80 FR 55621 - Proposed Agency Information Collection Activities; Comment Request

FEDERAL RESERVE SYSTEM

Federal Register Volume 80, Issue 179 (September 16, 2015)

Page Range		55621-55627
FR Document		2015-23267
On June 15, 1984, the Office of Management and Budget (OMB) delegated to the Board of Governors of the Federal Reserve System (Board) its approval authority under the Paperwork Reduction Act (PRA), to approve of and assign OMB 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 instruments are placed into OMB's public docket files. The Federal Reserve 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 number.
Federal Register, Volume 80 Issue 179 (Wednesday, September 16, 2015)
[Federal Register Volume 80, Number 179 (Wednesday, September 16, 2015)]
[Notices]
[Pages 55621-55627]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-23267]


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FEDERAL RESERVE SYSTEM


Proposed Agency Information Collection Activities; Comment 
Request

AGENCY: Board of Governors of the Federal Reserve System.
SUMMARY: On June 15, 1984, the Office of Management and Budget (OMB) 
delegated to the Board of Governors of the Federal Reserve System 
(Board) its approval authority under the Paperwork Reduction Act (PRA), 
to approve of and assign OMB 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 instruments are placed into OMB's public docket files. The 
Federal Reserve 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 number.

DATES: Comments must be submitted on or before November 16, 2015.

ADDRESSES: You may submit comments, identified by FR Y-14A/Q/M, by any 
of the following methods:
     Agency Web site: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at http://www.federalreserve.gov/apps/foia/proposedregs.aspx .
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: [email protected]. Include OMB 
number in the subject line of the message.
     FAX: (202) 452-3819 or (202) 452-3102.
     Mail: Robert deV. Frierson, 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 Web site at 
http://www.federalreserve.gov/apps/foia/proposedregs.aspx as submitted, 
unless modified for technical reasons. Accordingly, your comments will 
not be edited to remove any identifying or contact information. Public 
comments may also be viewed electronically or in paper form in Room 
3515, 1801 K Street (between 18th and 19th Streets NW.) Washington, DC 
20006 between 9:00 a.m. and 5:00 p.m. on weekdays.
    Additionally, commenters may send a copy of their comments to the 
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 PRA OMB submission, 
including the proposed reporting form and instructions, supporting 
statement, and other documentation will be placed into OMB's public 
docket files, once approved. These documents will also be made 
available on the Federal Reserve Board's public Web site at: http://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) 452-3884. Telecommunications Device 
for the Deaf (TDD) users may contact (202) 263-4869, Board of Governors 
of the Federal Reserve System, Washington, DC 20551.

SUPPLEMENTARY INFORMATION:

Request for Comment on Information Collection Proposal

    The following information collection, which is being handled under 
this delegated authority, has received initial Board approval and is 
hereby published for comment. At the end of the comment period, the 
proposed information collection, along with an analysis of comments and 
recommendations received, will be submitted to the Board for final 
approval under OMB delegated authority. Comments are invited on the 
following:
    a. Whether the proposed collection of information is necessary for 
the proper performance of the Federal Reserve's functions; including 
whether the information has practical utility;
    b. The accuracy of the Federal Reserve'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 start-up costs and costs of operation, 
maintenance, and purchase of services to provide information.

Proposal To Approve Under OMB Delegated Authority the Extension for 
Three Years, With Revision, of the Following Report

    1. Report title: Capital Assessments and Stress Testing information 
collection.
    Agency form number: FR Y-14A/Q/M.
    OMB control number: 7100-0341.
    Effective Dates: December 31, 2015, March 31, 2016, and June 30, 
2016.
    Frequency: Annually, semi-annually, quarterly, and monthly.
    Reporters: Any top-tier bank holding company (BHC) (other than a 
foreign banking organization), that has $50 billion or more in total 
consolidated assets, as determined based on: (i) The average of the 
BHC's total consolidated assets in the four most recent quarters as 
reported quarterly on the BHC's Consolidated Financial Statements for 
Bank Holding Companies (FR Y-9C) (OMB No. 7100-0128); or (ii) the 
average of the BHC's total consolidated assets in the most recent 
consecutive quarters as reported quarterly on the BHC's FR Y-9Cs, if 
the BHC has not filed an FR Y-9C for each of the most recent four 
quarters. Reporting is required as of the first day of the quarter 
immediately following the quarter in which it meets this asset 
threshold, unless otherwise directed by the Federal Reserve.
    Estimated annual reporting hours: FR Y-14A: Summary, 65,142 hours; 
Macro scenario, 2,046 hours; Operational Risk, 396 hours; Regulatory 
capital transitions, 759 hours; Regulatory capital instruments, 660 
hours; Retail repurchase, 1,320 hours; and Business plan changes, 330 
hours. FR Y-14Q: Securities, 1,716 hours; Retail, 2,112 hours; Pre-
provision net revenue (PPNR), 93,852 hours; Wholesale, 20,064 hours; 
Trading, 69,336 hours; Regulatory capital transitions, 3,036 hours; 
Regulatory capital instruments, 6,864 hours; Operational risk, 6,600 
hours; Mortgage Servicing Rights (MSR) Valuation, 1,152 hours; 
Supplemental,

[[Page 55622]]

