[Federal Register Volume 77, Number 249 (Friday, December 28, 2012)]
[Notices]
[Pages 76484-76487]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-31179]



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FEDERAL RESERVE SYSTEM


Agency Information Collection Activities: Announcement of Board 
Approval Under Delegated Authority and Submission to OMB

AGENCY: Board of Governors of the Federal Reserve System.

SUMMARY: Notice is hereby given of the final approval of a proposed 
information collection by the Board of Governors of the Federal Reserve 
System (Board) under OMB delegated authority, as per 5 CFR 1320.16 (OMB 
Regulations on Controlling Paperwork Burdens on the Public). Board-
approved collections of information are incorporated into the official 
OMB inventory of currently approved collections of information. Copies 
of the Paperwork Reduction Act Submission, supporting statements and 
approved collection of information instrument(s) 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.

FOR FURTHER INFORMATION CONTACT: Federal Reserve Board Clearance 
Officer--Cynthia Ayouch--Division of Research and Statistics, Board of 
Governors of the Federal Reserve System, Washington, DC 20551 (202) 
452-3829.
    Telecommunications Device for the Deaf (TDD) users may contact 
(202) 263-4869, Board of Governors of the Federal Reserve System, 
Washington, DC 20551.
    OMB Desk Officer--Shagufta Ahmed --Office of Information and 
Regulatory Affairs, Office of Management and Budget, New Executive 
Office Building, Room 10235, 725 17th Street NW., Washington, DC 20503.
    Final approval under OMB delegated authority the implementation of 
the following report:
    Report title: The Banking Organization Systemic Risk Report.
    Agency form number: FR Y-15.
    OMB Control number: 7100-0352.
    Effective Date: The FR Y-15 report will be effective on December 
31, 2012 for those U.S. top-tier bank holding companies (BHCs) that 
were designated as global systemically important banks (G-SIBs) by the 
Financial Stability Board (FSB) on November 1, 2012.\1\ The initial 
submission date for these respondents will be 90 days after the 
December 31, 2012, as-of-date. The FR Y-15 report will be effective for 
the full BHC panel (i.e., all BHCs with over $50 billion in total 
consolidated assets, including those U.S. top-tier BHCs that are 
subsidiaries of foreign banking organizations (FBOs)) as of December 
31, 2013. Beginning with the December 31, 2013, as-of-date, all BHCs 
will file the FR Y-15 report 60 days after the as-of-date.
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    \1\ See Update of group of global systemically important banks 
(G-SIBs), available at http://www.financialstabilityboard.org/publications/r_121031ac.pdf.
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    Frequency: Annual.
    Reporters: BHCs with over $50 billion in total consolidated assets.
    Estimated annual reporting hours: 55,400 hours.
    Estimated average hours per response: Implementation: U.S. G-SIBs, 
1,000 hours; all other BHCs, 1,500 hours; Ongoing: 300 hours for U.S. 
G-SIBs and all other BHCs.
    Number of respondents: 33.
    General description of report: This information collection is 
mandatory pursuant to section 5 of the Bank Holding Company Act (12 
U.S.C. 1844(c)). Individual respondent data are not considered 
confidential and will be made available publicly via the National 
Information Center Web site (www.ffiec.gov/nicpubweb/nicweb/nichome.aspx). However, respondents may request confidential treatment 
for any information that they believe is subject to an exemption from 
disclosure under the Freedom of Information Act (FOIA) (5 U.S.C. 
522(b)(4) and (b)(6)).
    Abstract: The FR Y-15 report is based on a global data collection 
developed by the Basel Committee on Banking Supervision (BCBS). The 
report provides a baseline, consistent set of metrics with which to 
compare five dimensions of systemic risk: size, interconnectedness, 
substitutability, complexity, and cross-jurisdictional activity. The FR 
Y-15 report will be used by the Federal Reserve to monitor, on an 
ongoing basis, the systemic risk profile of BHCs which are subject to 
enhanced prudential standards under section 165 of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act (DFA), and to determine the 
capital surcharge associated with G-SIBs. Additionally, the data may 
also be used in the identification of domestic systemically important 
banks (D-SIBs) and in the systemic risk analysis of proposed mergers 
and acquisitions.
    Current Actions: On August 20, 2012, the Federal Reserve published 
a notice in the Federal Register (77 FR 50102) requesting public 
comment for 60 days on the implementation of the FR Y-15. The comment 
period for this notice expired on October 19, 2012. The Federal Reserve 
received four comment letters addressing the proposed implementation of 
the FR Y-15.

