[Federal Register Volume 83, Number 214 (Monday, November 5, 2018)]
[Notices]
[Pages 55366-55368]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-24118]


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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, request for comment.

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SUMMARY: The Board of Governors of the Federal Reserve System (Board) 
invites comment on a proposal to extend for three years, with revision, 
the Consolidated Holding Company Report of Equity Investments in 
Nonfinancial Companies (FR Y-12; OMB No. 7100-0300) and the Annual 
Report of Merchant Banking Investments Held for an Extended Period (FR 
Y-12A; OMB No. 7100-0300).

DATES: Comments must be submitted on or before January 4, 2019.

ADDRESSES: You may submit comments, identified by FR Y-12 or FR Y-12A, 
by any of the following methods:
     Agency Website: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at https://www.federalreserve.gov/apps/foia/proposedregs.aspx.
     Email: [email protected]. Include OMB 
number in the subject line of the message.
     Fax: (202) 452-3819 or (202) 452-3102.
     Mail: Ann E. Misback, 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 website at 
https://www.federalreserve.gov/apps/foia/proposedregs.aspx as 
submitted, unless modified for technical reasons or to remove sensitive 
personally identifiable information at the commenter's request. Public 
comments may also be viewed electronically or in paper form in Room 
3515, 1801 K Street NW (between 18th and 19th Streets NW), Washington, 
DC 20006 between 9:00 a.m. and 5:00 p.m. on weekdays. For security 
reasons, the Board requires that visitors make an appointment to 
inspect comments. You may do so by calling (202) 452-3684. Upon 
arrival, visitors will be required to present valid government-issued 
photo identification and to submit to security screening in order to 
inspect and photocopy comments.
    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, if approved. These documents will also be made available 
on the Board's public website 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: On June 15, 1984, the Office of Management 
and Budget (OMB) delegated to the Board authority under the Paperwork 
Reduction Act (PRA) to approve 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.

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 Board's functions; including whether the 
information has practical utility;
    b. The accuracy of the Board'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 Board 
should modify the proposal.

Proposal To Approve Under OMB Delegated Authority the Extension for 
Three Years, With Revision, of the Following Report

    Report Title: Consolidated Bank Holding Company Report of Equity 
Investments in Nonfinancial Companies, and the Annual Report of 
Merchant Banking Investments Held for an Extended Period.
    Agency form number: FR Y-12 and FR Y-12A, respectively.
    OMB control number: 7100-0300.
    Frequency: FR Y-12, quarterly and semiannually; and FR Y-12A, 
annually.
    Reporters: Bank holding companies (BHCs), savings and loan holding 
companies (SLHCs), U.S. intermediate holding companies (IHCs), and 
financial holding companies (FHCs) that hold merchant banking 
investments that are approaching the end of the holding periods 
permissible under Regulation Y.
    Estimated annual reporting hours: FR Y-12 quarterly, 1,782 hours; 
FR Y-12 semiannual, 165 hours; and FR Y-12A, 3,293 hours.
    Estimated average hours per response: FR Y-12, 16.5 hours; and FR 
Y-12A, 7.5 hours.
    Number of respondents: FR Y-12 quarterly, 27; FR Y-12 semiannual, 
5; and FR Y-12A, 439.
    General description of report: The FR Y-12 collects information 
from certain domestic BHCs, SLHCs, and U.S. intermediate holding 
companies (collectively, holding companies) on their equity investments 
in nonfinancial companies. Respondents report the FR Y-12 either 
quarterly or semiannually based on reporting threshold criteria. The FR 
Y-12A is filed annually by FHCs that hold merchant banking investments 
that are approaching the end of the holding periods permissible under 
Regulation Y (covered investments).
    Proposed revisions: The Board proposes to revise the FR Y-12 by (1) 
requiring that dollar values

[[Page 55367]]

be reported in thousands instead of millions, and (2) no longer 
requiring firms to report the fax number of the person to be contacted 
regarding a report submission. The Board proposes to revise the FR Y-
12A by (1) requiring that dollar values be reported in thousands 
instead of millions, (2) adding an item for the holding period 
expiration date of the covered investment, (3) expanding the scope of 
the item where a respondent indicates its plan and schedule for 
disposition of its covered investment, (4) clarifying that the top-tier 
FHC should be the filer for each submitted report, (5) adding an item 
for the RSSD ID of the direct holder of the covered investment, (6) 
clarifying that an FHC needs to continue to file the report until it 
ceases to hold the covered investment, (7) no longer requiring firms to 
report the fax number of the person to be contacted regarding a report 
submission, and (8) making other minor clarifications throughout the 
instructions. The proposed revisions to the FR Y-12 would be effective 
for the March 30, 2019, report date. The proposed revisions to the FR 
Y-12A would be effective for the December 31, 2019, report date.

