ss(1505-0017,BC)

SUPPORTING STATEMENT

Revision of Treasury International Capital (TIC)

Form BC (OMB No. 1505-0017)

A. Justification

1. Circumstances necessitating the collection of information

Treasury International Capital (TIC) Form BC, “Report of U.S. Dollar Claims of Financial Institutions on Foreign Residents”, is filed by banks, other depository institutions, bank holding companies, financial holding companies, securities brokers and dealers, and all other financial institutions in the United States to report their own portfolio claims (exclusive of long-term securities) on foreign residents. This report is required by E.O. Number 10033 of February 8, 1949 and implementing Treasury Regulations (31 C.F.R. 128), the International Investment and Trade in Services Survey Act (22 U.S.C. 3103), and the Bretton Woods Agreements Act (Sec. 8(a) 59 Stat. 515; 22 U.S.C. 286f).

2. Use of data

Data collected on TIC Form BC constitute the most complete and readily available information on cross-border dollar claims of U.S. banks and other financial institutions. The form and data it procures are necessary for compiling the U.S. international financial transactions accounts, for calculating the U.S. international investment position, and for formulating U.S. international financial and monetary policies. Treasury, the Department of Commerce, and the Board of Governors of the Federal Reserve System are the most significant users of the data for these purposes. Consistent with the procedures for TIC reporting forms, respondents covered by the reporting requirements of Form BC report directly to the district Federal Reserve Banks, which act as fiscal agents of the Treasury. The data are centrally aggregated and processed by the Federal Reserve Bank of New York (FRBNY) and then transmitted to the Treasury to be used for the purposes outlined above. Further, the data are published regularly in aggregate statistical formats, for the benefit of all private sector users, in the Federal Reserve Board of Governors’ monthly Federal Reserve Bulletin and in the Department of Commerce’s quarterly Survey of Current Business. Current and historical time series data, by country, reported on Form BC are also posted to the Treasury TIC website at http://www.treasury.gov/resource-center/data-chart-center/tic/Pages/ticlaim.aspx. Additionally, selected historical data are available in various issues of the Treasury Bulletin through December 2013.

3. Use of information technology

The general instructions for Form BC inform respondents that they may file electronically via the Federal Reserve’s Reporting Central portal on the Internet; use computer printouts pursuant to specific agreement signed by a responsible officer of the reporting institution and the Federal Reserve Bank of New York with which the report is filed; or on paper in the approved file format that is available on the website. As respondents' internal methods of maintaining and retrieving reportable information vary widely for Form BC, no single information technology can be prescribed to reduce burden on respondents.

4. Efforts to identify duplication

There is no duplication in the collection of these data. Similar information does not exist. The Treasury is the sole U.S. Government collection authority for these international portfolio capital flow data.

5. Impact on small entities

The reporting thresholds have been designed to reduce the overall reporting burden, especially on small entities. The reporting threshold is $50 million, EXCEPT that full reporting is also required when there is a position of $25 million or more vis-à-vis all counterparties in any one country. The threshold, which is applied to total own dollar claims on Form BC as of the end of a given month, effectively excludes smaller financial institutions in the United States from the reporting population.

6. Consequences of less frequent collection and obstacles to burden reduction

As is the case for all TIC reporting forms, the data are collected on an ongoing basis. The submission date for Form BC claims falls fifteen (15) calendar days following the month to which the report applies. If the data were collected less frequently, valuable information on trends in international capital movements would not be observed and made available to the U.S. Government. The lack of timely information could seriously impair the formulation of U.S. financial and monetary policies. The primary legal obstacle to reducing burden is the statutory mandate to collect the information. (See Item 1 above.)

7. Circumstances requiring special information collection

Frequency of reporting for Form BC: The circumstances that require those forms to be collected more often than quarterly are the U.S. Government’s need for timely and reliable information on trends in international financial markets. The likely consequences of collecting these data less frequently are outlined in Item 6 above.

Apart from the foregoing case, there are no special circumstances associated with Form BC that are inconsistent with the conditions outlined in Item A.7 of the Specific Instructions for Supporting Statements for Paperwork Reduction Act Submissions.

8. Solicitation of comments on information collection

Treasury's notice in the Federal Register soliciting public comment on Form BC was published Thursday, May 26, 2016, pages 33579-33580. The deadline for receiving pre-clearance comments was July 25, 2016. Because of delays in mail delivery, Treasury waited until July 28 to receive mail. To bring attention to the Federal Register notices, the Federal Reserve Bank of New York (FRBNY) contacted all respondents reporting to FRBNY, and other district Federal Reserve Banks that process TIC data.

The Federal Register notice proposed no changes to the TIC B forms, including Form BC. It proposed one change to the instructions: Beginning with the monthly TIC B reports as of July 29, 2016 and the quarterly TIC B reports as of September 30, 2016, the ‘‘Who Must Report’’ section of the instructions is revised to list out separately Intermediate Holding Companies (IHCs), as defined by Regulation YY, 12 CFR 252 (which became effective July 1, 2016), and to clarify that IHCs should follow the same consolidation rules that are applicable to Bank Holding Companies (BHCs), Financial Holding Companies (FHCs), and Savings and Loan Holding Companies.

We received one communication with comments. It was a letter from the Department of Commerce’s Bureau of Economic Analysis (BEA), dated July 18, 2016. The letter supported the proposed changes to the TIC B-form instructions, including those for Form BC, because the data collected on these forms are critical to key components of BEA’s economic statistics.

As is done for all TIC forms, discussions regarding all aspects of the reporting forms are held on an ongoing basis with staff of the International Reports Division of the Federal Reserve Bank of New York (FRBNY); with staff of the Federal Reserve Board of Governors’ Division of International Finance; and with staff of the Bureau of Economic Analysis (BEA) of the Department of Commerce. FRBNY, located in the nation's major financial center, is the processing center for the review and editing of information reported on Form BC. The Board of Governors and BEA are both major users of the data in aggregate form.

