80 FR 70671 - Regulatory Capital Rules; Enhanced Prudential Standards for Bank Holding Companies and Foreign Banking Organizations; Correction

FEDERAL RESERVE SYSTEM

Federal Register Volume 80, Issue 220 (November 16, 2015)

The Board of Governors of the Federal Reserve System (Board) published a final rule in the Federal Register on October 11, 2013 (78 FR 62018) regarding Regulatory Capital Rules and another final rule on October 27, 2014 (79 FR 64025) regarding Capital Plan and Stress Test Rules. This publication removes certain expired transitional requirements in Regulations H and Y, resolves certain citation errors, replaces a wrongly duplicated paragraph in Regulation Q, and corrects a typographical error in Regulation YY.

[Federal Register Volume 80, Number 220 (Monday, November 16, 2015)]
[Rules and Regulations]
[Pages 70671-70673]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-28294]


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FEDERAL RESERVE SYSTEM

12 CFR Parts 208, 217, 225, and 252

[Regulations H, Q, Y, and YY; Docket Nos. R-1442 and R-1492]
RIN 7100 AE-87


Regulatory Capital Rules; Enhanced Prudential Standards for Bank 
Holding Companies and Foreign Banking Organizations; Correction

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule; correcting amendment.

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SUMMARY: The Board of Governors of the Federal Reserve System (Board) 
published a final rule in the Federal Register on October 11, 2013 (78 
FR 62018) regarding Regulatory Capital Rules and another final rule on 
October 27, 2014 (79 FR 64025) regarding Capital Plan and Stress Test 
Rules. This publication removes certain expired transitional 
requirements in Regulations H and Y, resolves certain citation errors, 
replaces a wrongly duplicated paragraph in Regulation Q, and corrects a 
typographical error in Regulation YY.

DATES: The corrections are effective November 16, 2015, except that 
instructions 10.b and 10.f amending 12 CFR 208.43 are effective January 
1, 2018.

FOR FURTHER INFORMATION CONTACT: Benjamin McDonough, Special Counsel, 
(202) 452-2036, Julie Anthony, Counsel, (202) 475-6682, or Mark Buresh, 
Senior Attorney, (202) 452-5270, Legal Division, Board of Governors of 
the Federal Reserve System, 20th Street and Constitution Avenue NW., 
Washington, DC 20551. Telecommunications Device for the Deaf (TDD) 
users may contact (202) 263-4869.

SUPPLEMENTARY INFORMATION: The Board is correcting errors in and 
deleting certain expired transitional requirements from the final rule 
that was published in the Federal Register on October 11, 2013 (78 FR 
62018). These revisions will remove text or footnotes in 12 CFR parts 
208 and 225 describing certain transitional requirements that have 
expired, correct citations in 12 CFR 217.2 and 12 CFR 217.202(b)(10), 
and remove and replace a wrongly duplicated paragraph in 12 CFR 
217.300(c)(3). The Board is also correcting a typographical error in 
the final rule that was published in the Federal Register on October 
27, 2014 (79 FR 64025), which caused the unintended deletion of Sec.  
252.153(e)(2)-(5).

List of Subjects

12 CFR Part 208

    Accounting, Agriculture, Banks, Banking, Confidential business 
information, Consumer protection, Crime, Currency, Global systemically 
important bank, Insurance, Investments, Mortgages, Reporting and 
recordkeeping requirements, Securities.

12 CFR Part 217

    Administrative practice and procedure, Banks, Banking, Holding 
companies, Reporting and recordkeeping requirements, Securities.

12 CFR Part 225

    Administrative practice and procedure, Banks, banking, Federal 
Reserve System, Holding companies, Reporting and recordkeeping 
requirements, Securities.

[[Page 70672]]

12 CFR Part 252

    Administrative practice and procedure, Banks, Banking, Federal 
Reserve System, Holding companies, Nonbank financial companies 
supervised by the Board, Reporting and recordkeeping requirements, 
Securities, Stress testing.

