International Services Surveys: BE-180 Benchmark Survey of Financial Services Transactions Between U.S. Financial Services Providers and Foreign Persons
| Citation | 85 FR 31050 |
| Record Number | 2020-10166 |
| Published date | 22 May 2020 |
| Section | Rules and Regulations |
| Court | Economic Analysis Bureau |
Federal Register, Volume 85 Issue 100 (Friday, May 22, 2020)
[Federal Register Volume 85, Number 100 (Friday, May 22, 2020)]
[Rules and Regulations]
[Pages 31050-31053]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10166]
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DEPARTMENT OF COMMERCE
Bureau of Economic Analysis
15 CFR Part 801
[200507-0130]
RIN 0691-AA90
International Services Surveys: BE-180 Benchmark Survey of
Financial Services Transactions Between U.S. Financial Services
Providers and Foreign Persons
AGENCY: Bureau of Economic Analysis, Commerce.
ACTION: Final rule.
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SUMMARY: This final rule amends regulations of the Department of
Commerce's Bureau of Economic Analysis (BEA) to renew reporting
requirements for the mandatory BE-180 Benchmark Survey of Financial
Services Transactions between U.S. Financial Services Providers and
Foreign Persons. This survey applies to the 2019 fiscal reporting year.
This mandatory benchmark survey, conducted under the authority of the
International Investment and Trade in Services Survey Act, covers the
universe of transactions in financial services and is BEA's most
comprehensive survey of such transactions. For the 2019 benchmark
survey, BEA is making several changes in the data items collected and
the design of the survey form.
DATES: This final rule is effective June 12, 2020.
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, 4600 Silver Hill Rd.,
Washington, DC 20233; email [email protected] or phone (301)
278-9189.
SUPPLEMENTARY INFORMATION: On February 25, 2020, BEA published a notice
of proposed rulemaking that set forth the revised reporting criteria
for the BE-180 Benchmark Survey of Financial Services Transactions
between U.S. Financial Services Providers and Foreign Persons (85 FR
10628). This final rule amends 15 CFR part 801 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.
The BE-180 Benchmark Survey of Financial Services Transactions
between U.S. Financial Services Providers and Foreign Persons is a
[[Page 31051]]
mandatory survey and is conducted once every five years by BEA under
the authority provided by the International Investment and Trade in
Services Survey Act (Pub. L. 94-472, 90 Stat. 2059, 22 U.S.C. 3101-
3108, as amended) (the Act), and by Section 5408 of the Omnibus Trade
and Competitiveness Act of 1988 (15 U.S.C. 4908(b)). The Act provides
that data reported to BEA on this survey are confidential and may be
used only for analytical and statistical purposes. Without prior
written permission from the survey respondent, the data collected
cannot be presented in a manner that allows individual responses to be
identified. An individual respondent's report cannot be used for
purposes of taxation, investigation, or regulation. Copies retained by
BEA are exempt from legal process. Per the Federal Cybersecurity
Enhancement Act of 2015 (Division N, Title II, Subtitle B, Pub. L. 114-
113), a respondent's data are protected from cybersecurity risks
through security monitoring of the BEA information systems.
A response is required from persons subject to the reporting
requirements of the BE-180, whether or not they are contacted by BEA,
to ensure complete coverage of transactions in financial services
between U.S. persons (any individual or organization subject to the
jurisdiction of the United States) and foreign persons.
In 2012, BEA established regulatory guidelines for collecting data
on international trade in services and direct investment (77 FR 24373;
April 24, 2012). This final rule, as published, would amend those
regulations to require a response from persons subject to the reporting
requirements of the BE-180, whether or not they are contacted by BEA.
