[Federal Register Volume 85, Number 12 (Friday, January 17, 2020)]
[Notices]
[Pages 3049-3050]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-00662]
-----------------------------------------------------------------------
FEDERAL RESERVE SYSTEM
Proposed Agency Information Collection Activities; Comment
Request
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Notice, request for comment.
-----------------------------------------------------------------------
SUMMARY: The Board of Governors of the Federal Reserve System (Board)
invites comment on a proposal to extend for three years, with revision,
the Market Risk Capital Rule (FR 4201; OMB No. 7100-0314).
DATES: Comments must be submitted on or before March 17, 2020.
ADDRESSES: You may submit comments, identified by FR 4201, by any of
the following methods:
Agency Website: https://www.federalreserve.gov/. Follow
the instructions for submitting comments at https://www.federalreserve.gov/apps/foia/proposedregs.aspx.
Email: [email protected]. Include the 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
personally identifiable information at the commenter's request.
Accordingly, comments will not be edited to remove any identifying or
contact information. Public comments may also be viewed electronically
or in paper in Room 146, 1709 New York Avenue 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
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.
FOR FURTHER INFORMATION CONTACT: A copy of the Paperwork Reduction Act
(PRA) OMB submission, including the 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 https://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.
SUPPLEMENTARY INFORMATION: On June 15, 1984, OMB delegated to the Board
authority under the PRA to approve and assign OMB control numbers to
collections of information 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 under OMB Delegated Authority to Extend for Three Years,
With Revision, the Following Information Collection:
Report title: Market Risk Capital Rule.
Agency form number: FR 4201.
OMB control number: 7100-0314.
Frequency: Annually, quarterly, and on occasion.
Respondents: Bank holding companies, savings and loan holding
companies, intermediate holding companies, and state member banks.
Estimated number of respondents: 37.
[[Page 3050]]
Estimated average hours per response: Reporting, 1,088;
Recordkeeping, 508; Disclosure, 28.
Estimated annual burden hours: Reporting, 1,088; Recordkeeping,
31,744; Disclosure, 2,812.
General description of report: The market risk capital 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 respondents for
this collection of information are bank holding companies (BHCs),
savings and loan holding companies (SLHCs), intermediate holding
companies (IHCs), and state member banks (SMBs) that meet certain
thresholds. The market risk capital rule applies to any 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\ The Board may exclude a banking organization that
meets these thresholds 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\
---------------------------------------------------------------------------
\1\ See 12 CFR 217.201(b)(1).
\2\ See 12 CFR 217.201(b)(3).
---------------------------------------------------------------------------
The Board may further apply the market risk capital 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\ 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
capital rule. 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.
---------------------------------------------------------------------------
\3\ See 12 CFR 217.201(b)(2).
---------------------------------------------------------------------------
There are several recordkeeping requirements outlined in the market
risk capital rule. Subject banking organizations must adequately
document all material aspects of their internal models; the management
and valuation of their covered positions; their control, oversight,
validation, and review processes and results; and their internal
assessments of capital adequacy. Subject banking organizations are also
required to 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. Furthermore, subject banking organizations are required to
have clearly defined trading and hedging strategies for trading
positions.
In addition, subject banking organizations must conduct and
document an analysis of the risk characteristics of each securitization
position prior to acquiring the position, considering structural
features of the securitization that would materially impact the
performance of the position; relevant information regarding the
performance of underlying credit exposure(s); relevant market data of
the securitization; and, for resecuritization positions, performance
information on the underlying securitization exposure. On an ongoing
basis (but no less frequently than quarterly), subject banking
organizations must evaluate, review, and update as appropriate the
analysis required for each securitization position.
Proposed revisions: In August 2019, the Board extended the FR 4201
for three years, with revision, and a notice was published in the
Federal Register (84 FR 39843). Those revisions included removing
references to provisions in the market risk capital rule concerning
securitizations. This revision was in error, as the market risk capital
rule contains a recordkeeping requirement concerning securitizations,
which is described above. Therefore, the Board proposes to reinstate
this recordkeeping requirement. Additionally, the Board proposes to
revise the FR 4201 to account for the general recordkeeping requirement
in section 217.203(f) of the market risk capital rule, which was not
previously accounted for.
Legal authorization and confidentiality: The FR 4201 is authorized
pursuant to sections 9(6) and 11 of the Federal Reserve Act for SMBs
(12 U.S.C. 324 and 248); pursuant to section 5 of the Bank Holding
Company Act of 1956 (BHC Act) (12 U.S.C. 1844(c)) and, in some cases,
section 165 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Dodd-Frank Act) for BHCs (12 U.S.C. 5365); pursuant to
section 5 of the BHC Act (12 U.S.C. 1844), in conjunction with section
8 of the International Banking Act of 1978 (12 U.S.C. 3106), and
section 165 of the Dodd-Frank Act for IHCs of foreign banking
organizations; and pursuant to sections 10(b)(2) and (g) of the Home
Owners' Loan Act for SLCHs (12 U.S.C. 1467a(b)(2) and (g)). The FR 4201
is mandatory.
The information collected pursuant to 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) (5 U.S.C. 552(b)(8)). In addition, individual
respondents may request that certain data be afforded confidential
treatment pursuant to exemption 4 of the FOIA, which exempts from
disclosure ``trade secrets and commercial or financial information
obtained from a person [that is] privileged or confidential'' (5 U.S.C.
552(b)(4)). Determinations of confidentiality based on exemption 4 of
the FOIA would be made on a case-by-case basis.
Board of Governors of the Federal Reserve System, January 13,
2020.
Michele Taylor Fennell,
Assistant Secretary of the Board.
[FR Doc. 2020-00662 Filed 1-16-20; 8:45 am]
BILLING CODE 6210-01-P