[Federal Register Volume 78, Number 155 (Monday, August 12, 2013)]
[Notices]
[Pages 48871-48877]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-19357]


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FEDERAL RESERVE SYSTEM


Proposed Agency Information Collection Activities; 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 (PRA), 
pursuant to 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 part 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 Paperwork Reduction Act 
Submission, 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.

DATES: Comments must be submitted on or before October 11, 2013.

ADDRESSES: You may submit comments, identified by FR Y-9, by any of the 
following methods:
     Agency Web site: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at http://www.federalreserve.gov/apps/foia/proposedregs.aspx.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: [email protected]. Include OMB 
number in the subject line of the message.
     FAX: (202) 452-3819 or (202) 452-3102.
     Mail: Robert deV. Frierson, Secretary, Board of Governors 
of the Federal Reserve System, 20th Street and Constitution Avenue NW., 
Washington, DC 20551.

All public comments are available from the Board's Web site at 
www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, 
unless modified for technical reasons. Accordingly, your comments will 
not be edited to remove any identifying or contact information. Public 
comments may also be viewed electronically or in paper form in Room MP-
500 of the Board's Martin Building (20th and C Streets NW.) between 
9:00 a.m. and 5:00 p.m. on weekdays.
    Additionally, commenters may send a copy of their comments to the 
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 or by 
fax to (202) 395-6974.

FOR FURTHER INFORMATION CONTACT: A copy of the PRA OMB submission, 
including the proposed reporting form and instructions, supporting 
statement, and other documentation will be placed into OMB's public 
docket files, once approved. These documents will also be made 
available on the Federal Reserve Board's public Web site at: http://

[[Page 48872]]

www.federalreserve.gov/apps/reportforms/review.aspx or may be requested 
from the agency clearance officer, whose name appears below.
    Federal Reserve Board Clearance Officer--Cynthia Ayouch--Office of 
the Chief Data Officer, 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.

SUPPLEMENTARY INFORMATION:

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;
    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; and
    e. Estimates of capital or start up costs and costs of operation, 
maintenance, and purchase of services to provide information.

Proposal To Approve Under OMB Delegated Authority the Revision, Without 
Extension, of the Following Report

    Report title: Financial Statements for Holding Companies.\1\
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    \1\ This family of reports also contains the following mandatory 
reports, which are not being revised: the Parent Company Only 
Financial Statements for Large Bank Holding Companies (FR Y-9LP), 
the Financial Statements for Employee Stock Ownership Plan Bank 
Holding Companies (FR Y-9ES), and the Supplement to the Consolidated 
Financial Statements for Bank Holding Companies (FR Y-9CS).
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    Agency form number: FR Y-9C.
    OMB control number: 7100-0128.
    Frequency: Quarterly.
    Reporters: Bank holding companies (BHCs), savings and loan holding 
companies (SLHCs), and securities holding companies (SHCs) 
(collectively, ``holding companies'' (HCs)).
    Estimated average hours per response: Non-advanced approaches HCs: 
48.84 hours, and advanced approaches HCs: 50.09.
    Estimated annual reporting hours: 222,770 hours
    Number of respondents: 1,140.
    General description of report: This information collection is 
mandatory for BHCs (12 U.S.C. 12 U.S.C. 1844(c)(1)(A)). Additionally, 
12 U.S.C. 1467a(b)(2)(A) and 1850a(c)(1)(A), respectively, authorize 
the Federal Reserve to require that SLHCs and supervised SHCs file the 
FR Y-9C with the Federal Reserve. Confidential treatment is not 
routinely given to the financial data in this report. However, 
confidential treatment for the reporting information, in whole or in 
part, can be requested in accordance with the instructions to the form, 
pursuant to sections (b)(4), (b)(6), or (b)(8) of FOIA (5 U.S.C. 
Sec. Sec.  522(b)(4), (b)(6), and (b)(8)).
    Abstract: The FR Y-9C consists of standardized 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) filed by commercial banks and 
savings associations. The FR Y-9C collects consolidated data from HCs. 
The FR Y-9C is filed by top-tier HCs (under certain circumstances, a 
lower-tier HC may act as the top tier of the organization for purposes 
of regulatory reporting) with total consolidated assets of $500 million 
or more. (Under certain circumstances defined in the General 
Instructions, BHCs under $500 million may be required to file the FR Y-
9C.) The Federal Reserve proposes revisions to the FR Y-9C consistent 
with the regulatory capital rules approved by the Board on July 2, 2013 
(revised regulatory capital rules).\2\
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    \2\ On July 2, 2013, the Board approved the revised regulatory 
capital rules that were proposed on August 30, 2012. On July 9, 2013 
the OCC approved the revised regulatory capital rules and the FDIC 
issued an interim final rule to approve the revised regulatory 
capital rules. See http://www.federalreserve.gov/bcreg20130702a.pdf 
(Board); http://www.occ.gov/news-issuances/news-releases/2013/2013-110a.pdf (OCC); http://www.fdic.gov/news/board/2013/2013-07-09_notice_dis_a_res.pdf (FDIC). See also 77 Federal Register 52888, 
52909, 52958 (August 30, 2012).
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    Current Actions: The Federal Reserve proposes to split the current 
Schedule HC-R, Regulatory Capital, on the FR Y-9C into two parts: Part 
I, which would collect information on regulatory capital components and 
ratios, and Part II, which would collect information on risk-weighted 
assets. For report dates in 2014, Part I of proposed Schedule HC-R 
would be designated as Parts I.A and I.B. Part I.A would include data 
items 1 through 33 of current Schedule HC-R. Part I.B would include the 
revisions consistent with the revised regulatory capital rules. Part II 
would include data items 34 through 62 and Memorandum items 1 through 
10 of current Schedule HC-R. In March 2015, Part I.A would be removed 
and Part I.B would be re-designated as Part I.
    For the March 31, 2014, and March 31, 2015, report dates, as 
applicable, institutions may provide reasonable estimates for any new 
or revised FR Y-9C data items initially required to be reported as of 
the dates for which the requested information is not readily available. 
The specific wording of the captions for the revised FR Y-9C data items 
discussed in this proposal and the numbering of these data items should 
be regarded as preliminary.
    The Federal Reserve would modify the proposed revisions to the FR 
Y-9C and FR Y-9SP reports for consistency with any revisions to the 
Federal Financial Institutions Examination Council (FFIEC) Consolidated 
Reports of Condition and Income (Call Reports) (FFIEC 031 & 041; OMB 
No. 7100-0036) for implementation in 2014 and 2015 or because of 
technical revisions or corrections to the revised regulatory capital 
rules related to the new definition of capital, as appropriate.

