[Federal Register Volume 76, Number 94 (Monday, May 16, 2011)]
[Rules and Regulations]
[Pages 28168-28169]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-11788]



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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 335

RIN 3064-AD67


Securities of Nonmember Insured Banks

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Final rule.

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SUMMARY: The FDIC is adopting as final the Interim Final Rule published 
in the Federal Register (see 75 FR 73947) on November 30, 2010. The 
final rule adopts amendments to the FDIC's securities disclosure 
regulations applicable to state nonmember banks with securities 
required to be registered under section 12 of the Securities Exchange 
Act of 1934 (Exchange Act) and cross references to regulations issued 
by the Securities Exchange Commission (SEC). The FDIC received no 
comments in response to the Interim Final Rule concerning these 
revisions. Accordingly, the Final Rule makes no changes from the 
Interim Final Rule that preceded it.
    The Final Rule incorporates, through cross references, changes in 
regulations adopted by the SEC into the provisions of the FDIC's 
securities regulations. Cross referencing will ensure that the FDIC's 
regulations remain substantially similar to the SEC's regulations, as 
required by law.

DATES: These amendments are effective on May 16, 2011.

FOR FURTHER INFORMATION CONTACT: Dennis Chapman, Senior Staff 
Accountant, Division of Risk Management Supervision, (202) 898-8922 or 
[email protected]; Maureen Loviglio, Senior Staff Accountant, Division 
of Risk Management Supervision, (202) 898-6777 or [email protected]; 
or Mark G. Flanigan, Counsel, Legal Division, (202) 898-7426 or 
[email protected], Federal Deposit Insurance Corporation, 550 17th 
Street, NW., Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 12(i) of the Exchange Act, as amended (15 U.S.C. 78l(i)), 
authorizes the FDIC to issue regulations applicable to the securities 
of state nonmember banks that are substantially similar to those of the 
SEC with respect to its powers, functions, and duties to administer and 
enforce sections 10A(m) (standards relating to audit committees), 12 
(securities registration), 13 (periodic reporting), 14(a) (proxies and 
proxy solicitation), 14(c) (information statements), 14(d) (tender 
offers), 14(f) (arrangements for changes in directors), and 16 
(beneficial ownership and reporting) of the Exchange Act, and sections 
302 (corporate responsibility for financial reports), 303 (improper 
influence on conduct of audits), 304 (forfeiture of certain bonuses and 
profits), 306 (insider trades during blackout periods), 401(b) 
(disclosure of pro forma financial information), 404 (management 
assessment of internal controls), 406 (code of ethics for senior 
financial officers), and 407 (disclosure of audit committee financial 
experts) of the Sarbanes-Oxley Act (codified at 15 U.S.C. 7241, 7242, 
7243, 7244, 7261, 7262, 7264, and 7265) in regard to the depository 
institutions for which the FDIC is the appropriate Federal banking 
agency. These regulations must be substantially similar to the 
regulations of the SEC under the listed sections of the Exchange Act 
and the Sarbanes-Oxley Act, unless the FDIC publishes its reasons for 
deviating from the SEC's rules.\1\ The FDIC's regulations governing 
state nonmember banks with securities subject to the provisions of the 
Exchange Act are contained in part 335 of title 12 of the Code of 
Federal Regulations (CFR).
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    \1\ 15 U.S.C. 78l(i).
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II. Interim Final Rule and Request for Comments

    In November 2010, the FDIC's Board of Directors authorized 
publication of an Interim Final Rule in the Federal Register which 
revised Part 335 by cross referencing changes in regulations adopted by 
the SEC into the provisions of the FDIC's securities regulations. The 
Interim Final Rule also modified Part 335 by eliminating references to 
specific CFR sections and subparts of the SEC's rules, and by replacing 
them with references to titles and parts of the CFR instead. Further, 
these changes reflect changes to SEC regulations with respect to small 
business issuers and provide general guidance to FDIC filers regarding 
the electronic filing of certain documents.
    Finally, the Interim Final Rule made certain nonsubstantive changes 
to part 335 to improve clarity and readability, and to correct outdated 
terms. The new part 335 cross referencing provisions are an efficient 
way to apply SEC Exchange Act rules to state nonmember banks that have 
securities registered pursuant to the Exchange Act. The part 335 cross 
referencing revisions will also minimize the need to amend part 335 
each time the SEC revises its Exchange Act regulations resulting in 
amendments to a CFR section or subpart. The FDIC believes that cross 
referencing to the regulations of the SEC simplifies the administration 
and enforcement of the Exchange Act and also helps promote uniformity 
and consistency of administration.
    The FDIC requested comments on all aspects of the rule changes, 
with comments due by January 31, 2011. Commenters were asked to support 
any suggestions that the FDIC modify the requirements of the SEC rules, 
regulations, and forms for state nonmember banks by demonstrating how 
such modification would satisfy the requirements of section 12(i) of 
the Exchange Act. The FDIC also welcomed comments on the general 
organization of Part 335. No comments were received on the Interim 
Final Rule.