Summary of Comments

    The Federal Reserve received four comment letters on the proposed 
implementation of the FR Y-15: Three from trade organizations and one 
from a savings and loan holding company (SLHC). Federal Reserve staff 
also met with industry representatives regarding the proposed report. 
The majority of the comments centered on the proposed reporting 
requirements for SLHCs and FBOs, especially regarding differences in 
accounting. Other comments mentioned difficulties in calculating 
certain proposed data items. Commenters requested delayed 
implementation of the requirements, elimination or modification of the 
attestation requirement, and confidential treatment of FR Y-15 data. 
The following section of this notice is a detailed discussion of the 
comments received and the Federal Reserve's responses to those 
comments, which include modifications to the FR Y-15 proposal.

Detailed Discussion of Public Comments and Federal Reserve Responses

A. Respondent Panel

    The Federal Reserve proposed that the new FR Y-15 reporting 
requirements apply to (i) top-tier U.S. BHCs and SLHCs with $50 billion 
or more of total consolidated assets and (ii) FBOs with combined U.S. 
operations that total $50 billion or more in assets.
BHCs
    Commenters representing U.S. BHCs stated that the proposed 
reporting requirements would be unduly burdensome for certain BHCs and 
asserted that they should only apply to U.S. BHCs that have already 
participated in the G-SIB data collection process sponsored by the 
BCBS. Moreover, these commenters stated that information used to 
identify D-SIBs or assess the systemic risk implications of mergers and 
acquisitions should be gathered through separate data collections 
tailored to those purposes instead of being combined with the data 
collection process used for G-SIB identification and surcharge 
determination. The commenters also stated that the FR Y-15 proposal 
deviated from the BCBS G-SIB data requests with respect to some data 
items.
    In addition to (i) identifying institutions which may be designated 
as D-SIBs under a future framework and

