80 FR 28818 - International Services Surveys: BE-I80, Benchmark Survey of Financial Services Transactions Between U.S. Financial Services Providers and Foreign Persons

DEPARTMENT OF COMMERCE
Bureau of Economic Analysis

Federal Register Volume 80, Issue 97 (May 20, 2015)

This final rule amends regulations of the Bureau of Economic Analysis (BEA), Department of Commerce, to reinstate reporting requirements for the BE-180, Benchmark Survey of Financial Services Transactions between U.S. Financial Services Providers and Foreign Persons. Benchmark surveys are conducted every five years; the prior survey covered 2009. For the 2014 benchmark survey, BEA is making one change in the survey data items to collect data on equity- and debt- related underwriting transactions separately. This mandatory survey is conducted under the authority of the International Investment and Trade in Services Survey Act (the Act). Unlike most other BEA surveys conducted pursuant to the Act, a response is required from persons subject to the reporting requirements of the BE-180, Benchmark Survey of Financial Services Transactions between U.S. Financial Services Providers and Foreign Persons, whether or not they are contacted by BEA, to ensure Complete coverage of financial services transactions between U.S. financial services providers and foreign persons.

[Federal Register Volume 80, Number 97 (Wednesday, May 20, 2015)]
[Rules and Regulations]
[Pages 28818-28821]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-11996]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 801

[Docket No. 150108021-5409-01]
RIN 0691-AA84


International Services Surveys: BE-I80, Benchmark Survey of 
Financial Services Transactions Between U.S. Financial Services 
Providers and Foreign Persons

AGENCY: Bureau of Economic Analysis, Department of Commerce.

ACTION: Final rule.

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SUMMARY: This final rule amends regulations of the Bureau of Economic 
Analysis (BEA), Department of Commerce, to reinstate reporting 
requirements for the BE-180, Benchmark Survey of Financial Services 
Transactions between U.S. Financial Services Providers and Foreign 
Persons. Benchmark surveys are conducted every five years; the prior 
survey covered 2009. For the 2014 benchmark survey, BEA is making one 
change in the survey data items to collect data on equity- and debt-
related underwriting transactions separately. This mandatory survey is 
conducted under the authority of the International Investment and Trade 
in Services Survey Act (the Act). Unlike most other BEA surveys 
conducted pursuant to the Act, a response is required from persons 
subject to the reporting requirements of the BE-180, Benchmark Survey 
of Financial Services Transactions between U.S. Financial Services 
Providers and Foreign Persons, whether or not they are contacted by 
BEA, to ensure Complete coverage of financial services transactions 
between U.S. financial services providers and foreign persons.

DATES: This final rule is effective June 19, 2015.

FOR FURTHER INFORMATION CONTACT: Christopher Stein, Chief, Services 
Surveys Branch (BE-50), Balance of Payments Division, Bureau of 
Economic Analysis, U.S. Department of Commerce, Washington, DC 20230; 
phone (202) 606-9850.

SUPPLEMENTARY INFORMATION: On January 27, 2015, BEA published a notice 
of proposed rulemaking that set forth revised reporting criteria for 
the BE-180, Benchmark Survey of Financial Services Transactions between 
U.S. Financial Services Providers and Foreign Persons (80 FR 4228-
4231). BEA received four comments on the proposed rule.
    One comment was written on behalf of hedge fund managers who are 
subject to BE-180 reporting requirements. The letter stated that the 
BE-180 survey is not well suited to hedge funds and that, for these 
respondents, the burden of reporting is significant. The commenter made 
two recommendations: (1) Entities that are not contacted by BEA should 
have no reporting responsibilities (similar to other BEA surveys); and 
(2) BEA should not extend reporting by U.S. investment managers to 
other BEA surveys. BEA is very concerned about respondent burden and 
has employed several approaches to reduce the burden where possible. 
However, BEA does not adopt the above two recommendations because of 
the statistical needs that govern how the data are collected and 
tabulated. If BEA does not require responses from all persons subject 
to the reporting requirements of the BE-180, we could not ensure that a 
complete and accurate sample frame is maintained in the non-benchmark 
years. Thus, lack of this information in a benchmark year would result 
in incomplete data in our tabulated information in non-

