SHC Form Filing Deadline Coming Soon – Finance and Banking

Every five years, the Treasury Department, with the assistance of the Board of Governors of the Federal Reserve Bank of New York (“FRBNY“), performs its mandatory benchmark survey of U.S. ownership of foreign securities on its Treasury International Capital Form SHC (“CSS form“). The data collected is used by the government, among other things, to formulate international economic and financial policies by considering the international investment position of the United States as a whole. Under this record, various investment managers, custodians, and other end investors are required to file this Form SHC via the FRBNY by March 4, 2022.

WHO IS REQUIRED TO SUBMIT AN SHC FORM?

Form SHC must be filed by U.S. persons or organizations with reportable foreign securities equal to or greater than $200 million (as of December 31, 2021). Very generally, there are currently three categories of parties required to file:

1. U.S. resident custodians responsible for the safekeeping of $200 million or more in reportable foreign securities;




2. U.S. resident end investors who own or manage $200 million or more in reportable foreign securities; and




3. Any other entity specifically notified by FRBNY mail.

For more information on who should file an SHC form, please see the SHC form and instructions which can be found here.

HOW IS THE SHC FORM ORGANIZED?

The SHC form is made up of three parts:

• Annex 1 asks for basic identification information of the declarant as well as summary information regarding the data declared in Annexes 2 and 3 (if applicable).




• Appendix 2 requests details of foreign securities held by US resident investors (i) which the declarant maintains in safekeeping for itself or its US resident clients, (ii) for which the declarant directly employs – foreign resident depositories or – resident or foreign central securities depositories to manage the safekeeping of these securities or (iii) which are instruments of the type where there is no US depository to manage the safekeeping of these securities.




• Schedule 3 requests summary amounts for all foreign securities held by a US-resident depositary (which is not a US-resident central securities depository).

For more information on who should report on each of these three parts, a copy of the SHC form and instructions can be found here.

WHAT ARE FOREIGN SECURITIES TO DECLARE?

The only securities that need to be reported on Form SHC are foreign securities (including, but not limited to, foreign stocks, short-term debt securities, and long-term debt securities). Foreign securities are all securities issued by entities incorporated under the laws of a foreign country and all securities issued by international or regional organizations (for example, the International Bank for Reconstruction and Development and the Inter-American Bank of development), even if these organizations are physically located in the United States. Reportable securities may be traded or issued in the United States and foreign countries and may be denominated in any currency. Neither the country in which the securities are traded or issued nor the currency in which the securities are denominated is relevant in determining whether the securities are reportable.

For more details on the types of foreign securities to report, please see the instructions for the SHC form available here.

WHEN TO DEPOSIT?

In order to file, registrants should ensure they have the required 10-digit Journalist ID number assigned by the FRBNY as soon as possible. Filers can obtain a Journalist ID by contacting FRBNY staff at 212-720-6300 or [email protected].

Form SHC data must be filed with the Federal Reserve Bank of New York on or before March 4, 2022. Relevant data must be recorded as of December 31, 2021.

A copy of the SHC form and related instructions can be found here.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.