[Federal Register Volume 81, Number 202 (Wednesday, October 19, 2016)]
[Notices]
[Pages 72053-72055]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25203]


-----------------------------------------------------------------------

FEDERAL RESERVE SYSTEM


Agency Information Collection Activities; Announcement of Board 
Approval Under Delegated Authority and Submission to OMB

AGENCY: Board of Governors of the Federal Reserve System.
SUMMARY: The Board of Governors of the Federal Reserve System (Board or 
Federal Reserve) is adopting a proposal to revise, with extension for 
three years, the Annual Report of Holding Companies (FR Y-6), the 
Annual Report of Foreign Banking Organizations (FR Y-7), and the Report 
of Changes in Organizational Structure (FR Y-10). The revisions to the 
mandatory FR Y-6 and FR Y-7 information collections are effective with 
fiscal year-ends beginning December 31, 2016. The revisions to the 
mandatory FR Y-10 information collection are effective October 14, 
2016.
    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.

FOR FURTHER INFORMATION CONTACT: 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.
    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.

SUPPLEMENTARY INFORMATION: 
    Final approval under OMB delegated authority of the revision, with 
extension for three years, of the following information collection:
    Report titles: 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 numbers: FR Y-6, FR Y-7, and FR Y-10 (extension, with 
revision); FR Y-10E (extension, without revision).
    OMB control number: 7100-0297.
    Frequency: FR Y-6: Annual; FR Y-7: Annual; FR Y-10: Event-
generated; FR Y-10E: Event-generated.
    Effective dates: FR Y-6 and FR Y-7: Beginning with fiscal year-ends 
December 31, 2016; FR Y-10: October 14, 2016.
    Respondent type: Bank holding companies (BHCs), savings and loan 
holding companies (SLHCs), securities holding companies, and 
intermediate holding companies (IHCs) (collectively, holding companies 
(HCs)), 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 initial: 130 hours; FR Y-6 
ongoing: 26,549 hours; FR Y-7: 972 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 initial: 10 hours; FR 
Y-6 ongoing: 5.5 hours; FR Y-7: 4 hours; FR Y-10 initial: 1 hour; FR Y-
10 ongoing: 2.5 hours; FR Y-10E: 0.5 hour.
    Number of respondents: FR Y-6 initial: 13; FR Y-6 ongoing: 4,827; 
FR Y-7: 243; FR Y-10 initial: 530; FR Y-10 ongoing: 5,298; FR Y-10E: 
5,298.
    Legal authorization and confidentiality: 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 (FRA) (12 
U.S.C. 248(a)(1), 602, and 611a); and sections 113, 165, 312, 618, and 
809 of the Dodd-Frank Act (DFA) (12 U.S.C. 5361, 5365, 5412, 
1850a(c)(1), and 5468(b)(1)).
    FR Y-7: Sections 8(a) and 13(a) of the IBA (12 U.S.C. 3106(a) and 
3108(a)); sections 113, 165, 312, 618, and 809 of the DFA (12 U.S.C. 
5361, 5365, 5412, 1850a(c)(1), and 5468(b)(1)).

[[Page 72054]]

    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) and 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 FRA (12 
U.S.C. 248(a)(1), 321, 601, 602, 611a, 615, and 625); sections 113, 
165, 312, 618, and 809 of the DFA (12 U.S.C. 5361, 5365, 5412, 
1850a(c)(1), and 5468(b)(1)); and section 10(c)(2)(H) of the Home 
Owners' Loan Act (12 U.S.C. 1467a(c)(2)(H)).
    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.
    The Federal Reserve proposes that the disclosure of the responses 
to the certification questions may interfere with home-country 
regulators' administration, execution, and disclosure of their stress-
test regime and its results, and may cause substantial competitive harm 
to the FBO providing the information, and thus this information may be 
protected from disclosure under FOIA exemption 4.
    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 HC operations and determine HC 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, shareholder, and managerial information. The Federal 
Reserve uses the 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 FBOs; top-tier HCs; securities holding companies as authorized under 
Section 618 of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act of 2010 (the Dodd-Frank Act) (12 U.S.C. 1850a(c)(1)); 
state member banks unaffiliated with a bank holding company (BHC); Edge 
and agreement corporations that are not controlled by a member bank, a 
domestic BHC, or an 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: On April 25, 2016, the Federal Reserve published a 
notice in the Federal Register \1\ requesting public comment for 60 
days on the proposal to revise, with extension, the FR Y-6, FR Y-7, FR 
Y-10, and FR Y-10E. Under the proposal, the revisions were to: (1) 
Modify the FR Y-6, FR Y-7, and FR Y-10 confidential treatment questions 
on reporting forms and instructions to align with the recently approved 
confidentiality check-box proposal,\2\ (2) modify the FR Y-7 and FR Y-
10 to incorporate U.S. IHCs formed under the final rule for enhanced 
prudential standards for FBOs (Regulation YY),\3\ (3) clarifying the 
differences in reporting of additional companies by BHCs and Savings 
and Loan Holding Companies (SLHCs), adding a formula to calculate 
ownership percentage, and clarifying the signature requirements for 
employee stock ownership plans (ESOPs) and limited liability companies 
(LLCs), and (4) modify the FR Y-10 by removing the instructions for 
implementation of SLHCs from the General Instructions, removing the 
legal authority paragraph in the General Instructions, clarifying the 
instructions regarding the interest in sole partnership and sole member 
LLCs, separating the LAC for SLHCs into two codes, adding several new 
Glossary entries, and incorporating clarifying instructions that a 
nonbank subsidiary under a savings association does not meet the 
definition of a financial subsidiary. The comment period for this 
notice expired on June 24, 2016. The Federal Reserve received one 
comment letter from an industry association, which was outside the 
scope of the proposed changes. In addition, the Federal Reserve is 
extending the implementation date for the FR Y-10 to October 14, 2016.
---------------------------------------------------------------------------

