[Federal Register Volume 80, Number 231 (Wednesday, December 2, 2015)]
[Notices]
[Pages 75457-75463]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-30538]


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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) 
to approve of and assign OMB control numbers to collection of 
information requests and requirements conducted or sponsored by the 
Board. 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 February 1, 2016.

ADDRESSES: You may submit comments, identified by FR Y-9C, FR Y-9LP, FR 
Y-9SP, FR Y-9ES, FR Y-9CS, FR Y-6, FR Y-7, FR Y-10, or FR Y-10E, 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 
http://www.federalreserve.gov/apps/foia/proposedregs.aspx 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 
3515, 1801 K Street (between 18th and 19th Streets NW.) Washington, DC 
20006 between 9:00 a.m. and 5:00 p.m. on weekdays.
    Additionally, commenters may send a copy of their comments to the 
OMB

[[Page 75458]]

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://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--Nuha Elmaghrabi--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 Extension for 
Three Years, With Revision, of the Following Reports

    1. Report title: Annual Report of Holding Companies; Annual Report 
of Foreign Banking Organizations; Report of Changes in Organizational 
Structure; Supplement to the Report of Changes in Organizational 
Structure.
    Agency form number: FR Y-6; FR Y-7; FR Y-10; FR Y-10E.
    OMB control number: 7100-0297.
    Frequency: FR Y-6: Annual; FR Y-7: Annual; FR Y-10: Event-
generated; FR Y-10E: Event-generated.
    Reporters: Bank holding companies (BHCs) and savings and loan 
holding companies (SLHCs) (collectively, holding companies (HCs)), 
securities holding companies, foreign banking organizations (FBOs), 
state member banks unaffiliated with a BHC, Edge Act and agreement 
corporations, and nationally chartered banks that are not controlled by 
a BHC (with regard to their foreign investments only).
    Estimated annual reporting hours: FR Y-6: 26,477 hours; FR Y-7: 
1,094 hours; FR Y-10 initial: 530 hours; FR Y-10 ongoing: 39,735 hours; 
FR Y-10E: 2,649 hours.
    Estimated average hours per response: FR Y-6: 5.5 hours; FR Y-7: 
4.5 hours; FR Y-10 initial: 1 hour; FR Y-10 ongoing: 2.5 hours; FR Y-
10E: 0.5 hours.
    Number of respondents: FR Y-6: 4,814; FR Y-7: 243; FR Y-10 initial: 
530; FR Y-10 ongoing: 5,298; FR Y-10E: 5,298.
    General description of report: These information collections are 
mandatory as follows:
    FR Y-6: Section 5(c)(1)(A) of the Bank Holding Company Act (BHC 
Act) (12 U.S.C. 1844(c)(1)(A)), sections 8(a) and 13(a) of the 
International Banking Act (IBA) (12 U.S.C. 3106(a) and 3108(a)), 
sections 11(a)(1), 25, and 25A of the Federal Reserve Act (12 U.S.C. 
248(a)(1), 602, and 611a), and sections 113, 312, 618, and 809 of the 
Dodd-Frank Act (12 U.S.C. 5361, 5412, 1850a(c)(1), and 5468(b)(1), 
respectively).
    FR Y-7: Sections 8(a) and 13(a) of the IBA (12 U.S.C. 3106(a) and 
3108(a)) and sections 113, 312, 618, and 809 of the Dodd-Frank Act (12 
U.S.C. 5361, 5412, 1850a(c)(1), and 5468(b)(1), respectively).
    FR Y-10 and FR Y-10E: Sections 4(k) and 5(c)(1)(A) of the BHC Act 
(12 U.S.C. 1843(k), 1844(c)(1)(A)), section 8(a) of the IBA (12 U.S.C. 
3106(a)), sections 11(a)(1), 25(7), and 25A of the Federal Reserve Act 
(12 U.S.C. 248(a)(1), 321, 601, 602, 611a, 615, and 625), and sections 
113, 312, 618, and 809 of the Dodd-Frank Act (12 U.S.C. 5361, 5412, 
1850a(c)(1), and 5468(b)(1), respectively).
    The data collected in the FR Y-6, FR Y-7, FR Y-10, and FR Y-10E are 
not considered confidential. With regard to information that a banking 
organization may deem confidential, the institution may request 
confidential treatment of such information under one or more of the 
exemptions in the Freedom of Information Act (FOIA) (5 U.S.C. 552). The 
most likely case for confidential treatment will be based on FOIA 
exemption 4, which permits an agency to exempt from disclosure ``trade 
secrets and commercial or financial information obtained from a person 
and privileged and confidential,'' (5 U.S.C. 552(b)(4)). To the extent 
an institution can establish the potential for substantial competitive 
harm, such information would be protected from disclosure under the 
standards set forth in National Parks & Conservation Association v. 
Morton, 498 F.2d 765 (D.C. Cir. 1974). Exemption 6 of FOIA might also 
apply with regard to the respondents' submission of non-public personal 
information of owners, shareholders, directors, officers and employees 
of respondents. Exemption 6 covers ``personnel and medical files and 
similar files the disclosure of which would constitute a clearly 
unwarranted invasion of personal privacy,'' (5 U.S.C. 552(b)(6)). All 
requests for confidential treatment would need to be reviewed on a 
case-by-case basis and in response to a specific request for 
disclosure.
    Abstract: The FR Y-6 is an annual information collection submitted 
by top-tier HCs and non-qualifying FBOs. It collects financial data, an 
organization chart, verification of domestic branch data, and 
information about shareholders. The Federal Reserve uses the data to 
monitor holding company operations and determine holding company 
compliance with the provisions of the BHC Act, Regulation Y (12 CFR 
225), the Home Owners' Loan Act (HOLA), and Regulation LL (12 CFR 238).
    The FR Y-7 is an annual information collection submitted by 
qualifying FBOs to update their financial and organizational 
information with the Federal Reserve. The FR Y-7 collects financial, 
organizational, and managerial information. The Federal Reserve uses 
information to assess an FBO's ability to be a continuing source of 
strength to its U.S. operations, and to determine compliance with U.S. 
laws and regulations.
    The FR Y-10 is an event-generated information collection submitted 
by