Proposed Revisions--FR Y-9C

    The Federal Reserve proposes changes to the FR Y-9C reporting 
requirements consistent with the revised regulatory capital rules. The 
current Schedule HC-R, Regulatory Capital, collects information on 
regulatory capital components and ratios, as well as risk-weighted 
assets. The Federal Reserve proposes to split the current Schedule HC-R 
into Part I, which would collect information on regulatory capital 
components and ratios, and Part II, which would collect information on 
risk-weighted assets. For report dates in 2014, Part I of proposed 
Schedule HC-R would be designated as Parts I.A and I.B. Part I.A would 
include data items 1 through 33 of current Schedule HC-R. Part I.B 
would include the revisions consistent with the revised regulatory 
capital rules. Part II would include data items 34 through 62 and 
Memorandum items 1 through 10 of current Schedule HC-R. Starting in 
March 2015, Part I.A would be removed and Part I.B would

[[Page 48873]]

be re-designated as Part I and data items 34-62 would be renumbered.
    In Schedule HC-R, Part I.A (data items 1-33), an institution 
reports tier 1 capital, tier 2 capital, total regulatory capital, and 
its regulatory capital ratios (regulatory capital components and ratios 
portion).
    In Schedule HC-R, Part II (data items 34-62), an institution 
reports its risk-weighted assets (risk-weighted assets portion). 
Schedule HC-R, Part II also includes Memoranda items 1 through 10, in 
which an institution reports supplemental regulatory capital 
information.\3\
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    \3\ The Federal Reserve expects to publish at a later date a 
request for comment on a separate proposal to revise the risk-
weighted assets portion of Schedule HC-R to incorporate the 
standardized approach for calculating risk-weighted assets under the 
revised regulatory capital rules. The revisions to the risk-weighted 
assets portion of Schedule HC-R would take effect March 31, 2015. 
The Federal Reserve is proposing changes to Schedule HC-R in two 
stages to allow interested parties to better understand the proposed 
revisions and focus their comments on areas of particular interest. 
Therefore, for report dates in 2014, all FR Y-9C filers would 
continue to report risk-weighted assets in the portion of Schedule 
HC-R that contains existing data items 34 through 62 and Memorandum 
items 1 through 10 of current Schedule HC-R, but this portion of the 
schedule would be designated Part II and the data items would be 
renumbered beginning with item 1.
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    The Federal Reserve proposes to add Part I.B to Schedule HC-R to 
provide a more detailed breakdown of the regulatory capital elements, 
including deductions and adjustments, consistent with the revised 
regulatory capital rules. HCs subject to the revised regulatory capital 
rules would be required to calculate and report regulatory capital 
using a new definition of capital. Proposed Schedule HC-R, Part I.B is 
discussed in more detail below.
    Bank Holding Companies (BHCs): Advanced approaches BHCs would begin 
reporting on proposed Schedule HC-R, Part I.B, starting on March 31, 
2014, applying the revised regulatory capital rules. At that time, 
these respondents would no longer be required to complete Schedule HC-
R, Part I.A. On March 31, 2015, FR Y-9C respondents that are not 
subject to the advanced approaches rule would no longer report Schedule 
HC-R, Part I.A and would begin reporting the data items on proposed 
Schedule HC-R, Part I.B (re-designated as Part I), applying the revised 
regulatory capital rules.
    SLHCs: Prior to the approval of the revised regulatory capital 
rules, SLHCs were not subject to consolidated regulatory capital 
requirements and not required to file Schedule HC-R. Under the revised 
regulatory capital rules, top-tier SLHCs that are not substantially 
engaged in insurance or commercial activities (covered SLHCs) are 
subject to consolidated regulatory capital requirements effective 
January 1, 2015. Covered SLHCs would begin reporting on the proposed 
Schedule HC-R, Part I.B, starting on March 31, 2015.
    A top-tier SLHC is deemed to be substantially engaged in insurance 
activities (insurance SLHC) if (i) the top-tier SLHC is an insurance 
underwriting company; \4\ or (ii) as of June 30 of the previous 
calendar year, it held 25 percent or more of its total consolidated 
assets in subsidiaries that are insurance underwriting companies (other 
than assets associated with insurance for credit risk). For purposes of 
determining the 25 percent threshold, the SLHC must calculate its total 
consolidated assets in accordance with generally accepted accounting 
principles (GAAP), or if the SLHC does not calculate its total 