528 hours; and Retail Fair Value Option/Held for Sale (Retail FVO/HFS), 
1,408 hours; Counterparty, 18,288 hours; and Balances, 2,112 hours; FR 
Y-14M: 1st lien mortgage, 173,040 hours; Home equity, 166,860 hours; 
and Credit card, 110,160 hours. FR Y-14 On-going automation revisions, 
15,840 hours. FR Y-14 Attestation implementation, 43,200 hours; and On-
going audit and review, 23,040 hours.
    Estimated average hours per response: FR Y-14A: Summary, 987 hours; 
Macro scenario, 31 hours; Operational Risk, 12 hours; Regulatory 
capital transitions, 23 hours; Regulatory capital instruments, 20 
hours; Retail Repurchase, 20 hours; and Business Plan Changes, 10 
hours. FR Y-14Q: Securities, 13 hours; Retail, 16 hours; PPNR, 711 
hours; Wholesale, 152 hours; Trading, 1,926 hours; Regulatory capital 
transitions, 23 hours; Regulatory capital instruments, 52 hours; 
Operational risk, 50 hours; MSR Valuation, 24 hours; Supplemental, 4 
hours; and Retail FVO/HFS, 16 hours; Counterparty, 508 hours; and 
Balances, 16 hours; FR Y-14M: 1st lien mortgage, 515 hours; Home 
equity, 515 hours; and Credit card, 510 hours. FR Y-14 On-Going 
automation revisions, 480 hours. FR Y-14 Attestation Implementation, 
4,800 hours; and On-going audit and review, 2,560 hours.
    Number of respondents: 33.
    General description of report: The FR Y-14 series of reports are 
authorized by section 165 of the Dodd-Frank Act, which requires the 
Federal Reserve to ensure that certain BHCs and nonbank financial 
companies supervised by the Federal Reserve are subject to enhanced 
risk-based and leverage standards in order to mitigate risks to the 
financial stability of the United States (12 U.S.C. 5365). 
Additionally, section 5 of the Bank Holding Company Act authorizes the 
Federal Reserve to issue regulations and conduct information 
collections with regard to the supervision of BHCs (12 U.S.C. 1844).
    As these data are collected as part of the supervisory process, 
they are subject to confidential treatment under exemption 8 of the 
Freedom of Information Act (FOIA) (5 U.S.C. 552(b)(8)). In addition, 
commercial and financial information contained in these information 
collections may be exempt from disclosure under exemption 4 of FOIA (5 
U.S.C. 552(b)(4)), if disclosure would likely have the effect of (1) 
impairing the government's ability to obtain the necessary information 
in the future, or (2) causing substantial harm to the competitive 
position of the respondent. Such exemptions would be made on a case-by-
case basis.
    Though the Federal Reserve intends to share the information 
collected under the FR Y-14 with the Department of Treasury's Office of 
Financial Research, such sharing shall not be deemed a waiver of any 
privilege applicable to such information, including but not limited to 
any confidential status (12 U.S.C. 1821(t); 12 U.S.C. 1828(x)).
    Abstract: The data collected through the FR Y-14A/Q/M schedules 
provide the Federal Reserve with the additional information and 
perspective needed to help ensure that large BHCs have strong, 
firm[hyphen]wide risk measurement and management processes supporting 
their internal assessments of capital adequacy and that their capital 
resources are sufficient given their business focus, activities, and 
resulting risk exposures. The annual Comprehensive Capital Analysis and 
Review (CCAR) exercise is also complemented by other Federal Reserve 
supervisory efforts aimed at enhancing the continued viability of large 
BHCs, including continuous monitoring of BHCs' planning and management 
of liquidity and funding resources and regular assessments of credit, 
market and operational risks, and associated risk management practices. 
Information gathered in this data collection is also used in the 
supervision and regulation of these financial institutions. In order to 
fully evaluate the data submissions, the Federal Reserve may conduct 
follow up discussions with or request responses to follow up questions 
from respondents, as needed.
    The Capital Assessments and Stress Testing information collection 
consists of the FR Y-14A, Q, and M reports. The semi-annual FR Y-14A 
collects information on the stress tests conducted by BHCs, including 
quantitative projections of balance sheet, income, losses, and capital 
across a range of macroeconomic scenarios, and qualitative information 
on methodologies used to develop internal projections of capital across 
scenarios.\1\ The quarterly FR Y-14Q and the monthly FR Y-14M are used 
to support supervisory stress test models and for continuous monitoring 
efforts. The quarterly FR Y-14Q collects granular data on BHCs' various 
asset classes, including loans, securities and trading assets, and PPNR 
for the reporting period. The monthly FR Y-14M comprises three retail 
loan- and portfolio-level collections, and one detailed address 
matching collection to supplement two of the portfolio and loan-level 
collections.
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    \1\ BHCs that must re-submit their capital plan generally also 
must provide a revised FR Y-14A in connection with their 
resubmission.
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    Current Actions: The Federal Reserve proposes revising several 
schedules of the FR Y-14A/Q/M effective December 31, 2015, March 31, 
2016, and June 31, 2016, as noted.
    The proposal would add an attestation requirement for Large 
Institution Supervision Coordinating Committee (LISCC) respondents, 
revise the reports to reflect recent changes to the regulatory capital 
rules and to the capital plan rule, and modify other elements of the FR 
Y-14A/Q/M reports to improve consistency of reported data across firms, 
address industry concerns, and improve supervisory modeling.
    The proposal also provides notice to the public that the Office of 
Financial Research (OFR) of the Department of Treasury has requested 
access to the FR Y-14A/Q/M reports for use in connection with its 
statutory mandate ``to evaluate and report on stress tests,'' and that 
the Board plans to share the FR Y-14A/Q/M reports with the OFR in light 
of the assurances of confidentiality from the OFR.

Proposed Revision to the FR Y-14A/Q/M

    The Federal Reserve proposes to add an attestation requirement for 
the FR Y-14A/Q/M reports for all LISCC respondents. As proposed, the 
attestation would be effective beginning June 30, 2016.
    The Federal Reserve relies on BHCs to report accurate data on the 
FR Y-14A/Q/M reports. The FR Y-14A/Q/M reports are integral to the 
Federal Reserve's supervisory stress tests, as the Federal Reserve uses 
financial data reported by a BHC to assess whether the BHC has the 
capital necessary to absorb losses under stress. In previous CCAR and 
DFAST (Dodd-Frank Act Stress Test) cycles, the Federal Reserve has 
found that, while respondents generally report in accordance with the 
instructions, material inaccuracies have been identified in reported 
information.
    Material inaccuracies in reported information indicate deficiencies 
in a BHCs' internal control environment. Deficiencies in a BHC's 
internal control environment affect not only the accuracy of a BHC's 
reported data, but also the strength and credibility of the BHC's 
capital planning process. Under the Federal Reserve's capital plan and 
stress test rules, a BHC is required to estimate projected revenues, 
losses, reserves, and pro forma capital levels under expected and 
stressed conditions. An effective internal control environment enables 
a BHC to measure, monitor, and aggregate its risks, and

[[Page 55623]]