[[Page 75459]]

FBOs; top-tier HCs; security holding companies as authorized under 
Section 618 of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act of 2010 (12 U.S.C. 1850a(c)(1)); state member banks 
unaffiliated with a BHC; Edge Act and agreement corporations that are 
not controlled by a member bank, a domestic BHC, or a FBO; and 
nationally chartered banks that are not controlled by a BHC (with 
regard to their foreign investments only) to capture changes in their 
regulated investments and activities. The Federal Reserve uses the data 
to monitor structure information on subsidiaries and regulated 
investments of these entities engaged in banking and nonbanking 
activities. The FR Y-10E is a free-form supplement that may be used to 
collect additional structural information deemed to be critical and 
needed in an expedited manner.
    Current Actions: The Board proposes to add line items to the FR Y-7 
to collect information from an FBO on its compliance with applicable 
U.S. risk committee and home country stress test requirements under the 
Board's Regulation YY and section 165 of the Dodd-Frank Act.\1\
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    \1\ 79 FR 17239 (March 27, 2014).
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    Section 165 of the Dodd-Frank Act directs the Board to establish 
prudential standards for BHCs and FBOs with total consolidated assets 
of $50 billion or more and nonbank financial companies that the 
Financial Stability Oversight Council has designated for supervision by 
the Board. In addition, the statute directs the Board to issue 
regulations applying certain standards to BHCs and FBOs with total 
consolidated assets of $10 billion or more. In particular, the Board is 
directed to require publicly traded BHCs and FBOs with total 
consolidated assets of $10 billion or more to establish risk 
committees.\2\ In addition, the Board is required to issue regulations 
imposing company-run stress test requirements on BHCs, FBOs, state 
member banks, and savings and loan holding companies with total 
consolidated assets of more than $10 billion.\3\
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    \2\ See 12 U.S.C. 5365(h).
    \3\ 12 U.S.C. 5365(i).
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    In February of 2014, the Board adopted enhanced prudential 
standards for FBOs, including risk committee and stress testing 
requirements for FBOs with total consolidated assets of more than $10 
billion. These standards are contained in the Board's Regulation YY, 
which is organized into subparts that apply to FBOs depending on their 
asset size. The risk committee and stress testing requirements are 
located in the following subparts:
     Subpart L establishes stress testing requirements for FBOs 
with total consolidated assets of more than $10 billion;
     Subpart M establishes risk committee requirements for 
publicly traded FBOs with total consolidated assets between $10-$50 
billion;
     Subpart N establishes enhanced prudential standards 
(including risk committee and stress testing requirements) for FBOs 
with total consolidated assets of $50 billion or more but combined U.S. 
assets of less than $50 billion; and
     Subpart O establishes enhanced prudential standards 
(including risk committee and stress testing requirements) for FBOs 
with total consolidated assets of $50 billion or more and combined U.S. 
assets of $50 billion or more.
    With regards to risk committee requirements, an FBO subject to 
subpart M or N is required to certify that it has a risk committee that 
oversees the risk management practices of the combined U.S. operations 
of the company and has at least one member with appropriate risk 
