[Federal Register Volume 84, Number 156 (Tuesday, August 13, 2019)]
[Notices]
[Pages 40052-40054]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17266]
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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
Reporting Requirements Associated with Regulation Y (Extension of Time
to Conform to the Volcker Rule) (FR Y-1; OMB No. 7100-0333).
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.
A copy of the PRA OMB submission, including the reporting form and
instructions, supporting statement, and other documentation will be
placed into OMB's public docket files. These documents also are
available on the Board's public website at https://www.federalreserve.gov/apps/reportforms/review.aspx or may be requested
from the agency clearance officer, whose name appears above.
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 collections of information 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.
Final Approval Under OMB Delegated Authority of the Extension for Three
Years, With Revision, of the Following in Information Collection
Report title: Reporting Requirements Associated with Regulation Y
(Extension of Time to Conform to the Volcker Rule).
Agency form number: FR Y-1.
OMB control number: 7100-0333.
Frequency: Event-generated.
Respondents: Insured depository institutions (other than certain
limited-purpose trust institutions), any company that controls an
insured depository institution, any company that is treated as a bank
holding company for purposes of section 8 of the International Banking
Act of 1978 (12 U.S.C. 3106), and any affiliate or subsidiary of any of
the foregoing (collectively, banking entities), and nonbank financial
companies designated by the Financial Stability Oversight Council that
engage in proprietary trading activities or make investments in covered
funds.
Estimated number of respondents: 1.
Estimated average hours per response: 3.
Estimated annual burden hours: 3.
General description of report: The information collection in
section 225.181(c) of the Board's Regulation Y (12 CFR 225.181(c)) is
used by newly formed banking entities and existing companies that
become a banking entity (collectively, new banking entities) to seek an
extension of time to bring their activities and investments into
compliance with section 13 of the Bank Holding Company Act (the Volcker
Rule) or to divest their interest in an illiquid fund. The information
collection in section 225.182(c) of the
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Board's Regulation Y (12 CFR 225.182(c)) is used by nonbank financial
companies supervised by the Board to seek an extension of time to bring
their activities and investments into compliance with the Volcker Rule,
including any capital requirements and quantitative limits adopted
thereunder. A request by a banking entity or nonbank financial company
supervised by the Board also must address the relevant factors set out
in sections 225.181(d) and 225.182(d) of Regulation Y.
Conformance Period for Banking Entities Engaged in Prohibited
Proprietary Trading or Private Fund Activities--Approval Required To
Hold Interests in Excess of Time Limit (Section 225.181(c))
Section 225.181(c) requires an application for an extension by or
with respect to a new banking entity or an extension of the transition
period for illiquid funds to (1) be submitted in writing to the Board
at least 180 days prior to the expiration of the applicable time
period, (2) provide the reasons why the banking entity believes the
extension should be granted, and (3) provide a detailed explanation of
the banking entity's plan for divesting or conforming the activity or
investment(s). A request by a banking entity also must address the
relevant factors governing Board determinations set out in sections
225.181(d).
Additionally, Supervision and Regulation Letter 16-18 (SR Letter
16-18),\1\ states that the following additional information that should
be included in a request for an extended transition period for illiquid
funds:
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\1\ Procedures for a Banking Entity to Request an Extended
Transition Period for Illiquid Funds, SR Letter 16-18 (December 9,
2016), available at https://www.federalreserve.gov/supervisionreg/srletters/sr1618.pdf.
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A list or simple chart of illiquid funds for which an
extension is sought,
A short description of each fund, including the investment
strategy and types of investments made by each fund, which entity
within the firm holds the investment, the size of each fund, the total
exposure of the banking entity to each fund, the date by which each
remaining illiquid fund is expected to mature by its terms or be
conformed to section 13 of the BHC Act, and the banking entity's
relationship with the fund (for example, general partner, sponsor,
investment adviser, investor),
A description of the banking entity's specific efforts to
divest or conform its illiquid funds, including a description of the
overall covered funds (both liquid and illiquid) that have been
divested or conformed to date, the progress that has been made towards
divesting or conforming the investments for which an extension is being
sought (for example, the number of funds sold, the number of funds that
continue to be held, and the amount of investments remaining in each
fund and in aggregate),
A certification by the General Counsel or Chief Compliance
Officer of the entity that sponsors or invests in the illiquid funds
that each fund meets the definition of illiquid funds in section 13 of
the BHC Act and sections 225.180-.181 of Regulation Y, including that
the extension is necessary to fulfill a contractual obligation of the
banking entity that was in effect on May 1, 2010, and
The length of the requested extension of the conformance
period and a description of the banking entity's plan for divesting or
conforming each illiquid fund prior to the end of the requested
extension period.
