Quarterly Report of Assets and Liabilities of Large Foreign Offices of U.S. Banks

Draft as of January 26, 2015

INSTRUCTIONS FOR PREPARATION OF

Quarterly Report of Assets and Liabilities
of Large Foreign Offices of U.S. Banks
FR 2502q

Part I–General Instructions
A. Introduction
This report obtains data on the geographical distribution
of the assets and liabilities of major foreign branches and
subsidiaries of U.S. commercial banks and of Edge and
agreement corporations (‘‘banks’’). All assets and liabilities are to be reported gross, except where otherwise
noted in these instructions, in U.S. dollar equivalents as
shown on the books of the reporting branch or subsidiary,
not on the books of the ‘‘parent bank.’’ The reporting
standards for this report should be the same as those for
the Consolidated Reports of Condition and Income
(FFIEC 031) unless explicitly stated otherwise in these
instructions.

B. Who Files Reports
U.S. bank holding companies, including financial holding
companies, commercial banks and banking Edge and
agreement corporations file quarterly reports for certain
branches and subsidiaries located outside the United
States, excluding branches on U.S. military facilities
wherever located.

C. For Which Offices Reports Are Filed
Reports are to be filed for all branches and subsidiaries
that are located in the United Kingdom or the Caribbean
(listed below), that are not located in a U.S. military
facility, and that meet the following criteria:
• branches filing the Foreign Branch Report of Condition
FFIEC 030 whose total assets payable in all currencies
amount to $2 billion or more on a report date,
• subsidiaries filing the quarterly Financial Statements of
Foreign Subsidiaries of U.S. Banking Organizations
(FR 2314) that have a banking charter and engage in
banking business, and that report $2 billion or more in
total assets in Schedule BS, item 10, and $10 million or
more in total deposits in Schedule BS-M, item 6.
FR 2502q
March 2015

An office is located in the Caribbean if it is located in any
of the following: Anguilla, Antigua and Barbuda, Aruba,
Bahamas, Barbados, Bermuda, Bonaire, British Virgin
Islands, Cayman Islands, Cuba, Curacao, Dominica,
Dominican Republic, Grenada, Guadeloupe (including
Marie-Galante, La Desirade, Iles des Saintes, St. Barthelemy, and northern St. Martin), Haiti, Jamaica, Martinique, Montserrat, Saba, St. Eustatius, St. Kitts and
Nevis, St. Lucia, St. Maarten, St. Vincent and the Grenadines, Trinidad and Tobago, and the Turks and Caicos
Islands.
Reports need not be filed for offices that are not located in
the United Kingdom or the Caribbean.
A reporter should begin filing the report for a branch or
subsidiary as of the report date (i.e., quarter-end) on
which the branch or subsidiary meets the criteria
specified above. Once a report has begun to be filed for
branch or subsidiary has met the criteria stated above,
reports should continue to be filed for that branch or
subsidiary for each remaining quarter in the calendar year
regardless of whether the amount falls below the
reporting threshold on subsequent report dates during the
calendar year. A branch or subsidiary that is above the
reporting threshold as of the end of December should
report for the following calendar year.
The total assets test defined above applies to the total of
the foreign branch’s or subsidiary’s international and
local assets, regardless of the currency in which the assets
are payable. The test does not apply separately to offshore banking units, foreign currency units, or any other
administrative division within a branch or subsidiary.
Similarly, the assets and liabilities reported should be
those of the entire branch or subsidiary and those not
booked only in an administrative or regulatory subdivision of the branch or subsidiary.
As an alternative to filing separate reports for several
individual branches in the same country or dependency, a
bank may choose to file a consolidated report for all of its
branches in a single country (or dependency) as long as
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the report is filed on schedule with the Federal Reserve
Bank. If the report form breaks a country into several
geographical areas (as, e.g., the United Kingdom is
broken into England, Guernsey, Isle of Man, Jersey,
Northern Ireland, Scotland, and Wales), then consolidated reporting should be limited to all branches (or all
subsidiaries) located in a single defined area. Under this
alternative all branches in that country must be included
in the consolidated report, regardless of their individual
sizes; and the number of branches in the country must be
indicated in the appropriate place on the report. Changes
in this reporting procedure-for example, changing from
individual reports to a single consolidated report for all
branches in the same country (and vice versa)-may be
made only in the first quarter of a calendar year and must
be approved by the Federal Reserve Bank with whom the
reports are filed. When a bank has had a single branch in
a country and that branch has been preparing a FR 2502q
report, a de novo second branch of the parent bank may,
without prior approval, file on a consolidated basis with
the first branch provided that consolidated reports are
begun as of the first reporting date after the second
branch opens.
Similarly, a reporter may choose to file a consolidated
report for all of its subsidiaries in a single country, under
the same terms stipulated above for branches. Whether
a reporter files separate reports for its subsidiaries in a
given country or consolidates subsidiaries' data into a
single report, the data filed for subsidiaries should be
parent only (non-consolidated), as on the FR 2314 report.
Branches and subsidiaries, however, may not be
consolidated on one report, regardless of where they are
located.
In reporting, a branch or subsidiary may elect to omit
claims on and liabilities to residents of an individual
country (or dependency) the United States if both total
claims on and total liabilities to addressees in that
country the United States are less than $1 million
(equivalent). These and other assets and liabili-ties that
are not reported under a specific country because the
country was not listed on the reporting form should be
summed for each region and entered in the row for other
countries in each region (e.g., ‘‘Other Europe’’). Assets
and liabilities for which the customer was not known to
the bank (as would be the case with negotiable
certificates of deposit)-should be included in
‘‘UNALLO-CATED’’ (country code 88862).
Amounts reported should be rounded to the nearest
million dollars.

