[Federal Register Volume 81, Number 201 (Tuesday, October 18, 2016)]
[Notices]
[Pages 71730-71733]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25129]


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FEDERAL RESERVE SYSTEM


Proposed Agency Information Collection Activities; Comment 
Request

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Notice for comment regarding the Federal Reserve proposal to 
extend without revision the clearance under the Paperwork Reduction Act 
for the following information collection activity.

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SUMMARY: The Board of Governors of the Federal Reserve System (Board or 
Federal Reserve) invites comment on a proposal to extend for three 
years, without revision, the following reporting and recordkeeping 
requirements related to amendments made by the Gramm-Leach-Bliley Act, 
to the Bank Holding Company Act, the Federal Reserve Act, and related 
regulations:
     The mandatory Declarations to Become a Financial Holding 
Company (FHC) (FR 4010); \1\
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    \1\ Savings and Loan Holding Companies (SLHCs) were added to the 
FR 4010 as a result of Regulation LL. 12 CFR 238.65. (76 FR 56508) 
September 13, 2011.
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     The voluntary Requests for Determinations and 
Interpretations Regarding Activities Financial in Nature (FR 4011);
     The mandatory Notices of Failure to Meet Capital or 
Management Requirements (FR 4012); \2\
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    \2\ SLHCs were added to the FR 4012 as a result of Regulation 
LL. 12 CFR 238.65. (76 FR 56508) September 13, 2011.
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     The mandatory Notices by State Member Banks to Invest in 
Financial Subsidiaries (FR 4017);
     The mandatory Regulatory Relief Requests Associated with 
Merchant Banking Activities (FR 4019); and
     The mandatory Recordkeeping Requirements Associated with 
Merchant Banking Activities (FR 4023).

[[Page 71731]]

    These collections of information are event-generated and as such, 
there are no formal reporting forms associated with them. In each case, 
the type of information required to be filed is described in the 
Board's regulations.
    On June 15, 1984, the Office of Management and Budget (OMB) 
delegated to the Board 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. In exercising this delegated authority, the Board is directed to 
take every reasonable step to solicit comment. In determining whether 
to approve a collection of information, the Board will consider all 
comments received from the public and other agencies.

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

ADDRESSES: You may submit comments, identified by GLB Filings, 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 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 Board invites public comment on the following information 
collection, which is being reviewed under authority delegated by the 
OMB under the PRA. 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 startup costs and costs of operation, 
maintenance, and purchase of services to provide information.
    At the end of the comment period, the comments and recommendations 
received will be analyzed to determine the extent to which the Federal 
Reserve should modify the proposed revisions prior to giving final 
approval.

Proposal To Approve Under OMB Delegated Authority the Extension for 
Three Years, Without Revision, of the Following Information Collection

    Report title: Certain Filings Related to the GLB Act.
    Agency form number: FR 4010, FR 4011, FR 4012, FR 4017, FR 4019, 
and FR 4023.
    OMB control number: 7100-0292.
    Frequency: On occasion.
    Respondents: BHCs, SLHCs, foreign banking organizations, and state 
member banks.
    Estimated number of respondents: FR 4010: BHCs and SLHCs, 31, 
Foreign banks, 1; FR 4011: 5; FR 4012: BHCs decertified as an FHC, 2, 
FHCs back into compliance--BHC, 14; FR 4017: 1; FR 4019: Regulatory 
relief requests, 4, Portfolio company notification 2; FR 4023: 30.
    Estimated average hours per response: FR 4010: BHCs and SLHCs, 3 
hours, Foreign banks, 4 hours; FR 4011: 10 hours; FR 4012: BHCs 
decertified as an FHC, 1 hour, FHCs back into compliance--BHC, 10 
hours; FR 4017: 4 hours; FR 4019: Regulatory relief requests, 1 hour, 
Portfolio company notification, 1 hour; FR 4023: 50 hours.
    Estimated annual burden hours: FR 4010: BHCs and SLHCs, 93 hours, 
Foreign banks, 4 hours; FR 4011: 50 hours; FR 4012: BHCs decertified as 
an FHC, 2 hours, FHCs back into compliance--BHC, 140 hours; FR 4017: 4 
hours; FR 4019: Regulatory relief requests, 4 hours, Portfolio company 
notification, 2 hours; FR 4023: 1500 hours.