appropriately estimate losses under a stressful environment. All 
respondents to the FR Y-14A/Q/M reports should meet the Federal 
Reserve's expectations for internal controls.
    The Federal Reserve proposes to require the chief financial officer 
(CFO) or an equivalent senior officer \2\ of a LISCC respondent to make 
an attestation regarding the collection. The CFO or equivalent senior 
officer is proposed as the signatory because the CFO (or equivalent 
senior officer) is a senior officer with primary business line 
responsibility for internal controls. This requirement is proposed in 
order to encourage large firms to improve their systems for developing 
data necessary for the stress tests and CCAR. The requirement is 
similar to the attestation requirement for internal controls over 
financial reporting required under the Sarbanes-Oxley Act of 2002.\3\
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    \2\ ``An equivalent senior officer'' refers to a senior officer 
who functions as the CFO but carries a different title.
    \3\ Pub. L. 107-204, 116 Stat. 745 (July 30, 2002).
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    The Federal Reserve has described its supervisory expectations for 
internal controls in several publications. For instance, as described 
in the August 2013 paper Capital Planning at Large Bank Holding 
Companies: Supervisory Expectations and Range of Current Practice,\4\ a 
BHC's internal control framework should address its entire capital 
planning process, including the risk measurement and management systems 
used to produce input data, the models and other techniques used to 
generate loss and revenue estimates; the aggregation and reporting 
framework used to produce reports to management and boards; and the 
process for making capital adequacy decisions. The paper also 
highlighted the key role of internal audit in evaluating the capital 
planning process and all its components. Additionally, it outlines 
several components to ensure the integrity of reported information, 
including robust information systems.
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    \4\ See Board of Governors of the Federal Reserve System (2013), 
Capital Planning at Large Bank Holding Companies: Supervisory 
Expectations and Range of Current Practice (Washington: Board of 
Governors, August), www.federalreserve.gov/bankinforeg/bcreg20130819a1.pdf.
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    The attestation would include two parts. First, for projected data 
reported on the FR Y-14A/Q and for actual data reported on the FR Y-
14A/Q/M reports, the CFO (or equivalent senior officer) of a LISCC 
respondent would be required to attest that the reports have been 
prepared in conformance with the instructions issued by the Federal 
Reserve System.\5\ The instructions define the scope and content of 
items that must be reported, and specify that the reports must be filed 
in accordance with U.S. generally accepted accounting principles 
(GAAP). The instructions further state that respondents should maintain 
financial records in such a manner and scope to ensure the FR Y-14A/Q/M 
reports reflect a fair presentation of the BHCs' financial condition 
and assessment of performance under stressed scenarios.
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    \5\ Instructions for actual and projected information are the FR 
Y-14A/Q/M report from instructions. Instructions outlining Federal 
Reserve expectations related to the methodology for projected 
information can be found in CCAR Summary Instructions and Guidance. 
Those instructions are not included in the proposed attestation.
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    Second, for actual data, the CFO (or equivalent senior officer) of 
a LISCC respondent would be required to attest that he or she is 
responsible for the internal controls over the reporting of these data, 
and that the data reported are materially correct to the best of his or 
her knowledge. The CFO would also be required to attest that the 
controls are effective and include those practices necessary to provide 
reasonable assurance as to the accuracy of these data. The CFO would be 
required to attest that the controls are audited annually by internal 
audit or compliance staff, and are assessed regularly by management of 
the named institution. Last, the CFO would be required to agree to 
report material weaknesses in these internal controls and any material 
errors or omissions in the data submitted to the Federal Reserve 
promptly as they are identified.
    The proposed attestation requires the CFO (or equivalent senior 
officer) to attest that the controls are effective. The Committee of 
Sponsoring Organizations (COSO) of the Treadway Commission, a joint 
initiative of five private sector organizations representing executives 
within accounting, internal audit and finance,\6\ has developed a 
framework for establishing and assessing internal controls. This 
framework is outlined in the publication titled Internal Control--
Integrated Framework.\7\ Known as the COSO report, this publication 
provides a suitable and available framework for purposes of 
establishing and assessing internal controls. This publication defines 
effective controls as those practices necessary to provide reasonable 
assurance as to the accuracy of financial information. Thus, a CFO (or 
equivalent senior officer) that attests to the existence of effective 
controls is attesting that the controls include practices necessary to 
provide reasonable assurance as to the accuracy of the data.
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    \6\ The Committee of Sponsoring Organizations of the Treadway 
Commission (COSO) is a joint initiative of five private sector 
organizations including the American Accounting Association, the 
American Institute of Certified Public Accountants, The Association 
of Accountants and Finance Professionals in Business, and the 
Institute of Internal Auditors.
    \7\ The Committee of Sponsoring Organizations (COSO) of the 
Treadway Commission has published Internal Control--Integrated 
Framework. Known as the COSO report, this publication provides a 
suitable and available framework for purposes of establishing and 
assessing internal controls. http://www.coso.org/ic.htm.
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    The proposed attestation also would require the CFO (or equivalent 
officer) of a LISCC respondent to attest that internal controls are 
audited annually by internal audit or compliance staff and are assessed 
regularly by management. The proposed requirement for an annual 
internal audit aligns with the annual nature of the CCAR cycle and the 
expectations for an annual audit of internal controls over financial 
reporting in the context of annual financial statements. Through an 
audit of internal controls over the Y-14 series, internal audit or 
compliance function would provide reliable assurance regarding the 
effectiveness of internal controls. The proposed requirement for 
regular assessments by management is consistent with the Federal 
Reserve's expectations for all firms.
    Last, the proposed attestation would require the CFO (or equivalent 
officer) of a LISCC respondent to attest that, to the best of his or 
her knowledge the data reported are materially accurate, and to 
promptly report any material weaknesses in internal controls and any 
material errors or omissions in the submitted data. Material weaknesses 
are those weaknesses which would result in a material misstatement of 
the FR Y-14A/Q/M data.
    BHCs should have a policy in place for determining materiality in 
the context of management's attestation that data is materially 
accurate and management's attestation that internal controls over the 
FR Y-14A/Q/M reports are effective. This policy should include a robust 
analysis of all relevant quantitative and qualitative considerations, 
including, but not limited to, the size and effect of the omission or 
misstatement on firms' projected regulatory capital ratios in stressed 
scenarios. Qualitative factors may result in a conclusion that a small 
change in regulatory capital ratios is considered material. Those 
circumstances might include the repeat occurrence of errors and 
omissions, the proximity of a firm's regulatory capital ratios to 
minimum capital requirements, and whether errors and omissions could 
change a knowledgeable person's view of the adequacy of internal 
controls over the capital adequacy process.

[[Page 55624]]

