2021-01880. Proposed Collection; Comment Request

AGENCY:

Departmental Offices; Department of the Treasury.

SUMMARY:

The Department of the Treasury, as part of its continuing effort to reduce paperwork burdens, invites the general public and other Federal agencies to comment on the revision of a currently approved information collection that is to be proposed for approval by the Office of Management and Budget. The Office of International Affairs of the Department of the Treasury is soliciting comments concerning Treasury International Capital Form SLT, “Aggregate Holdings, Purchases and Sales, and Fair Value Changes of Long-Term Securities by U.S. and Foreign Residents.” The proposed expanded SLT data collection will be effective for reports beginning as of February 2022. Until that effective date, the currently approved Form SLT and instructions will continue to be effective without change.

DATES:

Written comments should be received on or before March 29, 2021 to be assured of consideration.

ADDRESSES:

Direct all written comments to Dwight Wolkow, International Portfolio Investment Data Systems, Department of the Treasury, Room 1050, 1500 Pennsylvania Avenue NW, Washington, DC 20220. In view of possible delays in mail delivery, please also notify Mr. Wolkow by email ([e-mail]), or telephone (cell: 202-923-0518).

FOR FURTHER INFORMATION CONTACT:

Dwight Wolkow at 202-923-0518, Copies of the proposed forms and instructions are available on the Treasury's TIC Forms web page, https://www.treasury.gov/​resource-center/​data-chart-center/​tic/​Pages/​forms-slt.aspx. Requests for additional information should be directed to Mr. Wolkow.

SUPPLEMENTARY INFORMATION:

Title: Treasury International Capital Form SLT, “Aggregate Holdings, Purchases and Sales, and Fair Value Changes of Long-Term Securities by U.S. and Foreign Residents.”

OMB Control Number: 1505-0235.

Abstract: Form SLT is part of the Treasury International Capital (TIC) reporting system, which is required by law (22 U.S.C. 286f; 22 U.S.C. 3103; E.O. 10033; 31 CFR 128), and is designed to collect timely information on international portfolio capital movements. Form SLT is a monthly report on cross-border portfolio investment in long-term marketable securities by U.S. and foreign residents. This information is used by the U.S. Government in the formulation of international financial and monetary policies and for the preparation of the U.S. balance of payments accounts and the U.S. international investment position.

