81 FR 20579 - Risk-Based Capital Guidelines: Implementation of Capital Requirements for Global Systemically Important Bank Holding Companies
FEDERAL RESERVE SYSTEM Federal Register Volume 81, Issue 68 (April 8, 2016)
Federal Register Volume 81, Issue 68 (April 8, 2016)
| Page Range | 20579-20582 | |
| FR Document | 2016-08015 |
[Federal Register Volume 81, Number 68 (Friday, April 8, 2016)] [Proposed Rules] [Pages 20579-20582] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-08015] ======================================================================= ----------------------------------------------------------------------- FEDERAL RESERVE SYSTEM 12 CFR Part 217 [Regulation Q; Docket No. R-1535] RIN 7100 AE-49 Risk-Based Capital Guidelines: Implementation of Capital Requirements for Global Systemically Important Bank Holding Companies AGENCY: Board of Governors of the Federal Reserve System. ACTION: Notice of proposed rulemaking. ----------------------------------------------------------------------- SUMMARY: The Board of Governors of the Federal Reserve System (Board) is inviting public comment on proposed clarifying revisions (proposed rule) to the Board's rule regarding risk-based capital surcharges for U.S. based global systemically important bank holding companies (GSIB surcharge rule). The proposed rule proposed rule would modify the GSIB surcharge rule to provide that a bank holding company subject to the rule would continue to calculate its method 1 and method 2 GSIB surcharge scores annually using data as of December 31 of the previous calendar year, even though the data will be due quarterly beginning with the June 30, 2016, report. In addition, the proposed rule would clarify that a bank holding company subject to the GSIB surcharge rule is required to calculate its method 2 GSIB surcharge score using systemic indicator amounts expressed in billions of dollars even though the data is reported in millions of dollars. The preamble to the proposed rule also provides clarifying information on how a covered bank holding company should calculate its short-term wholesale funding score for purposes of calculating its method 2 score under the GSIB surcharge rule. DATES: Comments must be received May 13, 2016. ADDRESSES: When submitting comments, please consider submitting your comments by email or fax because paper mail in the Washington, DC area and at the Board may be subject to delay. You may submit comments, identified by Docket No. R-1535 and RIN 7100 AE-49, by any of the following methods:Agency Web site: www.federalreserve.gov. Follow the instructions for submitting comments at www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm. Federal eRulemaking Portal: www.regulations.gov. Follow the instructions for submitting comments. Email: [email protected]. Include the docket number in the subject line of the message. Fax: (202) 452-3819 or (202) 452-3102. Mail: Address to Robert de V. Frierson, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue NW., Washington, DC 20551. All public comments will be made available on the Board's Web site at www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, unless modified for technical reasons. 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 MP-500 of the Board's Martin Building (20th and C Streets NW., Washington, DC 20551) between 9 a.m. and 5 p.m. on weekdays. FOR FURTHER INFORMATION CONTACT: Anna Lee Hewko, Associate Director, (202) 530-6260, Constance M. Horsley, Assistant Director, (202) 452- 5239, Juan C. Climent, Manager, (202) 872-7526, or Holly Kirkpatrick, Supervisory Financial Analyst, (202) 452-2796, Division of Banking Supervision and Regulation; or Benjamin McDonough, Special Counsel, (202) 452-2036, Mark Buresh, Senior Attorney, (202) 452- [[Page 20580]] 5270, or Mary Watkins, Attorney, (202) 452-3722, Legal Division. Board of Governors of the Federal Reserve System, 20th and C Streets NW., Washington, DC 20551. For the hearing impaired only, Telecommunications Device for the Deaf (TDD) users may contact (202) 263-4869. SUPPLEMENTARY INFORMATION: Table of Contents I. Introduction II. Background III. Revision Related to FR Y-15 Reporting Frequency IV. Revision To Clarify the Method 2 Score Calculation V. Clarification of the Transitional Short-Term Wholesale Funding Score Calculation VI. Request for Comment VII. Regulatory Analysis A. Paperwork Reduction Act B. Regulatory Flexibility Analysis C. Riegle Community Development and Regulatory Improvement Act of 1994 D. Plain Language Introduction Section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) authorizes the Board to establish enhanced prudential standards for bank holding companies with $50 billion or more in total consolidated assets and for nonbank financial companies that the Financial Stability Oversight Council has designated for supervision by the Board.\1\ These standards must include risk- based capital requirements as well as other enumerated standards. In July 2015, the Board adopted the GSIB surcharge rule, pursuant to section 165 of the Dodd-Frank Act, to identify global systemically important bank holding companies and impose a risk-based capital surcharge on those institutions.