    The LISCC respondents may be required to enhance certain systems 
and processes in order to meet the attestation requirement, such as 
enhancing information technology infrastructure and adding or modifying 
internal control frameworks and data governance committees to include 
accountability and escalation processes, as well as to increase the 
frequency of audits of internal controls over the FR Y-14A/Q/M reports. 
The Federal Reserve believes such enhancements are essential for a 
BHC's own risk aggregation and risk management. In order to allow 
sufficient time for such modifications, the attestation would be 
effective June 30, 2016. This effective date is consistent with the six 
month period previously requested by industry participants to implement 
changes to information infrastructure processes.
    An estimate of the associated increase in burden is reflected in 
the updated burden estimates. This estimate accounts for the burden 
associated with the initial implementation of modifications to existing 
systems and processes prior to the effective date as well as burden 
associated with ongoing requirements, particularly the annual audit, 
and is an average across applicable respondents. However, the Federal 
Reserve requests feedback from the industry regarding the specific 
burden increases necessary to meet the attestation requirement.
    The Federal Reserve invited comment on a proposal to add an 
attestation to the FR Y-14 submission in July 2012, but did not 
finalize an attestation requirement in light of concerns expressed by 
commenters.\8\ Specifically, commenters expressed concerns regarding 
the maturity of the data collection, given the recent implementation of 
the reports, the scale and pace of revisions to the reports, and the 
fact that firms were not receiving timely answers to questions posed 
through the Frequently Asked Questions (FAQ) process. Regarding the 
substance of the attestation, commenters questioned whether the 
attestation would be appropriate for projected information, and whether 
the chief risk officer (CRO) would be the appropriate person to provide 
the attestation. Last, commenters argued that the proposed effective 
date would not provide sufficient time to implement the necessary 
controls.\9\ In the final notice adopting other proposed changes to the 
FR Y-14A/Q/M, the Federal Reserve acknowledged commenters' concerns 
regarding attestation, and noted that the attestation requirement may 
be revisited in a future proposal.\10\
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    \8\ See 77 FR 40051.
    \9\ See 77 FR 60695.
    \10\ See 77 FR 60695.
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    The Federal Reserve has considered these comments in developing the 
attestation included in this proposal. First, the FR Y-14 reports are 
sufficiently mature to support the attestation. Since the initial 
proposal of attestation to the FR Y-14 in July 2012, BHCs have 
completed the FR Y-14A/Q/M reports for over two years, and have 
generally been able to report the requested information in accordance 
with the instructions. Further, the scale and pace of the revisions to 
the reports have slowed, and more time is provided between finalization 
of proposed changes to the FR Y-14 and the effective date of those 
changes.\11\ The Federal Reserve continues to improve the FAQ process 
in order to provide responses to commenters' questions in a timely 
manner. For instance, the Federal Reserve has been incorporating the 
most material FAQ responses into the instructions on a quarterly basis. 
Further, the Federal Reserve is conducting a large-scale review of its 
instructions and incorporating numerous relevant historical FAQs into 
the instructions.\12\ This review is expected to be completed by the 
finalization of this proposal. Regarding unanswered FAQs, the Federal 
Reserve intends to approach unanswered FAQs related to the Y-14A/Q/M 
reports in the same manner as unanswered questions related to the Y-9C 
report. As long as a firm has a reasonable and timely process for 
identifying questions and submitting FAQs, the firm makes a good faith 
effort to reasonably interpret the instructions while awaiting a 
response, and the firm, in fact, follows that process, the Federal 
Reserve would not expect to penalize a firm for incorrect reporting on 
the 14A/Q/M reports.
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    \11\ See 79 FR 59264 and the effective dates within this notice.
    \12\ This approach is consistent with the approach undertaken in 
2013. See 78 FR 38033 and 78 FR 59934.
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    The Federal Reserve considered comments regarding the 
appropriateness of an attestation regarding projected data, and whether 
the CRO should be the correct person to attest. Given that the 
projected data are estimates of future values under different stressed 
scenarios, the proposed attestation would not require a BHC to attest 
to the accuracy of projected data. Instead, it would require the BHC to 
attest that it has prepared the FR Y-14A/Q/M in conformance with the 
instructions. In addition, the Federal Reserve considered whether to 
permit the CRO to provide the proposed attestation, instead of the CFO 
or equivalent officer, but determined that the CRO would not be the 
appropriate signatory. Under industry standards, the CRO does not have 
primary business line responsibility for internal controls and is 
therefore not an appropriate individual to be a signatory of the 
attestation.\13\
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    \13\ See Institute of Internal Auditors position paper The Three 
Lines of Defense in Effective Risk Management and Controls (January 
2013); and COSO publication, Leveraging COSO Across the Three Lines 
of Defense, (July 2015).
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Proposed Revisions to the FR Y-14A

    The proposed revisions to the FR Y-14A consist of clarifying 
instructions, adding and removing schedules, adding, deleting, and 
modifying existing data items, and altering the as-of dates. These 
proposed changes would (1) increase consistency between the FR Y-14A 
and FR Y-9C, FFIEC 101, and FFIEC 102; (2) adjust the collection in 
accordance with revisions to the capital plan and stress test rules 
recently proposed by the Federal Reserve, which among other 
modifications would remove the requirement to calculate tier 1 common 
capital and the tier 1 common ratio; (3) shift the as-of dates by one 
quarter in accordance with the modifications to the capital plan and 
stress test rules that were finalized October 27, 2014 (79 FR 64026); 
and (4) modify and expand the supporting documentation requirements.

Schedule A (Summary)

    Revisions to Schedule A.1.c.1 (General RWA) This schedule would be 
removed in accordance with the proposed revisions to the capital plan 
and stress test rules to eliminate use of the tier 1 common ratio (to 
the extent finalized) \14\, effective December 31, 2015. However, in 
order to mitigate operational issues and allow for appropriate time to 
adjust internal system to accommodate changes this schedule would 
remain part of the technical instructions for the CCAR 2016 submission.
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    \14\ 80 FR 43637 (July 23, 2015).
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    Revisions to Schedule A.1.c.2 (Standardized RWA) This schedule 
would be modified to increase consistency with the FR Y-9C and the 
FFIEC 102. Specifically, the items of the existing market risk-weighted 
asset portion would be replaced with the appropriate items from the 
FFIEC 102 and the remaining items would be made to align with FR Y-9C 
Schedule HC-R Part II. These changes would be effective June 30, 2016.
    Revisions to Schedule A.1.d (Capital) The Federal Reserve proposes 
removing

[[Page 55625]]

certain items related to tier 1 common capital in accordance with the 
proposed revisions to the capital plan and stress test rules (to the 
extent finalized),\15\ effective December 31, 2015. However, in order 
to mitigate operational issues, these items would remain part of the 
technical instructions for the CCAR 2016 submission. Additionally, the 
Federal Reserve proposes adding one item that captures the aggregate 
non-significant investments in the capital of unconsolidated financial 
institutions in the form of common stock and breaking out two items 
related to deferred tax assets into the amount before valuation 
allowances and the associated valuation allowance. The additional 
information from these changes would result in two existing items 
converting to derived items based on the additional information.
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    \15\ 80 FR 43637 (July 23, 2015).
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    Revisions to Schedule A.2.b (Retail Repurchase) Because this 
information is utilized in the supervisory models, the schedule would 
be separated from FR Y-14A Schedule A to be its own semi-annual 
schedule of the FR Y-14A. For the two reported as-of dates, this 
schedule would be due seven calendar days after the FR Y-9C, similar to 
the FR Y-14Q. This change would be effective June 30, 2016.
    Deletion of Schedule A.2.c (ASC 310-30) This schedule would be 
removed to reduce reporting burden, effective June 30, 2016.
    Revisions to Schedule A.7.c (PPNR Metrics) In order to fully align 
the schedule with the stress scenarios, the beta information would be 
collected according to the scenario instead of the current ``normal 
environment'' requirement, effective December 31, 2015.