General Description of Report

FR 4010
    The BHC Act, and Regulations Y and LL specify the information to be 
included in a declaration.\3\ In most cases, FHC declarations are filed 
in the form of a letter addressed to the appropriate Federal Reserve 
Bank.
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    \3\ 12 U.S.C. 1843(l)(1); 12 CFR 225.82, 238.65(b) and 225.91.
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    An FHC declaration filed by a U.S. BHC must state that the BHC 
elects to become an FHC, must be signed by an authorized official or 
representative, and must provide the following information:
     The name and head office address of the BHC and of each 
depository institution controlled by the BHC (multi-tiered filers may 
file a single declaration, provided the name and head office address of 
each tiered company is listed.)
     a certification that the BHC and all depository 
institutions controlled by the BHC are well capitalized and well 
managed as of the declaration date
     the capital ratios (as of the close of the previous 
quarter for all relevant capital measures) for each depository 
institution the BHC controls
    An FHC declaration filed by a U.S. SLHC must state that the SLHC 
elects to be treated as an FHC, must be signed by an authorized 
official or representative,

[[Page 71732]]

and must provide the following information:
     The name and head office address of the SLHC and of each 
depository institution controlled by the SLHC (Multi-tiered filers may 
file a single declaration, provided the name and head office address of 
each tiered company is listed.)
     a certification that the SLHC and all depository 
institutions controlled by the SLHC are well capitalized and well 
managed as of the declaration date
     the capital ratios (as of the close of the previous 
quarter for all relevant capital measures) for each depository 
institution the SLHC controls
    An FHC declaration filed by an FBO must state that the FBO elects 
to be treated as an FHC, must be signed by an authorized official or 
representative, and must provide the following information:
     With respect to each foreign bank controlled by the FBO, 
the bank's risk-based capital ratios, amount of tier 1 capital, and 
total assets, as of the close of the most recent quarter and as of the 
close of the most recent audited reporting period
     a certification that each foreign bank controlled by the 
FBO is well-capitalized and well-managed
     a certification that all U.S. depository institutions 
controlled by the FBO are well capitalized and well managed as of the 
declaration date
     the capital ratios (as of the close of the previous 
quarter for all relevant capital measures) for each U.S. depository 
institution controlled by the FBO
FR 4011
    Regulation Y specifies the information to be collected in 
connection with each type of request.\4\ A request for a determination 
that an activity is financial in nature or incidental to a financial 
activity must be in writing and:
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    \4\ 12 CFR 225.88(b) and (e), and 225.89.
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     Identify, define, and describe the activity and explain 
how the activity would be conducted,
     explain why the activity should be considered financial in 
nature or incidental to a financial activity; and
     include information supporting the request and any other 
information required by the Board.
    A request for an advisory opinion that a specific activity is 
within the scope of activities previously determined to be financial in 
nature, or incidental to a financial activity, must be in writing and:
     Identify and describe the proposed activity or the 
proposed product or service,
     offer support for the desired interpretation, and
     include any other information requested by the Board.
    An applicant seeking prior approval to engage in an activity that 
the applicant believes is complementary to a financial activity must 
submit a written request that:
     Identifies, defines, and describes the activity and 
explains how the activity would be conducted;
     identifies the financial activity to which the proposed 
activity would be complementary and provides information sufficient to 
support a finding that the proposed activity is complementary to the 
financial activity;
     describes the scope and relative size of the proposed 
activity, measured by the percentage of the FHC's projected revenues 
expected to be derived from, and assets associated with, the activity;
     discusses the risks the activity may reasonably be 
expected to pose to the safety and soundness of the FHC's depository 
institutions and to the financial system generally;
     describes the potential adverse effects, including 