SR Letter 16-18 further provides that such a request should be
submitted in writing to the appropriate Federal Reserve Bank and that
the banking entity should provide the name, phone number, and email
address of the banking entity's point of contact for the request.
Additionally, SR Letter 16-18 provides that, in the case where the
banking entity that sponsors or invests in the illiquid fund is
supervised primarily by another federal banking agency, the Securities
and Exchange Commission, or the Commodity Futures Trading Commission,
the top-tier banking entity should also provide a copy of the extension
request to the relevant agency for the subsidiary banking entity.
Conformance Period for Nonbank Financial Companies Supervised by the
Federal Reserve Engaged in Proprietary Trading or Private Fund
Activities--Approval Required To Hold Interests in Excess of Time Limit
(Section 225.182(c))
Section 225.182(c) requires an application for an extension by a
nonbank financial company supervised by the Board to (1) be submitted
in writing to the Board at least 180 days prior to the expiration of
the applicable time period, (2) provide the reasons why the nonbank
financial company supervised by the Board believes the extension should
be granted, and (3) provide a detailed explanation of the company's
plan for coming into compliance with the requirements of the Volcker
Rule. A request by nonbank financial company supervised by the Board
also must address the relevant factors governing Board determinations
set out in section 225.182(d).
Legal authorization and confidentiality: Section 13 of the BHC Act
authorizes the Board to issue rules to permit entities covered by the
Volcker Rule to seek extensions of time of the conformance period (12
U.S.C. 1851(c)(6)). The Board also has the authority to require reports
from bank holding companies (12 U.S.C. 1844(c)), savings and loan
holding companies (12 U.S.C. 1467a(b) and (g)), and state member banks
(12 U.S.C. 248(a) and 324). The information collections associated with
requests for extensions of time to conform to the Volcker Rule are
required for covered entities that decide to seek an extension of time
to conform their activities to the Volcker Rule or divest their
interest in an illiquid hedge fund or private equity fund. These
collections of information, therefore, are required to obtain a
benefit.
Information required to be submitted in order to obtain an
extension of time to conform activities to the Volcker Rule may
include:
The terms of private contractual obligations,
The liquid or illiquid nature of assets proposed to be
divested by the regulated entity,
The total exposure of the covered entity to the activity
or investment, and its materiality to the institution,
The risks and costs of disposing of, or maintaining, the
activity or investment, or
The impact of divestiture or conformance of the activity
or investment on any duty owed by the institution to a client,
customer, or counterparty.
This information is the type of confidential commercial and
financial information that may be withheld under exemption 4 of the
Freedom of Information Act (5 U.S.C. 552(b)(4)). As required
information, it may be withheld under exemption 4 only if public
disclosure could result in substantial competitive harm to the
submitting institution.\2\
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\2\ See National Parks and Conservation Association v. Morton,
498 F.2d 765 (D.C. Cir. 1974).
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Current actions: On April 19, 2019, the Board published a notice in
the Federal Register (84 FR 16490) requesting public comment for 60
days on the extension, with revision, of the FR Y-1. The Board is
proposing to revise the FR Y-1 to account for the provisions of SR
Letter 16-18 that relate to the contents of a request for an extended
transition period for illiquid
[[Page 40054]]
funds and the procedures for filing such a request. The comment period
for this notice expired on June 18, 2019. The Board did not receive any
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comments. 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. 2019-17266 Filed 8-12-19; 8:45 am]
BILLING CODE 6210-01-P