[Federal Register Volume 84, Number 40 (Thursday, February 28, 2019)]
[Notices]
[Pages 6787-6788]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-03485]


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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) 
is adopting a proposal to extend for three years, without revision, the 
Recordkeeping Provisions Associated with the Guidance on Sound 
Incentive Compensation Policies (FR 4027; OMB No. 7100-0327).

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 
or by fax to (202) 395-6974.

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. Board-approved collections of information are 
incorporated into the official OMB inventory of currently approved 
collections of information. Copies of the Paperwork Reduction Act 
Submission, supporting statements and approved collection of 
information instrument(s) are placed into OMB's public docket files. 
The Board 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 control number.
    Final approval under OMB delegated authority of the extension for 
three years, without revision, (or the implementation) of the following 
information collection:
    Report title: Recordkeeping Provisions Associated with the Guidance 
on Sound Incentive Compensation Policies.
    Agency form number: FR 4027.
    OMB control number: 7100-0327.
    Frequency: Annual.
    Respondents: Banking organizations.
    Estimated number of respondents: One-time implementation for large 
institutions: 1; one-time implementation for small institutions: 1; 
ongoing maintenance: 5,710.
    Estimated average hours per response: One-time implementation for 
large institutions: 480; one-time implementation for small 
institutions: 80; ongoing maintenance: 40.
    Estimated annual burden hours: 228,960.

General Description of Report

Compatibility With Effective Controls and Risk Management

    Pursuant to Principle 2 of the Guidance, a banking organization's 
risk-management processes and internal controls should reinforce and 
support the development and maintenance of balanced incentive 
compensation arrangements. Principle 2 states that banking 
organizations should create and maintain sufficient documentation to 
permit an audit of the organization's processes for establishing, 
modifying, and monitoring incentive compensation arrangements. 
Additionally, large banking organizations should maintain policies and 
procedures that (i) identify and describe the role(s) of the personnel, 
business units, and control units authorized to be involved in the 
design, implementation, and monitoring of incentive compensation 
arrangements; (ii) identify the source of significant risk-related 
inputs into these processes and establish appropriate controls 
governing the development and approval of these inputs to help ensure 
their integrity; and (iii) identify the

[[Page 6788]]

individual(s) and control unit(s) whose approval is necessary for the 
establishment of new incentive compensation arrangements or 
modification of existing arrangements.

Strong Corporate Governance

    Pursuant to Principle 3 of the Guidance, banking organizations 
should have strong and effective corporate governance to help ensure 
sound compensation practices. The Guidance states that a banking 
organization's board of directors should approve and document any 
material exceptions or adjustments to the organization's incentive 
compensation arrangements established for senior executives.
    Legal authorization and confidentiality: The recordkeeping 
provisions of the Guidance are authorized pursuant to sections 9, 
11(a), 25, and 25A of the Federal Reserve Act (12 U.S.C. 248(a), 325, 
602, and 625); section 5 of the Bank Holding Company Act (12 U.S.C. 
1844); section 10(b)(2) of the Home Owners' Loan Act (12 U.S.C. 
1467a(b)(2)); section 7(c) of the International Banking Act (12 U.S.C. 
3105(c)); and section 39 of the Federal Deposit Insurance Act (12 
U.S.C. 1831p-1(c)).
    Because the recordkeeping provisions are contained within guidance, 
which is nonbinding, they are voluntary. There are no reporting forms 
associated with this information collection.
    Because the incentive compensation records would be maintained at 
each banking organization, the Freedom of Information Act (``FOIA'') 
would only be implicated if the Board obtained such records as part of 
the examination or supervision of a banking organization. In the event 
the records are obtained by the Board as part of an examination or 
supervision of a financial institution, this information is considered 
confidential 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)). In addition, the information may also be kept confidential 
under exemption 4 of the FOIA, which protects commercial or financial 
information obtained from a person that is privileged or confidential 
(5 U.S.C. 552(b)(4)).
    Current actions: On November 30, 2018, the Board published a notice 
in the Federal Register (83 FR 61637) requesting public comment for 60 
days on the extension, without revision, of the Recordkeeping 
Provisions Associated with the Guidance on Sound Incentive Compensation 
Policies. The comment period for this notice expired on January 29, 
2019. The Board did not receive any comments.

    Board of Governors of the Federal Reserve System, February 21, 
2019.
Michele Taylor Fennell,
Assistant Secretary of the Board.
[FR Doc. 2019-03485 Filed 2-27-19; 8:45 am]
 BILLING CODE 6210-01-P