Académique Documents
Professionnel Documents
Culture Documents
Debra Kuntz
Overview
5
History
6
Changes Required
7
Changes Implemented
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EDRS
system
➤ Greater transparency required in an integrated
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EDRS
10
EDRS
12
Institute of International Finance
Recommendations
➤ International organizations
➤ U.S. Government
➤ Academic research
14
Uses
exposure
➤ Reduced net debtor position
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Uses
data editing
➤ June 2002 data decreased estimated level of
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Increasingly Important
bank lending
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Summary
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Who Must Report
Richard McGee
Who Must Report
21
Who Must Report
➤ Exemption Level
➤ The exemption level is determined on a
consolidated basis
➤ All areas of an organization must be taken into
consideration and their holdings aggregated
➤ Subsidiaries
➤ Affiliates
➤ Custodial business
➤ Foreign issuances
22
Who Must Report
➤ Exemption Level
➤ U.S.-resident entities must report detailed
Schedule 2 information if the total fair market
value of all reportable U.S. securities owned by
foreign residents meets or exceeds $100
million.
➤ If your organization meets or exceeds the
exemption level and did not receive a copy of
the instruction booklet you are still required to
file. 23
Who Must Report
➤ Categories of reporters
➤ U.S.-resident custodians
➤ U.S.-resident central securities depositories
➤ U.S.-resident issuers
25
Proper Classification of U.S. and
Foreign
➤ Definition of United States
➤ The fifty states of the United States
➤ The District of Columbia
➤ The Commonwealth of Puerto Rico
➤ American Samoa, Baker Island, Guam, Howland
Island, Jarvis Island, Johnston Atoll, Kingman Reef,
Midway Island, Navassa Island, Northern Mariana
Islands, Palmyra Atoll, U.S. Virgin Islands, and Wake
Island
26
Proper Classification of U.S. and
Foreign
➤ subsidiaries
27
Proper Classification of U.S. and
Foreign
➤ www.treas.gov
28
Proper Classification of U.S. and
Foreign
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Proper Classification of U.S. and
Foreign
➤ How to determine residency
➤ Citizenship does not determine residency
➤ Tax forms
➤ W-8 forms are filed by foreign residents
➤ Mailing address
30
Proper Classification of U.S. and
Foreign
➤ Examples of U.S. ➤ Examples of non-U.S.
residents residents
➤ Bayerische ➤ Bank of New York
Landesbank NY Tokyo Branch
Branch ➤ BP p.l.c.
➤ BP America Inc. ➤ GMAC Canada
➤ General Motors ➤ International Bank for
Corporation (includes Reconstruction and
GMAC) Development (IBRD;
➤ KfW International World Bank)
Finance, Inc.
31
Proper Classification of U.S. and
Foreign
➤ Reporting organization
➤ Report all U.S. securities issued directly to
foreigners (that is, no U.S.-resident custodian is
used) by all U.S.-resident parts of your
organization
➤ U.S.-resident branches
➤ U.S.-resident offices
➤ U.S.-resident subsidiaries
32
Proper Classification of U.S. and
Foreign
➤ Holders of securities
➤ Non-U.S.-resident clients
➤ Non-U.S.-resident custodians
➤ Non-U.S.-resident central securities depositories
➤ Non-U.S-resident parts of your organization
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Categories of Reporters
➤ U.S.-resident custodians
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Categories of Reporters
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Categories of Reporters
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Categories of Reporters
➤ Schedule 2 reporting:
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Categories of Reporters
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Categories of Reporters
➤ U.S.-resident issuers
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Categories of Reporters
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Categories of Reporters
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Who Must Report
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Who Must Report
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Who Must Report
Foreign-Resident U.S.-Resident
Custodian Custodian
U.S.-Resident U.S.-Resident
Issuer Custodian
Brian Mullarkey
U.S. Securities
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U.S. Securities
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U.S. Securities
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U.S. Securities
Example 1
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U.S. Securities
Example 1 Answer
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U.S. Securities
Example 2 Answer
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U.S. Securities
Example 3
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U.S. Securities
Example 3 Answer
➤ U.S. dollar-denominated asset-backed security issued
by Company B incorporated in Hong Kong and
guaranteed by the parent, Company A, incorporated in
the United States.
