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Tax News
TIC Form SLT: Yet another Treasury form befalls the investment fund industry
May 11, 2011
Administrative Actions
This form comes courtesy of Treasury’s latest effort to ensure more timely and accurate measurement of aggregate holdings of long-term securities.  The concept here is not new. Some investment managers surely are familiar with the TIC reporting.  Treasury International Capital (TIC) already requires monthly data on holdings of short-term securities, on purchases and sales of long-term securities, and annual data on holdings of long-term securities (via the so called TIC S Forms, including Forms S, SHC, SHCA, SHL, and SHLA).  As Treasury explains, now, certain funds, investment managers and custodians such as securities brokers will have to report long-term securities on a monthly basis to the Federal Reserve on this new TIC Form SLT. Per the latest updates from Treasury, the required reporting will begin as of September 30, 2011, instead of the previously announced June 30 date.  Per Treasury’s explanations, reportable long-term securities include: (1) U.S. securities held by U.S.-resident custodians on behalf of foreign residents; (2) foreign securities held by U.S.-resident custodians on behalf of U.S. residents; (3) U.S. securities issued by U.S.-resident issuers in foreign markets and held directly by foreign residents, i.e., where no U.S.-resident custodian or U.S.-resident central securities depository is used by the U.S.-resident issuer; and (4) foreign securities held directly by U.S.-resident end-investors, i.e., where no U.S.-resident custodian is used by the U.S.- resident end-investor.  There are two notable exceptions.  First, the reporting applies only to reporting entities that hold on consolidated basis (own account + customers) long-term securities with fair value of over $1 billion, and two,  no reporting is required for securities held as part of a direct investment relationship.

This new form does not have any particular tax implication, but I thought that it was important to mention it here on the website, because it seems to add to a notable trend of bombardment of the investment industry with all kinds of new forms and reporting requirements. FATCA has been discussed several times on this blog, and in addition, new reporting requirements were discussed here. As always, not knowing about the requirements, or not reporting in compliance with the requirements, could lead to penalties, and in egregious circumstances, criminal sanctions. The TIC Form SLT notice and the draft form are attached below.

Draft Form

Form SLT Notice
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Tags: reporting of long term securities, TIC Form SLT, TIC S Form