Canada's International Transactions in Securities

Detailed information for October 2017

Status:

Active

Frequency:

Monthly

Record number:

1535

The series on international transactions in securities cover portfolio transactions in stocks, bonds, and money market securities between non-residents and residents of Canada.

Data release - December 18, 2017

Description

The series on international transactions in securities covers portfolio transactions in stocks, bonds, and money market securities between non-residents and residents of Canada. The series include trade in outstanding issues, new issues, retirements, and change in interest payable and are further segmented by issuing sector and major geographical area.

The principle guiding their construction is that a change of ownership occurs between residents of a foreign country and Canada. These series form an integral part of Canada's balance of payments. Certain types of security transactions, which are excluded from this monthly program, are classified to other balance of payments series as follows:

- international security transactions representing direct investment capital by the principal owners of an enterprise, e.g. parent companies subscribing to new stocks of their foreign subsidiaries;

- foreign securities held as part of Canada's official international reserves or by Canadian banks for their own account;

Security transactions are recorded before charges for fees and commissions. The value used is the transaction price and the timing of a transaction's recording is generally the settlement or delivery date.

Statistical activity

The Canadian System of Macroeconomic Accounts (CSMA) provides a conceptually integrated framework of statistics for studying the state and behaviour of the Canadian economy. The accounts are centered on the measurement of activities associated with production of goods and services, the sales of goods and services in final markets, the supporting financial transactions, and the resulting wealth positions.

The Non-resident Sector Program is a component of the Canadian System of National Accounts (CSNA). The linkage is possible because the standards and conventions used to establish the Canadian residency of the transactors and to compile the transactions of Canadian residents with non-residents are identical to those used in the CSNA.

Subjects

  • Balance of international payments
  • Economic accounts
  • Government financial statistics

Data sources and methodology

Target population

The universe for the international transactions in securities includes all transactors who reside in Canada who buy or sell foreign securities, as well as transactors who reside outside of Canada who buy or sell Canadian securities. The transactors can be businesses, governments, non-profit institutions, households or persons.

In general, it is much more practical to collect these data from the intermediaries who act as brokers or agents for those trading securities, rather than trying to collect the data from the transactors themselves who are ultimately buying or selling the securities. Further streamlining of collection effort is gained by requesting data from companies that perform data processing services on behalf of several intermediaries. There are two such data processing firms that supply data for approximately twenty of the largest intermediaries.

In some cases, however, the purchaser or seller engages in these transactions for their own account, without going through an intermediary. These transactors, which include large institutional investors such as pension funds, are directly surveyed.

The series on foreign portfolio investment in Canadian securities are reported in a monthly survey sent to the major investment dealers, pension funds, and the largest debt issuing institutions such as the provinces and their enterprises.

A considerable effort is made to identify the various Canadian institutions which invest in foreign securities and survey them on a monthly basis.

Instrument design

The questionnaires used for the international transactions in securities were designed in the 1950's with minor modifications implemented up to the present.

The following questionnaires are used to collect data for compiling Canada's international transactions in securities:

BP30 - Canada's international transactions in securities (monthly)
BP30A - Sales of short-term securities to non-residents of Canada (monthly)
BP30B - Purchases of short-term securities from non-residents of Canada (monthly)
BP30Q - Canada's international transactions in securities (quarterly)

Sampling

Data are requested from transactors who are known to engage in international portfolio investment transactions, or in some cases from the intermediaries who act on their behalf, or in other cases from firms who process data on behalf of intermediaries.

For those transactors who trade for their own account, and thus are surveyed directly, the very large transactors are surveyed on a monthly basis. There are approximately 25 such transactors and another 15 transactors who trade for their own account, but on a smaller scale, and these are surveyed directly on a quarterly basis.

There are 55 investment intermediaries who are surveyed, and there are two data processing firms that provide data for an additional twenty intermediaries.

