[Federal Register Volume 82, Number 10 (Tuesday, January 17, 2017)]
[Notices]
[Pages 4880-4883]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-00841]


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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 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. 
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.

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) 
452-3884. 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: The Board is adopting 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).
    These collections of information are event-generated and as such, 
there are no formal reporting forms associated

[[Page 4881]]

with them. In each case, the type of information required to be filed 
is described in the Board's regulations.
    Final approval under OMB delegated authority of the extension, 
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.
    Respondent Type: BHCs, SLHCs, foreign banking organizations, and 
state member banks.
    Estimated Annual Reporting 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.
    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.
    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.
    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).
    Abstract: 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, 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,

[[Page 4882]]

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:

    \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:

    \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\

    \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\

    \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 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\

    \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

[[Page 4883]]

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.

    Current Actions: On October 18, 2016, the Board published a notice 
in the Federal Register (81 FR 71730) requesting public comment for 60 
days on the proposal to extend, without revision, the 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 comment period for this notice 
expired on December 19, 2016. The Board did not receive any comments.

    Board of Governors of the Federal Reserve System, January 11, 
2017.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2017-00841 Filed 1-13-17; 8:45 am]
 BILLING CODE 6210-01-P