FR Y-12 and FR Y-12A

    The Board is proposing to require firms to report dollar values on 
the FR Y-12 and FR Y-12A reports in thousands instead of millions. 
Since firms currently file the reports in millions, any amounts 
reported that are less than $500 thousand round down and are reported 
as a $0. On the FR Y-12A report, this can cause problems as the Board 
may not be adequately able to assess a respondent's plan for disposing 
of its covered investment without knowing the dollar value of the 
investment. For consistency between the FR Y-12 and FR Y-12A reports, 
the Board is proposing this change for both reports.
    The Board is also proposing to remove the item that captures the 
fax number of the person to be contacted regarding a report submission 
from the FR Y-12 and FR Y-12A reports, as this information is no longer 
needed.

FR Y-12A Only

    The Board is proposing to add an item indicating when the 
permissible holding period expires for a merchant banking investment. 
As previously mentioned, FHCs are only allowed to hold merchant banking 
investments for a specified number of years, unless the Board approves 
an extension request. Currently, the date of expiration for the 
permissible holding period is not included on the form. As a result, 
Board staff routinely need to follow up with FHCs for this information. 
To streamline this process, the Board is proposing to revise the FR Y-
12A to require respondents to indicate the date on which the 
permissible holding period expires for a covered investment (proposed 
item 1.a).
    The Board is also proposing to expand the scope of the existing 
item where an FHC indicates its plan and schedule for disposition of 
its covered investment (current item 8). Since FHCs can only hold 
merchant banking investments for a specified number of years, the FR Y-
12A report currently contains an item where FHCs explain their plans 
and schedules for disposition of these investments. In reviewing these 
plans, the Board frequently needs to reach out to the FHCs to obtain 
more information than is provided in FR Y-12A submissions. For example, 
the Board may ask about previous efforts to dispose of the covered 
investment, or any potential challenges related to the disposition. 
Therefore, the Board is proposing to expand the scope of current item 8 
in order to have a more complete picture of the disposition process. 
This expanded item will streamline the review process for the FR Y-12A 
report by allowing the Board to ask FHCs fewer follow up questions 
regarding FR Y-12A submissions. To better incorporate this expanded 
scope, the Board is proposing to rename this item from `Plan and 
Schedule for disposition of the Covered Investment' to `Past Efforts 
and Future Plan, Including Timing, to Achieve Disposition of Covered 
Investment Within the Holding Period.'
    The Board is further proposing to clarify that the top-tier FHC 
should be the filer for each submitted report. Currently, there is 
diversity in practice among FR Y-12A filers in that some firms file at 
the FHC level, while other firms file at the direct holder level. The 
instructions are ambiguous as to which firm within the organization 
should be the filer. For consistency and clarity, the Board proposes to 
clarify the instructions to state that all firms should report at the 
FHC level. On a case-by-case basis, top-tier holding companies can be 
given exemptions to file certain regulatory reports. In these cases, 
lower-tier holding companies typically file on their behalf. The 
proposed revisions to the FR Y-12A would indicate that if the top-tier 
FHC is exempt from reporting the FR Y-12A report, then a lower-tier 
holding company must file on its behalf.
    In conjunction with the proposal to clarify that the top-tier FHC 
should be the FR Y-12A filer, the Board is also proposing to add an 
item that requires an FHC to report the RSSD ID of the direct holder of 
the covered investment within its organization. An RSSD ID is a unique 
identifier assigned to institutions by the Federal Reserve. The FR Y-
12A report currently has an item for the name and location of the 
direct holder of the covered investment, but not an item for the RSSD 
ID of the direct holder. Submission of the RSSD ID of the direct holder 
will better enable the Board to monitor the covered investment, and 
will allow the Board to more effectively scope examinations to put more 
resources towards specific subsidiaries if they are direct holders of 
covered investments.
    Finally, the Board is proposing to clarify that an FHC needs to 
continue to file the FR Y-12A report until the FHC ceases to hold its 
covered investment. The instructions currently require FHCs to file the 
report if they hold merchant banking investments for longer than eight 
years (or 13 years in the case of an investment held through a 
qualifying private equity fund). An FHC may hold such investments 
beyond the permissible holding period if it receives Board approval to 
do so. However, the instructions do not clearly state that an FHC needs 
to continue to file the FR Y-12 report until it ceases to hold its 
merchant banking investment, even if the permissible holding period has 
been extended by the Board. Adding such clarifying language will remove 
ambiguity about when an FHC can cease reporting the FR Y-12A report. 
Legal authorization and confidentiality: The Board's Legal Division has 
determined that the information collected under the FR Y-12 and FR Y-
12A is mandatory and authorized to be collected from BHCs and FHCs 
pursuant to section 5(c) of the Bank Holding Company Act (BHC ACT) (12 
U.S.C. 1844(c)(1)(A)); from SLHCs pursuant to section 10(b)(2) of the 
Home Owners Loan Act (HOLA) (12 U.S.C. 1467a(b)(2)), as amended by 
Section 369(8) of the Dodd-Frank Wall Street and Consumer Protection 
Act (Dodd-Frank Act); and from IHCs pursuant to Section 5(c) of the BHC 
Act, (12 U.S.C. 1844(c)(1)(A)), as well as pursuant to Sections 
102(a)(1) and 165 of the Dodd-Frank Act, (12 U.S.C. 5311(a)(1)) and 
5365,\1\ and Regulation YY, 12 CFR 252.153(b)(2).
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    \1\ Section 165(b)(2) of Title I of the Dodd-Frank Act, (12 
U.S.C. 5365(b)(2)), refers to ``foreign-based bank holding 
company.'' Section 102(a)(1) of the Dodd-Frank Act, (12 U.S.C. 
5311(a)(1)), defines ``bank holding company'' for purposes of Title 
I of the Dodd-Frank Act to include foreign banking organizations 
that are treated as bank holding companies under Section 8(a) of the 
International Banking Act, (12 U.S.C. 3106(a)). The Board has 
required, pursuant to Section 165(b)(1)(B)(iv) of the Dodd-Frank 
Act, (12 U.S.C. 5365(b)(1)(B)(iv)), certain of the foreign banking 
organizations that are subject to section 165 of the Dodd-Frank Act 
to form U.S. intermediate holding companies. Accordingly, the parent 
foreign-based organization of a U.S. IHC is treated as a BHC for 
purposes of the BHC Act and Section 165 of the Dodd-Frank Act. 
Because Section 5(c) of the BHC Act authorizes the Board to require 
reports from subsidiaries of BHCs, Section 5(c) provides additional 
authority to require U.S. IHCs to report the information contained 
in the FR Y-12 and FR Y-12A reports.