potential conflicts of interest, decreased or unfair competition, or 
other risks, that the activity could cause, and the measures the FHC 
proposes to take to address those potential effects;
     describes the potential benefits to the public, such as 
greater convenience, increased competition, or gains in efficiency, the 
proposal may be reasonably expected to produce; and
     provides information about the FHC's financial and 
managerial resources and any other information requested by the Board.
FR 4012
    Regulation Y provides that the notice must identify the 
noncompliant banking entity and the area of noncompliance. Regulation Y 
does not prescribe a format for such notices, however, they typically 
take the form of a letter.\5\ Plans submitted to remediate capital and 
management deficiencies typically include the following:
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    \5\ 12 CFR 225.83(b)(1), 225.93(b)(1) and 238.66(b).
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     An explanation of the specific actions the FHC will take 
to correct all areas of noncompliance
     a schedule within which each action will be taken
     any other information the Board may require
FR 4017
    Regulation H requires FR 4017 notices to be in the form of a letter 
with enclosures and to: \6\
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    \6\ 12 CFR 208.76.
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     Describe the proposed transaction by which the bank would 
acquire the stake in the financial subsidiary;
     provide the name and head office address of the 
subsidiary;
     describe each current and proposed activity of the 
financial subsidiary and the legal authority for each activity;
     provide the capital ratios, as of the end of the most 
recent calendar quarter, for the bank and each of its depository 
institution affiliates;
     certify that the bank and each of its depository 
institution affiliates were well-capitalized at the close of the 
previous calendar quarter and as of the notice date;
     certify that the bank and each of its depository 
institution affiliates are well-managed as of the notice date;
     certify that the bank meets any applicable debt rating or 
alternative requirements and complies both before and after the 
transaction with the limit on the aggregate amount of assets held by 
the bank's financial subsidiaries; and
     describe the insurance activities, if the financial 
subsidiary will engage in insurance activities, to be conducted and 
identify each state in which the company holds an insurance license and 
the state insurance authority that issued the license.
FR 4019
    Regulation Y requires requests for extension of the holding period 
for a merchant bank investment to include the following information: 
\7\
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    \7\ 12 CFR 225.172(b)(4).
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     The reasons for the request, including information 
addressing the factors the Board must consider in acting on such a 
request (including the costs and risks to the FHC of disposing of the 
investment, market conditions, the extent and history of the FHC's 
involvement in managing or operating the portfolio company, and the 
FHC's average holding period for its merchant banking investments)
     an explanation of the FHC's plan for divesting the 
investment
    A notice of extended routine management or operation of a portfolio 
company can be in the form of a brief letter and must identify the 
portfolio company, the date on which the FHC first became involved in 
the routine management or operation of the portfolio company, the 
reasons for the FHC's involvement, the actions taken by the FHC to 
address the circumstances

[[Page 71733]]

giving rise to its involvement, and an estimate of when the FHC 
anticipates ceasing routinely managing or operating the portfolio 
company.
FR 4023
    The general policies and procedures that an FHC must establish with 
respect to merchant banking must be reasonably designed to: \8\
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    \8\ 12 CFR 225.175(a)(1).
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     Monitor, with respect to each investment and the entire 
portfolio, carrying and market values and performance;
     identify and manage market, credit, and other risks of 
such investments;
     identify and monitor terms and risks of transactions of 
companies in which the FHC has merchant banking investments;
     ensure the corporate separateness of the FHC and the 
companies in which it has merchant banking investments;
     ensure compliance with sections 23A and 23B of the FRA, 
anti-tying statutes, Regulation Y, and any other applicable provisions 
of law.