D. Report Date
Reports are to be prepared as of the close of business on
the last business day of the calendar quarter in the
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country (or dependency) in which the branch or subsidiary is located.

E. When and Where Reports Are Filed
U.S. bank holding companies, including financial holding
companies, commercial banks, and banking Edge and
agreements corporations should file the reports required
for its branches and subsidiaries with the Federal Reserve
Bank of the District in which the head office is located,
on the schedule stipulated by the Reserve Bank.

F. Method of Submitting Data to Federal
Reserve Bank
Reports may be submitted on the printed reporting form
FR 2502q. Alternatively, reports may be submitted in any
other format that is mutually satisfactory both to the
reporting bank and to the Federal Reserve Bank. All
reports should be clear and legible. Handwritten reports
must be submitted in ink.

G. Determination of Country or
Dependency of Customer
Assets and liabilities in the row for the United States
should be reported if the United States is according to the
country of the principal address of the customer (i.e.
depositor, creditor, borrower, obligor, etc.). If the
principal address is unclear, the branch or subsidiary may
use as the principal address that address to which
statements of the customer’s account (or receipted notes)
are sent. However, the address of a bank ‘‘shell’’ branch
is the country (or dependency) in which the branch is
authorized to operate, even though statements may be
sent to the head office in a different country. Care should
be taken to ensure that accounts of foreign branches or
subsidiaries of U.S. corporations are not reported as U.S.
accounts, and that accounts of U.S. branches or subsidiaries of foreign corporations are not reported as non-U.S.
accounts, (i.e., that domicile and not ownership determine the identification of the country of customer). U.S.
accounts are those of customers domiciled in the fifty
states, the District of Columbia, and on U.S. military
facilities wherever located. All other persons or corporations are non-U.S. addressees, which includes foreign
governments and any of its subdivisions or agencies,
including all foreign official non-banking institutions,
even if located in the U.S. (e.g. an embassy of a foreign
country).
FR 2502q
March 2015

Securities and other assets, as well as claims and liabilities resulting from the fair value of derivatives contracts,
should be reported according to the principal address of
the obligor, not the address of a guarantor or parent
company (i.e., do not report positions on an ultimate risk
basis).
However, if the branch or subsidiary files regular reports
with the authorities of its country (or dependency) of
domicile which use a different basis than the above for
determining the country of customer, the branch or
subsidiary may employ that basis in completing this
report but should note differences in this regard by
indicating such on the report form.