expertise.\4\ This certification must be filed on an annual basis with 
the Board concurrently with the FR Y-7. FBOs subject to subpart O are 
subject to more prescriptive U.S. risk committee requirements and must 
employ a U.S. chief risk officer in the United States.\5\
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    \4\ The combined U.S. operations of a FBO include its U.S. 
branches and agencies and U.S. subsidiaries (other than any section 
2(h)(2) company, if applicable).
    \5\ FBOs subject to subpart O are not required to certify that 
they have a U.S. risk committee because the Board expects to gain 
sufficient information through the supervisory process to evaluate 
whether the U.S. risk committee meets the requirements of this 
section.
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    With regards to stress testing, an FBO subject to subpart L, N, or 
O must be subject to a consolidated capital stress testing regime 
administered by the FBO's home-country supervisor, meet the home-
country supervisor's minimum standards, and in some cases provide 
information to the Board about the results of home country stress 
testing. If these conditions are not met, the U.S. branches and 
agencies of the foreign bank are subject to an asset maintenance 
requirement, and generally must conduct an annual stress test of its 
U.S. subsidiaries. An FBO subject to subpart O must also conduct stress 
testing at its U.S. intermediate holding company. The proposed 
revisions to the FR Y-7 would implement the U.S. risk committee 
certification requirement and provide FBOs with a standardized way to 
indicate compliance with the home country stress testing requirements 
(if not, the FBO would be subject to additional requirements in the 
United States). Specifically, the proposal would require an FBO to 
certify that it meets, does not meet, or is not subject to the relevant 
U.S. risk committee certification requirement and indicate that it 
meets, does not meet, or is not subject to the relevant home-country 
stress testing requirement. The instructions to the line item would 
describe the requirements and the scope of applicability so that an FBO 
would be able to identify and confirm compliance with the applicable 
requirements.
    2. Report title: Consolidated Financial Statements for Holding 
Companies, Parent Company Only Financial Statements for Large Holding 
Companies, Parent Company Only Financial Statements for Small Holding 
Companies, Financial Statement for Employee Stock Ownership Plan 
Holding Companies, and the Supplemental to the Consolidated Financial 
Statements for Holding Companies.
    Agency form number: FR Y-9C, FR Y-9LP, FR Y-9SP, FR Y-9ES, and FR 
Y-9CS.
    OMB control number: 7100-0128.
    Frequency: Quarterly, semiannually, and annually.
    Reporters: Bank holding companies (BHCs), savings and loan holding 
companies (SLHCs), and securities holding companies (SHCs) 
(collectively, holding companies).
    Estimated annual reporting hours: FR Y-9C (non advanced approaches 
holding companies): 131,514 hours; FR Y-9C (advanced approached holding 
companies): 2,683 hours; FR Y-9LP: 16,695 hours; FR Y-9SP: 45,425 
hours; FR Y-9ES: 44 hours; FR Y-9CS: 472 hours.
    Estimated average hours per response: FR Y-9C (non advanced 
approaches holding companies): 50.35 hours; FR Y-9C (advanced 
approached holding companies HCs): 51.60 hours; FR Y-9LP: 5.25 hours; 
FR Y-9SP: 5.40 hours; FR Y-9ES: 0.50 hours; FR Y-9CS: 0.50 hours.
    Number of respondents: FR Y-9C (non advanced approaches holding 
companies): 653; FR Y-9C (advanced approached holding companies): 13; 
FR Y-9LP: 795 hours; FR Y-9SP: 4,206; FR Y-9ES: 88; FR Y-9CS: 236.
    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 Savings and Loan Holding

[[Page 75460]]

