The U.S. Department of the Treasury (Treasury) published a notice to the public on Dec. 8, 2021, that it is commencing a mandatory survey of foreign securities ownership beginning Dec. 31, 2021. The survey is mandatory for all U.S. persons with foreign securities totaling $200 million or more as of Dec. 31, 2021.
All U.S. persons (this broad term is explained in more detail below) must report their foreign security ownership through Treasury's survey if they manage or own foreign securities that, aggregated together over all accounts and for all U.S. branches of affiliates, total $200 million or more.1 The requirement of ownership or management covers U.S. persons who act as custodians of foreign securities and those who own in portfolios or invest on behalf of others, such as investment fund sponsors. If this minimum ownership level describes your business, completion of Treasury's survey is mandatory.
Alternatively, the survey must be completed upon receipt of a letter from the Federal Reserve Bank of New York instructing the U.S. person to complete the survey. If, after receiving a letter, the U.S. person's assets do not meet the reporting threshold, a response to the survey must still be submitted, noting that the U.S. person is "exempt."
In this context, the term "U.S. person" refers to any individual, entity, business or government (whether or not from the United States) that is resident in the United States or subject to U.S. jurisdiction.2 This overly broad definition captures a larger than expected group from a variety of industries and business types. The term "foreign securities" includes equities, long-term debt securities and short-term debt securities (including selected money market instruments).
In sum, individuals and businesses that own foreign securities should carefully assess their securities to determine whether the mandatory reporting requirement applies to their holdings.
Notes
1 A response is mandatory under U.S. law, 22 U.S.C. § 3101 et seq. The law gives the U.S. president the power to collect information on international investment and U.S. foreign trade, including from the general public.
2 For more detail on who is included in this definition, see 22 U.S.C. § 3102(3) and (4).