consolidated assets under GAAP for any regulatory purpose (including 
compliance with applicable securities laws), the SLHC may estimate its 
total consolidated assets, subject to review and adjustment by the 
Federal Reserve. Thus, insurance SLHCs are not required to complete 
Schedule HC-R, even if they complete other schedules of FR Y-9C.\5\
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    \4\ Insurance underwriting company means an insurance company as 
defined in section 201 of the Dodd-Frank Act (12 U.S.C. 5381) that 
engages in insurance underwriting activities.
    \5\ Under the current reporting requirements, SLHCs are exempt 
from filing the FR Y-9C if: (1) as calculated annually as of June 
30th, using the assets reported as of June 30th, more than 50 
percent of the assets of the SLHC are derived from the business of 
insurance on an enterprise-wide basis; and (2) the SLHC does not 
submit reports to the Securities and Exchange Commission (SEC) 
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 
1934. Regulatory capital requirements for SLHCs substantially 
engaged in insurance or commercial activities will be finalized at a 
later date.
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    A top-tier SLHC is deemed to be substantially engaged in commercial 
activities (commercial SLHC) if (i) the top-tier SLHC is a 
grandfathered unitary SLHC as defined in section 10(c)(9)(A) of HOLA 
and (ii) as of June 30 of the previous calendar year, it derived 50 
percent or more of its total consolidated assets or 50 percent of its 
total revenues on an enterprise-wide basis (as calculated under GAAP) 
from activities that are not financial in nature under section 4(k) of 
the Bank Holding Company Act (12 U.S.C. 1842(k)). This exclusion from 
the revised regulatory capital rules is similar to the current 
regulatory reporting exemption for SLHCs substantially engaged in 
commercial activities and is designed to capture those SLHCs that would 
likely be subject to a future intermediate HCs regulation of the 
Federal Reserve.
    2. Report Title: Parent Company Only Financial Statements for Small 
Holding Companies.
    Agency form number: FR Y-9SP.
    OMB control number: 7100-0128.
    Frequency: Semiannually, as of the last calendar day of June and 
December.
    Reporters: BHCs, SLHCs and SHCs with total consolidated assets of 
less than $500 million (small BHCs, small SLHCs and small SHCs).
    Estimated annual reporting hours: 49,443.
    Estimated average hours per response: BHCs: 5.40 hours, SLHCs: 
14.20 hours; One-time implementation: 500 hours.
    Number of respondents: 4,094.
    General description of report: This information collection is 
mandatory for BHCs [12 U.S.C. 1844(c)(1)(A).] Additionally, 12 U.S.C. 
1467a(b)(2)(A) and 1850a(c)(1)(A), respectively, authorize the Federal 
Reserve to require that SLHCs and supervised SHCs file the FR Y-9SP 
with the Federal Reserve. Confidential treatment is not routinely given 
to the financial data in this report. However, confidential treatment 
for the reporting information, in whole or in part, can be requested in 
accordance with the instructions to the form, pursuant to sections 
(b)(4), (b)(6), or (b)(8) of the Freedom of Information Act (5 U.S.C. 
552(b)(4), (b)(6), and (b)(8)).
    Abstract: The FR Y-9SP is a parent company only financial statement 
filed by HCs with total consolidated assets of less than $500 million. 
This form is a simplified or abbreviated version of the more extensive 
parent company only financial statement for large HCs (FR Y-9LP). This 
report is designed to obtain basic balance sheet and income information 
for the parent company, information on intangible assets, and 
information on intercompany transactions. The Federal Reserve proposes 
several revisions to the FR Y-9SP consistent with the regulatory 
capital rules approved by the Board on July 2, 2013 (revised regulatory 
capital rules).\6\
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    \6\ On July 2, 2013, the Board approved the revised regulatory 
capital rules that were proposed on August 30, 2012. On July 9, 2013 
the OCC approved the revised regulatory capital rules and the FDIC 
issued an interim final rule to approve the revised regulatory 
capital rules. See http://www.federalreserve.gov/bcreg20130702a.pdf 
(Board); http://www.occ.gov/news-issuances/news-releases/2013/2013-110a.pdf (OCC); http://www.fdic.gov/news/board/2013/2013-07-09_notice_dis_a_res.pdf (FDIC). See also 77 Federal Register 52888, 
52909, 52958 (August 30, 2012).
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    Current actions: On the FR Y-9SP, the Federal Reserve proposes to 
add a new Schedule SC-R, Regulatory Capital Components and Ratios, to 
collect consolidated regulatory capital data from small SLHCs subject 
to the revised