[[Page 28819]]

benchmark years. To aid in communicating filing requirements, BEA will 
consider what additional guidance it can offer to hedge fund filers, 
possibly by providing expanded form instructions and Frequently Asked 
Questions (FAQs).
    Another comment was written on behalf of the international banking 
community in the United States. The letter requested that BEA adopt an 
accommodating approach to allow impacted companies adequate time to 
complete the BE-180 survey. As the BE-180 applies to a broader audience 
and has reporting requirements that differ from the related BE-185 
Quarterly Survey of Financial Services Transactions between U.S. 
Financial Services Providers and Foreign Persons, the commenter stated 
that additional time to comply was necessary to help alleviate the 
filing burden. To provide ample time for respondents to complete and 
file the BE-180 survey, BEA will accept filing extension requests 
through the October 1, 2015 due date. Respondents can request 
extensions of 30 days or less over the phone or in writing; requests of 
greater than 30 days must be provided in writing. Additionally, any 
respondent that chooses to file electronically through BEA's eFile 
system will automatically receive a 30 day extension.
    The third comment was written on behalf of the commercial energy 
industry and was concerned with the BE-180 definition of financial 
services provider. The commenter requested that BEA provide 
clarification with regard to what information should be reported by 
principals to commodity contracts. The commenter recommended that if 
BEA is unable to provide this clarification, the obligation to file the 
BE-180 should be limited only to those entities that are contacted by 
BEA. We will consider what additional guidance it can offer to clarify 
how commodity-related activities are to be reported, including expanded 
form instructions and FAQs.
    The final comment was written on behalf of asset management firms 
that are subject to BE-180 reporting requirements. The letter stated 
that the impact of the BE-I80 survey and the reporting burden for 
entities in this industry are significant. The commenter made three 
recommendations: (1) Entities that are not contacted by BEA should have 
no reporting responsibilities (similar to other BEA surveys); (2) BEA 
should raise the $3 million monetary threshold for mandatory reporting 
on the BE-180 of financial services transactions; and (3) BEA should 
provide additional guidance to asset managers in order to collect 
meaningful Survey data. BEA does not adopt the first recommendation 
because of the statistical needs that govern data collection and 
tabulation. As previously stated, BEA could not ensure that a complete 
and accurate sample frame is maintained in the non-benchmark years if 
we did not require responses from all persons subject to the reporting 
requirements of the BE-180, which is a benchmark survey. BEA does not 
adopt the second recommendation because the $3 million threshold for 
mandatory reporting on the BE-180 survey is necessary to ensure an 
accurate sample frame for the quarterly BE-I85 survey. Therefore, this 
threshold is unchanged from the previous benchmark survey. Regarding 
the third recommendation, BEA will consider what additional guidance it 
can offer to asset managers, possibly in the form of expanded 
instructions and FAQs, to aid in communicating the filing requirements.
    The change in data items collected (described in the Description of 
Changes section below) will be reflected in the final version of the 
BE-180 survey form.
    This final rule adds 15 CFR part 801.9 to set forth the reporting 
requirements for the BE-180, Benchmark Survey of Financial Services 
Transactions between U.S. Financial Services Providers and Foreign 
Persons. BEA conducts the BE-180 under the authority provided by the 
International Investment and Trade in Services Survey Act (22 U.S.C. 
3101-3108) and by Section 5408 of the Omnibus Trade and Competitiveness 
Act of 1988.
    By rule issued in 2012 (77 FR 24373), BEA established guidelines 
for collecting data on international trade in services and direct 
investment through notices, rather than through rulemaking. This final 
rule amends the regulations to require a response from persons subject 
to the reporting requirements of the BE-180, whether or not they are 
contacted by BEA, to ensure complete coverage of financial services 
transactions between U.S. financial services providers and foreign 
persons.
    The BE-180 survey covers financial services transactions with 
foreign persons. In non-benchmark years, the universe estimates 
covering these transactions are derived from the sample data reported 
on BEA's BE-185, Quarterly Survey of Financial Services Transactions 
between U.S. Financial Services Providers and Foreign Persons.
    The data are used by BEA to estimate the financial services 
component of the U.S. International Transactions Accounts and other 
economic accounts compiled by BEA. The data are needed to monitor U.S. 
exports and imports of financial services; analyze their impact on the 
U.S. and foreign economies; support U.S. international trade policy on 
financial services; and assess and promote U.S. competitiveness in 
international trade in services. In addition, these data will improve 
the ability of U.S. businesses to identify and evaluate market 
opportunities.
    The services covered by the BE-180 include the following 
transactions: (1) Brokerage services related to equity transactions; 
(2) other brokerage services; (3) underwriting and private placement 
services; (4) financial management services; (5) credit-related 
services, except credit card services; (6) credit card services; (7) 
financial advisory and custody services; (8) securities lending 
services; (9) electronic funds transfer services; and (10) other 
financial services.

