[Federal Register Volume 81, Number 33 (Friday, February 19, 2016)]
[Notices]
[Pages 8494-8497]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-03444]


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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 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 PRA 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 number.

DATES: Comments must be submitted on or before April 19, 2016.

ADDRESSES: You may submit comments, identified by Reg Y-1, Form MSD-4, 
or Form MSD-5 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.

[[Page 8495]]

     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 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 Proposals

    The following information collections, which are being handled 
under this delegated authority, have received initial Board approval 
and are hereby published for comment. At the end of the comment period, 
the proposed information collections, 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, without revision, of the following report:
    Report title: Reporting Requirements Associated with Regulation Y 
(Extension of Time to Conform to the Volcker Rule).
    Agency form number: Reg Y-1.
    OMB control number: 7100-0333.
    Frequency: Event-generated.
    Reporters: Insured depository institution (other than certain 
limited-purpose trust institutions), any company that controls an 
insured depository institution, any company that is treated as a bank 
holding company for purposes of section 8 of the International Banking 
Act of 1978 (12 U.S.C. 3106), and any affiliate or subsidiary of any of 
the foregoing, and nonbank financial companies designated by the 
Financial Stability Oversight Council that engage in proprietary 
trading activities or make investments in covered funds.
    Estimated annual reporting hours: 774 hours.
    Estimated average hours per response: 3 hours.
    Number of respondents: 258 respondents.
    General description of report: The Board's Legal Division has 
determined that section 13 of the BHC Act specifically authorizes the 
Board to issue rules to permit entities covered by the Volcker Rule to 
seek extensions of time of the conformance period. 12 U.S.C. 
1851(c)(6). The information collections in sections 225.181(c) and 
225.182(c) of Regulation Y are required for covered entities that 
decide to seek an extension of time to conform their activities to the 
Volcker Rule or divest their interest in an illiquid hedge fund or 
private equity fund. The obligation to respond, therefore, is required 
to obtain a benefit. As noted above, the information collected under 
the provisions of section 13 of the BHC Act and subpart K of Regulation 
Y is required to be submitted in order to obtain an extension of time 
to conform a covered entity's assets and activities to the Volcker 
Rule. As provided in sections 221.181(d) and 221.182(d) of subpart K, 
such information includes:
     The terms of private contractual obligations;
     The liquid or illiquid nature of assets proposed to be 
divested by the regulated entity;
     The total exposure of the covered entity to the activity 
or investment, and its materiality to the institution;
     The risks and costs of disposing of, or maintaining, the 
activity or investment; and
     The impact of divestiture or conformance of the activity 
or investment on any duty owed by the institution to a client, 
customer, or counterparty.
    This information is the type of confidential commercial and 
financial information that may be withheld under Exemption 4 of the 
Freedom of Information Act, 5 U.S.C. 552(b)(4). As required 
information, it may be withheld under Exemption 4 only if public 
disclosure could result in substantial competitive harm to the 
submitting institution.
    Abstract: The Dodd-Frank Wall Street Reform and Consumer Protection 
Act (the ``Dodd-Frank Act'') was enacted on July 21, 2010.\1\ Section 
619 of the Dodd-Frank Act, also known as the Volcker Rule, adds a new 
section 13 to the Bank Holding Company Act of 1956 (the ``BHC Act'') 
\2\ that generally prohibits any banking entity \3\ from engaging in 
proprietary trading or from investing in, sponsoring, or having certain 
relationships with a hedge fund or private equity fund (together, a 
covered fund). Section 13 of the BHC Act also provides that nonbank 
financial companies designated by the Financial Stability Oversight 
Council (the ``Council'') that engage in proprietary trading activities 
or make investments in covered funds may be made subject

[[Page 8496]]