These surveys are believed to cover close to 100% of the target population on a quarterly basis, with over 90% of the target population covered on a monthly basis.

Data sources

Responding to this survey is mandatory.

Data are collected directly from survey respondents.

Data are collected directly from survey respondents and extracted from administrative files.

Most respondents send electronic files using Statistics Canada's Electronic File Transfer system.
Questionnaires - Data are collected mostly via monthly questionnaires; response is mandatory for the surveyed entities. Questionnaires are sent out on the last business day of the month. Respondents are instructed to send their completed questionnaires to the International Accounts and Trade Division within three weeks after the end of the month. Followed-up done by emails or phone calls.

Questionnaires and communications are offered in both official languages to respondents.

Bank of Canada's Business and Capital Market Statistics (BCMS) for new issues and redemptions of Canadian securities.

Some data sources are combined to compile Canada's International Transactions in Securities. Other sources are used such as financial press, private commercial databases, etc.

View the Questionnaire(s) and reporting guide(s).

Error detection

The raw data received from respondents are submitted to edits to ensure consistency and coherence. This includes verifying that detailed transactions add up to totals provided, ensuring geographical and currency codes are valid, and removal of transactions that are included due to an incorrect assignment of country of residence. The volume and value of transactions for each respondent is compared to their historical levels and any dubious high or low volumes or values are identified. When necessary, there is follow up with the respondent to verify and if necessary correct the data.

Imputation

In the case of non-response, both purchases and sales of securities are imputed using equal values by type of security (foreign / Canadian, debt / equity). The result of this type of imputation is that gross sales and gross purchases are both increased, but the net international flow of securities for the imputed respondent is zero. The level of sales and purchases for imputation is chosen by analysing the respondent's historical trend.

Estimation

Some respondents are surveyed on a quarterly basis only. Monthly values for these respondents are estimated by dividing the most recent quarterly data by three.

Macro adjustments are sometimes made where the data suggest that some transactions may have been missed. Macro adjustments are also made for new issues and retirements. In the case of retirements, the data generated by the system does not include calls by the issuer which frequently occur when interest rates decline.

Quality evaluation

Coverage of foreign portfolio investment in Canada is validated against administrative data and annual census surveys of foreign holdings of Canadian portfolio investments:

BP-FIC - Foreign Investment in Canada(annual)
BP55 - Particulars of issues of funded debt and foreign bank borrowings (annual)
BP56 - Geographic distribution of selected long-term debt booked in Canada at Canadian banks and consolidated Canadian subsidiaries (annual)

Coverage of Canadian portfolio investment abroad is validated against the annual BP-54 questionnaire (Canadian portfolio investment).

Disclosure control

Statistics Canada is prohibited by law from releasing any information it collects which could identify any person, business, or organization, unless consent has been given by the respondent or as permitted by the Statistics Act. Various confidentiality rules are applied to all data that are released or published to prevent the publication or disclosure of any information deemed confidential. If necessary, data are suppressed to prevent direct or residual disclosure of identifiable data.

Revisions and seasonal adjustment

Estimates for each month are revised when those for subsequent months of the same year are published. At the time of the third quarter of each year (reference month: September), revisions are generally made back three years. Canada's international transactions in Securities is not normally revised again except when comprehensive revisions are carried out. This is in line with the revision policy of the Canadian Systems of Macroeconomics Accounts (CSMA).

There is no seasonal adjustment of the international transactions in securities data.

Data accuracy

The response rate for the monthly questionnaires is excellent, being consistently over 95%.

Non-response error is related to respondents that may refuse to answer, are unable to respond or are too late in reporting. In these cases, data are imputed. The extent of any imputation error decreases with increases in the response rate and attempts are therefore made to obtain as high a response rate as possible.

Processing error may occur at various stages of processing such as data entry, editing and tabulation. Measures have been taken to minimize these errors. Tabulation is automated to eliminate human error.

Documentation

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