The BE-180 benchmark survey is intended to cover the universe of
financial services transactions of U.S. financial services companies
with foreign persons and is BEA's most comprehensive survey of such
transactions. In nonbenchmark years, the universe of 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 BE-185 and the
BE-180 collect similar information. BEA uses cutoff sampling for the
BE-185, meaning that respondents must report on the BE-185 only if they
had combined sales to foreign persons that exceeded $20 million or
combined purchases from foreign persons that exceeded $15 million in
any one of the 10 covered financial services transaction categories
during fiscal year 2019. The sample of respondents that file on a
quarterly basis throughout fiscal year 2019 will also be required to
report on the 2019 BE-180 survey. BEA reconciles the annual data from
the BE-180 survey with the quarterly data reported on the BE-185 survey
by comparing quarterly to annual submissions that are typically
completed using audited information.
The benchmark data, which includes data from respondents not
subject to filing on an ongoing quarterly basis, will be used, in
conjunction with quarterly data collected on the companion BE-185
survey, to produce quarterly estimates of financial services
transactions for BEA's international transactions accounts, national
income and product accounts, and industry accounts. The data collected
through the BE-180 are also used to monitor U.S. trade in financial
services, to analyze the impact of U.S. trade in financial services on
the U.S. economy and on foreign economies, to compile and improve the
U.S. economic accounts, to support U.S. commercial policy on trade in
services, to conduct trade promotion activities, and to improve the
ability of U.S. businesses to identify and evaluate market
opportunities.
A full list of the financial services transactions covered by the
BE-180 survey can be found in the regulatory text of this final rule in
new Sec. 801.13(g). This includes brokerage services, underwriting and
private placement services related to equity transactions and debt
transactions, financial management services, credit-related services,
credit card services, financial advisory and custody services,
securities lending services, electronic funds transfer services, and
other financial services.
Description of Changes
This final rule amends the regulations at 15 CFR part 801 by adding
new Sec. 801.13 to set forth the reporting requirements for the BE-180
benchmark survey, and amends the survey form for the BE-180 benchmark
survey to satisfy changing data needs and to improve data quality and
the effectiveness and efficiency of data collections. These amendments
include several changes in data items collected and the design of the
survey form relative to the 2014 benchmark survey.
BEA changes the reporting requirements for respondents with
transactions in covered services below the threshold for mandatory
reporting on the schedule(s) of the survey ($3 million in combined
sales and/or purchases for fiscal year 2019). For the 2019 BE-180, all
respondents, regardless of the amount of their transactions in covered
services are required to provide a total dollar amount for their sales
and purchases, as applicable, by transaction type.
BEA adds the following items to the benchmark survey form:
(1) Question to request the Legal Entity Identifier (LEI) of the
survey respondent. Respondents will be asked to provide their
20[hyphen]digit LEI, if they have one. Obtaining an LEI is not required
for the purpose of filing the survey.
(2) Questions to collect financial management transactions by type
of account. Respondents who had financial management transactions
during the fiscal year will be required to disaggregate these
transactions, for both sales and purchases, as applicable, by type of
account (for example, mutual funds; pension funds; exchange-traded
funds; private equity funds; corporate portfolio; individual portfolio;
hedge funds; and trusts).
(3) Questions about the timing of performance fees. Respondents who
had financial management transactions during fiscal year 2019 will be
required to provide additional information about whether these
transactions included fees that are tied to performance and, if so,
about the timing of those performance fees. Respondents with
performance fees (receipts and/or payments) during fiscal year 2019
will be required to distribute them, in a table, based on the
quarter(s) in which they were received and/or paid.
(4) Mandatory questions to collect information on financial
services that were conducted remotely, e.g., where both the supplier
and the consumer were in different territories when the service was
delivered. This information will be collected for both sales of
services performed remotely for foreign persons and for purchases of
services performed remotely by foreign persons. For transactions in the
financial services categories covered by the survey, respondents will
be required to check one of several boxes identifying the percentage of
their transactions that were conducted remotely, and to identify if
this information was sourced from their accounting records or from
recall/general knowledge. Respondents will also be required to check
one of two boxes identifying how the remainder of the services not
reported as 100% remotely transacted were typically performed (e.g., by
the provider traveling to the consumer or by the consumer traveling to
the provider).