\2\ --------------------------------------------------------------------------- \1\ See 12 U.S.C. 5365. \2\ 80 FR 49082 (August 14, 2015). --------------------------------------------------------------------------- II. Background The GSIB surcharge rule works to mitigate the potential risk that the material financial distress or failure of a GSIB could pose to U.S. financial stability by increasing the stringency of capital standards for GSIBs, thereby increasing the resiliency of these firms. The GSIB surcharge rule takes into consideration the nature, scope, size, scale, concentration, interconnectedness, and mix of activities of each company subject to the rule. These factors are reflected in the GSIB surcharge rule's method 1 and method 2 scores, which use quantitative metrics reported on the FR Y 15 reporting form to measure the firm's systemic footprint. A bank holding company whose method 1 score exceeds a defined threshold is identified as a GSIB. Bank holding companies that are identified as GSIBs under the GSIB surcharge rule must calculate their method 1 and method 2 scores each year using data reported on a firm's FR Y-15 as of December 31 of the prior year. GSIB surcharges are established using these scores, and GSIBs with higher scores are subject to higher GSIB surcharges. Method 1 uses five equally-weighted categories that are correlated with systemic importance--size, interconnectedness, cross- jurisdictional activity, substitutability, and complexity--and these categories are subdivided into twelve systemic indicators.\3\ For each systemic indicator, a firm divides its own measure of the systemic indicator by an aggregate global indicator amount. Each resulting value is then weighted and put onto a standard scale. The firm's method 1 score is the sum of its weighted systemic indicator scores. Method 2 uses similar inputs to those used in method 1, but replaces the substitutability category with a measure of a firm's use of short-term wholesale funding.\4\ The GSIB surcharge for the firm is the higher of the two surcharges determined under method 1 and method 2.\5\ Method 2 is calibrated differently from method 1 and method 2 generally results in a higher GSIB surcharge. --------------------------------------------------------------------------- \3\ 12 CFR 217.404. \4\ 12 CFR 217.405. \5\ 12 CFR 217.403. --------------------------------------------------------------------------- The FR Y-15 reporting form collects systemic risk data from U.S. bank holding companies and covered savings and loan holding companies \6\ with total consolidated assets of $50 billion or more. The Federal Reserve primarily uses the FR Y-15 data to monitor, on an ongoing basis, the systemic risk profile of the institutions that are subject to enhanced prudential standards under section 165 of the Dodd-Frank Act. The information reported on the FR Y-15 is also used in the calculation of a bank holding company's method 1 and method 2 scores under the GSIB surcharge rule. Currently, the FR Y-15 requires reporting of the components used in calculating the method 1 and method 2 scores on the FR Y-15, but does not require reporting of the scores themselves.\7\ --------------------------------------------------------------------------- \6\ Covered savings and loan holding companies are those which are not substantially engaged in insurance or commercial activities. For more information, see the definition of ``covered savings and loan holding company'' provided in 12 CFR 217.2. \7\ Beginning on January 1, 2016, a bank holding company that is subject to a GSIB surcharge is required to report its applicable GSIB surcharge on line 67 of the FFIEC 101 report. --------------------------------------------------------------------------- III. Revisions Related to FR Y-15 Reporting Frequency The FR Y-15, as implemented on December 31, 2012, is an annual report that collects data regarding a firm's systemic risk.\8\ The Board recently adopted revisions to the FR Y-15 that include requiring the FR Y-15 to be filed on a quarterly basis, beginning with the report as of June 30, 2016.\9\ Under the GSIB surcharge rule, bank holding companies are required to calculate their method 1 and method 2 scores using data from the most recent FR Y-15.\10\ At the time the GSIB surcharge rule was adopted, these calculations were intended to be conducted annually consistent with the frequency of the FR Y-15 and using data as of December 31 of the prior calendar year. --------------------------------------------------------------------------- \8\ See 77 FR 76487 (December 28, 2012). The Board subsequently revised the FR Y-15 in December 2013. See 78 FR 77128 (December 20, 2013). \9\ 80 FR 77344 (December 14, 2015). \10\ 80 FR 49082 (August 14, 2015). --------------------------------------------------------------------------- The proposed rule would revise the GSIB surcharge rule to require continued use of a December 31 as-of date for purposes of a bank holding company's calculation of its method 1 and method 2 scores. In particular, the proposed rule would revise sections 217.404 and 217.405 of the GSIB surcharge rule, which are the sections that describe the methodology for calculating a firm's method 1 and method 2 scores, respectively. The revisions to sections 217.404 and 217.405 would clarify that the systemic indicator amount used in the calculations would be drawn from a firm's FR Y-15 as of December 31 of the previous calendar year even after the FR Y-15 becomes a quarterly report. IV. Revision To Clarify the Method 2 Score Calculation The proposed rule would revise section 217.405 of the Board's Regulation Q to clarify that, for purposes of calculating its method 2 score, a GSIB should convert its systemic indicator amounts as reported on the FR Y-15 in millions of dollars to billions of dollars. The FR Y- 15 requires these data to be reported in millions of dollars, while the fixed coefficients used in the calculation of a firm's method 2 score were determined using aggregate data expressed in billions of dollars.\11\ [[Page 20581]] Therefore, to properly use the fixed coefficients in the method 2 score methodology, a firm should reflect its systemic indicator amounts used in the method 2 score calculation in billions of dollars. --------------------------------------------------------------------------- \11\ See 80 FR 49082, 49088. --------------------------------------------------------------------------- V. Clarification of the Short-Term Wholesale Funding Method 2 Score Calculation A firm subject to the GSIB surcharge rule must calculate a short- term wholesale funding score in order to calculate the denominator of its method 2 GSIB surcharge, if any.