Companies (SLHCs) and supervised Securities Holding Companies (SHCs) 
file the FR Y-9LP, and 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 FOIA (5 U.S.C. 
522(b)(4), (b)(6), and (b)(8)). The applicability of these exemptions 
would need to be reviewed on a case by case basis.
    Abstract: The FR Y-9 family of reporting forms continues to be the 
primary source of financial data on holding companies that examiners 
rely on in the intervals between on-site inspections. Financial data 
from these reporting forms are used to detect emerging financial 
problems, to review performance and conduct pre-inspection analysis, to 
monitor and evaluate capital adequacy, to evaluate holding company 
mergers and acquisitions, and to analyze a holding company's overall 
financial condition to ensure the safety and soundness of its 
operations. The FR Y-9C serves as standardized financial statements for 
the consolidated holding company. The FR Y-9LP, and FR Y 9SP serve as 
standardized financial statements for parent holding companies; the FR 
Y-9ES is a financial statement for holding companies that are Employee 
Stock Ownership Plans (ESOPs). The Federal Reserve also has the 
authority to use the FR Y-9CS (a free-form supplement) to collect 
additional information deemed to be (1) critical and (2) needed in an 
expedited manner.
    Current Actions: The Federal Reserve proposes to implement a number 
of revisions to the FR Y-9C requirements in March 2016. All of these 
proposed changes except for those related to Schedule HC-I are 
consistent with proposed changes to the Call Reports. The proposed 
changes include:
     Deletions of certain existing data items pertaining to 
other-than-temporary impairments from Schedule HI, Income Statement; 
troubled debt restructurings from Schedule HC-C, Loans and Leases, and 
Schedule HC-N, Past Due and Nonaccrual Loans, Leases, and Other Assets; 
loans covered by FDIC loss-sharing agreements from Schedule HC-M, 
Memoranda, and Schedule HC-N; and unused commitments to asset-backed 
commercial paper conduits with an original maturity of one year or less 
in Schedule HC-R, Part II, Risk-Weighted Assets;
     Increases and additions to reporting thresholds for 
certain data items in four FR Y-9C schedules;
     Instructional revisions addressing the reporting of home 
equity lines of credit that convert from revolving to non-revolving 
status in Schedule HC-C; securities for which a fair value option is 
elected in Schedule HC, Balance Sheet; and net gains (losses) and 
other-than-temporary impairments on equity securities that do not have 
readily determinable fair values in Schedule HI;
     New and revised data items, including:
    [cir] Increasing the time deposit size threshold from $100,000 to 
$250,000 in Schedule HC-E, Deposit Liabilities
    [cir] Revising the reporting of certain securities measured under a 
fair value option in Schedule HC-Q and moving the existing Memorandum 
items for the fair value and unpaid principal balance of loans (not 
held for trading) from Schedule HC-C, to Schedule HC-Q;
    [cir] Eliminating the concept of extraordinary items and revising 
affected data items in Schedule HI.

Proposed FR Y-9C Revisions

A. Deletions of Existing Data Items

    Based on the Federal Reserve's review of the information that 
holding companies are required to report in the FR Y-9C, the Federal 
Reserve has determined that the continued collection of the following 
items is no longer necessary and are proposing to eliminate them 
effective March 31, 2016:
    (1) Schedule HI, Memorandum items 17(a) and 17(b), on other-than-
temporary impairments; \6\
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    \6\ Institutions would continue to complete Schedule HI, 
Memorandum item 17(c), on net impairment losses recognized in 
earnings.
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    (2) Schedule HC-C, Memorandum items 1(f)(2), 1(f)(5), and 1(f)(6) 
on troubled debt restructurings in certain loan categories that are in 
compliance with their modified terms;
    (3) Schedule HC-N, Memorandum items 1(f)(2), 1(f)(5), and 1(f)(6) 
on troubled debt restructurings in certain loan categories that are 30 
days or more past due or on nonaccrual;
    (4) Schedule HC-M, items 6(a)(5)(a) through (d) on loans in certain 
loan categories that are covered by FDIC loss-sharing agreements; and
    (5) Schedule HC-N, items 12(e)(1) through (4) on loans in certain 
loan categories that are covered by FDIC loss-sharing agreements and 
are 30 days or more past due or on nonaccrual.
    In addition, when Schedule HC-R, Part II, is completed properly, 
item 18(b) on unused commitments to asset-backed commercial paper 
conduits with an original maturity of one year or less is not needed 
because such commitments should already have been reported in item 10 
as off-balance sheet securitization exposures. The instructions for 
item 18(b) explain that these unused commitments should be reported in 
item 10 and that amounts should not be reported in item 18(b). 
Accordingly, the Federal Reserve proposes to delete existing item 18(b) 
from Schedule HC-R, Part II. Existing item 18(c) of Schedule HC-R, Part 
II, for unused commitments with an original maturity exceeding one year 
would then be renumbered as item 18(b).

