[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]


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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 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\
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    \1\ See 12 CFR 217.201(b)(1).
    \2\ See 12 CFR 217.201(b)(3).
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    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.
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    \3\ See 12 CFR 217.201(b)(2).
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    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