Current Actions: (1) Justification: One important aim of this revision of the SLT data collection is to create, for the first time, a data collection of “changes in fair value” for the TIC securities data. Users of TIC data often compare the change in the holdings of long-term securities reported on the Form SLT, with the net purchases (purchases less sales) of long-term securities reported on the Form S. There is general agreement that the difference between the change in holding and the net purchases is due largely to the change in fair value of the securities, with less important factors making up the remainder of the difference. In mathematical terms, “Change in holdings” equals “purchases less sales” plus “change in fair value” plus “other factors”. Different assessments between TIC data users often arise because each one has to create their own estimates of the “change in fair value” despite lacking detailed information on the holdings of, and transactions in, the many securities in the TIC system. Another aim of this revision of the SLT data collection is to obtain the three main data types (holdings, purchases and sales, and change in fair value) from the same source. The result should greatly improve the connections between the holdings data and the purchases and sales data and the “change in fair value” data. Lastly, while there is an increase in the reporting burden on custodians from the revision of the SLT, after 2022 it is expected that this increase in burden will be significantly offset by the decrease in burden when the Form S is discontinued. (2) No changes are made in the collection of holdings data; i.e., no changes are made in the columns and rows of the Form SLT or in the instructions regarding the holdings of long-term securities. In both the current and revised Form SLT there are eleven such columns covering three types of foreign securities and four types of U.S. securities, where for each type of U.S. security there is a column for foreign-official-held and a separate column for other-foreign-held. (3) To accomplish the aims in (1) above, both the Form SLT and the instructions are expanded to add the collection of data on the total change in the fair (market) value over the month for all securities held at the end of the month for each type of long-term security. In the Form SLT, one column is added for each of the 11 columns of holdings mentioned in (2) above; in the instructions, sections II.F.4 and III.G are added. (4) To accomplish the aims in (1) above, both the Form SLT and the instructions are expanded to add the collection of data on U.S. purchases and U.S. sales of long-term securities by U.S.-residents with foreign-residents; in the Form SLT, two columns are added for each of the 11 columns of holdings mentioned in (2) above; in the instructions, sections II.F.3, II.F.5, III.E and III.F are added. (5) Note that while purchases and sales in the revised SLT data collection appear to be generally the same as in the Form S data collection, there are three important differences: (i) Purchases and sales in the Form SLT are reported by the custodian or issuer or end-investor that is also reporting the holdings, while in the Form S purchases and sales are reported by a trader (e.g., broker-dealer, prime broker, principal trading firm); (ii) the Form SLT data are recorded from the U.S. point of view, while the Form S data are recorded from the foreign point-of-view (e.g., Form SLT “purchases” are made by U.S. residents from foreign-residents, whereas Form S “purchases” are made by foreign-residents from U.S.-residents); and (iii) purchases and sales of foreign securities in Form SLT are recorded opposite the foreign country that issued the security, whereas the Form S data are recorded opposite the country that purchased or sold the security. The Form SLT data are much more informative about U.S. claims on individual foreign countries. (6) The revised Form SLT no longer has Parts A and B, where previously a custodian reported data in part A and an issuer and/or end-investor reported data in part B. In the revised Form SLT the reporting firm must check one or both of the two boxes in the top-center section of the cover page to specify whether the data is from a custodian or from an issuer and/or end- investor or from both; see II.A in the instructions. So a firm that reports data for both a custodian and an issuer/end-user can combine both types of data into one report, and no longer needs to report them separately in part A and part B. (7) To allow time for respondents to revise their reporting systems, the revised form and instructions are scheduled to become effective for reports as of February 2022. (8) Until the revised form becomes effective in 2022, the currently-approved Form SLT and instructions will continue to be in effect. (9) The name of the revised Form SLT on the cover page and elsewhere is expanded to “Aggregate Holdings, Purchases and Sales, and Fair Value Changes of Long-Term Securities by U.S. and Foreign Residents.” Added on the cover page under the name, is the phrase “Effective for reports beginning as of February 2022”. (10) After the revised Form SLT becomes effective in February 2022, there will be a duplication of the Purchase and Sales data with the Form S for roughly six months. This period of overlap for comparison of the two sources of data will allow the agencies to make any necessary adjustments to the revised Form SLT and/or instructions. After the six month overlap period ends, and if the purchases and sales data from the revised Form SLT are acceptable, then the Form S will be discontinued. (11) Some other clarifications and format changes may be made to improve the instructions.

Type of Review: Revision of a currently approved collection.

Affected Public: Business or other for-profit organizations. Form SLT (1505-0235).

Estimated Number of Respondents: 438.

Estimated Average Time per Respondent: Average 11.7 hours per respondent per filing. The estimated average burden per respondent varies widely, from about 21.6 hours per filing for a U.S.-resident custodian to about 9.3 hours for a U.S.-resident issuer or U.S.-resident end-investor.

Estimated Total Annual Burden Hours: 61,722 hours, based on 12 reporting periods per year.

Request for Comments: Comments submitted in response to this notice will be summarized and/or included in the request for Office of Management and Budget approval. All comments will become a matter of public record. The public is invited to submit written comments concerning: (a) Whether Form SLT is necessary for the proper performance of the functions of the Office, including whether the information will have practical uses; (b) the accuracy of the above estimate of the burdens; (c) ways to enhance the quality, usefulness and clarity of the information to be collected; (d) ways to minimize the reporting and/or record keeping burdens on respondents, including the use of information technologies to automate the collection of the data; and (e) estimates of capital or start-up costs of operation, maintenance and purchase of services to provide information.

Dwight Wolkow,

Administrator, International Portfolio Investment Data Reporting Systems.