B. New Reporting Threshold and Increases in Existing Reporting 
Thresholds.

    In three FR Y-9C schedules, holding companies are currently 
required to itemize and describe each component of an existing item 
when the component exceeds both a specified percentage of the item and 
a specified dollar amount Based on a preliminary evaluation of the 
existing reporting thresholds, the Federal Reserve has concluded that 
the dollar portion of the thresholds that currently apply to these 
items can be increased to provide a reduction in reporting burden 
without a loss of data that would be necessary for supervisory or other 
public policy purposes. The percentage portion of the existing 
thresholds would not be changed. Accordingly, the Federal Reserve 
proposes to raise from $25,000 to $100,000 the dollar portion of the 
threshold for itemizing and describing components of:
    (1) Schedule HI, memo item 6, ``Other noninterest income;''
    (2) Schedule HI, memo item 7, ``Other noninterest expense;''
    (3) Schedule HC-Q, Memorandum item 1, ``All other assets;'' and
    (4) Schedule HC-Q, Memorandum item 2, ``All other liabilities.''
    To reduce burden, the Federal Reserve also proposes to raise from 
$25,000 to $1,000,000 the dollar portion of the threshold for itemizing 
and describing components of ``Other trading assets'' and ``Other 
trading liabilities'' in Schedule HC-D, Memorandum items 9(b) and 10.
    Based on the Federal Reserve's review of items reported on Schedule 
HC-I, Insurance-Related Underwriting Activities (Including 
Reinsurance), the Federal Reserve proposes that a $10,000,000 threshold 
be added to provide a reduction in reporting burden for reinsurance 
recoverables reported on Schedule HC-I, Part I line item 1 and HC-I, 
Part II line item 1 due to the

[[Page 75461]]

limited activity and immateriality on these line items. Reporting of 
these data items would be determined as of end of each quarter.