(5) A question to identify respondents engaged in transactions
related to
[[Page 31052]]
cryptocurrency. BEA adds a single question asking respondents to
identify, of their 2019 cross-border financial services reported in the
required transaction categories, if any were related to cryptocurrency
activities.
In addition, BEA has redesigned the format and wording of the
survey. The new survey design incorporates improvements that have been
made to other BEA surveys. Some improvements are the result of a recent
review conducted with selected survey respondents during the planning
for the 2017 BE-120 Benchmark Survey of Transactions in Selected
Services and Intellectual Property with Foreign Persons. BE-180
Benchmark Survey instructions and data item descriptions have been
changed to improve clarity and ensure that the survey form is
consistent with other BEA surveys.
Change to the Regulatory Text of the Proposed Rule
BEA received one comment on the proposed rule which was generally
supportive of the rule. The commenter made one suggestion which was
outside of the scope of this rulemaking which may be considered for
future applications.
We note that we have made a change to paragraph (h), entitled ``Due
date'', in new Sec. 801.13, as found in the regulatory text of the
proposed rule. The phrase ``July 31, 2020 (or by August 31, 2020 for
respondents that use BEA's eFile system)'' has been replaced with
``September 30, 2020 (or by October 30, 2020 for respondents that use
BEA's eFile system).'' BEA made this change in this final rule to
provide respondents additional time to comply with the requirements of
the new section.
Executive Order 12866
This final rule has been determined to be not significant for
purposes of Executive Order 12866. This rule is not an Executive Order
13771 regulatory action because this rule is not significant for
purposes of Executive Order 12866.
Executive Order 13132
This final rule does not contain policies with Federalism
implications sufficient to warrant preparation of a Federalism
assessment under Executive Order 13132.
Paperwork Reduction Act
The collection-of-information in this final rule was submitted to
the Office of Management and Budget (OMB) pursuant to the Paperwork
Reduction Act of 1995, 44 U.S.C. 3501-3520 (PRA). OMB approved the
reinstatement, with change, of 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 7,000 respondents. Approximately 5,500 respondents
would report mandatory data on the survey, and approximately 1,500
would file exemption claims. The respondent burden for this collection
of information would vary from one respondent to another, but is
estimated to average (1) 11 hours for the 1,875 respondents that file
mandatory or voluntary data by country and affiliation for relevant
transaction types on the mandatory schedules; (2) 2 hours for the 3,625
respondents that file mandatory data by transaction type but not by
country or affiliation; and (3) 1 hour for the 1,500 exemption claims.
These burden-hour estimates consider time for reviewing instructions,
searching existing data sources, gathering and maintaining the data
needed, and completing and reviewing the collection of information.
Thus, the total respondent burden for this survey is estimated at
29,375 hours, or approximately 4 hours per response (29,375 hours/7,000
respondents), compared to 27,500 hours, or about 3 hours per response
(27,500 hours/8,750 respondents) for the 2014 BE-180 benchmark survey.
The increase in burden hours is due to estimated changes in the
expected response composition of the respondent universe from 2014 to
2019, as well as changes in the content of the survey.
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, O.I.R.A., Paperwork Reduction
Project 0608-0073, Attention PRA Desk Officer for BEA, Kerrie Leslie,
via email at [email protected].
Regulatory Flexibility Act
The Chief Counsel for Regulation, Department of Commerce, certified
to the Chief Counsel for Advocacy, Small Business Administration, at
the proposed rule stage that this action will not have a significant
economic impact on a substantial number of small entities. No comments
were received on that certification or on the economic impacts of this
rule more generally. Therefore, no regulatory flexibility analysis is
required and none has been prepared.
List of Subjects in 15 CFR Part 801
Economic statistics, Foreign trade, International transactions,
Penalties, Reporting and recordkeeping requirements.
