[Federal Register Volume 66, Number 91 (Thursday, May 10, 2001)]
[Notices]
[Pages 23929-23930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-11749]


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FEDERAL RESERVE SYSTEM


Agency Information Collection Activities: Proposed Collection; 
Comment Request

AGENCY: Board of Governors of the Federal Reserve System, Federal 
Reserve System.

Background

    On June 15, 1984, the Office of Management and Budget (OMB) 
delegated to the Board of Governors of the Federal Reserve System 
(Board) its approval authority under the Paperwork Reduction Act, as 
per 5 CFR 1320.16, to approve of and assign OMB control numbers to 
collection of information requests and requirements conducted or 
sponsored by the Board under conditions set forth in 5 CFR 1320 
Appendix A.1. Board-approved collections of information are 
incorporated into the official OMB inventory of currently approved 
collections of information. Copies of the OMB 83-Is and supporting 
statements and approved collection of information instruments are 
placed into OMB's public docket files. The Federal Reserve may not 
conduct or sponsor, and the respondent is not required to respond to, 
an information collection that has been extended, revised, or 
implemented on or after October 1, 1995, unless it displays a currently 
valid OMB control number.

Request for Comment on Information Collection Proposal

    The following information collection, which is being handled under 
this delegated authority, has received initial Board approval and is 
hereby published for comment. At the end of the comment period, the 
proposed information collection, along with an analysis of comments and 
recommendations received, will be submitted to the Board for final 
approval under OMB delegated authority. Comments are invited on the 
following:
    a. whether the proposed collection of information is necessary for 
the proper performance of the Federal Reserve's functions; including 
whether the information has practical utility;
    b. the accuracy of the Federal Reserve's estimate of the burden of 
the

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proposed information collection, including the validity of the 
methodology and assumptions used;
    c. ways to enhance the quality, utility, and clarity of the 
information to be collected; and
    d. ways to minimize the burden of information collection on 
respondents, including through the use of automated collection 
techniques or other forms of information technology.

DATES: Comments must be submitted on or before July 9, 2001.

ADDRESSES: Comments, which should refer to the OMB control number or 
agency form number, should be addressed to Jennifer J. Johnson, 
Secretary, Board of Governors of the Federal Reserve System, 20th and C 
Streets, NW., Washington, DC 20551, or mailed electronically to 
[email protected]. Comments addressed to Ms. Johnson may 
be delivered to the Board's mailroom between 8:45 a.m. and 5:15 p.m., 
and to the security control room outside of those hours. Both the 
mailroom and the security control room are accessible from the 
courtyard entrance on 20th Street between Constitution Avenue and C 
Street, N.W. Comments received may be inspected in room M-P-500 between 
9 a.m. and 5 p.m., except as provided in section 261.14 of the Board's 
Rules Regarding Availability of Information, 12 CFR 261.14(a).
    A copy of the comments may also be submitted to the OMB desk 
officer for the Board: Alexander T. Hunt, Office of Information and 
Regulatory Affairs, Office of Management and Budget, New Executive 
Office Building, Room 3208, Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: A copy of the proposed form and 
instructions, the Paperwork Reduction Act Submission (OMB 83-I), 
supporting statement, and other documents that will be placed into 
OMB's public docket files once approved may be requested from the 
agency clearance officer, whose name appears below.
    Mary M. West, Federal Reserve Board Clearance Officer (202-452-
3829), Division of Research and Statistics, Board of Governors of the 
Federal Reserve System, Washington, DC 20551. Telecommunications Device 
for the Deaf (TDD) users may contact Capria Mitchell (202) 872-4984, 
Board of Governors of the Federal Reserve System, Washington, DC 20551.

Proposal To Approve Under OMB Delegated Authority the 
Implementation of the Following Report

    Report title: the Consolidated Bank Holding Company Report of 
Equity Investments in Nonfinancial Companies.
    Agency form number: FR Y-12.
    Frequency: Quarterly and semi-annually.
    Reporters: Bank holding companies.
    Annual reporting hours: 14,112 hours.
    Estimated average hours per response: 16 hours.
    Number of respondents: 232.
    Small businesses are affected.
    General description of report: This information collection is 
mandatory (12 U.S.C. 1844(c)) and data may be exempt from disclosure 
pursuant to sections (b)(4) and (b)(8) of the Freedom of Information 
Act (5 U.S.C. 552(b)(4) and (8)).
    Current Actions: The Federal Reserve proposes to implement the 
mandatory FR Y-12. The FR Y-12 would collect information from certain 
domestic bank holding companies on their investments in nonfinancial 
companies on three schedules: Type of Investments, Type of Security, 
and Type of Entity within the Banking Organization. Large bank holding 
companies would report on a quarterly basis, and small bank holding 
companies would report semi-annually.
    BHC investments in nonfinancial companies have increased 
significantly over the past several years. These investments have 
contributed significantly to earnings and capital at institutions 
actively involved in this business line. Equity investments also have 
contributed to the volatility of earnings and capital in recent periods 
and have increased some institutions' risk profiles. The GLB Act 
permits financial holding companies to make investments in any amount 
in any type of nonfinancial company as part of a securities 
underwriting or merchant or investment banking activity. The 
investments permissible under the GLB Act's merchant banking authority 
are substantially broader in scope than the investment activities 
otherwise permissible for BHCs. Thus, these investments present the 
potential for additional volatility and risk in banking organizations' 
portfolios.
    The FR Y-12 would provide valuable supervisory information that 
would permit examiners and other supervisory staff to monitor the on-
going growth and contribution to profitability of this increasingly 
active business line. For institutions active in this business line, 
annual reviews generally are conducted. The FR Y-12 would serve as an 
important risk-monitoring device for institutions active in this 
business line by allowing supervisory staff to monitor an institution's 
activity between review dates. It also could serve as an ``early 
warning'' mechanism to identify institutions whose activities in this 
area are growing rapidly and that, therefore, may warrant special 
supervisory attention.
    On January 31, 2001, the Board and the Treasury Department 
published a final rule in the Federal Register on merchant banking 
investments made by financial holding companies (66 FR 8466). In 
Section 225.175 of this final rule, the two agencies stated that 
reporting forms to fulfill the quarterly and annual reporting 
requirements associated with this rule would be published separately. 
Institutions will not be held responsible for these reporting 
requirements until the reporting forms are finalized. This proposal 
covers the quarterly reporting requirements; the reporting forms for 
the annual reporting requirements will be addressed in a separate 
proposal later this year. The annual report would obtain information on 
merchant banking investments that have been held for an extended period 
of time.
    The Federal Reserve would also like to solicit public comment on 
the burden of collecting a memorandum item on consolidated recognized 
gains or losses on equity investments in nonfinancial companies. This 
item is being considered for purposes of determining what portion of a 
BHC's consolidated net income is derived from equity investment 
activities.

    Board of Governors of the Federal Reserve System, May 4, 2001.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 01-11749 Filed 5-9-01; 8:45 am]
BILLING CODE 6210-01-P