The Bureau of Economic Analysis’ (BEA) 2019 benchmark survey1 of financial services transactions between U.S. financial services providers and foreign persons is due on October 30, 2020, for respondents who submit their form through eFile, the BEA’s electronic filing system.
Who is required to complete the Form BE-180?
Any U.S. person that is a financial services provider that had financial services transactions in covered services with foreign persons during the 2019 fiscal year is required to complete the BE-180 survey. U.S. persons that did not have such transactions with foreign persons are required to complete a partial BE-180 survey, if notified by BEA about the survey.
The definition of covered services is far-reaching. It includes the following types of financial services transactions between U.S. financial services providers and foreign persons: brokerage services, underwriting and private placement services, financial management services, credit-related services, financial advisory and custody services, securities lending services, electronic funds transfer services, and certain other financial services. U.S. financial services providers include U.S. fund managers and U.S. funds.
Therefore, U.S. persons who provided or received investment advisory services, or fund management or brokerage services, for example, to or from foreign persons during 2019 must complete and file the survey. More specifically, a U.S. private fund manager that received management fees and/or incentive fees/allocations from non-U.S. funds in 2019 may have a Form BE-180 filing requirement. Similarly, a U.S. private fund that paid management fees/incentive fees or made incentive allocations to foreign investment managers in 2019 may also have a Form BE-180 filing requirement. Furthermore, compensation paid by a U.S. private fund for brokerage services received from a foreign broker-dealer and compensation paid by a U.S. private fund manager to a foreign sub-adviser or placement agent are relevant for Form BE-180 reporting.
What type of information is required to be reported?
U.S. persons that engaged in financial services transactions in covered services directly with foreign persons, that exceeded $3 million for its 2019 fiscal year on an accrual basis, are required to provide data on total sales and/or purchases for each type of covered services transaction and must disaggregate the totals by country and by relationship to the foreign client or service provider (affiliate, parent group, or unaffiliated). U.S. persons that engaged in financial services transactions in covered services directly with foreign persons, that were $3 million or less for its 2019 fiscal year on an accrual basis, are required to provide data regarding the total sales and/or purchases for each type of covered services transaction in which they engaged.
Are there any exemptions from the requirement to complete the survey?
Yes. U.S. financial services providers may be exempt from filing Form BE-180 if one of the following conditions is satisfied. The U.S. financial services provider: (i) had no reportable transactions during the 2019 fiscal year; (ii) was not in existence during the 2019 fiscal year; (iii) was owned more than 50 percent by another U.S. entity during the 2019 fiscal year; or (iv) is filing under a different U.S. identification number.
Any U.S. person that receives a BE-180 survey notification letter from BEA, but is not subject to the reporting requirements, must nevertheless file an exemption claim by completing the “Determination of Reporting Status” section of the survey and returning it to the BEA by the filing due date. The exemption claim is required to ensure compliance with reporting requirements.
What is the data from the survey used for?
The data is used (i) in gathering the U.S. international transactions accounts and national income and product accounts and (ii) to devise U.S. policy on such international transactions and evaluate the impact of said policy and the policies of foreign countries.
Please contact one of the listed authors of this Client Alert or your regular Lowenstein Sandler contact if you have any questions regarding the Form BE-180 or would like assistance completing the survey.
1 Form BE-180 is a mandatory survey conducted every five years under the International Investment and Trade Services Survey Act and Section 5408 of the Omnibus Trade and Competitiveness Act of 1988.