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(ii) analyzing the systemic risk implications of proposed mergers and 
acquisitions, the Federal Reserve plans to use the FR Y-15 data to 
monitor, on an ongoing basis, the systemic risk of BHCs with over $50 
billion in total assets. By extending the reporting requirements beyond 
the BHCs that have previously participated in the G-SIB data collection 
exercise, the Federal Reserve will have a clearer picture of the 
systemic risk profile of the institutions which are subject to enhanced 
prudential standards under section 165 of DFA. The indicators adopted 
by the BCBS provide a baseline, consistent set of metrics with which to 
compare five dimensions of systemic risk: size, interconnectedness, 
substitutability, complexity, and cross-jurisdictional activity. 
Adjustments to the data requirements for certain institutions would 
jeopardize the comparability of the information and detract from the 
ability to measure relative systemic importance.
    Consistent with the concerns raised by commenters, the Federal 
Reserve recognizes that smaller BHCs subject to DFA section 165 which 
have not previously participated in international data collections such 
as the Quantitative Impact Study (QIS) may require additional time to 
collect and audit the FR Y-15 data. To allow additional time for 
compliance, the Federal Reserve will limit the FR Y-15 reporting panel 
for the December 31, 2012, as-of-date to the eight U.S. top-tier BHCs 
that were designated as G-SIBs by the FSB on November 1, 2012.\2\ This 
will exclude all U.S. BHCs that are a subsidiary of an FBO from the 
2012 reporting panel. The Federal Reserve will require that the full 
BHC panel (i.e., all BHCs with over $50 billion in total consolidated 
assets, including those that are subsidiaries of FBOs) file the FR Y-15 
starting with the December 31, 2013, as-of-date.
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    \2\ See, Update of group of global systemically important banks 
(G-SIBs), available at http://www.financialstabilityboard.org/publications/r_121031ac.pdf.
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SLHCs
    Commenters expressed concerns about subjecting SLHCs to the 
proposed FR Y-15 reporting requirements. Commenters stated that the 
reporting requirements would be unduly burdensome for SLHCs, 
particularly those principally engaged in insurance activities, and the 
data collection would be duplicative of international efforts to 
identify systemically important insurance companies. One commenter 
noted that insurance SLHCs are exempt from reporting consolidated 
financial statements until the proposed consolidated regulatory capital 
rules for SLHCs are finalized.\3\
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    \3\ See 76 FR 22662.
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    Several commenters questioned whether the Federal Reserve has the 
authority to collect the data in the proposed FR Y-15. They stated that 
the Home Owners Loan Act (HOLA) and DFA do not provide a basis for the 
Federal Reserve to collect systemic risk data from SLHCs. Commenters 
stated that DFA section 604, which authorizes the Federal Reserve to 
analyze the systemic risk implication of proposed mergers and 
acquisitions by BHCs, does not extend to SLHCs. They further stated 
that DFA section 165, which allows for the enhanced supervision of BHCs 
with over $50 billion in total assets, also does not extend to SLHCs. 
They stated that applying the FR Y-15 to SLHCs represents an 
overextension of the Federal Reserve's authority and infringes on the 
authority of the Financial Stability Oversight Council (FSOC) to 
designate nonbanks as systemically important financial institutions 
(SIFIs).
    The Federal Reserve has authority under HOLA to collect information 
from SLHCs. HOLA provides that, to the extent possible, the Federal 
Reserve is required to use reports and other supervisory information 
that the SLHC or its subsidiaries have provided to other federal or 
state regulators, externally audited financial statements, and 
information that is available publically.\4\
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    \4\ 12 U.S.C. 1467a(b)(2).
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    The Federal Reserve has recently proposed applying consolidated 
capital requirements to all SLHCs pursuant to DFA section 171 and the 
safety and soundness provisions of HOLA.\5\ The proposed capital 
requirements have received significant comment from SLHCs--especially 
with respect to insurance operations--and the comments and proposals 
are currently under review by the Federal Reserve. Considering the 
reporting burden and the fact that the proposed capital requirements 
may be revised, the Federal Reserve will exempt SLHCs from filing the 
FR Y-15 at this time. The Federal Reserve intends to publish a separate 
proposal for comment concerning these institutions after the regulatory 
capital rules for SLHCs are finalized.
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    \5\ See 77 FR 52792 (August 30, 2012).
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FBOs
    One commenter cited the difficulties in calculating the combined 
U.S. operations of FBOs due to differences in accounting standards and 
the proposed atypical segmentation of their business operations. The 
commenter questioned the need for collecting FBO data because most, if 
not all, of the reporting FBOs already participate in the annual G-SIB 
assessment via their home jurisdiction. Another commenter further 
suggested that FBOs be exempted from reporting the FR Y-15 until the 
proposed rules for FBOs under DFA section 165 are finalized.
    After considering these comments, the Federal Reserve will exempt 
FBOs from filing the FR Y-15 at this time. The Federal Reserve intends 
to publish a separate proposal for comment concerning these 
institutions after the proposed supervisory assessment rule is 
finalized.