Legal Authorization and Confidentiality

     FR 4010 is authorized by section 4(l)(1)(C) of the BHC Act 
(12 U.S.C. 1843 (l)(1)(C)); section 10(c)(2)(H) of the Home Owners' 
Loan Act (12 U.S.C. 1467a(c)(2)(H)); section 8(a) of the International 
Banking Act (12 U.S.C. 3106(a)); sections 225.82 and 225.91 of the 
Board's Regulation Y (12 CFR 225.82, 225.91; and section 238.65 of the 
Board's Regulation LL (12 CFR 238.65)).
     FR 4011 is authorized by section 4(j) and (k) of the BHC 
Act (12 U.S.C. 1843(j)-(k)), and sections 225.88 and 225.89 of the 
Board's Regulation Y (12 CFR 225.88, 225.89).
     FR 4012 is authorized by section 4(l)(1) and 4(m) of the 
BHC Act (12 U.S.C. 1843(l)(1), (m)); section 10(c)(2)(H) of the Home 
Owners' Loan Act (12 U.S.C. 1467a(c)(2)(H)); section 8(a) of the 
International Banking Act (12 U.S.C. 3106(a)); sections 225.83 and 
225.93 of the Board's Regulation Y (12 CFR 225.83, 225.93); and section 
238.66(b) of the Board's Regulation LL (12 CFR 238.66(b)).
     FR 4017 is authorized by section 9 of the FRA (12 U.S.C. 
335), and section 208.76 of the Board's Regulation H (12 CFR 208.76).
     FR 4019 is authorized by section 4(k)(7) of the BHC Act 
(12 U.S.C. 1843(k)(7)); sections 225.171(e)(3), 225.172(b)(4); and 
section 225.173(c)(2) of the Board's Regulation Y (12 CFR 
225.171(e)(3), 225.172(b)(4), 225.173(c)(2)).
     FR 4023 is authorized by section 4(k)(7) of the BHC Act 
(12 U.S.C. 1843(k)(7)), and sections 225.171(e)(4) and 225.175 of the 
Board's Regulation Y (12 CFR 225.171(e)(4), 225.175).
    The obligation to respond to the FR 4011 is voluntary (for requests 
to determine that an activity is financial in nature or to issue an 
advisory opinion that an activity is within the scope of an activity 
previously determined to be financial in nature) and required to obtain 
or retain benefits (for approvals to engage in an activity that is 
complementary to a financial activity). The obligation to respond to 
the FR 4010, FR 4017, and FR 4019 is required to obtain or retain 
benefits. The obligation to respond to FR 4012 and the obligation to 
comply with the recordkeeping requirements of the FR 4023 is mandatory.
    The information collected on the FR 4010, FR 4011, FR 4017, and FR 
4019 and information related to a failure to meet capital requirements 
on the FR 4012 is not generally considered confidential. Nevertheless, 
a respondent may request confidential treatment of information 
contained in these information collections in accordance with section 
(b)(4) or (b)(6) of the Freedom of Information Act (FOIA) (5 U.S.C. 
552(b)(4), (b)(6)). Any request for confidential treatment of 
information must be accompanied by a detailed justification for 
confidentiality. Information related to a failure to meet management 
requirements on the FR 4012 is considered confidential and exempt from 
disclosure under section (b)(4), because the release of this 
information would cause substantial harm to the competitive position of 
the entity, and section (b)(8), if the information is related to 
examination, operating, or condition reports prepared by, on behalf of, 
or for the use of an agency responsible for the regulation or 
supervision of financial institutions (5 U.S.C. 552(b)(4), (b)(8)).
    Additionally, the records kept in accordance with the Recordkeeping 
Requirements Associated with Merchant Banking Activities are retained 
by the respondent itself and the FOIA would only be implicated if the 
Board's examiners retained a copy of the records as part of an 
examination or supervision of a banking institution. In this case, the 
records would likely be exempt from disclosure under exemption (b)(8), 
for examination material. 5 U.S.C. 552(b)(8). In addition, the records 
may also be exempt under (b)(4) and (b)(6).

    Board of Governors of the Federal Reserve System, October 13, 
2016.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2016-25129 Filed 10-17-16; 8:45 am]
 BILLING CODE 6210-01-P