Description of Changes From the 2009 BE-180 Survey

    The changes amend the regulations and the survey form for the BE-
180 Benchmark Survey of Financial Services Transactions between U.S. 
Financial Services Providers and Foreign Persons. These amendments 
include changes in the data items collected and questionnaire design. 
Under this final rule and unlike many other BEA surveys conducted 
pursuant to the Act, persons subject to the reporting requirements of 
the BE-180 are required to respond whether or not they are contacted by 
BEA. Also, we are adding one item to the 2014 BE-180 survey form to 
collect data on equity- and debt-related underwriting transactions 
separately. The 2009 BE-180 survey collected these transactions as a 
combined amount. Separate reporting of these transactions is needed to 
accurately remove equity- and debt-related underwriting fees from 
purchases and sales of equity and debt security transactions, which are 
reported inclusive of underwriting and brokerage fees. A number of 
reporters include language in their financial statements that suggests 
equity- and debt-related underwriting transactions are readily 
obtainable from their accounting records. In addition, BEA is 
redesigning the format and wording of the survey form. The new design 
incorporates cognitive design improvements made to other BEA surveys 
that improve the flow of the survey form and eliminate redundancies in 
the survey questions. Survey instructions and data item descriptions 
are being changed to improve clarity and to make the benchmark survey 
form more consistent with those of other BEA surveys.

[[Page 28820]]

Executive Order 12866

    This final rule has been determined to be not significant for 
purposes of E.O. 12866.

Executive Order 13132

    This final rule does not contain policies with Federalism 
implications sufficient to warrant preparation of a Federalism 
assessment under E.O. 13132.

Paperwork Reduction Act

    The collection of information in this final rule has been submitted 
to the Office of Management and Budget (OMB) under the Paperwork 
Reduction Act (PRA). OMB has pre-approved the information collection 
under OMB control number 0608-0062. Notwithstanding any other 
provisions of law, no person is required to respond to, nor shall any 
person be subject to a penalty for failure to comply with, a collection 
of information subject to the requirements of the PRA unless that 
collection displays a currently valid OMB control number.
    The BE-180 survey is expected to result in the filing of reports 
from approximately 8,750 respondents. Approximately 1,250 respondents 
would report mandatory or voluntary data on the survey and 
approximately 7,500 would file exemption claims. The respondent burden 
for this collection of information will vary from one respondent to 
another, but is estimated to average ten hours for the respondents that 
file mandatory or voluntary data-including time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information and two hours for other responses. Thus the 
total respondent burden for this survey is estimated at 27,500 hours, 
compared to 24,000 hours for the 2009 BE-180 survey. The increase in 
burden hours is due to an increase in the size of the respondent 
universe. Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-Information requirements contained in the 
final rule should be sent to both BEA via email at 
[email protected], and to OMB, via email at [email protected] 
or by FAX at (202) 395-7245.

Regulatory Flexibility Act

    The Chief Counsel for Regulation, Department of Commerce, certified 
at the proposed rule stage to the Chief Counsel for Advocacy, Small 
Business Administration, under the provisions of the Regulatory 
Flexibility Act, 5 U.S.C. 605(b), that this final rule will not have a 
significant economic impact on a substantial number of small entities. 
The factual basis for the certification was published in the proposed 
rule and is not repeated here.
    BEA received one comment on the impact on small entities. The 
commenter, writing on behalf of asset management firms, stated that the 
broad scope of the financial services collected on the BE-180 survey, 
and the fact that the $3 million mandatory reporting level applies 
separately to sales or purchases, will impact a larger number of small 
businesses than indicated by BEA. BEA is very concerned about 
respondent burden and only collects data from the broader group of 
filers on benchmark surveys that are conducted once every five years. 
BEA acknowledges that a larger number of asset managers may be required 
to complete the BE-180 survey as a result of the $3 million threshold. 
However, even with a larger number of entities being required to 
report, preparing and submitting the required data will not have a 
significant economic impact on any entity, large or small. While the 
resources required to respond to the survey will vary from one 
respondent to another, BEA estimates that it will take, on average, ten 
hours for the respondents that file mandatory or voluntary data, and 
two hours for other responses. These estimates include time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing, reviewing, and submitting 
the appropriate form. This rule has no other impact or regulatory 
burden beyond the one-time reporting of the required information. 
Therefore, even businesses required to provide mandatory data on the 
survey will only expend a minimal number of hours of staff time to 
comply, which does not constitute a significant economic impact. 
Because this rule will not have a significant economic impact on a 
substantial number of small entities, no FRFA is required and none has 
been prepared.