III. Final Rule

    As explained above, the FDIC requested comments on the Interim 
Final Rule that was issued on November 30, 2010, and received no 
comments during the comment period that ended on January 31, 2011. 
Accordingly, the FDIC is issuing the Final Rule with no modifications.

IV. Regulatory Analysis and Procedure

A. Administrative Procedure Act

    Pursuant to the Administrative Procedure Act (APA), 5 U.S.C. 
553(b)(B), the FDIC found good cause to issue the Interim Final Rule 
without first seeking public comment. The Exchange Act requires that 
the FDIC issue regulations substantially similar to those of the SEC or 
publish its reasons for not doing so. Certain portions of Part 335 that 
are being amended are organizational; other portions result from the 
amendment or adoption of SEC Exchange Act regulations that were 
published with notice and opportunity for the public to comment. 
Nonetheless, the FDIC solicited public comment and received no comments 
on the Interim Final Rule. For these reasons, the FDIC confirms its 
finding that the good cause exception provided for in section 553(b)(B) 
of the APA applies to the Final Rule.
    Section 553(d)(3) of the APA provides that the publication of a 
rule shall be made not less than 30 days before its effective date, 
except ``* * * (3) as otherwise provided by the agency for good cause 
found and published with the rule.'' For reasons that supported its 
invocation of the good cause exception to section 553(b)(B) of the APA, 
the FDIC relied upon the good cause exception to section 553(d)(3) and 
published the Interim Final Rule with

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an immediate effective date. For the same reasons, the FDIC finds that 
there is good cause for this Final Rule to take effect immediately upon 
publication in the Federal Register. The Final Rule is identical to the 
Interim Final Rule that became effective on November 30, 2010. No 
purpose would be served by delaying the Final Rule's effective date.

B. Riegle Community Development and Regulatory Improvement Act

    The Riegle Community Development and Regulatory Improvement Act 
provides that any new regulations or amendments to regulations 
prescribed by a Federal banking agency that impose additional 
reporting, disclosures, or other new requirements on insured depository 
institutions shall take effect on the first day of a calendar quarter 
which begins on or after the date on which the regulations are 
published in final form, unless the agency determines, for good cause 
published with the rule, that the rule should become effective before 
such time.\2\ For the same reasons discussed above, the FDIC finds that 
good cause exists for an immediate effective date for the Final Rule.
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    \2\ 12 U.S.C. 4802.
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C. Paperwork Reduction Act

    The Final Rule contains no new collections of information as 
defined by the Paperwork Reduction Act.

D. Regulatory Flexibility Act

    Pursuant to the Regulatory Flexibility Act (RFA), a regulatory 
flexibility analysis is required only when the agency must publish a 
notice of proposed rulemaking.\3\ As discussed in the Interim Final 
Rule and above, the FDIC has determined for good cause that general 
notice and opportunity for comment is unnecessary. Therefore, the RFA, 
pursuant to 5 U.S.C. 601(2), does not apply.
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    \3\ 5 U.S.C. 603, 604.
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E. Small Business Regulatory Enforcement Fairness Act

    The Office of Management and Budget (OMB) has determined that the 
Final Rule is not a ``major rule'' within the meaning of the relevant 
sections of the Small Business Regulatory Enforcement Act of 1996 
(SBREFA) (5 U.S.C. 801, et seq.).
    As required by SBREFA, the FDIC will file the appropriate reports 
with Congress and the General Accounting Office so that the Final Rule 
may be reviewed.

F. The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families

    The FDIC has determined that the Final Rule will not affect family 
well-being within the measure of section 654 of the Treasury and 
General Government Appropriations Act, enacted as part of the Omnibus 
Consolidated and Emergency Supplemental Appropriations Act of 1999 
(Pub. L. 105-277, 112 Stat. 2681).

G. Plain Language

    Section 722 of the Gramm-Leach-Bliley Act, Public Law 106-102, 113 
Stat. 1338, 1471 (November 12, 1999), requires the federal banking 
agencies to use plain language in all proposed and final rules 
published after January 1, 2000. The FDIC has sought to present the 
revisions to Part 335 in a simple and straightforward manner. It 
requested comments on all aspects of the Interim Final Rule and 
received none.

List of Subjects in 12 CFR Part 335

    Accounting, Banks, Banking, Confidential business information, 
Reporting and recordkeeping requirements, Securities.

PART 335--SECURITIES OF NONMEMBER INSURED BANKS

0
Accordingly, the interim rule amending 12 CFR part 335 which was 
published at 75 FR 73947 on November 30, 2010, is adopted as a final 
rule without change.

[FR Doc. 2011-11788 Filed 5-13-11; 8:45 am]
BILLING CODE 6714-01-P