[[Page 48874]]

regulatory capital rules. Schedule HC-R, Part I.B, of the FR Y-9C and 
Schedule SC-R of the FR Y-9SP would collect the same data items, except 
proposed Schedule HC-R, Part I.B, would collect additional data from 
HCs subject to the advanced approaches risk-based capital rules 
(advanced approaches HCs).\7\
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    \7\ An advanced approaches banking organization as defined in 
the revised regulatory capital rules (i) has consolidated total 
assets on its most recent year-end regulatory report equal to $250 
billion or more; (ii) has consolidated total on-balance sheet 
foreign exposure on its most recent year-end regulatory report equal 
to $10 billion or more; (iii) is a subsidiary of a depository 
institution that uses the advanced approaches pursuant to subpart E 
of 12 CFR part 3 (OCC), 12 CFR part 217 (Federal Reserve), or 12 CFR 
part 325 (FDIC) to calculate its total risk-weighted assets; (iv) is 
a subsidiary of a bank holding company or savings and loan holding 
company that uses the advanced approaches pursuant to 12 CFR part 
217 to calculate its total risk-weighted assets; or (v) elects to 
use the advanced approaches to calculate its total risk-weighted 
assets.
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    HCs subject to the revised regulatory capital rules would be 
required to calculate and report regulatory capital using a new 
definition of capital. For the June 30, 2015, report date, institutions 
may provide reasonable estimates for any new or revised FR Y-9SP data 
items initially required to be reported as of that date for which the 
requested information is not readily available. The specific wording of 
the captions for the revised FR Y-9SP data items discussed in this 
proposal and the numbering of these data items should be regarded as 
preliminary.

Proposed FR Y-9SP Revisions

    The Federal Reserve proposes changes to the FR Y-9SP reporting 
requirements consistent with the revised regulatory capital rules, 
which apply to covered SLHCs with total consolidated assets of less 
than $500 million (small covered SLHCs). Under current regulatory 
reporting requirements, small SLHCs submit the FR Y-9SP semiannually. 
The Federal Reserve proposes to revise the FR Y-9SP by implementing new 
Schedule SC-R, Regulatory Capital Components and Ratios, to collect 
consolidated regulatory capital data from small covered SLHCs. Schedule 
SC-R would collect regulatory capital data from small covered SLHCs and 
therefore, eliminate the need for these institutions to file a 
consolidated FR Y-9C report. Small covered SLHCs would apply the 
revised regulatory capital rules to report their regulatory capital 
data on proposed Schedule SC-R starting on June 30, 2015. Small BHCs 
that file FR Y-9SP would not be affected by this proposal and they 
would not be required to complete proposed Schedule SC-R.
    The following table summarizes the proposed reporting criteria for 
FR Y-9C and FR Y-9SP respondents.

------------------------------------------------------------------------
         Respondents                  2014                  2015
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                           FR Y-9C respondents
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Non-advanced approaches BHCs   Complete      Current
                               the current           Schedule HC-R, Part
                               Schedule HC-R, Part   I.A is removed and
                               I.A and Part II;.     Part I.B is re-
                               Do not        designated as Part
                               complete proposed     I;
                               Schedule HC-R, Part   Complete
                               I.B.                  the proposed
                                                     Schedule HC-R, Part
                                                     I.B (re-designated
                                                     as Part I in 2015)
                                                     and Part II;
                                                     Schedule HC-
                                                     R Part II includes
                                                     the revised and
                                                     renumbered risk-
                                                     weighted assets
                                                     portion of the
                                                     template.
Advanced approaches BHCs....   Do not
                               complete Schedule
                               HC-R, Part I.A
                               (items 1 through
                               33);.
                               Complete
                               current Schedule HC-
                               R, Part II.
                               Complete
                               proposed Schedule
                               HC-R, Part I.B
                               (items 1 through
                               48).
Covered SLHCs other than      Do not complete
 small covered SLHCs.          Schedule HC-R.
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                          FR Y-9SP respondents
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Small BHCs..................  No change...........  No change.
Small covered SLHCs.........  Do not complete       Complete proposed
                               proposed Schedule     Schedule SC-R.
                               SC-R.
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Discussion of Proposed Schedules HC-R and SC-R