List of Subjects in 15 CFR Part 801

    International transactions, Economic statistics, Foreign trade, 
Penalties, Reporting and record keeping requirements, International 
Services.

    Dated May 12, 2015.
Brian C. Moyer,
Director, Bureau of Economic Analysis.

    For reasons set forth in the preamble, BEA amends 15 CFR part 801 
as follows:

PART 801--SURVEY OF INTERNATIONAL TRADE IN SERVICES BETWEEN U.S. 
AND FOREIGN PERSONS AND SURVEYS OF DIRECT INVESTMENT

0
1. The authority citation for 15 CFR part 801 continues to read as 
follows:

    Authority: 5 U.S.C. 301; 15 U.S.C. 4908; 22 U.S.C. 3101-3108; 
E.O. 11961 (3 CFR, 1977 Comp., p. 86), as amended by E.O. 12318 (3 
CFR, 1981 Comp. p. 173); and E.O. 12518 (3 CFR, 1985 Comp. p. 348).


0
2. Revise Sec.  801.3 to read as follows:


Sec.  801.3  Reporting requirements.

    Except for surveys subject to rulemaking in Sec. Sec.  801.7, 801.8 
and 801.9, reporting requirements for all other surveys conducted by 
the Bureau of Economic Analysis shall be as follows:
    (a) Notice of specific reporting requirements, including who is 
required to report, the information to be reported, the manner of 
reporting, and the time and place of filing reports, will be published 
by the Director of the Bureau of Economic Analysis in the Federal 
Register prior to the implementation of a survey;
    (b) In accordance with section 3104(6)(2) of title 22 of the United 
States Code, persons notified of these surveys and subject to the 
jurisdiction of the United States shall furnish, under oath, any report 
containing information which is determined to be necessary to carry out 
the surveys and studies provided for by the Act; and
    (c) Persons not notified in writing of their filing obligation by 
the Bureau of Economic Analysis are not required to complete the 
survey.

0
3. Add Sec.  801.9 to read as follows:


Sec.  801.9  Rules and regulations for the BE-180, Benchmark Survey of 
Financial Services Transactions between U.S. Financial Services 
Providers and Foreign Persons--2014.

    A BE-180, Benchmark Survey of Financial Services Transactions 
between U.S. Financial Services Providers and Foreign Persons will be 
conducted covering 2014. All legal authorities, provisions, 
definitions, and requirements contained in Sec. Sec.  801.1 through 
801.2 and 801.4 through 801.6 are applicable to this survey. Specific 
additional rules and regulations for the BE-180 survey are given in 
paragraphs (a) through (e) of this section. More detailed instructions 
are given on the report forms and in instructions accompanying the 
report forms.
    (a) Response required. A response is required from persons subject 
to the reporting requirements of the BE-180, Benchmark Survey of 
Financial Services

[[Page 28821]]

