[Federal Register Volume 68, Number 240 (Monday, December 15, 2003)]
[Notices]
[Pages 69700-69703]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E3-00561]


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FEDERAL RESERVE SYSTEM


Agency Information Collection Activities: Proposed Collection; 
Comment Request

AGENCY: Board of Governors of the Federal Reserve System.
SUMMARY: 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-I's 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 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 February 13, 2004.

ADDRESSES: Comments may be mailed to Ms. Jennifer J. Johnson, 
Secretary, Board of Governors of the Federal Reserve System, 20th 
Street and Constitution Avenue, NW., Washington, DC 20551. However, 
because paper mail in the Washington area and at the Board of Governors 
is subject to delay, please consider submitting your comments by e-mail 
to [email protected], or faxing them to the Office of 
the Secretary at 202-452-3819 or 202-452-3102. Comments addressed to 
Ms. Johnson may also be delivered to the Board's mail facility in the 
West Courtyard between 8:45 a.m. and 5:15 p.m., located on 21st Street 
between Constitution Avenue and C Street, NW. Members of the public may 
inspect comments in Room MP-500 between 9 a.m. and 5 p.m. on weekdays 
pursuant to 261.12, except as provided in 261.14, of the Board's Rules 
Regarding Availability of Information, 12 CFR 261.12 and 261.14.
    A copy of the comments may also be submitted to the OMB desk 
officer for the Board: Joseph Lackey, Office of Information and 
Regulatory Affairs, Office of Management and Budget, New Executive 
Office Building, Room 10235, 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.
    Cindy Ayouch, 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 (202-263-4869), Board of Governors 
of the Federal Reserve System, Washington, DC 20551.

Proposal to approve under OMB delegated authority the revision, without 
extension, of the following reports:

    Report title: Financial Statements for Bank Holding Companies.
    Agency form numbers: FR Y-9C, FR Y-9LP, FR Y-9SP, FR Y-9CS, and FR 
Y-9ES.
    OMB control number: 7100-0128.
    Frequency: Quarterly, semiannually, and annually.
    Reporters: Bank holding companies (BHCs).
    Annual reporting hours: 369,113.
    Estimated average hours per response: FR Y-9C: 34.80 hours, FR Y-
9LP: 4.75 hours, FR Y-9SP: 4.09 hours, FR Y-9CS: 30 minutes, FR Y-9ES: 
30 minutes.
    Number of respondents: FR Y-9C: 2,113, FR Y-9LP: 2,455, FR Y-9SP: 
3,312, FR Y-9CS: 600; FR Y-9ES: 92.
    General description of report: This information collection is 
mandatory (12 U.S.C. 1844(c)). Confidential treatment is not routinely 
given to the data in these reports. However, confidential treatment for 
the reporting information, in whole or in part, can be requested in 
accordance with the instructions to the form.
    Abstract: The FR Y-9C consists of standardized consolidated 
financial statements similar to the Federal Financial Institutions 
Examination Council (FFIEC) Consolidated Reports of Condition and 
Income (Call Reports) (FFIEC 031 & 041; OMB No.7100-0036). The FR Y-9C 
is filed quarterly by top-tier BHCs that have total assets of $150 
million or more and by lower-tier BHCs that have total consolidated 
assets of $1 billion or more. In addition, multibank holding companies 
with total consolidated assets of less than $150 million with debt 
outstanding to the general public or engaged in certain nonbank 
activities must file the FR-Y9C.
    The FR Y-9LP includes standardized financial statements filed 
quarterly on a parent company only basis from each BHC that files the 
FR Y-9C. In addition, for tiered BHCs, a separate FR Y-9LP must be 
filed for each lower tier BHC.
    The FR Y-9SP is a parent company only financial statement filed 
semiannually by one-bank holding companies with total consolidated 
assets of less than $150 million, and multibank holding companies with 
total consolidated assets of less than $150 million that meet certain 
other criteria. This report, an abbreviated version of the more 
extensive FR Y-9LP, is designed to obtain basic balance sheet and 
income statement information for the parent company, information on 
intangible assets, and information on intercompany transactions.
    The FR Y-9CS is a free form supplement that may be utilized to 
collect any additional information deemed to be critical and needed in 
an expedited manner. It is intended to