Schedule D.4 (Regulatory Capital Transitions--Standardized RWA)

    As with the changes to Schedule A.1.c.2, the Federal Reserve 
proposes modifying this schedule in accordance with FFIEC 102 and FR Y-
9C Schedule HC-R. These changes would be effective December 31, 2015. 
Additionally, the Federal Reserve proposes removing projected year six 
from the projection period in accordance with the shift in the CCAR as-
of date.

Proposed Schedule F (Business Plan Changes)

    The Federal Reserve proposes adding a schedule that collects the 
effects of an intended business plan change on a respondent's asset, 
liability, and capital projections. This information has been collected 
in previous CCAR cycles on an ad-hoc basis, and this proposal is 
intended to formalize the collection. This schedule would be effective 
December 31, 2015.

Appendix A (Supporting Documentation)

    The Federal Reserve proposes modifying the supporting documentation 
requirements to align with the documentation expectations outlined in 
the CCAR 2015 Summary Instructions and Guidance. Specifically, the 
appendix would be revised to require BHCs to provide the following 
supporting documentation: Policies and procedures (including a model 
risk management policy), mapping of estimation methodologies to FR Y-
14A line items, model inventory, and methodology documentation. 
Required methodology documentation will include: Methodology and 
process overview; model technical documents; model validation 
documents; audit reports; documentation describing the review, 
challenge, aggregation, and finalization of results; and documentation 
describing the methodology for developing the consolidated pro forma 
financials. The Federal Reserve proposes to maintain the more specific 
documentation requirements on categories of exposures and risk areas in 
other sections of the appendix without change. The appendix would also 
note that the Federal Reserve expects to provide additional detail 
relating to these requirements, and as well as suggested organization 
and metadata tags, through the CCAR instructions.

Proposed Revisions to the FR Y-14Q

    The proposed revisions to the FR Y-14Q consist of clarifying 
instructions, adding a schedule, and adding, deleting and redefining 
existing data items. These proposed changes would provide additional 
information to enhance supervisory models, be responsive to industry 
comments, and shift the special as-of dates for Schedules F and L by 
one quarter in accordance with the modifications to the capital plan 
and stress test rules that were finalized October 27, 2014 (79 FR 
64026). The Federal Reserve has conducted a thorough review of proposed 
changes and believes that because the proposed item additions and 
modifications to the FR Y-14Q request information are currently 
collected by respondents in their regular course of business reporting 
burden will be minimized. A summary of the proposed changes by schedule 
is provided below.

Schedules A.1-A.10 (Retail)

    The Federal Reserve proposes restricting the loan population of 
this schedule to accrual loans, which would accurately reflect the 
intention of the schedule and be responsive to industry comments. These 
changes would be effective December 31, 2015.

Schedules A.8 and A.9 (Retail--International Small Business and U.S. 
Small Business)

    The Federal Reserve proposes excluding non[hyphen]purpose loans and 
loans for purchasing and carrying securities from this schedule. This 
change, along with accompanying changes to FR Y[hyphen]14Q Schedules 
H.1 and M, would ensure that non[hyphen]purpose commercial loans and 
loans for purchasing or carrying securities are treated consistently 
across institutions. These changes would be effective December 31, 
2015.

Schedule B (Securities)

    For schedule B.1 (Securities 1) the Federal Reserve proposes (1) 
requiring information to be reported in the Security Description 2 or 
Security Description 3 items in cases where an internal identifier is 
reported for a security or where the security type Other is assigned in 
order to increase consistency across institutions; (2) add 
``Appropriation-Backed'' to the list of options for the Municipal Bond 
security type in order to capture the unique characteristics of this 
bond type; and (3) remove debt issued by the Student Loan Marketing 
Association as a U.S. Government or Agency debt organization in 
accordance with recent developments in the student loan financing 
market. Additionally, the Federal Reserve proposes removing schedule 
B.2 in order to reduce reporting burden. These changes would be 
effective December 31, 2015.

Schedule C.3 (Regulatory Capital Instruments--Issuances During Quarter)

    All of the proposed changes to this schedule are only applicable to 
subordinated debt instruments.
    The Federal Reserve proposes (1) adding an item that collects the 
currency in which the instrument is denominated to be able to account 
for changes in exchange rates; (2) adding options to the Index item for 
Canadian Dealer's Offer Rate, Australian Bill Bank Swap, and UK Libor 
as well as 1M, 3M, and 6M maturities for all reference rates as well as 
require respondents to specify the index used when Other is reported in 
order to accurately calculate contractual expenses; (3) restrict the

[[Page 55626]]

reporting of BHC-provided identifiers to only cases in which a CUSIP or 
ISIN identifier is unavailable; and (4) adding options to identify 
coupons that ``step up'' or transition from fixed to floating as well 
as items to identify the date on which the contractual terms change, 
the reset coupon, and the spread over index, also to more accurately 
calculate contractual expenses. These changes would be effective 
December 31, 2015, and would require a separate one-time submission of 
all subordinated debt instruments for the effective date in order to 
ensure the proposed information is accurately captured for the 
associated subordinated debt instrument.
    Additionally, the Federal Reserve proposes adding items to collect 
details on swaps that are matched to subordinated debt instruments in 
order to capture the effect of these swaps on subordinated debt 
interest expenses. Specifically, the Federal Reserve proposes (1) 
adding items to capture the details of interest rate swaps matched to 
subordinated debt--issue date, maturity date, notional amount, fixed 
payment rate, payment index, and payment spread over index; (2) adding 
items to capture the details of foreign exchange swaps matched to 
subordinated debt--currency denomination of the instrument, currency of 
the payment, notional amount, and exchange rate; and (3) adding items 
that collect the unamortized discounts, premiums and fees, the fair 
value of the swap, and the carrying value of the swap as well as an 
item that reconciles the carrying value to the FR Y-9C. These changes 
would be effective June 30, 2016, and would require a separate one-time 
submission of all subordinated debt instruments for the effective date 
in order to ensure the proposed information is accurately captured for 
the associated subordinated debt instrument.

Schedule D.4 (Regulatory Capital Transitions--Standardized RWA)

    As with the changes to FR Y-14A Schedule A.1.c.2, the Federal 
Reserve proposes modifying this schedule in accordance with FFIEC 102 
and FR Y-9C Schedule HC-R. These changes would be effective December 
31, 2015.

Schedule G (PPNR)

    The Federal Reserve proposes eliminating the deposit funding 
threshold and requiring submissions from all respondents. Currently 
nearly all respondents are required to submit this schedule, and this 
modification would create consistency in analysis and supervisory 
modeling across respondents.