The liability for the permanent investment of the parent
bank in the branch should be shown as a liability to the
United States. Assets and liabilities in accounts with
customers in Puerto Rico and U.S. dependencies should
not be reported on the line provided for these accounts
the United States.
For customers residing in a country that is not listed on
the form, subtotals of assets and liabilities should be
calculated for each region and should be listed in the
lines provided on the form for other countries in each
region (e.g., ‘‘Other Europe’’).

H. International and Regional
Organizations
Assets and liabilities in accounts of international and
regional organizations should be reported on the line
provided for these accounts and not opposite the country
in which the headquarters or a branch office of such
organization is located. However, assets and liabilities in
accounts of the Bank for International Settlements and
the European Central Bank should be reported on the
lines provided on the form (country codes 13307 and
13501, respectively) under the heading ‘‘EUROPE.’’ Any
transactions with a single country’s central bank should
continue to be reported opposite the country of that
central bank.

I. Unallocated Accounts
The unallocated category is intended to capture items that
cannot be allocated to a particular country (or dependency). Include in ‘‘UNALLOCATED’’ assets and liabili-

FR 2502q
March 2015

ties for which the customer (and, hence, the country of
customer) is not known to the respondent. Negotiable
certificates of deposit and acceptances (both liabilities)
should be included in ‘‘UNALLOCATED’’ because it is
likely that the customer is not known to the respondent.
On the other hand, customer’s liability on acceptances
(an asset) should be reported according to the country of
the principal address of the account party who is the
obligor. Unrealized gains or losses resulting from
exchange rate translations should be recorded as ‘‘UNALLOCATED’’ (country code 88862).

H J. Valuation
Assets and liabilities should be valued using U.S. GAAP.
Assets or liabilities payable in foreign currencies should
be converted into U.S. dollars at the exchange rate
prevailing on the report date.
Claims and liabilities resulting from the fair value of
derivatives contracts items should be reported on a gross
basis, except such contracts with the same counterparty
that meet the criteria for a valid right of setoff contained
in FASB Interpretation Number 39. Foreign currency
translations should be reported net.
Claims and liabilities resulting from securities purchased
and sold under resale and repurchase agreements can be
netted if they meet the requirements outlined in FASB
Interpretation No. 41, ‘‘Offsetting of Amounts Related to
Certain Repurchase and Reverse Repurchase Agreements’’ (FIN 41).

I K. Total Assets Must Equal
Total Liabilities
Components of column totals and subtotals must sum to
their respective total or subtotal. Moreover, total assets
must equal total liabilities (country code 99996).

J L. Negative Numbers
All amounts should be reported as positive balances.
Items such as 1) undivided profits or accumulated operation lossess, and 2) unremitted foreign currency translation adjustments should be reported as positive amounts
due to or due from the parent.