    For the reasons set forth in the preamble, chapter II of title 12 
of the Code of Federal Regulations is amended as follows:

PART 208--MEMBERSHIP OF STATE BANKING INSTITUTIONS IN THE FEDERAL 
RESERVE SYSTEM

0
1. The authority citation for part 208 continues to read as follows:

    Authority: 12 U.S.C. 24, 36, 92a, 93a, 248(a), 248(c), 321-338a, 
371d, 461, 481-486, 601, 611, 1814, 1816, 1818, 1820(d)(9), 1833(j), 
1828(o), 1831, 1831o, 1831p-1, 1831r-1, 1831w, 1831x, 1835a, 1882, 
2901-2907, 3105, 3310, 3331-3351, 3353, and 3905-3909; 15 U.S.C. 
78b, 78l(b), 78l(i), 780-4(c)(5), 78q, 78q-1, 78w, 1681s, 1681w, 
6801 and 6805; 31 U.S.C. 5318; 42 U.S.C. 4012a, 4104b, 4106, and 412


Sec.  208.2  [Amended]

0
2. In Sec.  208.2, remove footnote 2.


Sec.  208.3  [Amended]

0
3. In Sec.  208.3, redesignate footnote 3 as footnote 2.


Sec.  208.4  [Amended]

0
4. In Sec.  208.4, remove footnotes 4 and 5.


Sec.  208.5  [Amended]

0
5. In Sec.  208.5, redesignate footnote 6 as footnote 3 and footnote 7 
as footnote 4.


Sec.  208.21  [Amended]

0
6. In Sec.  208.21, redesignate footnote 8 as footnote 5.


Sec.  208.24  [Amended]

0
7. In Sec.  208.24, redesignate footnote 9 as footnote 6.
0
8. In Sec.  208.40, revise paragraph (e) to read as follows:


Sec.  208.40  Authority, purpose, scope, other supervisory authority, 
and disclosure of capital categories.

* * * * *
    (e) Timing. The calculation of the definitions of common equity 
tier 1 capital, the common equity tier 1 risk-based capital ratio, the 
leverage ratio, the supplementary leverage ratio, tangible equity, tier 
1 capital, the tier 1 risk-based capital ratio, total assets, total 
leverage exposure, the total risk-based capital ratio, and total risk-
weighted assets under this subpart is subject to the timing provisions 
at 12 CFR 217.1(f) and the transitions at 12 CFR part 217, subpart G.
* * * * *


Sec.  208.41  [Amended]

0
9. In Sec.  208.41, remove footnotes 10, 11, 12, 13, 14, and 15.
0
10. In Sec.  208.43:
0
a. Revise paragraph (a);
0
b. Effective January 1, 2018, paragraph (a)(2)(iv)(C) as added on May 
1, 2014 (79 FR 24540), and further amended on August 14, 2015 (80 FR 
49102), is redesignated as paragraph (a)(4)(iii).
0
c. Remove paragraph (b);
0
d. Redesignate paragraphs (c) and (d) as paragraphs (b) and (c).
0
e. Revise the introductory text of newly redesignated paragraph (b); 
and
0
f. Effective January 1, 2018, paragraph (c)(1)(iv) as revised on May 1, 
2014 (79 FR 24540), and further amended on August 14, 2015 (80 FR 
49102), is redesignated as paragraph (b)(1)(iv).
    The revisions read as follows:


Sec.  208.43  Capital measures and capital category definitions.

    (a) Capital measures. For purposes of section 38 and this subpart, 
the relevant capital measures are:
    (1) Total Risk-Based Capital Measure: The total risk-based capital 
ratio;
    (2) Tier 1 Risk-Based Capital Measure: The tier 1 risk-based 
capital ratio;
    (3) Common Equity Tier 1 Capital Measure: The common equity tier 1 
risk-based capital ratio; and
    (4) Leverage Measure:
    (i) The leverage ratio; and
    (ii) With respect to an advanced approaches bank, on January 1, 
2018, and thereafter, the supplementary leverage ratio.
* * * * *
    (b) Capital categories applicable to all member banks. For purposes 
of section 38 and this subpart, a member bank is deemed to be:
* * * * *


Sec.  208.102  [Amended]

0
11. In Sec.  208.102, redesignate footnote 16 as footnote 7.


Sec.  208.111  [Amended]

0
12. In Sec.  208.111, redesignate footnote 17 as footnote 8 and 
footnote 18 as footnote 9.