➤ Equity
➤ Short-Term Debt
➤ Long-Term Debt
➤ Asset-Backed Securities
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Equity
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Equity
Direct Investment
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Equity
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Equity
U.S.-Resident Funds
➤ Report foreign residents’ ownership of shares/units
of funds legally established in the United States as
equity.
➤ Examples of funds:
➤ closed-end and open-end mutual funds
➤ real estate investment trusts
➤ money market funds
➤ index-linked funds
➤ investment trusts
➤ exchange traded funds
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Equity
U.S.-Resident Funds
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Funds
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Equity Exclusions
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Term
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Term
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Term Examples
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Short-Term Debt
➤ Reportable short-term debt includes the
following instruments where the original
maturity is one year or less:
➤ commercial paper - including asset-backed
commercial paper
➤ negotiable certificates of deposit, bank notes
and deposit notes
➤ U.S. government securities (e.g., U.S. Treasury
bills)
➤ bankers’ and trade acceptances 68
Long-Term Debt
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Long-Term Debt
Stripped Securities
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Long-Term Debt
Stripped Securities Example
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Debt Exclusions
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Debt Exclusions
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Debt Exclusions
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Asset-Backed Securities
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Asset-Backed Securities
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Asset-Backed Securities
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Asset-Backed Securities
➤ other assets
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Asset-Backed Securities
Exclusions
➤ Exclude from asset-backed securities:
➤ asset-backed commercial paper
➤ securities backed by a sinking fund
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Repurchase Agreements
Security Lending Arrangements
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Repurchase Agreements
Security Lending Arrangements
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Review of Schedules
Dejana Neskovic
Review of Schedules
Schedule 1
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Review of Schedules
Schedule 1
➤ Reporter Type (Line 4):
➤ 8 categories
➤ Choose the classification code that best
describes your entity.
➤ If two or more codes are appropriate, choose
the one that represents the largest portion of
your entity’s day-to-day operations.
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Review of Schedules
Schedule 1
➤ Reporter Type (Line 4):
➤ Bank: Depository Institution (i.e., an institution that
takes deposits) or a bank holding company.
➤ Other Financial Organization: Entity that acts as a
financial intermediary, such as a finance company or
broker/dealer, which is operated separately from an
entity in one of the other categories listed.
➤ Non-Financial Organization: An entity that conducts
commercial, industrial or trade activities.
➤ Other: Use this code if none of the categories listed
describe your firm. 90
Review of Schedules
Schedule 1
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Review of Schedules
Schedule 1
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Review of Schedules
Schedule 1
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Review of Schedules
Schedule 2
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Review of Schedules
Schedule 2
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Review of Schedules
Schedule 2
enterprise (code 2)
➤ State or local government, including their
subdivisions (code 3)
➤ Other (code 4)
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Review of Schedules
Schedule 2
➤ Security Type (Line 10)
➤ Equity securities are broken out into the
following categories:
➤ Common Stock (code 1)
➤ Preferred Stock (code 2)
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Review of Schedules
Schedule 2
➤ Security Type (Line 10)
➤ Short and Long-term debt (excluding ABS) are
broken out into seven categories:
➤ Commercial Paper (code 5)
➤ Negotiable CD (code 6)
102
Review of Schedules
Schedule 2
➤ Registered/Bearer Indicator (Line 11)
➤ If a security is a registered instrument (e.g., a
bond that is recorded in the name of the holder),
it should be reported with a registered indicator
(code 1).
➤ If a security is a bearer instrument, (i.e.,
possession of the bond certificate is the only
proof of ownership), it should be reported with a
bearer indicator (code 2).
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Review of Schedules
Schedule 2
➤ Country of Foreign Holder (Line 14)
➤ Identifies the location of the beneficial owner of
the security or its custodian.
➤ Type of Foreign Holder (Line 15)
➤ An abbreviated list of Foreign Official
Institutions can be found in Appendix D of the
instructions.
➤ A complete list can be found on the Treasury
website at www.treas.gov/tic/forms.htm.