by rule to additional capital requirements or quantitative limits.\4\ 
In December 2013, the Board, OCC, FDIC, SEC and CFTC (the ``Agencies'') 
approved final regulations implementing the provisions of section 13 of 
the BHC Act (the ``final rule'').\5\
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    \1\ Public Law 111-203, 124 Stat. 1376 (2010).
    \2\ 12 U.S.C. 1851.
    \3\ The term ``banking entity'' is defined in section 13(h)(1) 
of the BHC Act. See 12 U.S.C. 1851(h)(1). The term means any insured 
depository institution (other than certain limited-purpose trust 
institutions), any company that controls an insured depository 
institution, any company that is treated as a bank holding company 
for purposes of section 8 of the International Banking Act of 1978 
(12 U.S.C. 3106), and any affiliate or subsidiary of any of the 
foregoing.
    \4\ See 12 U.S.C. 1851(a)(2) and (f)(4).
    \5\ See Prohibitions and Restrictions on Proprietary Trading and 
Certain Interests in, and Relationships With, Hedge Fund and Private 
Equity Funds, 79 FR 5536 (Jan. 31, 2014); 79 FR 5808 (Jan. 31, 
2014). At the time of the final rule, the Agencies explained they 
would explore whether a nonbank financial company designated by the 
Council that was not also a banking entity engages in any activity 
subject to section 13 of the BHC Act and what, if any, requirements 
to apply under section 13.
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    The restrictions and prohibitions of section 13 of the BHC Act 
became effective on July 21, 2012,\6\ however, the statute provided 
banking entities a grace period until July 21, 2014, to conform their 
activities and investments to the requirements of the statute and any 
rule issued by the Agencies. The statute also granted exclusively to 
the Board authority to provide banking entities additional time to 
conform or divest their investments and activities covered by section 
13. The statute provides that the Board may, by rule or order, extend 
the conformance period ``for not more than one year at a time,'' up to 
three times, if in the judgment of the Board, an extension is 
consistent with the purposes of section 13 and would not be detrimental 
to the public interest.\7\ This would allow extensions of the 
conformance period until July 21, 2017.\8\ Section 13 also permits the 
Board, upon application by a banking entity, to provide up to an 
additional five-year transition period to conform certain illiquid 
funds.\9\
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    \6\ See 12 U.S.C. 1851(c)(1).
    \7\ See 12 U.S.C. 1851(c)(2).
    \8\ At the time of issuance of the final rule in December 2013, 
the Board exercised authority under the statute to extend this 
period for one year, until July 21, 2015. See Board Order Approving 
Extension of Conformance Period (Dec. 10. 2013), available at http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20131210b1.pdf. 
In addition, in December 2014, the Board extended the conformance 
period until July 21, 2016 for banking entities to conform 
investments in and relationships with covered funds and foreign 
funds that were in place prior to December 31, 2013 (``legacy 
covered funds'') and stated its intention to act next year to give 
banking entities until July 21, 2017 to conform legacy covered 
funds. See Board Order Approving Extension of Conformance Period 
under Section 13 of the Bank Holding Company Act (December 18, 
2014), available at http://www.federalreserve.gov/newsevents/press/bcreg/20141218a.htm.
    \9\ See 12 U.S.C. 1851(c)(3)-(4).
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    Section 13 also gives nonbank financial companies supervised by the 
Board the same general two-year conformance period with the potential 
of up to three, one-year extensions to bring their activities into 
compliance with any requirements or limits established. Consistent with 
the conformance period available to banking entities, the Board has the 
ability to extend this two-year period by up to three additional one-
year periods, if the Board determines that such an extension is 
consistent with the purpose of the Volcker Rule and would not be 
detrimental to the public interest.\10\
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    \10\ See 12 U.S.C. 1851(c)(2).
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    On February 2011, the Board adopted a final rule to implement the 
conformance period provisions of section 13 (``Conformance Rule'') 
during which banking entities and nonbank financial companies 
supervised by the Board must bring their activities and investments 
into compliance with the Volcker Rule and implementing regulations. The 
information collections associated with the Conformance Rule are 
located in sections 225.181(c) and 225.182(c) of Regulation Y. Sections 
225.181(c) and 225.182(c) permit a banking entity and nonbank financial 
company, respectively, to request an extension of time to conform their 
activities to the Volcker Rule. The Conformance Rule became effective 
April 1, 2011.
    Proposal to approve under OMB delegated authority the extension for 
three years, with revision, of the following reports:
    Report title: Uniform Application for Municipal Securities 
Principal or Municipal Securities Representative Associated with a Bank 
Municipal Securities Dealer; Uniform Termination Notice for Municipal 
Securities Principal or Municipal Securities Representative Associated 
with a Bank Municipal Securities Dealer.
    Agency form number: Form MSD-4; Form MSD-5.
    OMB control number: 7100-0100; 7100-0101.
    Frequency: On occasion.
    Reporters: State member banks, bank holding companies, and foreign 
dealer banks that are municipal securities dealers.
    Estimated annual reporting hours: Form MSD-4, 20 hours; Form MSD-5, 
13 hours.
    Estimated average hours per response: Form MSD-4, 1 hour; Form MSD-
5, 0.25 hours.
    Number of respondents: Form MSD-4, 20; Form MSD-5, 50.
    General description of report: The Board's Legal Division has 
determined that sections 15B(a)-(b) and 17 of the Securities Exchange 
Act (15 U.S.C. 78o-4(a)-(b) and 78q) authorize the SEC and MSRB to 
promulgate rules requiring municipal security dealers to file 
registration reports about associated persons with the SEC and the ARA. 
In addition, section 15B(c) of the Act provides that ARAs may enforce 
compliance with the SEC's and MSRB's rules. 15 U.S.C. 78o-4(c). Section 
23(a) of the Act also authorizes the SEC, the Board, and the other ARAs 
to make rules and regulations in order to implement the provisions of 
the Act. 15 U.S.C. 78w(a). The Board is the ARA for bank municipal 
securities dealers that are savings and loan holding companies, state 
member banks (including their divisions or departments), and bank 
holding companies (including a subsidiary bank of the bank holding 
company if the subsidiary does not already report to another ARA or to 
the SEC, and any divisions, departments or subsidiaries of that 
subsidiary).\11\ 15 U.S.C. 78c(a)(34)(A)(ii). The Board is also the ARA 
for state branches or agencies of foreign banks that are municipal 
securities dealers.\12\ Accordingly, the Board's collection of Form 
MSD-4 and Form MSD-5 for these institutions is authorized pursuant to 
15 U.S.C. 78o-4, 78q and 78w.
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    \11\ Currently, the instructions to Form MSD-4 and to Form MSD-5 
do not explicitly state that a savings and loan holding company 
(``SLHC'') or a bank holding company (``BHC'') is required to file 
these forms with the Board. These instructions will be amended to 
make this requirement explicit, and the forms will be revised to 
include a Privacy Act notice.
    \12\ Although Section 3(a)(34) of the Act, 15 U.S.C. 78c(a)(34), 
does not specify the ARA for municipal securities dealer activities 
of foreign banks, uninsured state branches or state agencies of 
foreign banks, commercial lending companies owned or controlled by a 
foreign bank, or Edge Act corporations (collectively referred to as 
foreign dealer banks), the Division of Market Regulation of the SEC 
has agreed that the Federal Reserve should examine the municipal 
securities dealer activities of foreign dealer banks. See Letter 
from Catherine McGuire, Chief Counsel, SEC's Division of Market 
Regulation, to Laura M. Homer, Assistant Director, Federal Reserve 
Board's Division of Banking Supervision and Regulation, June 14, 
1994.
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    The Board is also authorized to require that state member banks and 
their departments file reports with the Board pursuant to section 
11(a)(1) of the Federal Reserve Act, 12 U.S.C. 248(a)(1). Branches and 
agencies of foreign banks are also subject to the reporting 
requirements of section 11(a)(1) of the Federal Reserve Act pursuant to 
section 7(c)(2) of the International Banking Act, 12 U.S.C. 3105(c)(2). 
In addition, section 10(b)(2) of the Home Owners' Loan Act authorizes 
the Board to require SLHCs to file ``such reports as may be required by 
the Board'' and instructs that such reports ``shall contain such 
information concerning the operations of such savings and loan holding 
company and its subsidiaries as the Board may require.'' 12 U.S.C. 
1467a(b)(2), as