[[Page 69701]]

supplement the FR Y-9C and FR Y-9SP reports.
    The FR Y-9ES is filed annually by BHCs that are Employee Stock 
Ownership Plans (ESOPs).
    Current Actions: A detailed description of the proposed changes 
follows.
Proposed Revisions Effective March 31, 2004.
    Voluntary Advance Collection of Summary FR Y-9C Data from the 
Largest BHCs.
    The Federal Reserve proposes to incorporate into the FR Y-9C 
information collection the advance collection of key FR Y-9C summary 
items from selected institutions of up to fifty of the largest BHCs. 
These data would be collected in advance of the regular FR Y-9C filing 
deadline on a voluntary, as-needed basis. The Federal Reserve relies 
primarily on the quarterly earnings press releases published by these 
institutions to perform analysis of the largest BHCs - individually and 
in aggregate - weeks before FR Y-9C filings become available. However, 
pronounced and sustained differences have appeared between aspects of 
these published results and the FR Y-9C data at many of these 
institutions. The nature of these differences appears to be specific to 
each institution, related to the manner in which the institution 
chooses to present its results. The presence of such differences 
impairs the Federal Reserve's ability to analyze aggregates and make 
meaningful comparisons across institutions.
    The Federal Reserve has addressed these differences by obtaining 
preliminary or estimated FR Y-9C information from affected institutions 
on a voluntary basis through informal dialog after the press releases 
have been issued. These cases were highly individualized, in which 
selected institutions were generally asked to provide preliminary 
information on a variety of FR Y-9C items. However, over the past year 
a growing range of items with differences has emerged at a 
significantly larger set of these institutions, and indeed for some 
items (e.g., earning assets) there have been significant differences 
for a major share of these largest institutions.
    Obtaining these selected, institution-specific preliminary data 
allows the Federal Reserve to evaluate meaningfully the financial 
condition and performance of the largest banking institutions, to 
discern and monitor emerging trends and issues (such as credit quality) 
in the banking industry, and to analyze these data in a timely manner. 
The Federal Reserve is willing to accept preliminary or estimated data 
from the institution in the interest of minimizing burden. In general, 
the data requested are supplemental to those published in press 
releases and are routinely contained in a firm's management information 
systems.
    The items requested are primarily summary items such as total 
noninterest expense or total loans, and a few individual line items 
such as total trading revenue. The number of items collected varies 
from respondent to respondent according to the nature of the item, its 
relevance to the institution, and the basis of presentation used in the 
BHC's press release. However, any changes to this information 
collection would not exceed the estimated average burden of 30 minutes 
per respondent.
    The advance information is collected by the Federal Reserve in the 
manner most convenient to the institution, mainly through electronic 
mail, telephone, or facsimile transmission. Reporting instructions 
would not be required because the requested financial items are defined 
in the FR Y-9C instructions. The advance information collected would be 
used only within the Federal Reserve System and would not be made 
available to the public.
    Cover Pages
    The Federal Reserve proposes to modify the contact information on 
the cover page of the FR Y-9C, FR Y-9LP, and FR Y-9SP reports to 
include the email address of the person to whom questions about this 
report should be directed. Collection of the email address would 
enhance communications between the Federal Reserve Bank staff and the 
respondent.
    Schedule HC - Balance Sheet
    The Federal Reserve proposes to modify the definition of Schedule 
HC, Balance Sheet, item 20, ``Other liabilities,'' and Schedule HC-G, 
Other Liabilities, item 4, ``Other,'' to include information on trust 
preferred securities. This information would no longer be included in 
Schedule HC, item 22, ``Minority interest in consolidated subsidiaries 
and similar items.'' The proposed reporting change would be consistent 
with the manner in which trust preferred securities are presented for 
other public reporting purposes. In addition a footnote would be added 
to the form for item 20 stating that this item ``Includes guaranteed 
preferred beneficial interests in the bank holding company's junior 
subordinated debt securities (trust preferred securities).'' The 
footnote would clarify that trust preferred securities information 
included in other liabilities is comparable to information reported 
under this caption in other public financial reports, such as the 
Securities and Exchange Commission (SEC) Form 10-K.
    This proposed reporting change does not represent any change to the 
risk-based capital treatment for trust preferred securities. Consistent 
with guidance previously provided in Federal Reserve Supervisory Letter 
SR 03-13 of July 2, 2003, BHCs should continue to include eligible 
trust preferred securities in their tier 1 capital for regulatory 
capital purposes. The amounts qualifying for inclusion in tier 1 
capital should be reported in Schedule HC-R, item 6, in accordance with 
the reporting instructions. The Federal Reserve will review the 
regulatory implications of any accounting treatment changes affecting 
trust preferred securities and, if necessary or warranted, will provide 
further appropriate guidance.
    Schedule HC---Memoranda
    In order to promote public awareness of risk disclosures, and to 
enhance the ability of the public to readily access this information, 
the Federal Reserve proposes to add to Schedule HC-M, a new Memorandum 
item 22, ``URL for the reporting bank holding company's web page that 
displays risk disclosures, including those about credit and market 
risk.'' This item would be updated on a quarterly basis, if applicable. 
The Federal Reserve has long supported greater market discipline and 
enhanced risk disclosures by banking organizations to achieve that 
objective. The Federal Reserve Board, in cooperation with the U.S. 
Securities and Exchange Commission (SEC) and the Office of the 
Comptroller of the Currency, sponsored the Working Group on Public 
Disclosure (the Working Group) in April 2000, which was asked to 
provide recommendations for improved public disclosures. The Working 
Group issued six recommendations in January 2001 for enhanced 
disclosure of market and credit risk and the Federal Reserve issued an 
SR letter that strongly encouraged large banking organizations to adopt 
these recommendations. Some large banking organizations have since 
adopted them. Because the Working Group recommendations focus on large 
banking organizations, the Federal Reserve proposes to collect the URL 
from large banking organizations with total assets of $30 billion or 
more that provide risk disclosures on their web site. The Federal 
Reserve would provide to the public the web address, which would link 
directly to the risk disclosure information on the large banking 
organization's web site or to a table that cross-references to the 
location of the disclosures. For example,