PART 217--CAPITAL ADEQUACY OF BANK HOLDING COMPANIES, SAVINGS AND 
LOAN HOLDING COMPANIES, AND STATE MEMBER BANKS (REGULATION Q)

0
13. The authority citation for part 217 continues to read as follows:

    Authority: 12 U.S.C. 248(a), 321-338a, 481-486, 1462a, 1467a, 
1818, 1828, 1831n, 1831o, 1831p-l, 1831w, 1835, 1844(b), 1851, 3904, 
3906-3909, 4808, 5365, 5368, 5371.


0
14. In Sec.  217.2, in the definition of ``covered savings and loan 
holding company'', revise paragraph (1) to read as follows:


Sec.  217.2  Definitions

* * * * *
    Covered savings and loan holding company * * *
    (1) A top-tier savings and loan holding company that is:
    (i) An institution that meets the requirements of section 
10(c)(9)(C) of HOLA (12 U.S.C. 1467a(c)(9)(C)); and
    (ii) As of June 30 of the previous calendar year, derived 50 
percent or more of its total consolidated assets or 50 percent of its 
total revenues on an enterprise-wide basis (as calculated under GAAP) 
from activities that are not financial in nature under section 4(k) of 
the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k));
* * * * *


Sec.  217.202  [Amended]

0
15. In Sec.  217.202(b), in paragraph (10)(ii) of the definition of 
``securitization'', remove ``[12 CFR 208.34 (Board), 12 CFR 9.18 
(OCC)]'' and add in its place ``12 CFR 208.34.''
0
16. In Sec.  217.300, revise paragraph (c)(3) to read as follows:


Sec.  217.300  Transitions.

* * * * *
    (c) * * *
    (3) Depository institution holding companies under $15 billion and 
2010 MHCs. (i) Non-qualifying capital instruments issued by depository 
institution holding companies under $15 billion and 2010 MHCs prior to 
May 19, 2010, may be included in additional tier 1 or tier 2 capital if 
the instrument was included in tier 1 or tier 2 capital, respectively, 
as of January 1, 2014.
    (ii) Non-qualifying capital instruments includable in tier 1 
capital are subject to a limit of 25 percent of tier 1 capital 
elements, excluding any nonqualifying capital instruments and after 
applying all regulatory capital deductions and adjustments to tier 1 
capital.
    (iii) Non-qualifying capital instruments that are not included in 
tier 1 as a result of the limitation in paragraph (c)(3)(ii) of this 
section are includable in tier 2 capital.
* * * * *

[[Page 70673]]

PART 225--BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL 
(REGULATION Y)

0
17. The authority citation for part 225 continues to read as follows:

    Authority: 12 U.S.C. 1844(b), 3106 and 3108, 1817(j)(13), 
1818(b), 1831i, 1972, 3310, 3331-3351 and 3353; 12 U.S.C. 3901, et 
seq.; and 12 U.S.C. 1841, et seq.


Sec.  225.2  [Amended]

0
18. In Sec.  225.2(r)(1), remove footnotes 3 and 4.


Sec.  225.4  [Amended]

0
19. In Sec.  225.4, remove footnote 1.


Sec.  225.12  [Amended]

0
20. In Sec.  225.12:
0
a. Remove footnote 1;
0
b. Redesignate footnote 2 as footnote 1.


Sec.  225.22  [Amended]

0
21. In Sec.  225.22, remove footnote 1.


Sec.  225.172  [Amended]

0
22. In Sec.  225.172, remove footnote 1.

PART 252--ENHANCED PRUDENTIAL STANDARDS (REGULATION YY)

0
23. The authority citation for part 252 continues to read as follows:

    Authority: 12 U.S.C. 321-338a, 1467a(g), 1818, 1831p-1, 1844(b), 
1844(c), 5361, 5365, 5366.

0
24. In Sec.  252.153, add paragraphs (e)(2) through (5) to read as 
follows:


Sec.  252.153  U.S. intermediate holding company requirement for 
foreign banking organizations with U.S. non-branch assets of $50 
billion or more.

