The Bureau of Economic Analysis ("BEA") stated that it will implement changes recommended by the MFA regarding certain surveys of private funds to be conducted in 2017. The BEA had requested comments on a proposed information collection request concerning the reporting requirements for private funds included on the: (i) BE-577, Quarterly Survey of U.S. Direct Investment Abroad; (ii) BE-11, Annual Survey of U.S. Direct Investment Abroad; and (iii) BE-10, Benchmark Survey of U.S. Direct Investment Abroad (collectively, the "Surveys").
In a July 21, 2016 comment letter, the MFA asserted that "the Surveys and the existing reporting regime are not well-suited to the unique structure and operations of hedge funds, as compared to operating companies." The MFA emphasized that hedge funds: (i) submit information that may not be representative of the types of investment flows that the surveys are intended to measure; and (ii) experience an increased regulatory burden because they do not already compile such information in the normal course of their business activities.
Accordingly, the MFA expressed support for the BEA proposal to:
- provide that private fund managers would not need to complete surveys for foreign affiliates that are private funds and that do not own, directly or indirectly, 10 percent or more of the voting interest of another foreign business enterprise that is not also a private fund or holding company; and
- require reporters of investments in private funds that display characteristics of portfolio investment to report through the Treasury International Capital ("TIC") reporting system, rather than through the surveys.
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