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Review of Schedules
Schedule 2
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Review of Schedules
Schedule 2
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Review of Schedules
Schedule 2
➤ Reporting a Debt Security Other than ABS
➤ Security type must be either 5, 6, 7, 8, 9, 10, or 11
➤ The face value in the currency of denomination (line
19) must be reported
➤ Face value should be rounded to the nearest whole
currency unit
➤ If the security is traded in units, report the face value
by multiplying each unit by the number of units held
➤ An issue date and maturity date must be reported
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Review of Schedules
Schedule 2
➤ Reporting an Asset-Backed Security
➤ Security type must be 12
➤ The original face value in the currency of
denomination (line 22) must be reported
* Original face value is the amount that would still be
outstanding if no principal had been repaid
➤ Remaining principal outstanding in currency of
denomination must be reported (line 23)
* The remaining principal outstanding will only equal the
original face value if no principal has been repaid
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How We Review Your Data
Kenneth Aberbach
Three Levels of Review
➤ Reporter level
➤ Analyzing your data for reasonability
➤ Trend analysis
➤ Security level
➤ Comparing attributes of reported securities to one
another, and to commercial data sources.
➤ Macro level
➤ Additional comparisons on a broader level
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FRBNY Calculations
Implicit Price =
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FRBNY Price Calculations
(from Schedule 2)
➤ Equity Example: If the US$ Fair (Market) value is $10
million, and the number of shares is 100,000, what is the
implicit price?
114
FRBNY Price Calculations
(from Schedule 2)
➤ Equity Example: If the US$ Fair (Market) value is $10
million, and the number of shares is 100,000, what is the
implicit price?
115
FRBNY Price Calculations
(from Schedule 2)
➤ Non-ABS Debt Example: If the Fair (Market) value in
currency of denomination is $1 million, and the face value in
currency of denomination is $900,000, what is the implicit
price?
Implicit Price =
Fair (Market) Value in Currency of Denomination (line 16a)
Face Value in Currency of Denomination (line 19)
Implicit Price =
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FRBNY Price Calculations
(from Schedule 2)
➤ Non-ABS Debt Example: If the Fair (Market) value in
currency of denomination is $1 million, and the face value in
currency of denomination is $900,000, what is the implicit
price?
Implicit Price =
Fair (Market) Value in Currency of Denomination (line 16a)
Face Value in Currency of Denomination (line 19)
Implicit Price =
Fair (Market) Value in Currency of Denomination (line 16a)
Face Value in Currency of Denomination (line 19)
Implicit Price =
Fair (Market) Value in Currency of Denomination (line 16a)
Remaining Principal Outstanding in Currency of Denomination (line 23)
Implicit Price =
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FRBNY Price Calculations
(from Schedule 2)
➤ Asset-Backed Securities Example: If the Fair (Market) value in
currency of denomination is ¥100,000, and the remaining principal
outstanding in currency of denomination is ¥110,000, what is the
implicit price?
Implicit Price =
Fair (Market) Value in Currency of Denomination (line 16a)
Remaining Principal Outstanding in Currency of Denomination (line 23)
Implicit Price =
Fair (Market) Value in Currency of Denomination (line 16a)
Remaining Principal Outstanding in Currency of Denomination (line 23)
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FRBNY Factor Calculations
(from Schedule 2)
➤ Factor Value Example: If the original face value in currency of
denomination is £900,000, and the remaining principal
outstanding in currency of denomination is £700,000, what is the
implicit factor value?
Factor Value =
Remaining Principal Outstanding in Currency of Denomination (line 23)
Original Face Value in Currency of Denomination (line 22)
Factor Value =
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FRBNY Factor Calculations
(from Schedule 2)
➤ Factor Value Example: If the original face value in currency of
denomination is £900,000, and the remaining principal
outstanding in currency of denomination is £700,000, what is the
implicit factor value?
Factor Value =
Remaining Principal Outstanding in Currency of Denomination (line 23)
Original Face Value in Currency of Denomination (line 22)
Factor Value =
Remaining Principal Outstanding in Currency of Denomination (line 23)
Original Face Value in Currency of Denomination (line 22)
Exchange Rate =
US$ Fair (Market) Value (line 16)
Fair (Market) Value in Currency of Denomination (line 16a)
Exchange Rate =
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FRBNY Exchange Rate Calculations
(from Schedule 2)
➤ Exchange Rate Example: If the US$ Fair (Market) value is
$100,000 and the Fair (Market) value in currency of
denomination is £85,000, what is the exchange rate?