C. Instructional Revisions

1. Reporting Home Equity Lines of Credit That Convert From Revolving to 
Non Revolving Status
    Holding companies report the amount outstanding under revolving, 
open-end lines of credit secured by 1-4 family residential properties 
(commonly known as home equity lines of credit or HELOCs) in item 
1(c)(1) of Schedule HC-C, Loans and Leases. Closed-end loans secured by 
1-4 family residential properties are reported in Schedule HC-C, item 
1(c)(2)(a) or (b), depending on whether the loan is a first or a junior 
lien.\7\
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    \7\ Information also is separately reported for open-end and 
closed-end loans secured by 1-4 family residential properties in 
Schedule HI-B, Part I, Charge-offs and Recoveries on Loans and 
Leases; Memorandum items in Schedule HC-C; Schedule HC-D; Schedule 
HC-M; and Schedule HC-N.
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    A HELOC is a line of credit secured by a lien on a 1-4 family 
residential property that generally provides a draw period followed by 
a repayment period. During the draw period, a borrower has revolving 
access to unused amounts under a specified line of credit. During the 
repayment period, the borrower can no longer draw on the line of 
credit, and the outstanding principal is either due immediately in a 
balloon payment or is repaid over the remaining loan term through 
monthly payments. The FR Y-9C instructions do not address the reporting 
treatment for a home equity line of credit when it reaches its end-of-
draw period and converts from revolving to nonrevolving status. Such a 
loan no longer has the characteristics of a revolving, open-end line of 
credit and, instead, becomes a closed-end loan. In the absence of 
instructional guidance that specifically addresses this situation, 
Board staff has found diversity in how these credits are reported in 
Schedule HC-C. Some holding companies continue to report home equity 
lines of credit that have converted to non-revolving closed-end status 
in item 1(c)(1) of Schedule HC-C, as if they were still revolving open-
end lines of credit, while other holding companies recategorize such 
loans and report them as closed-end loans in item 1(c)(2)(a) or (b), as 
appropriate.
    Therefore, to address this absence of instructional guidance and 
promote consistency in reporting, the Federal Reserve proposes to 
clarify the instructions for reporting loans secured by 1-4 family 
residential properties to specify that after a revolving open-end line 
of credit has converted to non-revolving closed-end status, the loan 
should be reported in Schedule HC-C, item 1(c)(2)(a) or (b), as 
appropriate. In proposing this clarification, the Federal Reserve is 
requesting comment on whether an instructional requirement to 
recategorize HELOCs as closed-end loans for FR Y-9C purposes would 
create difficulties for holding company's loan recordkeeping systems. 
If so, please describe the difficulties this recategorization would 
create.
2. Reporting Treatment for Securities for Which a Fair Value Option Is 
Elected
    The FR Y-9C Glossary entry for ``Trading Account'' currently states 
that ``all securities within the scope of the Financial Accounting 
Standards Board's (FASB) Accounting Standards Codification (ASC) Topic 
320, Investments-Debt and Equity Securities (formerly FASB Statement 
No. 115, ``Accounting for Certain Investments in Debt and Equity 
Securities''), that a holding company has elected to report at fair 
value under a fair value option with changes in fair value reported in 
current earnings should be classified as trading securities.'' This 
reporting treatment was based on language contained in former FASB 
Statement No. 159, ``The Fair Value Option for Financial Assets and 
Financial Liabilities,'' but that language was not codified when 
Statement No. 159 was superseded by current ASC Topic 825, Financial 
Instruments. Thus, under U.S. GAAP as currently in effect, the 
classification of all securities within the scope of ASC Topic 320 that 
are accounted for under a fair value option as trading securities is no 
longer required. Accordingly, to bring the ``Trading Account'' Glossary 
entry into conformity with current U.S. GAAP, the Federal Reserve 
proposes to revise the statement from the Glossary entry quoted above 
by replacing ``should be classified'' with ``may be classified.''
    This revision to the ``Trading Account'' Glossary entry means that 
a holding company that elects the fair value option for securities 
within the scope of ASC Topic 320 would be able to classify such 
securities as held-to-maturity or available-for-sale in accordance with 
this topic based on the holding company's intent and ability with 
respect to the securities. In addition, a holding company could choose 
to classify securities for which a fair value option is elected as 
trading securities.
    Holding companies that have been required to classify all 
securities within the scope of ASC Topic 320 that are accounted for 
under a fair value option as trading securities also should consider 
the related proposed changes to Schedule HC-Q, Assets and Liabilities 
Measured at Fair Value on a Recurring Basis, which are discussed below.
3. Net Gains (Losses) on Sales of, and Other-Than-Temporary Impairments 
on, Equity Securities That Do Not Have Readily Determinable Fair Values
    Holding companies report investments in equity securities that do 
not have readily determinable fair values and are not held for trading 
(and to which the equity method of accounting does not apply) in FR Y-
9C Schedule HC-F, item 4, and on the FR Y-9C balance sheet in Schedule 
HC, item 11, ``Other assets.'' If such equity securities are held for 
trading, they are reported in Schedule HC, item 5, and in Schedule HC-
D, item 9 and Memorandum item 7.b, if applicable. In contrast, 
investments in equity securities with readily determinable fair values 
that are not held for trading are reported as available-for-sale 
securities in Schedule HC, item 2(b), and in Schedule HC-B, item 7, 
whereas those held for trading are reported in Schedule HC, item 5, and 
in Schedule HC-D, item 9 and Memorandum item 7(a), if applicable.
    In general, investments in equity securities that do not have 
readily determinable fair values are accounted for in accordance with 
ASC Subtopic 325-20, Investments-Other--Cost Method Investments 
(formerly Accounting Principles Board Opinion No. 18, ``The Equity 
Method of Accounting for Investments in Common Stock''), but are 
subject to the impairment guidance in ASC Topic 320, Investments-Debt 
and Equity Securities (formerly FASB Staff Position No. FAS 115-2 and 
FAS 124-2, ``Recognition and Presentation of Other-Than-Temporary 
Impairments'').
    The FR Y-9C instructions for Schedule HI, Income Statement, address 
the reporting of realized gains (losses), including other-than-
temporary impairments, on held to-maturity and available-for-sale 
securities as well as the reporting of realized and unrealized gains 
(losses) on trading securities and other assets held for trading. 
However, the Schedule HI instructions do not specifically explain where 
to report realized gains (losses) on sales or other disposals of, and 
other-than-temporary impairments on, equity securities that do not have 
readily determinable fair values and are not held for trading (and to 
which the equity method of accounting does not apply).