B. Submission Deadlines

    The proposal included a submission date of 45 days after the 
December 31 as-of-date. Several commenters noted that it would take a 
substantial amount of time to develop and test the data systems 
required to collect the FR Y-15 data. These commenters suggested the 
Federal Reserve provide additional time for the initial submission of 
the FR Y-15. One commenter suggested an initial deadline no earlier 
than June 30, 2013. To afford reporting institutions additional time to 
prepare the initial submission of the FR Y-15, the Federal Reserve will 
extend the initial submission date to 90 days after the December 31, 
2012, as-of-date.
    Another commenter stated that the proposed FR Y-15 submission date 
coincided with several other regulatory reports such as the 
Consolidated Financial Statements for Bank Holding Companies (FR Y-9C; 
OMB No. 7100-0128); the Advanced Capital Adequacy Framework Regulatory 
Reporting Requirements (FFIEC 101; OMB No. 7100-0319); and the Country 
Exposure Report (FFIEC 009; OMB No. 7100-0035), and that some of these 
reports are source documents for the FR Y-15. Several commenters 
suggested extending the ongoing filing deadline to at least 60 days 
after the as-of-date. After considering these comments, the Federal 
Reserve will move the submission date for the FR Y-15 to 60 days after 
the as-of-date, beginning with the December 31, 2013, as-of-date.

C. Attestation Requirement

    The Federal Reserve proposed that the reporting entity's Chief 
Financial Officer (CFO) sign and attest the FR Y-15 reporting form. 
Several commenters expressed concerns with this attestation 
requirement, stating that there would not be sufficient time for 
institutions to

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determine that the FR Y-15 data are accurate and complete for the 
initial submission. These commenters suggested collecting the initial 
submissions on a best-efforts basis. Some commented that, for FBOs, the 
CFO of the reporting institution may not be the most appropriate 
officer to undertake the attestation responsibility. Instead, the 
commenters proposed removing or revising the attestation requirement to 
allow signature and attestation by a duly authorized official of the 
reporting entity.
    Considering these comments, the Federal Reserve will allow 
institutions to provide reasonable estimates for their initial FR Y-15 
data submission. By permitting reasonable estimates and providing an 
extended submission deadline of 90 days after the as-of-date for the 
initial submissions, the Federal Reserve believes that institutions 
should be in a position to attest that the estimated amounts are 
reasonable and correct to the best of the officer's knowledge and 
belief. The initial reporting panel (those BHCs identified as G-SIBs by 
the FSB) will be required to attest to non-estimated data beginning 
with the December 31, 2013, as-of-date. All other BHCs subject to the 
FR Y-15 will be required to attest to non-estimated data beginning with 
the December 31, 2014, as-of-date.\6\
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    \6\ It is noted that, in any case, it is a federal violation to 
enter false information in a BHC's reports with the intent to 
defraud or deceive the Federal Reserve. See 15 U.S.C. 1005.
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    Furthermore, having considered the comments, the Federal Reserve 
will revise the FR Y-15 attestation requirement to indicate that the 
report must be attested by the CFO or by the individual performing this 
equivalent function. This is consistent with the attestation 
requirement for the FR Y-9C and the Report of Assets and Liabilities of 
U.S. Branches and Agencies of Foreign Banks (FFIEC 002; OMB No. 7100-
0032). The FR Y-15 attestation requirement is consistent with the 
policy of promoting appropriate controls to ensure data quality.