    This section describes the proposed revisions to FR Y-9C Schedule 
HC-R, Part I.B (to be re-designated as Part I in 2015) and FR Y-9SP 
Schedule SC-R (collectively, the proposed schedules) to revise the data 
collections consistent with the revised regulatory capital rules. The 
proposed schedules would contain the same data items, except the 
proposed Schedule HC-R, Part I.B would collect additional data from 
advanced approaches HCs. As specified in the revised regulatory capital 
rules and the corresponding instructions for proposed Schedule HC-R, 
Part I.B, advanced approaches HCs that file the FR Y-9C would report 
certain line items only after these institutions complete the parallel 
run process and receive notification from the Federal Reserve pursuant 
to section 121(d) of subpart E of the revised regulatory capital rules.
    The regulatory capital portion of the proposed schedules would 
collect data on the following regulatory capital components and ratios: 
(A) Common equity tier 1 capital; (B) common equity tier 1 capital 
adjustments and deductions; (C) additional tier 1 capital; (D) tier 2 
capital; (E) total assets for the leverage ratio; (F) capital ratios; 
and (G) capital buffer. A brief description of each of these sections 
and the corresponding data items is provided below. The proposed 
reporting instructions provide guidance on how to calculate and report 
items subject to the transition provisions under section 300 of the 
revised regulatory capital rules.

A. Proposed Schedules HC-R, Part I.B and SC-R Items 1 Through 5: Common 
Equity Tier 1 Capital

    Proposed line items 1 through 5 would collect information to 
determine the new regulatory capital component, common equity tier 1 
capital. The proposed data items align with the elements of common 
equity tier 1 capital under the revised definition of capital, 
including (item 1) common stock plus related surplus (net of treasury 
stock and unearned employee stock ownership plan shares), (item 2)

[[Page 48875]]

retained earnings, (item 3) accumulated other comprehensive income 
(AOCI), and (item 4) common equity tier 1 minority interest includable 
in common equity tier 1 capital.\8\ As explained in section 21 of the 
revised regulatory capital rules, an institution may include a limited 
amount of common equity tier 1 minority interest of a consolidated 
subsidiary that is a depository institution or a foreign bank in its 
common equity tier 1 capital. Line item 5 collects the sum of items 1 
through 4 to determine common equity tier 1 capital before adjustments 
and deductions.
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    \8\ Under current GAAP, minority interests are referred to as 
noncontrolling interests. In this regard, on the FR Y-9C balance 
sheet (Schedule HC), such interests are labeled ``Noncontrolling 
(minority) interests in consolidated subsidiaries.''
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    For purposes of reporting line item 3, AOCI, an institution that is 
not subject to the advanced approaches rule may make a one-time 
election to opt-out of the requirement to include most of the 
components of AOCI in common equity tier 1 capital (AOCI opt-out 
election). An institution that makes an AOCI opt-out election must 
report ``Yes'' in line item 3(a) and report the amounts in line items 
9(a), 9(b), 9(c), 9(d) and 9(e). An institution that is not an advanced 
approaches institution would make this election when it completes 
Schedule HC-R for March 31, 2015, or Schedule SC-R for June 30, 2015, 
as applicable. If an institution makes an AOCI opt-out election, the 
transition provisions for AOCI under section 300 of the revised 
regulatory capital rules would not apply to the reporting of AOCI in 
line item 3.
    All advanced approaches institutions and all other HCs that choose 
not to make the AOCI opt-out election must report ``No'' in line item 
3(a) and complete line item 9(f). In addition, such institutions must 
report AOCI in item 3 subject to the transition provisions, as 
described in section 300 of the revised regulatory capital rules and 
the corresponding instructions.

B. Proposed Schedules HC-R, Part I.B and SC-R Items 6 Through 19: 
Common Equity Tier 1 Capital: Adjustments and Deductions