In addition, the staffs of FRBNY and other district Federal Reserve Banks maintain regular contact with the major respondents. These analysts are in a unique position with respect to advice on changes needed in the forms or reporting instructions for purposes of amending or clarifying data coverage.

9. Provision of payments to record keepers

In respect of Form BC or any other TIC form, there has been no provision of payments or gifts to respondents for any purpose.

10. Assurance of confidentiality

As is the case for all TIC reporting forms, individual respondent data are confidential, and access to that information is strictly limited to selected staff of the Treasury, the Federal Reserve Board of Governors and the district Federal Reserve Banks. Compliance with the Privacy Act is assured.

11. Justification of sensitive questions

There are no questions of a sensitive nature. No personally identifiable information (PII) is collected.

12. Total annual hour burden

Number of Respondents: 389

Frequency of Responses: 12 per year

Annual Burden: 51,660 hours

The respondent population subject to Form BC is approximately 389 financial institutions (including, but not limited to banks, other depository institutions, securities brokers/dealers, bank/financial holding companies, investment banks, insurance companies, credit card issuers, money market funds, pension funds, private equity funds, hedge funds, trusts, finance companies, mortgage companies, commodity brokers and dealers, investment advisors and managers, loan brokers), based on the reporting threshold. We expect a total of about 4,668 responses per year. About 31 major respondents report relatively large amounts of data with an hourly burden that is double the burden of other respondents. With an estimated average reporting burden of 20.5 hours per filing by major respondents and 10.25 hours per filing by other respondents, based on information from several respondents, the estimated total reporting burden on the public is 51,660 hours per year.

# Respondents	# Responses per Respondent	Total Annual Responses	Hours Per Response	Total Burden
389	12	4,668	11.07	51,660

Generally, completion and review of the form involves two persons. It is estimated that the average wage of persons completing the form is $32.34 per hour (corresponding to an average salary of $67,264), while that of supervisory or other more senior staff reviewing the form is $50.04 per hour (corresponding to an average salary of $104,085). For 358 respondents filing 12 times per year, and using an average of 8.75 hours per form for completion plus 1.5 hours per review, and for 31 major respondents filing 12 times per year, and using an average 17.5 hours per form for completion plus 3 hours per review, the total annualized cost to respondents for the burden hours is estimated to be $1,538,118.

13. Estimated total annual cost burden to respondents

All cost figures are provided in Item 12 above. No special equipment is required to respond to this survey.

Total annual cost burden:

1. Total annualized capital and start-up costs associated with Form BC are estimated to be $0 (zero dollars). In general, reporting on the forms requires neither specialized capital equipment, nor fixed or variable costs that are not already associated with the customary and usual business practices of respondents.

(b) Total annualized operations, maintenance, and purchases of services costs are estimated to be $0 (zero dollars). Reporting on the forms does not in general impose operations, maintenance, or specialized services costs that are not already associated with the customary and usual practices of respondents.

The above cost estimates are not expected to vary widely among respondents.

Note: As required by OMB, the Federal Register notice of May 26, 2016 included an explicit request for public comments on the estimates of cost burden that are not captured in the estimates of burden hours. No comments on cost estimates were received.

14. Estimated cost to the Federal government

Consistent with procedures for all TIC reports, Form BC is produced, circulated, collected and edited by the Federal Reserve Banks that process TIC data. All TIC reports, including Form BC, are made available on the Treasury TIC website at http://www.treasury.gov/resource-center/data-chart-center/tic/Pages/forms-b.aspx.

The total annualized cost to the Federal government is estimated to be approximately $2,248,201. The figures are best estimates by the staff of the Federal Reserve Bank of New York using their standard accounting and costing procedures and are based in part on experience gained by conducting other TIC surveys. Treasury Department staff has included additional expected costs for advisory services, dissemination of results, etc.

Estimated Annual Federal Costs for Form BC

Salaries and Benefits $944,466

Overhead and Support Costs $1,155,057

Computer Systems and Programming Costs $148,678

Total $2,248,201

15. Reason for change

For Form BC there will be an increase of 3,813 in burden hours to 51,660 as compared to the estimate of 47,847 currently carried in OMB's Information Collection Inventory. The increase is entirely due to an increase in the number of respondents.

16. Plans for tabulation, statistical analysis, and publication

Form BC is needed to collect the data on an ongoing basis. Aggregate data in considerable detail by country, including breakdowns of banks’ own dollar claims and liabilities vis-à-vis foreigners, are published monthly in the Federal Reserve Bulletin and quarterly in the Survey of Current Business. Current and historical time series data, by country, reported on Form BC are also posted to the Treasury TIC website (http://www.treasury.gov/resource-center/data-chart-center/tic/Pages/ticlaim.aspx). Data are published or otherwise made publicly available in aggregate form only, so as to avoid violating the confidentiality of any single respondent’s submission. In addition, tabulations of these data frequently are made on an ad hoc basis for senior officials at the Treasury and the Board of Governors and other offices at Treasury and the Board.

17. Reasons why displaying the OMB expiration is inappropriate

Approval to not display the expiration date for OMB approval on the forms has previously been granted. The TIC forms on the website have expiration dates.

18. Exceptions to certification requirement of OMB Form 83-I

Regarding this request for OMB approval, there are no exceptions to the certification statement in item 19 of Form 83-I.

B. Collections of Information Employing Statistical Methods

The collection of this information does not employ statistical methods. Statistical methods are not appropriate for the type of information collected and would not reduce burden or improve accuracy of results.

July 2016