* * * * *
    (e) * * *
    (2) Capital requirements for a U.S. intermediate holding company--
(i) Risk-based capital and leverage requirements. (A) A U.S. 
intermediate holding company must calculate and meet all applicable 
capital adequacy standards set forth in 12 CFR part 217, other than 
subpart E of 12 CFR part 217, and comply with all restrictions 
associated with applicable capital buffers, in the same manner as a 
bank holding company.
    (B) A U.S. intermediate holding company may choose to comply with 
subpart E of 12 CFR part 217.
    (C) Notwithstanding 12 CFR 217.100(b), if a bank holding company is 
a subsidiary of a foreign banking organization that is subject to this 
section and the bank holding company is subject to subpart E of 12 CFR 
part 217, the bank holding company, with the Board's prior written 
approval, may elect not to comply with subpart E of 12 CFR part 217.
    (ii) Capital planning. A U.S. intermediate holding company must 
comply with Sec.  225.8 of Regulation Y in the same manner as a bank 
holding company.
    (3) Risk management and risk committee requirements--(i) General. A 
U.S. intermediate holding company must establish and maintain a risk 
committee that approves and periodically reviews the risk management 
policies and oversees the risk-management framework of the U.S. 
intermediate holding company. The risk committee must be a committee of 
the board of directors of the U.S. intermediate holding company (or 
equivalent thereof). The risk committee may also serve as the U.S. risk 
committee for the combined U.S. operations required pursuant to Sec.  
252.155(a).
    (ii) Risk-management framework. The U.S. intermediate holding 
company's risk-management framework must be commensurate with the 
structure, risk profile, complexity, activities, and size of the U.S. 
intermediate holding company and consistent with the risk management 
policies for the combined U.S. operations of the foreign banking 
organization. The framework must include:
    (A) Policies and procedures establishing risk-management 
governance, risk-management procedures, and risk-control infrastructure 
for the U.S. intermediate holding company; and
    (B) Processes and systems for implementing and monitoring 
compliance with such policies and procedures, including:
    (1) Processes and systems for identifying and reporting risks and 
risk-management deficiencies at the U.S. intermediate holding company, 
including regarding emerging risks and ensuring effective and timely 
implementation of actions to address emerging risks and risk-management 
deficiencies;
    (2) Processes and systems for establishing managerial and employee 
responsibility for risk management of the U.S. intermediate holding 
company;
    (3) Processes and systems for ensuring the independence of the 
risk-management function of the U.S. intermediate holding company; and
    (4) Processes and systems to integrate risk management and 
associated controls with management goals and the compensation 
structure of the U.S. intermediate holding company.
    (iii) Corporate governance requirements. The risk committee of the 
U.S. intermediate holding company must meet at least quarterly and 
otherwise as needed, and must fully document and maintain records of 
its proceedings, including risk-management decisions.
    (iv) Minimum member requirements. The risk committee must:
    (A) Include at least one member having experience in identifying, 
assessing, and managing risk exposures of large, complex financial 
firms; and
    (B) Have at least one member who:
    (1) Is not an officer or employee of the foreign banking 
organization or its affiliates and has not been an officer or employee 
of the foreign banking organization or its affiliates during the 
previous three years; and
    (2) Is not a member of the immediate family, as defined in Sec.  
225.41(b)(3) of the Board's Regulation Y (12 CFR 225.41(b)(3)), of a 
person who is, or has been within the last three years, an executive 
officer, as defined in Sec.  215.2(e)(1) of the Board's Regulation O 
(12 CFR 215.2(e)(1)) of the foreign banking organization or its 
affiliates.
    (v) The U.S. intermediate holding company must take appropriate 
measures to ensure that it implements the risk management policies for 
the U.S. intermediate holding company and it provides sufficient 
information to the U.S. risk committee to enable the U.S. risk 
committee to carry out the responsibilities of this subpart.
    (4) Liquidity requirements. A U.S. intermediate holding company 
must comply with the liquidity risk-management requirements in Sec.  
252.156 and conduct liquidity stress tests and hold a liquidity buffer 
pursuant to Sec.  252.157.
    (5) Stress test requirements. A U.S. intermediate holding company 
must comply with the requirements of subparts E and F of this part in 
the same manner as a bank holding company.
* * * * *

    By order of the Board of Governors of the Federal Reserve 
System, November 2, 2015.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2015-28294 Filed 11-13-15; 8:45 am]
 BILLING CODE 6210-01-P