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    The instructions for Schedule HI, item 5.k, ``Net gains (losses) on 
sales of other assets (excluding securities),'' direct holding 
companies to ``report the amount of net gains (losses) on sales and 
other disposals of assets not required to be reported elsewhere in the 
income statement (Schedule HI).'' The instructions for item 5(k) 
further advise holding companies to exclude net gains (losses) on sales 
and other disposals of securities and trading assets. The intent of 
this wording was to cover securities designated as held-to-maturity, 
available-for-sale, and trading securities because there are separate 
specific items elsewhere in Schedule HI for the reporting of realized 
gains (losses) on such securities (items 6(a), 6(b), and 5(c), 
respectively). Thus, the Federal Reserve to revise the instructions for 
Schedule HI, item 5(k), by clarifying that the exclusions from this 
item of net gains (losses) on securities and trading assets apply to 
held-to-maturity, available-for-sale, and trading securities and other 
assets held for trading. At the same time, the Federal Reserve to add 
language to the instructions for Schedule HI, item 5(k), that explains 
that net gains (losses) on sales and other disposals of equity 
securities that do not have readily determinable fair values and are 
not held for trading (and to which the equity method of accounting does 
not apply), as well as other-than-temporary impairments on such 
securities, should be reported in item 5(k). In addition, the Federal 
Reserve proposes to remove the parenthetic ``(excluding securities)'' 
from the caption for item 5(k) and add in its place a footnote to this 
item advising holding companies to exclude net gains (losses) on sales 
of trading assets and held-to-maturity and available-for-sale 
securities.

D. New and Revised Data Items

1. Increase in the Time Deposit Size Threshold
    The Federal Reserve is proposing to increase the time deposit size 
threshold from $100,000 to $250,000 in Schedule HC-E, memorandum item 
3, Time Deposits of $100,000 or more with a remaining maturity of one 
year or less. The comparable line item on the Call Report is being 
revised to reflect the permanent $250,000 deposit insurance limit. 
Therefore, the Federal Reserve is proposing this change to maintain 
consistency between the two reports.
2. Changes to Schedule HC-Q, Assets and Liabilities Measured at Fair 
Value on a Recurring Basis
    Holding companies reporting on Schedule HC-Q are currently required 
to treat securities they have elected to report at fair value under a 
fair value option as part of their trading securities. As a 
consequence, institutions must include fair value information for their 
fair value option securities, if any, in Schedule HC-Q two times: 
First, as part of the fair value information they report for their 
``Other trading assets'' in item 5(b) of the schedule, and then on a 
standalone basis in item 5(b)(1), ``Nontrading securities at fair value 
with changes in fair value reported in current earnings.'' This 
reporting treatment flows from the existing provision of the Glossary 
entry for ``Trading Account'' that, as discussed above, requires an 
institution that has elected to report securities at fair value under a 
fair value option to classify the securities as trading securities. 
However, as further discussed above, Board staff is proposing to remove 
this requirement because it is not consistent with current U.S. GAAP. 
As a result, holding company's fair value option securities can be 
classified as held-to-maturity, available-for-sale, or trading 
securities in accordance with the guidance in Topic 320, Investments-
Debt and Equity Securities.
    In its current form, Schedule HC-Q contains an item for available-
for-sale securities along with the items identified above for ``Other 
trading assets,'' which includes securities designated as trading 
securities, and ``Nontrading securities at fair value with changes in 
fair value reported in current earnings.'' However, Schedule HC-Q does 
not include an item for held-to-maturity securities because, given the 
existing instructional requirements for fair value option securities, 
the held-to-maturity category includes only securities reported at 
amortized cost. In addition to removing the requirement to report all 
fair value option securities within the scope of ASC Topic 320 as 
trading securities, as proposed earlier in this notice, the Federal 
Reserve is further proposing to replace item 5(b)(1) of Schedule HC-Q 
for nontrading securities accounted for under a fair value option with 
a new item for any ``Held-to-Maturity securities'' to which a fair 
value option is applied. In this regard, existing item 1 for 
``Available-for-sale securities'' would be renumbered as item 1(b) and 
fair value information for any fair value option securities designated 
as ``Held-to-maturity securities'' would be reported in a new item 1(a) 
of Schedule HC-Q. These changes to Schedule HC-Q would take effect 
March 31, 2016.
    In addition, at present, holding companies that have elected to 
measure loans (not held for trading) at fair value under a fair value 
option are required to report the fair value and unpaid principal 
balance of such loans in Memorandum items 10 and 11 of Schedule HC-C, 
Loans and Lease Financing Receivables. This information is also 
collected on the Call Report Schedule RC-C Loans and Leases. The 
Federal Deposit Insurance Corporation and the Office of the Comptroller 
of the Currency (the agencies) have proposed to move this information 
from Schedule RC-C to Schedule RC-Q, Assets and Liabilities Measured at 
Fair Value on a Recurring Basis. Holding companies have commented in 
the past that retaining a consistent format between the Call Report and 
the FR Y-9C on the reporting of comparable information reduces 
reporting burden to the holding companies. Accordingly, the Board 
proposes to move Memorandum items 10 and 11 on the fair value and 
unpaid principal balance of fair value option loans from Schedule HC-C, 
to Schedule HC-Q effective March 31, 2016, and to designate them as 
Memorandum items 3 and 4.
3. Extraordinary Items
    In January 2015, the FASB issued ASU No. 2015-01, ``Simplifying 
Income Statement Presentation by Eliminating the Concept of 
Extraordinary Items.'' This ASU eliminates the concept of extraordinary 
items from U.S. GAAP. At present, ASC Subtopic 225-20, Income 
Statement--Extraordinary and Unusual Items (formerly Accounting 
Principles Board Opinion No. 30, ``Reporting the Results of 
Operations''), requires an entity to separately classify, present, and 
disclose extraordinary events and transactions. An event or transaction 
is presumed to be an ordinary and usual activity of the reporting 
entity unless evidence clearly supports its classification as an 
extraordinary item. For FR Y-9C purposes, if an event or transaction 
currently meets the criteria for extraordinary classification, a 
holding company must segregate the extraordinary item from the results 
of its ordinary operations and report the extraordinary item in its 
income statement in Schedule HI, item 11, ``Extraordinary items and 
other adjustments, net of income taxes.''
    ASU 2015-01 is effective for fiscal years, and interim periods 
within those fiscal years, beginning after December 15, 2015. Thus, for 
example, holding companies with a calendar year fiscal