Schedules H.1 and H.2 (Corporate Loan and Commercial Real Estate)

    The Federal Reserve proposes (1) expanding the loan population to 
include loans that were disposed during the reporting period as well as 
adding the item Disposition Flag that collects the disposition method 
in order to capture the difference in loan characteristics; (2) 
expanding the options of the Participation Flag item for agent, 
participant, and inclusion in the Shared National Credit report in 
order to effectively identify syndicated loans; (3) adding the item 
Leveraged Loan Flag that identifies leveraged loans across all 
wholesale loans, not only loans reported through the Shared National 
Credit Program report, for a more accurate reflection of the associated 
risk characteristics of such loans; and (4) adding the item 
Participation Interest that captures the percent of the commitment held 
by the respondent for participated or syndicated loans to help match 
loans across institutions. The latter three items along with 
clarifications to the SNC Internal Credit ID would allow the Federal 
Reserve to better match loans between FR Y-14Q Schedule H and the 
Shared National Credit report and to explore methods to utilize both 
reports. These changes would be effective March 31, 2016.

Schedule H.1 (Corporate Loan)

    The Federal Reserve proposes (1) eliminating the restriction to the 
loan population of legally binding commitments, which would align the 
schedule with the FR Y-9C definition of corporate loans; (2) adding 
five categories to the Credit Facility Purpose item to capture non-
purpose margin loans, non-purpose loans collateralized by securities 
for other purposes, dealer floorplan, equipment leasing, and bridge 
financing in order to more accurately require such loans to be reported 
as wholesale loans; (3) adding two categories to the Credit Facility 
Type item to identify fronting exposures and swinglines to 
appropriately capture their unique characteristics in supervisory 
modeling; and (4) adding two items--Syndicated Loan Flag and Target 
Hold--that capture the status of the credit and the share of the credit 
that the respondent intends to retain upon clearing of the deal in 
order to assign credit risk throughout the syndication process. These 
changes would be effective March 31, 2016. Additionally, effective 
December 31, 2015, the Federal Reserve proposes (5) expanding the loan 
population to include non-purpose loans that are not graded to 
accurately reflect the intention of the schedule and be responsive to 
industry comments, which is in conjunction with proposed changes to FR 
Y-14Q Schedules A.8, A.9, and M.

Schedule L (Counterparty)

    The Federal Reserve proposes (1) adding the item Stressed Discount 
Factor to Schedule L.2 in order to consistently capture this 
information as incorporated into respondents expected exposure 
profiles; (2) changing the counterparties that are reported on Schedule 
L.4 from the top 10 by credit valuation adjustment (CVA) to the top 10 
by sensitivity to the risk factor in each section of the schedule as 
well as add several risk factors to this schedule, which would provide 
more material information for the same estimated ongoing burden; (3) 
modifying the reporting requirements for Schedules L.5 and L.6 so that 
the top 25 counterparties are reported by exposure amount for the CCAR 
as of quarter, which would create consistency in the reporting of 
counterparties across quarters, and replacing L.5.1.a, L.5.2.a, 
L.6.1.a, and L.6.2.a with a requirement for separate submissions and an 
item identifying the submission; (4) on Schedule L.4 combining the 
counterparty and reference spread portions as well as the CCC and below 
rating categories of the Credit Spreads section in an effort to reduce 
reporting burden; (5) adding an item to Schedules L.1 through L.4 that 
requires the reporting of a Legal Entity Identifier for each 
counterparty, as available, in order to more accurately identify and 
match counterparties throughout Schedule L; and (6) changing or adding 
the Industry item on Schedules L.1 through L.6 to require respondents 
to report a North American Industry Classification System code to more 
accurately identify the industry of the counterparty. These changes 
would be effective December 31, 2015.

Schedule M (Balances)

    Along with proposed changes to FR Y-14Q Schedules A.8, A.9, and 
H.1, the Federal Reserve proposes modifying items such that non-purpose 
commercial loans and loans for purchasing or carrying securities are 
reported in the commercial loan line items, regardless of whether they 
are graded or scored. This change would be effective December 31, 2015.

Proposed Revisions to the FR Y-14M

Schedule A (First Lien)
    The Federal Reserve proposes (1) adding two items--Serviced by 
Others Flag and Reporting As of Month--in an

[[Page 55627]]

effort to be responsive to industry comments regarding the delayed 
reporting of loans that are serviced-by-others; and (2) adding two 
options to the Mortgage Insurance Company item to more consistently 
identify companies within and across respondents. These changes would 
be effective December 31, 2015.
Schedule B (Home Equity)
    The Federal Reserve proposes (1) adding two items--Serviced by 
Others Flag and Reporting As of Month--in an effort to be responsive to 
industry comments regarding the delayed reporting of loans that are 
serviced-by-others; and (2) adding the item Payment Type at the End of 
Draw Period and an option to the Modification Type item to capture the 
differing risk characteristics based on payment type set on the loan 
after the draw period has ended. These changes would be effective 
December 31, 2015.

Notice of Intent To Share Information

    The Office of Financial Research (OFR) of the Department of 
Treasury has requested access to the FR Y-14A/Q/M reports for use in 
connection with its statutory mandate ``to evaluate and report on 
stress tests.'' The current FR Y-14 collections indicate that the 
collected data will be kept confidential. Through this proposal, the 
Board is providing notice that OFR will have access to the FR Y-14A/Q/M 
reports. The OFR has provided assurances that it will maintain the 
confidentiality of this information, including that it would limit 
access to the data to authorized staff and that any publication by the 
OFR using the reports would not contain confidential information.

Request for Additional Feedback

    Respondents have previously expressed concern, either through 
industry groups or the Federal Reserve's Frequently Asked Questions 
process, regarding the cost and burden of collecting the information 
related to the Performance of First Lien item of FR Y-14M Schedule B. 
As such, respondents either have been unable to report this information 
or have been doing so inconsistently. During the 60 day public comment 
period, the Federal Reserve is requesting industry feedback on the item 
below. If respondents are concerned about providing this information in 
a public comment letter, the Federal Reserve recommends that responses 
be submitted anonymously.

FR Y-14M Schedule B (Home Equity Loan and Home Equity Line)

    What is the most efficient and cost-effective manner to collect the 
information related to the performance of a first lien that is related 
to a junior lien reported on FR Y-14M Schedule B? What standards could 
be established that would make this item easier to report (e.g. use of 
credit bureau scores as proxy, use of external vendors to procure data, 
establish threshold limits if the junior lien portfolio is below a 
certain limit)?