    Proposed line items 6 through 18 reflect adjustments and deductions 
to common equity tier 1 capital, as described in section 22 of the 
revised regulatory capital rules. Institutions must refer to the 
revised regulatory capital rules to determine under which conditions 
deferred tax liabilities (DTLs) may be netted against assets subject to 
deduction. An institution would calculate and report the following 
adjustments and deductions, as described below, which would be summed 
in line item 18 and deducted from common equity tier 1 capital in line 
item 19.
    Schedules HC-R, Part I.B and SC-R item 6: LESS: Goodwill net of 
associated deferred tax liabilities (DTLs): Goodwill net of associated 
DTLs is reported and deducted from common equity tier 1 capital.
    Schedules HC-R, Part I.B and SC-R item 7: LESS: Intangible assets 
(other than goodwill and mortgage servicing assets (MSAs)), net of 
associated DTLs: Intangible assets, other than goodwill and MSAs, net 
of associated DTLs, must be deducted from common equity tier 1 capital.
    Schedules HC-R, Part I.B and SC-R item 8: LESS: Deferred tax assets 
(DTAs) that arise from operating loss and tax credit carryforwards, net 
of any related valuation allowances and net of DTLs: An institution 
must deduct DTAs that arise from operating loss and tax credit 
carryforwards, net of any related valuation allowances and net of DTLs, 
from common equity tier 1 elements.\9\
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    \9\ DTAs arising from temporary differences that the banking 
organization could realize through net operating loss carrybacks are 
not subject to deduction and instead receive a 100 percent risk 
weight.
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    Schedules HC-R, Part I.B and SC-R item 9: AOCI-related adjustments: 
An institution that makes an AOCI opt-out election by reporting ``1'' 
for Yes in line item 3(a), would adjust its common equity tier 1 
capital by reporting the amount of specified AOCI components in line 
items 9(a), 9(b), 9(c), 9(d) and 9(e), that is, net unrealized gains 
(losses) on available-for-sale (AFS) securities; net unrealized loss on 
AFS preferred stock classified as an equity security under GAAP and AFS 
equity exposures; accumulated net gains (losses) on cash flow hedges; 
amounts recorded in AOCI attributed to defined benefit postretirement 
plans resulting from the initial and subsequent application of the 
relevant GAAP standards that pertain to such plans; and net unrealized 
gains (losses) on held-to-maturity securities that are included in 
AOCI.
    An institution that does not make an AOCI opt-out election by 
reporting ``0'' for No and advanced approaches respondents would report 
in line item 9(f), any accumulated net gain (loss) on cash flow hedges 
included in AOCI, net of applicable tax effects, that relate to the 
hedging of items not recognized at fair value on the balance sheet.
    Schedules HC-R, Part I.B and SC-R item 10: Other deductions from 
(additions to) common equity tier 1 capital before threshold-based 
deductions: Under the revised regulatory capital rules, institutions 
must make the following deductions from or additions to common equity 
tier 1 capital:
    Schedules HC-R, Part I.B and SC-R item 10(a): LESS: Unrealized net 
gain (loss) related to changes in the fair value of liabilities that 
are due to changes in own credit risk: An institution would report the 
amount of unrealized net gain (loss) related to changes in the fair 
value of liabilities that are due to changes in its own credit risk. 
Advanced approaches HCs would include the credit spread premium over 
the risk free rate for derivatives that are liabilities.
    Schedules HC-R, Part I.B and SC-R item 10(b): LESS: All other 
deductions from (additions to) common equity tier 1 capital before 
threshold-based deductions: An institution would report in line item 
10.b the total of the following deductions and additions:
    (1) Gain-on-sale associated with a securitization exposure: An 
institution must deduct from common equity tier 1 capital any after-tax 
gain-on-sale associated with a securitization exposure. Gain-on-sale 
means an increase in the equity capital of the institution resulting 
from the consummation or issuance of a securitization (other than an 
increase in equity capital resulting from the institution's receipt of 
cash in connection with the securitization).
    (2) Defined benefit pension fund assets net of associated DTLs: 
Defined benefit pension fund assets, net of any associated DTLs, must 
be deducted from common equity tier 1 capital. (This discussion does 
not pertain to defined benefit pension fund net assets owned by 
depository institutions.)
    (3) Investments in own regulatory capital instruments: To avoid the 
double-counting of regulatory capital, an institution must deduct any 
investments in its own common equity tier 1, own additional tier 1, and 
own tier 2 capital instruments from its common equity tier 1, 
additional tier 1, and tier 2 capital elements, respectively. Any 
common equity tier 1, additional tier 1, or tier 2 capital instrument 
issued by the institution which the institution could be contractually 
obligated to purchase must be deducted from its common equity tier 1, 
additional tier 1, or tier 2 capital, respectively. If an institution 
already deducts its investment in its own shares (for example, treasury 
stock) from its common equity tier 1 capital, it does not need to make 
this deduction twice.
    (4) Reciprocal cross holdings in the capital instruments of 
financial institutions: A reciprocal cross holding results from a 
formal or informal

[[Page 48876]]

