A U.S. custodian does not need to report unless there is no other U.S. financial intermediary involved in the transaction. If a U.S. broker is involved in the transaction, the broker should report payments of brokerage commissions. If there is no U.S. broker involved with the transaction, and a U.S. financial manager is involved, the U.S. financial manager should report. When neither a U.S. broker nor a U.S. manager is involved in the transaction, the U.S. custodian should report. For example, if a U.S. principal uses a foreign manager but a U.S. custodian, then the U.S. custodian should report on their client’s behalf.

If the custodian cannot obtain the information needed to report, the U.S. principal or its paying agent should report. The custodian should confer with the principal to ensure that the transactions will be reported. The U.S. principal must make the determination of whether it or the paying agent will report on their behalf.