D. Confidentiality

    Several commenters expressed concern about the proposal's 
requirement that all FR Y-15 data be made available to the public. 
These commenters recommended that the Federal Reserve designate all FR 
Y-15 data as confidential, referring to the BCBS's practice thus far of 
keeping data submissions confidential through the G-SIB monitoring 
process. These commenters asserted that public disclosure of the data 
would harm the competitive position of institutions subject to the 
requirement with respect to competitors not subject to the requirement, 
as well as give counterparties sensitive information, which could be 
exploited to the detriment of the subject institutions.
    The proposal to make FR Y-15 data publicly available through the 
FFIEC Web site was intended to provide transparency for future systemic 
risk assessments, including, but not limited to, the designation of G-
SIBs. Public disclosure of the data is consistent with the BCBS's 
commitment to ensuring the transparency of the G-SIB methodology. By 
disclosing the individual bank data along with the specifics of the G-
SIB calculation, ``banks, regulators and market participants can 
understand how actions that banks take could affect their systemic 
importance score'' and thus affect their G-SIB capital surcharge.\7\ 
Disclosing data related to smaller BHCs provides the market with clear 
information about how close each institution is to the cutoff for G-SIB 
designation. Furthermore, the Federal Reserve believes that the data 
provides valuable information about the domestic systemic risk 
landscape. The market can use the consistent and comparable measures of 
systemic risk found in the FR Y-15 to evaluate the systemic importance 
of an individual institution on a national level.
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    \7\ See Global systemically important banks: Assessment 
methodology and the additional loss absorbency requirement, 
paragraph 72, available at http://www.bis.org/publ/bcbs207.pdf.
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    Accordingly, FR Y-15 data will not be considered confidential. The 
Federal Reserve will make the FR Y-15 data available to the general 
public via the FFIEC Web site. However, if a reporting institution 
believes that disclosure of the FR Y-15 data will result in competitive 
harm, the respondent may request confidential treatment on a cases-by-
case basis under FOIA. The Federal Reserve notes that certain items on 
the FR Y-15 will be automatically retrieved from the FR Y-9C. 
Therefore, institutions that have been granted confidential treatment 
of any FR Y-9C data will need to request that this confidentiality also 
apply to the same data included in the FR Y-15. The Federal Reserve 
also acknowledges that total foreign claims information will be 
automatically calculated using data from the FFIEC 009, which is a 
confidential report. The Federal Reserve will publish this data item 
since it represents a highly aggregated figure that, if nonzero, does 
not reveal any of the actual underlying values included in the FFIEC 
009 report.

E. Use of U.S. GAAP

    Several commenters stated that the Federal Reserve should not 
require certain respondents to report based on U.S. generally accepted 
accounting principles (GAAP). One commenter suggested that the report 
accommodate for differences between International Financial Reporting 
Standards and GAAP since FBOs do not maintain or report standalone GAAP 
data for their U.S. operations. Two commenters noted that SLHCs 
predominantly engaged in insurance activities do not prepare financial 
statements in accordance with GAAP. They suggested that systemic risk 
is better measured for these institutions using the more conservative 
and industry-specific Statutory Accounting Principles (SAP). Several 
commenters also indicated that converting values from SAP to GAAP would 
involve a considerable amount of time and resources. As mentioned 
above, the Federal Reserve is removing SLHCs and FBOs from the 
reporting panel at this time. As the reporting panel has been narrowed 
to only BHCs, the Federal Reserve will retain the GAAP reporting 
requirement.

F. Duplicative Data Collection Efforts

    Several commenters stated that the FR Y-15 would be duplicative of 
existing international and domestic data collection efforts. The 
Federal Reserve notes that the data collected by the International 
Association of Insurance Supervisors in developing a methodology for 
determining global systemically important insurers is not a suitable 
alternative to the FR Y-15 since the information is confidential, 
voluntary, and collected on a best-efforts basis. Furthermore, the 
information collected by the Office of Financial Research (OFR) in 
connection with the FSOC's designation of nonbank SIFIs is specifically 
tailored to each reporting institution and only collected from 
institutions that are advanced into Stage 3 of the designations 
process.\8\ The Federal Reserve notes that neither of the two 
collections precisely mirrors the FR Y-15. The Federal Reserve also 
notes that the FR Y-15 data collection would not duplicate the OFR 
collection since the FSOC only requests data that is not available from 
a public or supervisory source. However, in any future data collection 
proposal applicable to SLHCs, the Federal Reserve will consider other 
available information as required by HOLA.
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    \8\ See 77 FR 21637.