arrangement between two financial institutions to swap, exchange, or 
otherwise intend to hold each other's capital instruments. Institutions 
must deduct reciprocal holdings of capital instruments of other 
financial institutions in certain circumstances. The deduction is made 
by using the corresponding deduction approach as described in section 
22(c) of the revised regulatory capital rules. The corresponding 
deduction approach requires the institution to make the deduction from 
the tier of capital for which the instrument would qualify. However, if 
the institution does not have a sufficient amount of the tier of 
capital to effect the required deduction, the shortfall must be 
deducted from the next higher (that is, more subordinated) component of 
regulatory capital. For example, if an institution is required to 
deduct a certain amount of regulatory capital from additional tier 1 
capital and it does not have sufficient additional tier 1 capital to 
effectuate the deduction, then the amount of the deduction in excess of 
the available additional tier 1 capital must be made from common equity 
tier 1 capital.
    (5) Equity investments in financial subsidiaries: An institution 
must deduct the aggregate amount of its outstanding equity investment, 
including retained earnings, in its financial subsidiaries and may not 
consolidate the assets and liabilities of a financial subsidiary with 
those of the parent institution.
    (6) Advanced approaches HCs: After an advanced approaches HC 
completes its parallel run process, it would include expected credit 
losses that exceed its eligible credit reserves in this line item.
    Schedules HC-R, Part I.B and SC-R item 11: LESS: Non-significant 
investments in the capital of unconsolidated financial institutions in 
the form of common stock that exceed the 10 percent threshold for non-
significant investments: Non-significant investments in the capital of 
unconsolidated financial institutions are investments where an 
institution owns 10 percent or less of the issued and outstanding 
common shares of an unconsolidated financial institution. An 
institution must deduct the amount of the non-significant investments 
that are above the 10 percent threshold for non-significant investments 
(calculated as described in section 22(c)(4) of the revised regulatory 
capital rules and in the reporting instructions for this line item), 
applying the corresponding deduction approach.
    Schedules HC-R, Part I.B and SC-R item 12: Subtotal: An institution 
would report the amount in item 5 less the amounts in items 6 through 
11. The amount reported in this item is used to calculate the common 
equity tier 1 capital deduction thresholds that are used for reporting 
items 13, 14, 15, and 16.
    Schedules HC-R, Part I.B and SC-R items 13 through16: Items subject 
to the 10 and 15 percent common equity tier 1 capital threshold 
deductions: An institution must report the amount of each of the 
following items that individually exceed the 10 percent common equity 
tier 1 capital deduction threshold (that is, 10 percent of the amount 
reported in line item 12). These items are referred to as items subject 
to the threshold deductions in section 22(d) of the revised regulatory 
capital rules and include: (1) Significant investments in the capital 
of financial institutions in the form of common stock, net of 
associated DTLs; (2) MSAs, net of associated DTLs; and (3) DTAs arising 
from temporary differences that could not be realized through net 
operating loss carrybacks, net of any related valuation allowances and 
net of DTLs.
    The aggregate amount of the items subject to the threshold 
deductions (that are not deducted in line items 13, 14, and 15) is not 
permitted to exceed 15 percent of an institution's common equity tier 1 
capital. The aggregate amount in excess of the 15 percent threshold, if 
any, calculated in accordance with section 22(d)(2) of the revised 
regulatory capital rules and the corresponding line item instructions, 
must be deducted in line item 16.
    Schedules HC-R, Part I.B and SC-R item 17: LESS: Deductions applied 
to common equity tier 1 capital due to insufficient amount of 
additional tier 1 capital and tier 2 capital to cover deductions: If an 
institution does not have a sufficient amount of additional tier 1 
capital and tier 2 capital to cover deductions, then the shortfall must 
be reported in this line item.
    Schedules HC-R, Part I.B and SC-R items 18 and19: An institution 
would summarize total adjustments and deductions in line item 18 and 
deduct that amount from its common equity tier 1 capital before 
adjustments and deductions to determine its common equity tier 1 
capital, which would be reported in line item 19

C. Proposed Schedules HC-R, Part I.B and SC-R Items 20 Through 25: 
Additional Tier 1 Capital, and Item 26, Tier 1 Capital

    Proposed Schedules HC-R, Part I.B and SC-R line items 20 through 25 
would require reporting of additional tier 1 capital elements. As 
defined in the revised regulatory capital rules, additional tier 1 
capital is the sum of: (Item 20) additional tier 1 capital instruments 
that satisfy the eligibility criteria described in section 20 of the 
revised regulatory capital rules, plus related surplus, (item 21) non-
qualifying capital instruments subject to phase out from additional 
tier 1 capital, and (item 22) tier 1 minority interest that is not 
included in an institution's common equity tier 1 capital, less (item 
24) applicable deductions.
    Line item 26 collects data on the institution's tier 1 capital, 
calculated as the sum of (item 19) common equity tier 1 capital and 
(item 25) additional tier 1 capital.

D. Proposed Schedules HC-R, Part I.B and SC-R Items 27 Through 34: Tier 
2 Capital, and Item 35: Total Capital

    Proposed Schedules HC-R, Part I.B and SC-R line items 27 through 34 
would require reporting of tier 2 capital elements. As defined in the 
revised regulatory capital rules, tier 2 capital is the sum of: (Item 
27) tier 2 capital instruments that satisfy the eligibility criteria 
described in section 20 of the revised regulatory capital rules, plus 
related surplus; (item 28) non-qualifying capital instruments subject 
to phase out from tier 2 capital; (item 29) total capital minority 
interest not included in an institution's tier 1 capital; (HC-R item 
30(a), SC-R item 30) allowance for loan and lease losses (ALLL) 
includable in tier 2 capital or, for advanced approaches HCs, (HC-R 
item 30(b)) eligible credit reserves includable in tier 2 capital; and 
(item 31) unrealized gains on AFS preferred stock classified as an 
equity security under GAAP and AFS equity exposures includable in tier 
2 capital, less (item 33) tier 2 capital deductions.
    As noted above, advanced approaches HCs would report line items 
30(b) (eligible credit reserves includable in tier 2 capital); 32(b) 
(tier 2 capital before deductions); 34(b) (tier 2 capital); and 35(b) 
(total capital) on the proposed Schedule HC-R only after these 
institutions conduct a satisfactory parallel run.
    Line item 35(a) would collect data information on an institution's 
total capital, which is the sum of (item 26) tier 1 capital and (item 
34) tier 2 capital.

