News Overview
On May 6, 2025, the U.S. Department of the Treasury issued a notice announcing the launch of a mandatory survey regarding foreign residents’ holdings of U.S. securities, including certain money market instruments. The survey, known as the Survey of Foreign Holdings of U.S. Securities (SHLA), is scheduled for June 30, 2025. Authorized under the International Investment and Trade in Services Survey Act, this survey will be carried out by the Federal Reserve Bank of New York. The Treasury requires all U.S. persons identified in the notice to respond and comply with this survey.
FinTax Commentary
1. Introduction to the Survey
The announcement specifies definitions and key requirements for the survey as follows:
- A U.S. Person: This includes any individual, branch, partnership, affiliated group, association, estate, trust, corporation, or other organization residing in the U.S. or subject to its jurisdiction (regardless of incorporation status), as well as any government entity—whether foreign, federal, state, or local—and its agencies, corporations, financial institutions, or departments, including government-sponsored enterprises.
- Who Must Report: The mandatory survey is conducted under the authority of the International Investment and Trade in Services Survey Act (22 U.S.C. 3101 et seq.) and Section 129 of Title 31 of the Code of Federal Regulations (31 CFR 129). The survey sample is primarily drawn from data reported in the 2024 Benchmark Survey of Foreign Holdings of U.S. Securities and the December 2024 TIC SLT Report, which covers aggregate holdings, purchases, sales, and valuation changes. Only entities contacted by the Federal Reserve Bank of New York are required to report; others are exempt.
- What to Report: The survey collects information on foreign residents’ holdings of U.S. securities, including equities, short-term debt securities (including certain money market instruments), and long-term debt securities.
- How to Report: The full set of survey instructions, including definitions and procedures, is available at the official website: https://home.treasury.gov/data/treasury-international-capital-tic. The guidance outlines the survey’s objectives, reportable securities, and form completion requirements. Reporting is to be consolidated by state and Federal Reserve district, and reporting entities must retain records supporting their submissions for 36 months after submission.
- When to Report: Reporting entities must submit the required data to the Federal Reserve Bank of New York, acting as fiscal agent of the Treasury, by September 2, 2025.
2. Background of the Survey
This mandatory SHLA survey is not new—it is part of a series of recurring official surveys conducted under the International Investment and Trade in Services Survey Act. The data collected feeds into the Treasury International Capital (TIC) reporting system, which monitors cross-border investments between U.S. residents (including foreign branches in the U.S.) and foreign residents (including U.S. branches overseas). The TIC system captures holdings of short-term and long-term securities, financial derivatives, and asset/liability positions of banks and brokers across monthly, quarterly, and annual reporting schedules.
Besides the SHLA form, the TIC system includes other forms such as TIC B/D/S, SLT, SHC, and SHL, each targeting specific data types and frequencies. Regarding foreign investment in U.S. securities, the Treasury conducts a large-scale benchmark survey every five years using the SHL form, while the SHLA serves as an annual sample survey targeting selected large holders. The SHL requires mandatory reporting from all qualified entities; the SHLA only from those contacted. Both aim to gather reliable data for the U.S. balance of payments and international investment position, and support monetary and financial policy development.
This current SHLA is a follow-up to the 2024 benchmark and mainly targets large custodians and issuers. Although routine in nature, the survey may reflect heightened attention due to the current geopolitical and economic climate. According to a Reuters report dated May 16, U.S. Treasury data from March 2025 shows that foreign investors held $9.05 trillion in U.S. Treasuries—a record high—indicating strong demand. Meanwhile, geopolitical tensions and the unpredictability of Trump-era trade policies have increased market volatility, prompting the Treasury to enhance surveillance of foreign-held U.S. securities. As a result, this SHLA may emphasize timeliness and mandatory compliance more strongly than in the past.
3. Anticipated Impact
The SHLA helps the U.S. government gather accurate, reliable data on international securities holdings to track the country’s global financial position and support monetary policy decisions. It allows detailed monitoring of foreign investor behavior, potentially leading to policy shifts such as capital controls or enhanced foreign investment reviews.
For reporting institutions, the most immediate impact is increased compliance costs. For large custodians and international brokers, the SHLA requires high levels of audit readiness for data processing, identity verification, and asset valuation. Non-compliance or false reporting could result in civil, administrative, or even criminal penalties. This also increases the pressure on custodians and issuers to conduct reverse due diligence on investors. Therefore, although foreign investors are not directly required to report, they may be identified as beneficial owners. Relevant data could be reported by custodians or platform service providers, and investors may be required to cooperate in providing such information and closely monitor how future policy changes could impact their personal financial decisions.
It is important to emphasize that in this survey by the U.S. Department of the Treasury, only qualified institutions are obligated to report relevant information. Non-U.S. individual investors themselves are not directly required to file reports and will not receive any reporting notifications. However, if their U.S. securities are held under a reporting entity, the details of those assets may be included as part of the report. That said, it is believed that the data reported will be aggregated asset information, which the Treasury will use for statistical analysis, not for individual tax investigations or enforcement actions. In fact, acquiring investment data on residents and non-residents alike is a common objective among governments worldwide, as such data supports both macro-level policymaking and micro-level enforcement efforts.
Shortly before the launch of this U.S. Treasury survey, tax authorities in mainland China initiated audits targeting overseas income earned by Chinese tax residents. These audits were based on analysis and integration of CRS-reported data and cross-border fund flow records, with income from U.S. and Hong Kong stocks being among the key areas of focus. This similarly reflects the Chinese government’s heightened attention to domestic residents’ overseas investment activities.
Conclusion
This mandatory survey is one of the U.S. Treasury’s routine statistical exercises. However, against the backdrop of increasing uncertainty in global capital flows and rising concern over the composition of foreign capital, it also serves as a meaningful policy signal. It presents an important opportunity for the U.S. government to evaluate its exposure to foreign capital and assess its regulatory capacity. For individual investors, while not directly affected, this survey may indirectly influence those holding U.S. securities through compliance obligations and evolving policy trends.
Reference：
[4] https://home.treasury.gov/data/treasury-international-capital-tic
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