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G. Data Items

    One commenter noted that several data items differ from the 
information collected in the last G-SIB exercise. The Federal Reserve 
notes that the FR Y-15 reporting form contains some additional data 
items in the total exposures section in order to capture several 
definitional decision points that have yet to be decided by the BCBS. 
Capturing this information ensures a consistent data series is 
available once the final definitions have been adopted. Without these 
additional items, subsequent definitional changes would diminish the 
comparability of new data with previous submissions. The Federal 
Reserve intends to remove any FR Y-15 data item that is inconsistent 
with the final data collected in the G-SIB initiative, unless that item 
is useful as a supplementary indicator of systemic risk. The Federal 
Reserve notes that FR Y-15 data provided to Basel for the purposes of 
the G-SIB calculation will be consistent with the most current G-SIB 
data collection definitions.
    The Federal Reserve also notes that an additional data item has 
been added to the payments section that captures payments made in all 
other currencies not specifically listed. This additional data item 
provides insight into the true payments activity of the respondent by 
capturing payments made outside of the major global currencies. 
Furthermore, the list of currencies collected as part of the G-SIB 
methodology is subject to change in the future, so it is recommended 
that institutions build their systems such that they can capture more 
than just the twelve currencies indicated. The Federal Reserve will 
retain this additional payments data item.
    Several commenters stated that some data items on the FR Y-15 have 
yet to be finalized by the BCBS, such as Level 1 and Level 2 assets in 
the Liquidity Coverage Ratio (LCR). Commenters also stated that these 
and other data items are computed under frameworks that have not been 
fully implemented in the U.S. These commenters stated that it is 
inappropriate to require attestation of such data and suggested 
excluding these items from the FR Y-15 until such time that the 
underlying frameworks are fully implemented in the U.S.
    The Federal Reserve acknowledges that the LCR has not yet been 
implemented in the United States. However, because Level 1 and Level 2 
assets are a part of the overall calculation of a firm's systemic risk, 
the Federal Reserve will continue to collect this information. The 
Federal Reserve will adopt the current definitions of Level 1 and Level 
2 assets from the LCR for the end-2012 data collection. Furthermore, 
the Federal Reserve intends to update the instructions as necessary to 
reflect definitional revisions adopted by Basel.
    Two commenters raised concerns about the difficulty of reporting 
gross payments activity, as payments are cleared using numerous 
internal systems and some are only recorded on a net basis. Considering 
the difficulty associated with aggregating the payments data, the 
Federal Reserve will allow reporting of reasonable estimates for the 
payments panel by requiring attestation of only a specified number of 
significant figures. Furthermore, should the precise data be 
unavailable, the Federal Reserve will allow known overestimates to be 
reported. Finally, due to the calculation burden associated with 
providing the subset of payments made on behalf of other institutions, 
the Federal Reserve will remove these data items from the FR Y-15 
report.
    Commenters asked for a number of clarifications regarding specific 
data items on the proposed FR Y-15 form. The Federal Reserve has 
addressed questions related to BHC reporting in the final version of 
the FR Y-15 instructions. The Federal Reserve plans to address 
questions related to SLHCs and FBOs in proposed instructions at the 
time that these institutions are made subject to relevant reporting 
requirements.

H. Burden Estimate

    Several commenters believed that the 180 hour burden estimate 
vastly underestimated the actual burden on firms, especially those 
firms that are currently subject to Basel I and have never participated 
in an international data collection. The Federal Reserve concurs and, 
as noted above, proposes phasing in smaller BHCs so as to allow 
additional time for collection and auditing of their initial FR Y-15 
submissions. Considering the comments received from industry, the 
Federal Reserve has increased the burden estimate, particularly for 
initial submissions.

    Board of Governors of the Federal Reserve System, December 21, 
2012.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2012-31179 Filed 12-27-12; 8:45 am]
BILLING CODE 6210-01-P