[[Page 75463]]

year must begin to apply the ASU in their FR Y-9C for March 31, 
2016.\8\ After a holding company adopts ASU 2015-01, any event or 
transaction that would have met the criteria for extraordinary 
classification before the adoption of the ASU should be reported in 
Schedule HI, item 5(l), ``Other noninterest income,'' or item 7(d), 
``Other noninterest expense,'' as appropriate, unless the event or 
transaction would otherwise be reportable in another item of Schedule 
HI.
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    \8\ Early adoption of ASU 2015-01 is permitted provided that the 
guidance is applied from the beginning of the fiscal year of 
adoption.
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    Consistent with the elimination of the concept of extraordinary 
items in ASU 2015-01, the Federal Reserve proposes to revise the 
instructions for Schedule HI, item 11, and remove the term 
``extraordinary items'' and revise the captions for Schedule HI, item 
8, ``Income (loss) before income taxes and extraordinary items and 
other adjustments,'' item 10, ``Income (loss) before extraordinary 
items and other adjustments,'' and item 11, ``Extraordinary items and 
other adjustments, net of income taxes,'' effective March 31, 2016. 
After the concept of extraordinary items has been eliminated and such 
items would no longer be reportable in Schedule HI, item 11, only the 
results of discontinued operations would be reportable in item 11. 
Accordingly, effective March 31, 2016, the revised captions for 
Schedule HI, items 8, 10 and 11 would become ``Income (loss) before 
income taxes and discontinued operations,'' ``Income (loss) before 
discontinued operations,'' and ``discontinued operations, net of 
applicable income taxes'' respectively. The captions for Schedule HI, 
memorandum items 2, 8, items 8 and 11 on the Predecessor Financial 
Items and applicable Glossary references would also be revised to 
eliminate the concept of extraordinary items.

    Board of Governors of the Federal Reserve System, November 27, 
2015.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2015-30538 Filed 12-1-15; 8:45 am]
 BILLING CODE 6210-01-P