Dated: May 7, 2020.
Paul W. Farello,
Associate Director of International Economics, 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, 801.9, 801.10, 801.11, 801.12, and 801.13, 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(b)(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. 801.13 to read as follows:
[[Page 31053]]
Sec. 801.13 Rules and regulations for the BE-180 Benchmark Survey of
Financial Services Transactions between U.S. Financial Services
Providers and Foreign Persons--2019.
The BE-180 Benchmark Survey of Financial Services Transactions
between U.S. Financial Services Providers and Foreign Persons will be
conducted covering fiscal year 2019. All legal authorities, provisions,
definitions, and requirements contained in Sec. Sec. 801.1 and 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 form and in instructions accompanying the
report form.
(a) Response required. 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--2019, contained herein, whether or not
they are contacted by BEA. Also, a person, or its agent, that is
contacted by BEA about reporting on 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 by the due date of the
survey; or
(2) If exempt, by completing the determination of reporting status
section of the BE-180 survey and returning it to BEA by the due date of
the survey.
(b) Who must report. 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 financial services transactions with foreign
persons in the categories covered by the survey during its 2019 fiscal
year.
(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 funds
(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) What must be reported. (1) A U.S. person that had combined
sales to, or purchases from, foreign persons that exceeded $3 million
in the financial services categories covered by the survey during its
2019 fiscal year, on an accrual basis, is required to provide data on
total sales and/or purchases of each of the covered types of financial
services and must disaggregate the totals by country and by
relationship to the foreign transactor (foreign affiliate, foreign
parent group, or unaffiliated). The determination of whether a U.S.
financial services provider is subject to this reporting requirement
can 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.
(2) A U.S. person that had combined sales to, or purchases from,
foreign persons that were $3 million or less in the financial services
categories covered by the survey during its 2019 fiscal year, on an
accrual basis, is required to provide the total sales and/or purchases
for each type of transaction in which they engaged. The $3 million
threshold for sales and purchases should be applied to financial
services transactions with foreign persons by all parts of the
consolidated domestic U.S. Reporter. Because the $3 million threshold
applies separately to sales and purchases, the mandatory reporting
requirement may apply only to sales, only to purchases, or to both.
(e) Voluntary reporting of financial services transactions. If,
during fiscal year 2019, combined sales and purchases were $3 million
or less, on an accrual basis, the U.S. person may, in addition to
providing the required total for each type of transaction, report sales
at a country and affiliation level of detail on the applicable
mandatory schedule(s). The estimates can be judgmental, that is, based
on recall, without conducting a detailed records search.
(f) Exemption claims. Any U.S. person that receives the BE-180
survey form from BEA, but is not subject to the reporting requirements,
must file an exemption claim by completing the determination of
reporting status section of the BE-180 survey and returning it to BEA
by the due date of the survey. This requirement is necessary to ensure
compliance with reporting requirements and efficient administration of
the Act by eliminating unnecessary follow-up contact.
(g) Covered types of financial services. Financial services covered
by the BE-180 survey consist of transactions between U.S. financial
services companies and foreign persons for:
(1) Brokerage services related to equity transactions;
(2) Other brokerage services;
(3) Underwriting and private placement services related to equity
transactions;
(4) Underwriting and private placement services related to debt
transactions;
(5) Financial management services;
(6) Credit-related services, except credit card services;
(7) Credit card services;
(8) Financial advisory and custody services;
(9) Securities lending services;
(10) Electronic funds transfer services; and
(11) Other financial services.
(h) Due date. A fully completed and certified BE-180 report, or
qualifying exemption claim with the determination of reporting status
section completed, is due to be filed with BEA not later than September
30, 2020 (or by October 30, 2020 for respondents that use BEA's eFile
system).
[FR Doc. 2020-10166 Filed 5-21-20; 8:45 am]
BILLING CODE 3510-06-P