    Board of Governors of the Federal Reserve System, September 11, 
2015.
Michael Lewandowski,
Associate Secretary of the Board.
[FR Doc. 2015-23267 Filed 9-15-15; 8:45 am]
 BILLING CODE 6210-01-P
Federal Register / Vol. 80, No. 179 / Wednesday, September 16, 2015 / Notices 55621

communication among international Constitution Avenue NW., Washington, proposed information collection,
carriers by their use of the ISPC code on DC 20551. including the validity of the
the shared signaling network. The All public comments are available methodology and assumptions used;
Commission informs the International from the Board’s Web site at http:// c. Ways to enhance the quality,
Telecommunications Union (ITU) of its www.federalreserve.gov/apps/foia/ utility, and clarity of the information to
assignment of ISPCs to international proposedregs.aspx as submitted, unless be collected;
carriers on an ongoing basis. modified for technical reasons. d. Ways to minimize the burden of
Federal Communications Commission. Accordingly, your comments will not be information collection on respondents,
edited to remove any identifying or including through the use of automated
Marlene H. Dortch,
contact information. Public comments collection techniques or other forms of
Secretary, Office of the Secretary. information technology; and
may also be viewed electronically or in
[FR Doc. 2015–23273 Filed 9–15–15; 8:45 am] e. Estimates of capital or start-up costs
paper form in Room 3515, 1801 K Street
BILLING CODE 6712–01–P (between 18th and 19th Streets NW.) and costs of operation, maintenance,
Washington, DC 20006 between 9:00 and purchase of services to provide
a.m. and 5:00 p.m. on weekdays. information.
FEDERAL RESERVE SYSTEM Additionally, commenters may send a Proposal To Approve Under OMB
copy of their comments to the OMB Delegated Authority the Extension for
Proposed Agency Information Desk Officer, Shagufta Ahmed, Office of
Collection Activities; Comment Three Years, With Revision, of the
Information and Regulatory Affairs, Following Report
Request Office of Management and Budget, New
Executive Office Building, Room 10235, 1. Report title: Capital Assessments
AGENCY: Board of Governors of the
725 17th Street NW., Washington, DC and Stress Testing information
Federal Reserve System.
20503 or by fax to (202) 395–6974. collection.
SUMMARY: On June 15, 1984, the Office
Agency form number: FR Y–14A/Q/
of Management and Budget (OMB) FOR FURTHER INFORMATION CONTACT: A
M.
delegated to the Board of Governors of copy of the PRA OMB submission, OMB control number: 7100–0341.
the Federal Reserve System (Board) its including the proposed reporting form Effective Dates: December 31, 2015,
approval authority under the Paperwork and instructions, supporting statement, March 31, 2016, and June 30, 2016.
Reduction Act (PRA), to approve of and and other documentation will be placed Frequency: Annually, semi-annually,
assign OMB numbers to collection of into OMB’s public docket files, once quarterly, and monthly.
information requests and requirements approved. These documents will also be Reporters: Any top-tier bank holding
conducted or sponsored by the Board. made available on the Federal Reserve company (BHC) (other than a foreign
Board-approved collections of Board’s public Web site at: http:// banking organization), that has $50
information are incorporated into the www.federalreserve.gov/apps/ billion or more in total consolidated
official OMB inventory of currently reportforms/review.aspx or may be assets, as determined based on: (i) The
approved collections of information. requested from the agency clearance average of the BHC’s total consolidated
Copies of the PRA Submission, officer, whose name appears below. assets in the four most recent quarters
supporting statements and approved Federal Reserve Board Clearance as reported quarterly on the BHC’s
collection of information instruments Officer, Nuha Elmaghrabi, Office of the Consolidated Financial Statements for
are placed into OMB’s public docket Chief Data Officer, Board of Governors Bank Holding Companies (FR Y–9C)
files. The Federal Reserve may not of the Federal Reserve System, (OMB No. 7100–0128); or (ii) the
conduct or sponsor, and the respondent Washington, DC 20551 (202) 452–3884. average of the BHC’s total consolidated
is not required to respond to, an Telecommunications Device for the Deaf assets in the most recent consecutive
information collection that has been (TDD) users may contact (202) 263– quarters as reported quarterly on the
extended, revised, or implemented on or 4869, Board of Governors of the Federal BHC’s FR Y–9Cs, if the BHC has not
after October 1, 1995, unless it displays Reserve System, Washington, DC 20551. filed an FR Y–9C for each of the most
a currently valid OMB number. SUPPLEMENTARY INFORMATION: recent four quarters. Reporting is
DATES: Comments must be submitted on required as of the first day of the quarter
or before November 16, 2015. Request for Comment on Information immediately following the quarter in
Collection Proposal which it meets this asset threshold,
ADDRESSES: You may submit comments,
identified by FR Y–14A/Q/M, by any of The following information collection, unless otherwise directed by the Federal
the following methods: which is being handled under this Reserve.
• Agency Web site: http:// delegated authority, has received initial Estimated annual reporting hours: FR
www.federalreserve.gov. Follow the Board approval and is hereby published Y–14A: Summary, 65,142 hours; Macro
instructions for submitting comments at for comment. At the end of the comment scenario, 2,046 hours; Operational Risk,
http://www.federalreserve.gov/apps/ period, the proposed information 396 hours; Regulatory capital
foia/proposedregs.aspx . collection, along with an analysis of transitions, 759 hours; Regulatory
• Federal eRulemaking Portal: http:// comments and recommendations capital instruments, 660 hours; Retail
www.regulations.gov. Follow the received, will be submitted to the Board repurchase, 1,320 hours; and Business
instructions for submitting comments. for final approval under OMB delegated plan changes, 330 hours. FR Y–14Q:
• Email: regs.comments@ authority. Comments are invited on the Securities, 1,716 hours; Retail, 2,112
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federalreserve.gov. Include OMB following: hours; Pre-provision net revenue
number in the subject line of the a. Whether the proposed collection of (PPNR), 93,852 hours; Wholesale,
message. information is necessary for the proper 20,064 hours; Trading, 69,336 hours;
• FAX: (202) 452–3819 or (202) 452– performance of the Federal Reserve’s Regulatory capital transitions, 3,036
3102. functions; including whether the hours; Regulatory capital instruments,
• Mail: Robert deV. Frierson, information has practical utility; 6,864 hours; Operational risk, 6,600
Secretary, Board of Governors of the b. The accuracy of the Federal hours; Mortgage Servicing Rights (MSR)
Federal Reserve System, 20th Street and Reserve’s estimate of the burden of the Valuation, 1,152 hours; Supplemental,

