[Federal Register Volume 78, Number 49 (Wednesday, March 13, 2013)]
[Rules and Regulations]
[Pages 15869-15870]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-05765]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 78, No. 49 / Wednesday, March 13, 2013 /
Rules and Regulations
[[Page 15869]]
FEDERAL HOUSING FINANCE AGENCY
FEDERAL HOUSING FINANCE BOARD
12 CFR Part 998
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of Federal Housing Enterprise Oversight
12 CFR Part 1730
RIN 2590-AA64
Repeal of Disclosure Regulations
AGENCIES: Federal Housing Finance Agency; Federal Housing Finance
Board; and Office of Federal Housing Enterprise Oversight.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Housing Finance Agency (FHFA) is repealing two
obsolete regulations issued by its predecessor agencies, the Office of
Federal Housing Enterprise Oversight (OFHEO) and the Federal Housing
Finance Board (Finance Board) with respect to the entities regulated by
OFHEO and by the Finance Board. The regulations being repealed govern
public financial disclosures made by the entities with respect to
certain federal securities laws. The Housing and Economic Recovery Act
of 2008 obviates the need for these rules, making them obsolete and
unnecessary. This final rule repeals the two regulations in their
entirety.
DATES: This rule is effective on April 12, 2013.
FOR FURTHER INFORMATION CONTACT: Peggy K. Balsawer, Assistant General
Counsel, Office of General Counsel, Federal Housing Finance Agency, 400
Seventh Street SW., Washington, DC 20024, (202) 649-3060 (not a toll-
free number). The telephone number for the Telecommunications Device
for the Deaf is 800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Background and Analysis
A. Creation of the Federal Housing Finance Agency
Effective July 30, 2008, the Housing and Economic Recovery Act of
2008 (HERA), Public Law 110-289, 122 Stat. 2654, established FHFA as an
independent agency of the Federal Government to regulate and oversee
the Federal National Mortgage Association, the Federal Home Loan
Mortgage Corporation (collectively, the Enterprises), and the Federal
Home Loan Banks (Bank(s)) (collectively, the regulated entities). HERA
transferred to FHFA the supervisory and oversight responsibilities of
OFHEO over the Enterprises, the oversight responsibilities of the
Finance Board over the Banks and the Office of Finance (OF), and
certain functions of the Department of Housing and Urban Development.
See id. at section 1101, 122 Stat. 2661-63. FHFA's mission is to
ensure, among other things, that the regulated entities operate ``in a
safe and sound manner'' and that their activities ``foster liquid,
efficient, competitive and resilient national housing finance
markets.'' Id. at section 1102, 122 Stat. 2663-64. The regulations
promulgated by OFHEO and the Finance Board continue to remain in effect
with respect to the regulated entities until they are superseded by
FHFA-issued regulations. See id. at sections 1301, 1302, 1311, 1312,
122 Stat. 2794-95, 2797-98.
B. Part 1730 (Disclosure of Financial and Other Information)
The Enterprises' securities were expressly exempted from the
Securities Exchange Act of 1934 (the 1934 Act) by their respective
charters. In 2002, both Enterprises agreed to voluntarily register
their common stock with the Securities and Exchange Commission (SEC)
under section 12(g) of the 1934 Act. Section 12(g) registration also
subjects registrants to the requirement that they submit periodic
disclosures to the SEC in accordance with the 1934 Act and associated
SEC rules. OFHEO's issuance of Part 1730 in 2003 was expressly intended
in part to ``facilitate the process'' of registration. 68 FR 16715,
16716 (Apr. 7, 2003). The rule provides that compliance with related
disclosure obligations under the securities laws would satisfy OFHEO's
disclosure requirements.
In July 2008, HERA expressly removed the exemption for Enterprise
equity securities from sections 12, 13, 14 and 16 of the 1934 Act. See
HERA section 1112, 122 Stat. 2677, adding 1934 Act section 38(a), 15
U.S.C. Section 78oo(a). As a result, the Enterprises were statutorily
required to register their equity securities under section 12 of the
1934 Act and comply with the SEC disclosure rules attendant to
registration. The need for OFHEO's regulation was thus obviated by
Congressional action, and consequently the regulation is obsolete and
unnecessary, warranting repeal and removal from the Code of Federal
Regulations.\1\ Therefore, FHFA is hereby repealing part 1730 in its
entirety.
---------------------------------------------------------------------------
\1\ The 1934 Act permits termination of registration under some
narrow circumstances. In the unlikely event an Enterprise becomes
eligible to terminate its securities registration during
conservatorship, FHFA would take appropriate action, should the
Conservator consent to such a course, to ensure that periodic
disclosures are not suspended.