[[Page 8497]]

amended by section 369 of the Dodd-Frank Act.
    The obligation to file the forms with the Board is mandatory for 
those financial institutions for which the Board serves as the ARA, and 
the filing of both forms is event generated.
    The data collected on Forms MSD-4 and MSD-5 is compiled in a 
``system of records'' within the meaning of the Privacy Act. 5 U.S.C. 
552a(a)(5). In 1977, the Board formally designated a system of records 
for Forms MSD-4 and MSD-5. See 4 Fed. Res. Reg. Service ] 8-350 (42 FR 
16,854 (Mar. 30, 1977)).\13\ The Privacy Act prohibits the Board from 
disclosing the information collected on the forms unless certain 
exceptions apply that would permit disclosure. 5 U.S.C. 552a(b).
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    \13\ In 2008, the Board updated all of the Board's existing 
systems of records, including the system of records for Forms MSD-4 
and MSD-5 (BGFRS-17). See 73 FR 24,984, 24,999 (May 6, 2008).
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    Abstract: These mandatory information collections are submitted on 
occasion by state member banks (SMBs), bank holding companies (BHCs), 
savings and loan holding companies (``SLHCs''), and foreign dealer 
banks that are municipal securities dealers.\14\ The Form MSD-4 
collects information (such as personal history and professional 
qualifications) on an employee whom the bank wishes to assume the 
duties of municipal securities principal or representative. The Form 
MSD-5 collects the date of, and reason for, termination of such an 
employee.
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    \14\ At this time, there are no SLHCs or foreign dealer banks 
that are registered as municipal securities dealers.
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    On August 4, 2014, the Municipal Securities Rulemaking Board (MSRB) 
(MSRB Notice 2014-13) announced the creation of a new designation of 
registered person--Limited Representative--Investment Company and 
Variable Contracts Products--which is a sub-category of Municipal 
Securities Representative.\15\ To conform to MSRB Notice 2011-54, the 
Board staff proposes to make a minor revision to the Form MSD-4 to add 
the Limited Representative--Investment Company and Variable Contracts 
Products as a new type of qualification. The Board staff also proposes 
to require electronic submission of both the Form MSD-4 and Form MSD-5 
to a secure Federal Reserve Board email address.
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    \15\ See http://www.msrb.org/~/media/Files/Regulatory-Notices/
Announcements/2014-13.ashx?n=1.

    Board of Governors of the Federal Reserve System, February 12, 
2016.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2016-03444 Filed 2-18-16; 8:45 am]
BILLING CODE 6210-01-P