E. Proposed Schedules HC-R, Part I.B and SC-R Items 36 Through 39: 
Total Assets for the Leverage Ratio

    Institutions would report total assets for the leverage ratio 
denominator in line item 39, calculated as: (Item 36) average total 
consolidated assets, less (item 37) deductions from common

[[Page 48877]]

equity tier 1 capital and additional tier 1 capital, and less (item 38) 
other deductions from (additions to) assets for leverage ratio 
purposes, as described under sections 22(a), (c), and (d) of the 
revised regulatory capital rules.

F. Proposed Schedules HC-R, Part I.B and SC-R Items 40 Through 45: 
Total Risk-Weighted Assets and Capital Ratios

    Proposed Schedules HC-R, Part I.B and SC-R line item 40 would 
collect data on an institution's risk-weighted assets. Proposed 
Schedules HC-R, Part I.B and SC-R line items 41 through 45 would 
collect data on the following regulatory capital ratios: (Item 41) 
common equity tier 1 ratio; (item 42) tier 1 capital ratio; (item 43) 
total capital ratio; (item 44) tier 1 leverage ratio; and, for advanced 
approaches HCs, (item 45), supplementary leverage ratio, all calculated 
as described in section 10 of the revised regulatory capital rules. 
Item 45 would not apply to Schedule SC-R.\10\
---------------------------------------------------------------------------

    \10\ During the reporting periods in 2014, FR Y-9C filers would 
continue applying the general risk-based capital rules to report 
their total risk-weighted assets in line item 40.a of Part I of 
Schedule HC-R (as currently reported in item 62 of the risk-weighted 
assets portion of Schedule HC-R). The amount in line item 40 would 
serve as the denominator of the risk-based capital ratios reported 
in line items 41 through 44 (Column A). Effective March 31, 2015, FR 
Y-9C filers would apply the standardized approach, described in 
subpart D of the revised regulatory capital rules, to report their 
risk-weighted assets in line item 40.a and the risk-based capital 
ratios in line items 41 through 44 (Column A) of the regulatory 
capital ratios portion of Schedule HC-R.
---------------------------------------------------------------------------

    Advanced approaches HCs would report line items 40 through 43 on 
the proposed Schedule HC-R, Part I.B as follows.
     During the reporting periods in 2014, these institutions 
would continue applying Appendix A of the general risk-based capital 
rules \11\ to report their total risk-weighted assets in line item 
40(a), which would serve as the denominator of the ratios reported in 
line items 41 through 43 (Column A).
---------------------------------------------------------------------------

    \11\ The Federal Reserve's general risk-based capital rules are 
at 12 CFR parts 208 and 225, appendix A.
---------------------------------------------------------------------------

     Starting on March 31, 2015, these institutions would apply 
the standardized approach, described in subpart D of the revised 
regulatory capital rules, to report their risk-weighted assets in line 
item 40(a) and the regulatory capital ratios in line items 41 through 
43. As discussed, these institutions would report their total risk-
weighted assets (item 40(b)) and regulatory capital ratios (items 41 
through 43, Column B) using the advanced approaches rule after they 
conduct a satisfactory parallel run.
     In addition, starting on March 31, 2015, these 
institutions would report a supplementary leverage ratio in item 45, as 
described in section 10 of the revised regulatory capital rules.

G. Proposed Schedules HC-R, Part I.B and SC-R Items 46 Through 48: 
Capital Buffer

    Under section 11 of the revised regulatory capital rules, 
institutions must hold sufficient common equity tier 1 capital to avoid 
limitations on distributions and discretionary bonus payments. An 
institution's (item 46(a)) capital conservation buffer is the lowest of 
the following measures: (1) The institution's common equity tier 1 
capital ratio minus the applicable minimum (4 percent in 2014, 4.5 
percent in 2015 and thereafter); (2) the institution's tier 1 capital 
ratio minus the applicable minimum (5.5 percent in 2014 6 percent in 
2015 and thereafter); and (3) the institution's total capital ratio 
minus 8 percent. Advanced approaches HCs must make additional 
calculations (item 46(b)) to account for all the applicable buffers, as 
described in section 11 of the revised regulatory capital rules. Item 
46(b) would not apply to Schedule SC-R. If an institution's capital 
buffer is less than or equal to applicable minimum capital conservation 
buffer (or in the case of an advanced approaches HC, the applicable 
minimum capital conservation buffer plus any other applicable capital 
buffers), then it must report (item 47) eligible retained income and 
(item 48) distributions and discretionary bonus payments to executive 
officers, as described in section 11 of the revised regulatory capital 
rules.

    Board of Governors of the Federal Reserve System, August 5, 
2013.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2013-19357 Filed 8-9-13; 8:45 am]
BILLING CODE 6210-01-P