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Part II–Specific Item Instructions
Memoranda
Item 1. Amounts included in ‘‘UNITED
STATES’’ above (country code 01007) for claims on,
and liabilities to, U.S. addressees as follows: Do
not include negotiable CDs; they are reported in
‘‘UNALLO-CATED TOTAL, all areas’’ (country code
88862 99996) in the body of the report.
The term ‘‘United States’’ (U.S.) includes the fifty states,
the District of Columbia, and U.S. military facilities
wherever located. The term ‘‘U.S. addressee’’ includes
any person or corporation whose principal address (i.e.,
domicile), according to the records of the reporting
branch, is in the United States. (See Section G of General
Instructions.)
Item 1.a. Claims on, and liabilities to, U.S. parent
bank (as defined below). Include as assets all advances
to the U.S. parent bank, balances due from the parent
bank, and acceptances created for the parent bank as well
as all loans, securities, or other assets purchased from the
U.S. parent bank under a specific repurchase agreement.
Exclude all assets acquired from the parent bank without
repurchase agreements.
Include as liabilities advances from the U.S. parent bank
or balances due to the parent bank, including the liability
of the branch or subsidiary to the parent bank resulting
from acceptances confirmed, endorsed, or created by the
parent bank for the branch or subsidiary. If this report is
being filed for a branch or branches, also include as a
liability the permanent investment of the parent bank in
the branch(es). If this report is being filed for a subsidiary
or subsidiaries, include subsidiary equity in this item.
Unremitted profits/losses are balances due to or due from
the parent bank and should be reported as assets (for net
losses) or liabilities (for net profits).
Parent bank. The term ‘‘parent bank’’ includes all U.S.
offices and branches of the ‘‘bank’’ of which the reporting branch or subsidiary is a part. It includes the parent
bank’s International Banking Facility. In addition, it
includes such bank’s Edge and agreement subsidiaries
and other subsidiaries in the fifty states and the District of
Columbia that are consolidated with the parent bank for
purposes of reporting on the FFIEC 031. Branches at U.S.
military facilities wherever located are also to be included
with the parent bank. ‘‘Parent bank’’ excludes the bank
holding company owning the bank filing these reports
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and other U.S. subsidiaries, branches or agencies of that
holding company, unless they are consolidated with the
bank when it files condition reports with banking authorities in the United States. If the bank holding company is
not consolidated, it is reported in memorandum Item 1.c.,
‘‘U.S. addressees other than depository institutions.’’
Trust departments are to be excluded from the parent
bank and included in ‘‘U.S. addressees other than depository institutions.’’
Item 1.b. Claims on, and liabilities to, other depository institutions in the United States. Report claims on,
and liabilities, other than negotiable CDs, to other depository institutions in the United States.
Other depository institutions in the United States. The
term ‘‘other depository institutions in the United States’’
(i.e., other than the parent bank) includes commercial
banks, unaffiliated Edge and agreement corporations,
branches and agencies of foreign banks, building or
savings and loan associations, mutual or stock savings
banks, cooperative banks, credit unions, and homestead
associations, located in the fifty states of the United
States, the District of Columbia, and on U.S. military
facilities wherever located. This term also includes International Banking Facilities of the abovementioned institutions. It excludes trust departments (included in item
1.c. below), all banking offices in Puerto Rico and U.S.
territories and possessions, and U.S. government and
international financial institutions.
Item 1.c. Claims on, and liabilities to, U.S. addressees
other than depository institutions. Report claims on,
and liabilities, other than negotiable CDs, to U.S. addressees other than the parent bank and other depository
institutions. Include balances of trust departments. Include
balances of the parent bank’s holding company, if not
consolidated and reported in Item 1.a. above. Note: The
amounts reported for ‘‘UNITED STATES’’ (country code
01007) must equal the sum of memorandum items 1.a.,
1.b., and 1.c.
Item 2. Amounts included in ‘‘TOTAL, all areas’’
above (country code 99996) that represent claims and
liabilities from the fair value of derivatives contracts,
if any. Report the claims and liabilities reported anywhere on this form that are attributable to the fair value
of derivatives contracts, if any.
Item 3. Amounts included in ‘‘TOTAL, all areas’’
above (country code 99996) that represent claims on,
FR 2502q
March 2015

and liabilities to, other non-U.S. offices of the parent
bank. Report claims on, and liabilities to, other non-U.S.
branches or subsidiaries of the parent bank that are
located either within or outside the country of domicile of
the reporting branch or subsidiary. Include such claims
and liabilities whether or not the particular branches or
subsidiaries against which the claims and liabilities exist

FR 2502q
March 2015

are exempt from reporting on the FR 2502q. Non-U.S.
branches or subsidiaries are those located outside the fifty
states of the United States and the District of Columbia,
excluding those on U.S. military facilities, wherever
located. Note: The amounts reported in memorandum
item 3 must not exceed the amounts reported in ‘‘TOTAL,
all areas,’’ (country code 99996).

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