[[Page 69702]]

this information would likely be found in the risk management 
disclosure in management's discussion and analysis (MD&A) of large BHCs 
Form 10-K and Form 10-Q filed with the SEC and usually available on the 
BHC's website.
    Schedule HC---Regulatory Capital
    The Federal Reserve proposes to make the following changes to 
Schedule HC-R, Regulatory Capital.
    1. Remove the caption for memoranda item 3.a, ``Perpetual preferred 
stock eligible for inclusion in Tier 1 capital:'' and modify the 
caption for memoranda item 3 to read ``Preferred stock (including 
related surplus) eligible for inclusion in Tier 1 capital:.''
    2. Renumber memoranda item 3.a(1) as item 3.a and modify the 
caption to include a clarifying parenthetical note. The caption would 
read ``Noncumulative perpetual preferred stock (included and reported 
in ``Total equity capital,'' on Schedule HC).''
    3. Renumber memoranda item 3.a(2) as item 3.b and modify the 
caption to include a clarifying parenthetical note. The caption would 
read ``Cumulative perpetual preferred stock (included and reported in 
``Total equity capital,'' on Schedule HC).''
    4. Modify current memoranda item 3.b, ``Cumulative preferred stock 
(e.g., trust preferred securities) included and reported in ``Minority 
interest in consolidated subsidiaries and similar items,''on Schedule 
HC'' and renumber as 3.d. The revised caption would read ``Other 
cumulative preferred stock eligible for inclusion in Tier 1 capital 
(e.g., trust preferred securities) (included in Schedule HC, items 20 
or 22).'' This item would include trust preferred stock eligible for 
Tier 1 capital that is issued out of a special purpose subsidiary for 
which the bank holding company is the sole common shareholder, and that 
is reflected in Schedule HC, item 20, ``Other liabilities.'' This item 
would also include any other cumulative preferred stock included in 
Schedule HC, item 22, ``Minority interest in consolidated subsidiaries 
and similar items.''
    5. Add a new memoranda item 3.c, ``Other noncumulative preferred 
stock eligible for inclusion in Tier 1 capital (e.g., REIT preferred 
securities) (included in Schedule HC, item 22).''
    The Federal Reserve proposes the first three changes to clarify 
existing items and proposes the fourth change for consistency with the 
proposed changes to Schedule HC, Balance Sheet, on trust preferred 
securities. The Federal Reserve proposes the fifth change, the addition 
of new memoranda item 3.c, to collect information on real estate 
investment trust (REIT) preferred securities. REIT preferred securities 
are a type of innovative capital instrument typically issued from a 
special purpose subsidiary at the bank level. Qualifying REIT preferred 
securities may be included in bank Tier 1 capital with a limit of up to 
25 percent of Tier 1. Currently no data are collected for REIT 
instruments on financial reports at either the bank or BHC level. 
Therefore the Federal Reserve does not have comprehensive information 
on the amount of these instruments in banks' or BHCs' capital 
structures. The Federal Reserve has learned through available anecdotal 
information that a number of large banking organizations have made 
issuances of over $500 million. This item would also include any other 
noncumulative preferred stock included in Schedule HC, item 22, 
``Minority interest in consolidated subsidiaries and similar items.''
    Instructions
    Instructional revisions and clarifications will be made to FR Y-9C, 
FR Y-9LP, FR Y-9SP, and FR Y-9ES, as necessary, in an attempt to 
achieve greater consistency in reporting by respondents.
Proposed Revisions Effective September 30, 2004 and December 31, 2004
    Editing of Data by Respondents
    The Federal Reserve proposes to require data validation checks to 
be performed by respondents as a condition for the accepted filing of 
the FR Y-9 reports (except for the FR Y-9CS). Implementation of this 
requirement is targeted as of the September 30, 2004, reporting date 
for FR Y-9C and FR Y-9LP respondents, and as of the December 31, 2004, 
reporting date for FR Y-9SP and FR Y-9ES respondents. The proposed 
changes are also consistent with the proposed data validation process 
for the Call Report, also targeted for September 2004.
    Currently, after the Federal Reserve receives a bank holding 
company (BHC) report, it is subjected to edit checks to assess the 