---------------------------------------------------------------------------
C. Part 998 (Registration of Federal Home Loan Bank Equity Securities)
Part 998 was issued by the Finance Board to require each Bank to
register (voluntarily from the perspective of the 1934 Act) a class of
its equity securities under section 12(g) of the 1934 Act and make the
attendant required periodic disclosures to the SEC. Prior to the
Finance Board's issuance of Part 998, the Banks did not register their
equity securities under the 1934 Act, but had been supplying
information to the OF, the Banks' fiscal agent, to enable the OF to
prepare combined annual and quarterly financial reports on behalf of
the entire Bank system. However, those reports were submitted to the
Finance Board rather than the SEC, and otherwise did not fully comply
with 1934 Act standards and associated SEC rules.
The enactment of HERA in 2008 imposed a statutory requirement on
each Bank to register a class of its common stock under section 12(g)
and continue to maintain such registration regardless of the number of
members holding such stock at any given time. See HERA section 1112,
122 Stat. 2677, adding 1934 Act section 38(b), 15 U.S.C.
[[Page 15870]]
Section 78oo(b)(1).\2\ As a result of SEC mandatory registration, each
Bank is now required to make the periodic public disclosures made by
similarly situated SEC registrants. Thus, the reason for the Finance
Board regulation was superseded by Congressional action, and
consequently the regulation is obsolete and warrants repeal and removal
from the Code of Federal Regulations. Therefore, FHFA is hereby
repealing part 998 in its entirety.
---------------------------------------------------------------------------
\2\ This provision applies only to the Banks and effectively
precludes the termination of a Bank's registration.
---------------------------------------------------------------------------
D. Considerations of Differences Between the Banks and the Enterprises
Section 1201 of HERA requires FHFA's Director, when promulgating
regulations ``of general applicability and future effect'' relating to
the Banks, to consider the differences between the Banks and the
Enterprises as they may relate to the Banks' cooperative ownership
structure, mission of providing liquidity to members, affordable
housing and community development mission, capital structure, and joint
and several liability. HERA section 1201, 122 Stat. 2782 (amending 12
U.S.C. 4513). This final rule does not impose any new obligations on
the Banks, but instead simply removes an existing Finance Board
regulation that, as a result of the passage of HERA and changed
circumstances, is obsolete, unnecessary and no longer of any regulatory
purpose. The repeal of part 998 of title 12 of the Code of Federal
Regulations therefore would not have any ``future effect'' on the
Banks. For these reasons, a section 1201 analysis is not required for
this final rule.
II. Notice and Public Participation
FHFA finds that good cause exists under 5 U.S.C. 553(b)(B) of the
Administrative Procedure Act for adopting these rule changes as a final
rule without public notice and comment because the subject regulations
currently have no regulatory purpose or value and thus their removal
would be insignificant in nature and impact and of no consequence to
the industry and the public. The provisions of part 1730 were expressly
intended to facilitate the Enterprises' securities registration and
associated financial disclosures, which had already been agreed to by
the Enterprises. These requirements have subsequently been
independently mandated under HERA. Similarly, the provisions of part
998 relate solely to the Finance Board's requirement that the Banks
register their equity securities under the 1934 Act and make attendant
financial disclosures. These requirements too were subsequently
mandated by the provisions of HERA. Neither of these regulations
includes provisions that are appropriate for FHFA to carry over and
incorporate into its own regulations, and thus they should be repealed
and removed from the Code of Federal Regulations. For these reasons,
FHFA believes that public comments are unnecessary and would serve no
purpose.
III. Paperwork Reduction Act
The final rule does not contain any collections of information
pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et
seq.). Therefore, FHFA has not submitted any information to the Office
of Management and Budget for review.
IV. Regulatory Flexibility Act
The final rule applies only to the Banks and Enterprises, which do
not come within the meaning of small entities as defined in the
Regulatory Flexibility Act (RFA). See 5 U.S.C. 601(6). Therefore in
accordance with section 605(b) of the RFA, FHFA certifies that this
final rule will not have a significant economic impact on a substantial
number of small entities.
List of Subjects
12 CFR Part 998
Credit, Federal home loan banks, Financial disclosure, Government-
sponsored enterprises, Records, Reporting and recordkeeping, Securities
disclosure.
12 CFR Part 1730
Financial disclosure, Government-sponsored enterprises, Records,
Reporting and recordkeeping.
Accordingly, for reasons stated in the Supplementary Information
and under the authority of 12 U.S.C. 4511, 4512, 4513, and 4526, FHFA
amends subchapter M of chapter IX and subchapter C of chapter XVII of
title 12 of the Code of Federal Regulations as follows:
CHAPTER IX--FEDERAL HOUSING FINANCE BOARD
SUBCHAPTER M--FEDERAL HOME LOAN BANK DISCLOSURES
PART 998--[REMOVED]
0
1. Remove part 998.
CHAPTER XVII--OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT,
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
SUBCHAPTER C--SAFETY AND SOUNDNESS
PART 1730--[REMOVED]
0
2. Remove part 1730.
Dated: March 5, 2013.
Edward J. DeMarco,
Acting Director, Federal Housing Finance Agency.
[FR Doc. 2013-05765 Filed 3-12-13; 8:45 am]
BILLING CODE 8070-01-P