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[[Page 55368]]

    In addition, with respect to the FR Y-12A report, Section 
4(k)(7)(A) of the BHC Act, (12 U.S.C. 1843(k)(7)(A)), authorizes the 
Board and the Treasury Department to jointly develop implementing 
regulations governing merchant banking activities for purposes of 
section 4(k)(4)(H) of the BHC Act. Section 4(k)(4)(H) of the BHC Act, 
(12 U.S.C. 1843(k)(4)(H)), and subpart J of the Board's Regulation Y, 
(12 CFR 225.170 et seq.), authorize a BHC that has made an effective 
FHC election to acquire merchant banking investments that are not 
otherwise permissible for an FHC. Section 10(c)(2)(H) of HOLA, as 
amended by Section 606(b) of the Dodd-Frank Act, (12 U.S.C. 
1467a(c)(2)(H)), and Section 8(a) of the International Bank Act, (12 
U.S.C. 3106(a)), extend certain authorities and requirements of the BHC 
Act to SLHCs and to foreign banks, respectively.
    The Board does not consider information collected on the FR Y-12 
report to be confidential, and the completed version of this report 
generally is made available to the public upon request. However, 
exemption 4 of the Freedom of Information Act (FOIA) provides an 
exemption from public disclosure for ``trade secrets and commercial or 
financial information obtained from a person and privileged or 
confidential.'' (5 U.S.C. 552(b)(4)). Thus, if a respondent feels that 
disclosure of confidential commercial or financial information on the 
FR Y-12 report is reasonably likely to result in substantial harm to 
its competitive position under exemption 4 of the FOIA, the respondent 
may request confidential treatment for such information pursuant to the 
Board's Rules Regarding the Availability of Information, 12 CFR 261.15.
    The Board generally considers the information collected on the FR 
Y-12A to be confidential under exemption 4 of the FOIA (5 U.S.C. 
552(b)(4)). Information reported on the FR Y-12A is competitively 
sensitive and its release would likely result in substantial harm to 
the competitive position of an FHC or SLHC. In addition, if the FR Y-
12A data is obtained as a part of an examination or supervision of a 
financial institution, this information may also be withheld pursuant 
to exemption 8 of the FOIA, which protects information contained in 
``examination, operating, or condition reports'' obtained in the bank 
supervisory process (5 U.S.C. 552(b)(8)).

    Board of Governors of the Federal Reserve System, October 29, 
2018.
Michele Taylor Fennell,
Assistant Secretary of the Board.
[FR Doc. 2018-24118 Filed 11-2-18; 8:45 am]
 BILLING CODE 6210-01-P