    \1\ 81 FR 24101 (April 25, 2016).
    \2\ 80 FR 52282 (August 28, 2015).
    \3\ The draft FR Y-6 reporting form and instructions associated 
with this proposal also include the language to collect information 
for U.S. IHCs of FBOs as discussed in the IHC proposal. See 81 FR 
6265 (February 5, 2016) and 81 FR 35016 (June 1, 2016).
---------------------------------------------------------------------------

Detailed Discussion of Public Comments

    The following is a detailed discussion of the comments and 
responses.
    The commenter requested an electronic filing option for the FR Y-6 
Organizational Chart. After review and consideration, the Federal 
Reserve will provide the option of submitting the FR Y-6 report as a 
PDF file in an email attachment to reduce burden. The instructions will 
be updated to reflect this change.
    The commenter stated the method for validating Legal Entity 
Identifiers (LEIs) is inaccurate particularly for LEIs issued prior to 
2012. While the validation method is accurate based on the current 
standards for issuing an LEI, the Federal Reserve believes it can be 
removed since the one-time collection for existing LEIs has been 
completed. Upon consideration of the comment, the Federal Reserve will 
remove the LEI validation from the FR Y-10 online application.
    Although the proposal did not include amendments to item 10 or the 
definition of an LLC on the FR Y-10, the commenter requested guidance 
on how to report foreign entities for that line item in the FR Y-10 and 
suggested that a mapping document be provided, which would list foreign 
entities with their corresponding U.S. legal structure. Alternatively, 
the commenter made a number of suggestions regarding how LLCs, in 
particular, are reported on the form, and one suggestion was to modify 
the definition of LLC to clarify when a

[[Page 72055]]

foreign entity should be reported as an LLC. After review and 
consideration, the Federal Reserve decided not to make these changes. 
Given the vast number of diverse organizational structures, the Federal 
Reserve believes that it is up to each respondent to apply judgement in 
determining whether a particular entity type fits within the legal 
entity structures listed in the form, including whether a foreign 
entity should be reported as an LLC. If a respondent determines that a 
business organization does not fit within any of the legal entity 
structures listed in the form, including the definition of LLC, it may 
report the legal entity as ``Other'' and provide a description of its 
unique characteristics.
    The commenter requested clarification on how to report ownership 
interests in LLCs when the organization's governing documents are 
silent regarding the designation of a managing member and where an 
entity is designated as a manager (i.e., actively manages the day-to-
day operation of the LLC), but has no ownership interest in the LLC. In 
addition, the commenter suggested that a flowchart be provided in the 
instructions to indicate how to report these interests. After review 
and consideration, the Federal Reserve decided not to make these 
changes. Since each respondent's relationship with the LLC will vary 
and the determination of whether to report its ownership interest as a 
managing or non-managing member may depend upon a combination of 
factors, including applicable state laws, the respondent should consult 
with its legal staff to take into account these unique facts and 
circumstances and report its interest in the manner it deems most 
appropriate.
    The commenter requested an established and consistent process for 
withdrawing an erroneous FR Y-10 report that should not have been 
filed. The Federal Reserve support incorporating procedures for this 
process and will consider adding them as part of a future proposal.
    Finally, the commenter requested several other technical 
enhancements to the FR Y-10 online application: (1) Establish a process 
for withdrawing an FR Y-10 report that should not have been filed, (2) 
add straight-through processing of the FR Y-10 either directly from 
internal systems or through a data load process, (3) add a notification 
that informs the reporter after an event has been processed, (4) add 
foreign branch entities, (5) remove restriction in the FR Y-10 online 
application to allow reporters that own interest in the same entity to 
report their holdings differently, and (6) update the RSSD search 
function. The Federal Reserve need additional time to investigate 
whether these enhancements are feasible and may consider them as a part 
of a future proposal as costs and resources permit.

    Board of Governors of the Federal Reserve System, October 13, 
2016.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2016-25203 Filed 10-18-16; 8:45 am]
 BILLING CODE 6210-01-P