Transactions between U.S. Financial Services Providers and Foreign 
Persons--2014, contained herein, whether or not they are contacted by 
BEA to ensure complete coverage of financial services transactions 
between U.S. financial services providers and foreign persons. Also, a 
person, or its agent, that is contacted by BEA about reporting in this 
survey, either by sending a report form or by written inquiry, must 
respond in writing pursuant to this section. This may be accomplished 
by:
    (1) Completing and returning the BE-180 survey by the due date; or,
    (2) If exempt, by completing pages one through five of the BE-180 
survey and returning them to BEA.
    (b) Who must report. (1) A BE-180 report is required of each U.S. 
person that is a financial services provider or intermediary, or whose 
consolidated U.S. enterprise includes a separately organized 
subsidiary, or part, that is a financial services provider or 
intermediary, and that had transactions (either sales or purchases) 
directly with foreign persons in all financial services combined in 
excess of $3,000,000 during its fiscal year covered by the survey on an 
accrual basis. The $3,000,000 threshold should be applied to financial 
services transactions with foreign persons by all parts of the 
consolidated U.S. enterprise combined that are financial services 
providers or intermediaries. Because the $3,000,000 threshold applies 
separately to sales and purchases, the mandatory reporting requirement 
may apply only to sales, only to purchases, or to both.
    (i) The determination of whether a U.S. financial services provider 
or intermediary is subject to this mandatory reporting requirement may 
be based on the judgment of knowledgeable persons in a company who can 
identify reportable transactions on a recall basis, with a reasonable 
degree of certainty, without conducting a detailed manual records 
search.
    (ii) Reporters that file pursuant to this mandatory reporting 
requirement must provide data on total sales and/or purchases of each 
of the covered types of financial services transactions and must 
disaggregate the totals by country and by relationship to the foreign 
transactor (foreign affiliate, foreign parent group, or unaffiliated).
    (2) Voluntary reporting. If, during the fiscal year covered, sales 
or purchases of financial services by a firm that is a financial 
services provider or intermediary, or by a firm's subsidiaries, or 
parts, combined that are financial services providers or 
intermediaries, are $3,000,000 or less, the U.S. person is requested to 
provide an estimate of the total for each type of service. Provision of 
this information is voluntary. The estimates may be judgmental, that 
is, based on recall, without conducting a detailed records search. 
Because the $3,000,000 threshold applies separately to sales and 
purchases, this voluntary reporting option may apply only to sales, 
only to purchases, or to both.
    (3) Exemption claims. Any U.S. person that receives the BE-180 
survey form from BEA, but is not subject to the mandatory reporting 
requirements and chooses not to report voluntarily, must file an 
exemption claim by completing pages one through five of the BE-180 
survey and returning it to BEA. This requirement is necessary to ensure 
compliance with reporting requirements and efficient administration of 
the Act by eliminating unnecessary follow-up contact.
    (c) BE-180 definition of financial services provider. The 
definition of financial services provider used for this survey is 
identical to the definition of the term as used in the North American 
Industry Classification System, United States, 2012, Sector 52--Finance 
and Insurance, and holding companies that own or influence, and are 
principally engaged in making management decisions for these firms 
(part of Sector 55--Management of Companies and Enterprises). For 
example, companies and/or subsidiaries and other separable parts of 
companies in the following industries are defined as financial services 
providers: Depository credit intermediation and related activities 
(including commercial banking, savings institutions, credit unions, and 
other depository credit intermediation); non-depository credit 
intermediation (including credit card issuing, sales financing, and 
other non-depository credit intermediation); activities related to 
credit intermediation (including mortgage and nonmortgage loan brokers, 
financial transactions processing, reserve, and clearinghouse 
activities, and other activities related to credit intermediation); 
securities and commodity contracts intermediation and brokerage 
(including investment banking and securities dealing, securities 
brokerage, commodity contracts and dealing, and commodity contracts 
brokerage); securities and commodity exchanges; other financial 
investment activities (including miscellaneous intermediation, 
portfolio management, investment advice, and all other financial 
investment activities); insurance carriers; insurance agencies, 
brokerages, and other insurance related activities; insurance and 
employee benefit funds (including pension funds, health and welfare 
funds, and other insurance funds); other investment pools and finds 
(including open-end investment funds, trusts, estates, and agency 
accounts, real estate investment trusts, and other financial vehicles); 
and holding companies that own, or influence the management decisions 
of, firms principally engaged in the aforementioned activities.
    (d) Covered types of services. The BE-180 survey covers the 
following types of financial services transactions (sales or purchases) 
between U.S. financial services companies and foreign persons: 
brokerage services related to equity transactions; other brokerage 
services; underwriting and private placement services; financial 
management service (including fees for mutual funds, pension funds, 
exchange-traded funds, private equity funds, corporate portfolio, 
individual portfolio, hedge funds, trusts, and other); credit related 
services, except credit card services; credit card services; financial 
advisory and custody services; securities lending services; electronic 
funds transfer services; and other financial services.
    (e) Due date. A fully completed and certified BE-180 report, or 
qualifying exemption claim with pages one through five completed, is 
due to be filed with BEA not later than October 1, 2015.
[FR Doc. 2015-11996 Filed 5-19-15; 8:45 am]
 BILLING CODE 3510-06-M