[Federal Register Volume 84, Number 155 (Monday, August 12, 2019)]
[Notices]
[Pages 39843-39844]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17191]


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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, with revision, the 
Market Risk Capital Rule (FR 4201; OMB No. 7100-0314).

DATES: The revisions are applicable immediately.

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.
    Office of Management and Budget (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, 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 PRA 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, With Revision, of the Following Information Collection

    Report title: Market Risk Capital Rule.
    Agency form number: FR 4201.
    OMB control number: 7100-0314.
    Effective Date: Immediately.
    Frequency: Reporting, annually; Recordkeeping, annually; 
Disclosure, annually and quarterly.
    Respondents: Bank holding companies (BHCs), savings and loan 
holding companies (SLHCs), intermediate holding companies (IHCs), and 
state member banks (SMBs) that meet certain risk thresholds. The market 
risk rule applies to any such banking organization with aggregate 
trading assets and trading liabilities equal to (1) 10 percent or more 
of quarter-end total assets or (2) $1 billion or more.\1\
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    \1\ 12 CFR 217.201(b)(1).
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    Estimated number of respondents: 37.
    Estimated average hours per response: Reporting, 1,088; 
Recordkeeping, 220; Disclosure, 68.
    Estimated annual burden hours: 13,148.
    General description of report: The market risk rule, which requires 
banking organizations to hold capital to cover their exposure to market 
risk, is an important component of the Board's regulatory capital 
framework (12 CFR part 217; Regulation Q). The Board may exclude a 
banking organization that is subject to the market risk rule if the 
Board determines that the exclusion is appropriate based on the level 
of market risk of the banking organization and is consistent with safe 
and sound banking practices.\2\ The Board may further apply the market 
risk rule to any other banking organization if the Board deems it 
necessary or appropriate because of the level of market risk of the 
banking organization or to ensure safe and sound banking practices.\3\
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    \2\ 12 CFR 217.201(b)(3).
    \3\ 12 CFR 217.201(b)(2).
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    The Board's market risk rule requires a subject banking 
organization to obtain the approval of the Board prior to (1) using any 
internal model to calculate its risk-based capital requirements under 
subpart F of the Board's Regulation Q; (2) including in its capital 
requirement for de minimis exposures the capital requirement for any de 
minimis exposures using alternative techniques that appropriately 
measure the market risk associated with those exposures; (3) including 
portfolios of equity positions in its incremental risk model if the 
banking organization measures the specific risk of a portfolio of debt 
positions using internal models; or (4) using the method specified in 
section 209(a) of Regulation Q to measure comprehensive risk for one or 
more portfolios of correlation trading positions. A subject banking 
organization also must obtain the prior approval of the Board for, and 
notify the Board if the banking organization makes any material changes 
to, the policies and procedures required by section 206(b)(3) of 
Regulation Q. Further, the market risk rule requires subject banking 
organizations to (1) have clearly defined policies and procedures for 
determining which trading assets and trading liabilities are trading 
positions and which trading positions are correlation trading 
positions; (2) have clearly defined trading and hedging strategies for 
trading positions; (3) retain certain financial and statistical 
information regarding the institution's Board-approved subportfolios of 
its portfolio exposures subject to the

[[Page 39844]]

market risk rule; (4) have a formal disclosure policy that addresses 
the banking organization's approach for determining the market risk 
disclosures; and (5) make certain public quantitative disclosures.
    The collections of information provide current statistical data 
identifying market risk areas on which to focus onsite and offsite 
examinations. They also allow the Board to assess the levels and 
components of each reporting institution's risk-based capital 
requirements for market risk and the adequacy of the institution's 
capital under the market risk rule. Finally, these collections of 
information ensure capital adequacy of banking organizations according 
to their level of market risk and assist the Board in implementing and 
validating the market risk framework. There are no required reporting 
forms associated with this information collection.
    Legal authorization and confidentiality: The recordkeeping 
provisions of the Market Risk Capital Rule are authorized to be 
collected from SMBs pursuant to sections 9(6) and 11 of the Federal 
Reserve Act; \4\ from BHCs pursuant to section 5(c) of the Bank Holding 
Company Act (BHC Act) \5\ and, in some cases, section 165 of the Dodd-
Frank Act; \6\ from foreign banking organizations (FBOs) pursuant to 
section 8(a) of the International Banking Act \7\ and section 165 of 
the Dodd-Frank Act; and from SLHCs pursuant to section 10(b)(2) and (g) 
of the Home Owners' Loan Act (HOLA).\8\ Sections 9(6) and 11 of the 
Federal Reserve Act authorize the Board to require SMBs to submit 
reports, as necessary. Section 5(c) of the BHC Act authorizes the Board 
to require BHCs to submit reports to the Board regarding their 
financial condition, and section 8(a) of the International Banking Act 
subjects FBOs to the provisions of the BHC Act. Section 10 of HOLA 
authorizes the Board to collect reports from SLHCs.
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    \4\ 12 U.S.C. 324 and 248(a).
    \5\ 12 U.S.C. 1844(c).
    \6\ 12 U.S.C. 5365.
    \7\ 12 U.S.C. 3106(a).
    \8\ 12 U.S.C. 1467a(b)(2) and (g).
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    The information collections under FR 4201 are mandatory. The 
information collected through the FR 4201 is collected as part of the 
Board's supervisory process, and therefore may be afforded confidential 
treatment pursuant to exemption 8 of the Freedom of Information Act 
(FOIA).\9\ In addition, individual respondents may request that certain 
data be afforded confidential treatment pursuant to exemption 4 of the 
FOIA if the data has not previously been publically disclosed and the 
release of the data would likely cause substantial harm to the 
competitive position of the respondent.\10\ Determinations of 
confidentiality based on exemption 4 of the FOIA would be made on a 
case-by-case basis.
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    \9\ 5 U.S.C. 552(b)(8).
    \10\ 5 U.S.C. 552(b)(4).
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    Current actions: On April 9, 2019, the Board published a notice in 
the Federal Register (84 FR 14113) requesting public comment for 60 
days on the extension, with revision, of the Market Risk Capital Rule. 
The Board proposes to revise the collections of information associated 
with the market risk rule to include the prior approvals a banking 
organization must obtain from the Board pursuant to sections 203(c)(1) 
and 204(a)(2)(vi)(B) of Regulation Q. These revisions are intended to 
accurately reflect the information collection requirements of the 
market risk rule. The comment period for this notice expired on June 
10, 2019. One public comment was received but it was outside the scope 
of the Board's review under the Paperwork Reduction Act (PRA). The 
revisions will be implemented as proposed.

    Board of Governors of the Federal Reserve System, August 7, 
2019.
Michele Taylor Fennell,
Assistant Secretary of the Board.
[FR Doc. 2019-17191 Filed 8-9-19; 8:45 am]
 BILLING CODE 6210-01-P