Exchange Rate =
US$ Fair (Market) Value (line 16)
Fair (Market) Value in Currency of Denomination (line 16a)
Exchange Rate =
US$ Fair (Market) Value (line 16)
Fair (Market) Value in Currency of Denomination (line 16a)
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Reporter Level Review
Reasonability Analysis
➤ Ensuring all Schedule 2 data fields were reported.
These data must include:
➤ Security ID
➤ Country of foreign-resident holder
➤ Type of foreign holder (Official or Other)
➤ Number of shares held by foreign residents (equity)
➤ Face Value held by foreign residents (non-ABS debt)
➤ Remaining principal outstanding held by foreign
residents (ABS)
130
Reporter Level Review
Reasonability
➤ Currency/Exchange Rate Analysis
➤ Currency is US$ but US$ Fair (Market) Value (item 16)
does not equal the Fair (Market) Value in currency of
denomination (item 16a).
➤ Currency is not US$ and the exchange rate is not 1, but
the US$ Fair (Market) Value equals the Fair (Market)
value in currency of denomination.
➤ For each security, an implicit exchange rate is calculated.
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Reporter Level Review
Reasonability
➤ Country of foreign holder
➤ Country of foreign holder is U.S.
➤ Are these coded incorrectly or should these have been
excluded from your report?
➤ Are securities held by international and regional
organizations reported with the U.S. as the country of
foreign holder? If so, the the Country of Foreign Holder
code should be revised.
➤ Are securities held in a U.S. protectorate (Puerto Rico,
etc.)? If so, exclude from report.
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Reporter Level Review
Reasonability
➤ Country of foreign holder
➤ Country of foreign holder is Canada
133
Reporter Level Review
Reasonability
➤ Bearer Bonds
➤ Does your institution issue any bearer bonds?
➤ All bearer bonds outstanding should be reported.
➤ Country of foreign holder code 88862 (country unknown)
should be reported for bearer bonds if the country of
foreign holder cannot be determined.
➤ We compare your reported bearer bonds to a list of
known outstanding bearer bonds provided to the Federal
Reserve Bank of New York by the Bank for International
Settlements (BIS). 134
Reporter Level Review
Reasonability
➤ Key Securities Analysis
➤ Largest foreign-held securities by US$ Fair
(Market) value
➤ Implicit exchange rates, implicit prices, country of
foreign holder, etc.
➤ Securities reported with zero quantities
➤ Ifreported correctly, these securities do not need to
be reported, and should be excluded from future
reports.
135
Reporter Level Review
Reasonability
➤ Reporter Queries
We focus on areas that were reporting problems in
prior data submissions, such as:
➤ keywords in descriptions, such as “rights,” “warrants,”
“repurchase,” “repo,” etc. (should not be reported)
➤ debt prices far above par
137
Security Level Review
➤ Data embedded in the security description, e.g., security type
or maturity date, are compared to data in the relevant fields.