accuracy and reasonableness of the data submitted. ``Validity'' edits 
verify the accuracy of reported data, for example, whether the 
individual items in a report schedule add up to the reported total or 
whether an item reported in one schedule agrees with the amount 
reported for an equivalent item in another schedule. Validity edits 
include mathematical and logical tests. ``Quality'' edits test the 
reasonableness of data and include tests using historical data and 
other relational tests, for example, whether the amount reported for a 
year''to''date item is greater than or equal to the amount reported for 
the same item in the previous quarter or whether the fair value 
reported for a category of securities falls within a specified range of 
the amortized cost reported for these securities. Also certain quality 
or ``interseries'' edits compare data reported on parent''only 
statements (FR Y-9LP) and data reported on the consolidated bank 
holding company statements (FR Y-9C).\1\
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    \1\ A list of validity and quality edits (including interseries 
edits) is located at the end of the instructions to the FR Y-9 
reports (except for the FR Y-9CS), and validity edits are currently 
distributed to respondents in the form of a Reports Monitoring 
Checklist.
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    If this validation process identifies any edit exceptions in a 
BHC's report, a Federal Reserve analyst may contact the BHC and explain 
the edit exceptions detected in the BHC''s report. The BHC then reviews 
the reported data associated with these edit exceptions and provides 
the Federal Reserve analyst with any necessary corrections or describes 
the underlying facts and circumstances that explain why the data are 
correct as reported.
    Under this proposal, the validation process will take place in 
conjunction with a BHC's submission of its FR Y-9 reports. The Federal 
Reserve's internet''based data collection system will subject a 
respondent's electronic data submission, whether by data entry or by 
file transfer, to published validity and quality edit checks and 
transmit the results of such checks to the respondent.\2\ Companies 
that offer computer software to aid in the preparation of FR -9 reports 
or BHCs that have developed their own reporting software may also 
choose to incorporate validity and quality edit checks into their 
software. Thus edit exceptions will be identified while a BHC is 
preparing its report or during the submission process. The BHC will 
then be expected to correct its report data to eliminate any validity 
edit exceptions. The BHC will also be provided a method for supplying 
explanatory comments concerning quality edit exceptions. The Federal 
Reserve would not accept any submission as fulfilling reporting 
requirements or meeting the filing deadline that fails any validity 
edits or lacks explanatory comments concerning any quality edit 
exceptions.\3\
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    \2\ Note that due to interseries comparisons between the FR Y-
9LP and the FR Y-9C, the FR Y-9LP cannot be processed until the FR 
Y-9C is accepted.
    \3\ The data collection system will provide for acceptance of 
data that in rare situations may fail a validity edit due to unusual 
circumstances but have been identified as accurate.
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    Because a BHC will be made aware of any edit exceptions while its 
staff is completing its FR Y-9 report, the BHC

[[Page 69703]]

will respond to these exceptions immediately rather than 
after''the''fact as it is under the Federal Reserve's current method. 
Although BHCs will still have to provide explanations to support data 
that trigger quality edit exceptions, this change should reduce 
subsequent questions from the Federal Reserve about these edits. The 
Federal Reserve will continue to treat BHCs explanatory comments that 
address any quality exceptions as confidential. Overall the proposed 
requirements are expected to improve the timeliness and quality of BHC 
data, enhance market discipline through faster access by the public, 
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and utilize technological advances in an efficient manner.

    Board of Governors of the Federal Reserve System, December 9, 
2003.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. E3-00561 Filed 12-12-03; 8:45 am]
BILLING CODE 6210-01-S