend the Reporting Requirements of Other Forms to Hedge Fund 

Managers

At a minimum, regardless of the BEA’s determination of the reporting requirements for 

Form BE-180, we strongly urge the BEA not to extend the reporting requirements of other BEA 

forms to entities not contacted by the BEA. We have previously submitted comments explaining

that requiring hedge fund managers to submit other BEA forms would only provide information 

of limited usefulness to the BEA’s mission.

9

 We continue to believe that the BEA should 

maintain its existing reporting requirements for other types of forms, such as Form BE-11 and 

Form BE-577, such that entities not contacted by the BEA have no reporting responsibilities. 

In particular, applying a universal filing requirement to forms that are due annually or 

quarterly would only lead to additional costs and burdens for hedge funds while providing limited 

benefit to the BEA. In addition to Forms BE-11 and BE-577, for the reasons described above, we 

respectfully urge the BEA to maintain the existing requirements for Form BE-185, which requires 

that filers submit information similar to Form BE-180 on a quarterly basis. A quarterly filing 

requirement would impose a significantly greater burden on managers as compared to a filing 

every five years.

* * * * * * *

 

employee salaries or hourly rates of external personnel who are most likely to be involved in completing the 

Form. Where a particular manager’s costs would fall on this range would depend on the variety of fund 

structures under that adviser’s management, the amount of outside legal or accounting advice a particular 

manager decided to seek, and the seniority of the internal personnel who must become involved in completing, 

reviewing, and approving the Form.

9 Letter from Stuart J. Kaswell, Executive Vice President & Managing Director, General Counsel, MFA, to 

Jennifer Jessup, Departmental Paperwork Clearance Officer, Department of Commerce (Sept. 9, 2013), available 

at: https://www.managedfunds.org/wp-content/uploads/2013/09/MFA-Comments-on-BEA-Surveys-BE-11-andBE-577.pdf. 
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We would be happy to further discuss any of the above information with you or your 

colleagues. If you have any questions about these comments, or if we can provide further 

information, please do not hesitate to contact Matthew Newell, Associate General Counsel, or the 

undersigned at (202) 730-2600.

Respectfully submitted,

/s/ Stuart J. Kaswell

Stuart J. Kaswell

Executive Vice President & Managing Director,

General Counsel
March 30, 2015

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Appendix

*An SPV structure would typically be located beneath the Master Fund and above the 

Investments.