141
Differences
142
Differences
143
Differences
144
Compare - Overview
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Compare
Treasury Securities
146
Compare
Treasury Securities
147
Compare
Negotiable Securities
➤ SHL (per country) ➤ TIC BL-2 (per
➤ Type of Issuer = 2, 3, and 4 country)
(Item 9) ➤ Negotiable CDs and Short-
➤ Security Type 5, 6, 7, 8, 9, Term Negotiable Securities
10, 11, and 12 (Item 10) to Foreign Official
➤ Term Indicator = 1 (Item Institutions (column 2)
12) (Security Type 6
includes Term Indicator =
2)
➤ Currency = USD (Item 13)
➤ Type of Foreign Holder =1
(Item 15)
➤ Sum of face value (Item 17 148
or item 22 for ABS)
Compare
Negotiable Securities
150
Compare
Negotiable Securities Issued
151
Compare
General Government
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Compare
U.S. Agency
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Compare
Negotiable CDs in Foreign Currency
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Compare
Negotiable Securities in Foreign Currency
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Technical Topics
Submitting your Data
Melissa Harris
Technical Topics
Options for Filing
➤ Unacceptable Media
➤ IBM Mainframe Tapes/Cartridges - 3480/3490
➤ Round (Reel) Tapes
159
Technical Topics:
IESUB General Information
➤ Data Review
➤ Receipt
➤ Feedback
161
Technical Topics:
IESUB Security Information
➤ Server-side Certificate
162
Technical Topics:
IESUB User Comments
➤ Time Saver
➤ Confirmation of Receipt
163
Technical Topics:
IESUB Additional Information
164
Technical Topics:
Schedule 2 File Formats
165
Technical Topics
Correct Positional File Example
166
Technical Topics
Correct Positional File Example (continued)
167
Technical Topics
Correct Positional File Example (continued)
Maturity
Date
Filler (space)
Issue Date
Filler (space)
Face Value (Non-ABS) Debt Only
Filler (space)
Number of Shares Held -NULL
168
Technical Topics
Incorrect Positional File Example
170
Technical Topics
Correct Delimited File Example (continued)
Delimiters
for 7 NULL Debt
& ABS Items
Number of Shares Held
Reason for Zero - NULL
Fair (Market) value
US$ Fair Market value
171
Technical Topics
Incorrect Delimited File Example
Delimiters
for 7 NULL Debt
& ABS Items are
missing
172
Technical Topics
Positional & Delimited Files Example
Number of shares
173
Technical Topics
Positional & Delimited Files Example
174
Technical Topics
Tips & Traps
➤ Date Format
➤ Correct format MMDDYYYY. For example, the date
May 3, 2004 would be reported as 05032004
➤ Examples of incorrect date formats MM/DD/YY,
MM/DD/YYYY, MM-DD-YY, etc.
➤ Need to Have Leading Zeroes
➤ Reporter ID
➤ Date Fields
175
Technical Topics
Tips & Traps
176
Technical Topics
Contact Information
James Greer
Things to Remember
179
Things to Remember
180
Things To Remember
181
Things to Remember
➤ Review of Schedules
➤ Schedule 1
➤ All entities must file a Schedule 1.
➤ Schedule 2
➤ Exempt institutions do not have to file a Schedule 2.
➤ Make sure to include:
➤ Security Ids (line 5)
➤ Country of Foreign Holder (line 14)
➤ Type of Foreign Holder (line 15)
➤ Quantity (line 18, 19, or 23)
182
Things to Remember
➤ Review of Schedules
➤ Properly report issuer types (line 9)
➤ United States Department of Treasury (code 1)
➤ Other federal agency and federally sponsored
enterprise (code 2)
➤ State or local government, including their
subdivisions (code 3)
➤ Other (code 4)
183
Things to Remember
➤ Review of Schedules
➤ Properly report security types (line 10)
➤ Equity Securities (codes 1, 2, 3, 4)
➤ Debt Securities – excluding ABS
184
Things To Remember
➤ Quality Edits
➤ Properly report fair (market) values and quantities
➤ Implicit debt and ABS prices should have an approximate
value of 1.
➤ Review data for consistency
➤ Compare Schedule 2 data for identical securities
➤ Prices
➤ Exchange rates
➤ Factor values (ABS only)
➤ Currency (debt and ABS)
➤ Issue and maturity dates (debt and ABS)
185
Things to Remember
➤ Quality Edits
➤ Ensure term of debt (line 12) is calculated
based on original maturity
➤ Short-term(less than or equal to 1 year)
➤ Long-term (greater than one year)
186
Things To Remember
➤ Technical Issues
➤ Ensure proper file layouts
➤ Formatting Dates
➤ INCORRECT - MM/DD/YY, MM/DD/YYYY
➤ CORRECT - MMDDYYYY
➤ Reporting too few/too many semi-colons (in a semi-
colon delimited file)
➤ Not reporting all columns
187
Things To Remember
➤ Technical Issues
➤ Submitting data via IESUB
➤ Obtaining access to IESUB
➤ Filling out the form after the seminar
➤ Accessing the form at:
http://www.treas.gov/tic/forms.html#benchmark
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Want to Know More?