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Federal Register / Vol. 80, No. 179 / Wednesday, September 16, 2015 / Notices 55623

appropriately estimate losses under a define the scope and content of items internal controls. This publication
stressful environment. All respondents that must be reported, and specify that defines effective controls as those
to the FR Y–14A/Q/M reports should the reports must be filed in accordance practices necessary to provide
meet the Federal Reserve’s expectations with U.S. generally accepted accounting reasonable assurance as to the accuracy
for internal controls. principles (GAAP). The instructions of financial information. Thus, a CFO
The Federal Reserve proposes to further state that respondents should (or equivalent senior officer) that attests
require the chief financial officer (CFO) maintain financial records in such a to the existence of effective controls is
or an equivalent senior officer 2 of a manner and scope to ensure the FR Y– attesting that the controls include
LISCC respondent to make an attestation 14A/Q/M reports reflect a fair practices necessary to provide
regarding the collection. The CFO or presentation of the BHCs’ financial reasonable assurance as to the accuracy
equivalent senior officer is proposed as condition and assessment of of the data.
the signatory because the CFO (or performance under stressed scenarios. The proposed attestation also would
equivalent senior officer) is a senior Second, for actual data, the CFO (or require the CFO (or equivalent officer)
officer with primary business line equivalent senior officer) of a LISCC of a LISCC respondent to attest that
responsibility for internal controls. This respondent would be required to attest internal controls are audited annually
requirement is proposed in order to that he or she is responsible for the by internal audit or compliance staff
encourage large firms to improve their internal controls over the reporting of and are assessed regularly by
systems for developing data necessary these data, and that the data reported management. The proposed requirement
for the stress tests and CCAR. The are materially correct to the best of his for an annual internal audit aligns with
requirement is similar to the attestation or her knowledge. The CFO would also the annual nature of the CCAR cycle
requirement for internal controls over be required to attest that the controls are and the expectations for an annual audit
financial reporting required under the effective and include those practices of internal controls over financial
Sarbanes-Oxley Act of 2002.3 necessary to provide reasonable reporting in the context of annual
The Federal Reserve has described its assurance as to the accuracy of these financial statements. Through an audit
supervisory expectations for internal data. The CFO would be required to of internal controls over the Y–14 series,
controls in several publications. For attest that the controls are audited internal audit or compliance function
instance, as described in the August annually by internal audit or would provide reliable assurance
2013 paper Capital Planning at Large compliance staff, and are assessed regarding the effectiveness of internal
Bank Holding Companies: Supervisory regularly by management of the named controls. The proposed requirement for
Expectations and Range of Current institution. Last, the CFO would be regular assessments by management is
Practice,4 a BHC’s internal control required to agree to report material consistent with the Federal Reserve’s
framework should address its entire weaknesses in these internal controls expectations for all firms.
capital planning process, including the and any material errors or omissions in Last, the proposed attestation would
risk measurement and management the data submitted to the Federal require the CFO (or equivalent officer)
systems used to produce input data, the Reserve promptly as they are identified. of a LISCC respondent to attest that, to
models and other techniques used to The proposed attestation requires the the best of his or her knowledge the data
generate loss and revenue estimates; the CFO (or equivalent senior officer) to reported are materially accurate, and to
aggregation and reporting framework attest that the controls are effective. The promptly report any material
used to produce reports to management Committee of Sponsoring Organizations weaknesses in internal controls and any
and boards; and the process for making (COSO) of the Treadway Commission, a material errors or omissions in the
capital adequacy decisions. The paper joint initiative of five private sector submitted data. Material weaknesses are
also highlighted the key role of internal organizations representing executives those weaknesses which would result in
audit in evaluating the capital planning within accounting, internal audit and a material misstatement of the FR Y–
process and all its components. finance,6 has developed a framework for 14A/Q/M data.
Additionally, it outlines several BHCs should have a policy in place
establishing and assessing internal
components to ensure the integrity of for determining materiality in the
controls. This framework is outlined in
reported information, including robust context of management’s attestation that
the publication titled Internal Control—
information systems. data is materially accurate and
Integrated Framework.7 Known as the
The attestation would include two management’s attestation that internal
parts. First, for projected data reported COSO report, this publication provides controls over the FR Y–14A/Q/M
on the FR Y–14A/Q and for actual data a suitable and available framework for reports are effective. This policy should
reported on the FR Y–14A/Q/M reports, purposes of establishing and assessing include a robust analysis of all relevant
the CFO (or equivalent senior officer) of quantitative and qualitative
Instructions outlining Federal Reserve expectations
a LISCC respondent would be required related to the methodology for projected considerations, including, but not
to attest that the reports have been information can be found in CCAR Summary limited to, the size and effect of the
prepared in conformance with the Instructions and Guidance. Those instructions are omission or misstatement on firms’
instructions issued by the Federal not included in the proposed attestation. projected regulatory capital ratios in
6 The Committee of Sponsoring Organizations of
Reserve System.5 The instructions stressed scenarios. Qualitative factors
the Treadway Commission (COSO) is a joint
initiative of five private sector organizations may result in a conclusion that a small
2 ‘‘An equivalent senior officer’’ refers to a senior
including the American Accounting Association, change in regulatory capital ratios is
officer who functions as the CFO but carries a the American Institute of Certified Public considered material. Those
asabaliauskas on DSK7TPTVN1PROD with NOTICES

different title. Accountants, The Association of Accountants and
3 Pub. L. 107–204, 116 Stat. 745 (July 30, 2002).
circumstances might include the repeat
Finance Professionals in Business, and the Institute
4 See Board of Governors of the Federal Reserve of Internal Auditors. occurrence of errors and omissions, the
System (2013), Capital Planning at Large Bank 7 The Committee of Sponsoring Organizations proximity of a firm’s regulatory capital
Holding Companies: Supervisory Expectations and (COSO) of the Treadway Commission has published ratios to minimum capital requirements,
Range of Current Practice (Washington: Board of Internal Control—Integrated Framework. Known as and whether errors and omissions could
Governors, August), www.federalreserve.gov/ the COSO report, this publication provides a
bankinforeg/bcreg20130819a1.pdf. suitable and available framework for purposes of
change a knowledgeable person’s view
5 Instructions for actual and projected information establishing and assessing internal controls. http:// of the adequacy of internal controls over
are the FR Y–14A/Q/M report from instructions. www.coso.org/ic.htm. the capital adequacy process.

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Document Created: 2018-02-26 10:16:34
Document Modified: 2018-02-26 10:16:34
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		The Federal Reserve proposes revising several schedules of the FR Y-14A/Q/M effective December 31, 2015, March 31, 2016, and June 31, 2016, as noted.
Dates		Comments must be submitted on or before November 16, 2015.
Contact		A copy of the PRA OMB submission, including the proposed reporting form and instructions, supporting statement, and other documentation will be placed into OMB's public docket files, once approved. These documents will also be made available on the Federal Reserve Board's public Web site at: http:// www.federalreserve.gov/apps/reportforms/review.aspx or may be requested from the agency clearance officer, whose name appears below.
FR Citation		80 FR 55621