\12\ Some firms subject to the GSIB surcharge rule have requested clarification on what the appropriate denominator should be for determining the short-term wholesale funding score during the transitional period before the GSIB surcharge becomes fully phased in. Consistent with the definition in the GSIB surcharge rule, the draft Federal Register notice would state that, for purposes of calculating this denominator during the transitional period, the average risk-weighted assets used in determining a firm's short-term wholesale funding score is the four-quarter average of total risk- weighted assets associated with the lower of the firm's common equity tier 1 capital ratios, as reported on the firm's FR Y-9C for each quarter of the previous calendar year.\13\ --------------------------------------------------------------------------- \12\ 12 CFR 217.401(c). \13\ 12 CFR 217.401(c). --------------------------------------------------------------------------- As it relates to the numerator used in the short-term wholesale funding score calculation, the GSIB surcharge rule contains a transition provision that directs firms identified as GSIBs to determine the average of their weighted short-term wholesale funding amounts for the GSIB surcharge in effect beginning January 1, 2016, and January 1, 2017, by averaging their weighted short-term wholesale funding amounts on July 31, 2015, August 24, 2015, and September 30, 2015.\14\ These transition arrangements relate only to the calculation of a firm's average weighted short-term wholesale funding amount that is used as a component of the calculation of a firm's short-term wholesale funding score for the GSIB surcharges in effect during calendar year 2016 and calendar year 2017. These transition arrangements do not affect any other amount used in the calculation of a firm's short-term wholesale funding score, method 2 score, method 1 score, or GSIB surcharge. This is described further in the table below. --------------------------------------------------------------------------- \14\ 12 CFR 217.400(b)(3). The funding sources were defined using terminology from the Liquidity Coverage Ratio rule (12 CFR part 249) and aligned with items that are reported on the Board's Complex Institution Liquidity Monitoring Report on Form FR 2052a. GSIB Surcharge Calculation During the Transitional Period -------------------------------------------------------------------------------------------------------------------------------------------------------- Using RWAs in the short-term Using short-term wholesale wholesale Using indicator data funding calculated as the funding metric Resulting in a GSIB If the surcharge Surcharges calculated in: reported on the FR Y- average of the weighted calculated as surcharge in effect decreases, then it is 15 as of: amounts for the following the 4-quarter on: in effect on: days (numerator): average over the year (denominator): -------------------------------------------------------------------------------------------------------------------------------------------------------- December 2015...................... December 31, 2014..... July 31, August 24, and 2014 January 1, 2016....... September 30, 2015. January 1, 2017....... December 2016...................... December 31, 2015..... July 31, August 24, and 2015 January 1, 2018....... January 1, 2017 September 30, 2015. December 2017...................... December 31, 2016..... 2016 daily values.......... 2016 January 1, 2019....... January 1, 2018 December 2018...................... December 31, 2017..... 2017 daily values.......... 2017 January 1, 2020....... January 1, 2019 December [Year].................... December 31, [Year-1]. [Year-1] daily values...... [Year-1] January 1, [Year + 2]. January 1, [Year + 1] -------------------------------------------------------------------------------------------------------------------------------------------------------- VI. Request for Comment The Board seeks comment on all aspects of the proposed revisions to the GSIB surcharge rule. VII. Regulatory Analysis A. Paperwork Reduction Act (PRA) There is no new collection of information pursuant to the PRA (44 U.S.C. 3501 et seq.) contained in this proposed rule. B. Regulatory Flexibility Act Analysis The Board is providing an initial regulatory flexibility analysis with respect to this proposed rule. The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA), generally requires that an agency prepare and make available an initial regulatory flexibility analysis in connection with a notice of proposed rulemaking. Under regulations issued by the Small Business Administration, a small entity includes a depository institution, bank holding company, or savings and loan holding company with assets of $550 million or less (small banking organizations).\15\ As of December 31, 2014, there were approximately 3,833 small bank holding companies. --------------------------------------------------------------------------- \15\ See 13 CFR 121.201. Effective July 14, 2014, the Small Business Administration revised the size standards for banking organizations to $550 million in assets from $500 million in assets. 79 FR 33647 (June 12, 2014). --------------------------------------------------------------------------- The proposed rule would apply only to advanced approaches bank holding companies, which, generally, are bank holding companies with total consolidated assets of $250 billion or more, that have total consolidated on-balance sheet foreign exposures of $10 billion or more, that have subsidiary depository institutions that are advanced approaches institutions, or that elect to use the advanced approaches framework.\16\ Bank holding companies that are subject to the proposed rule therefore are expected to substantially exceed the $550 million asset threshold at which a banking entity would qualify as a small bank holding company. --------------------------------------------------------------------------- \16\ See 12 CFR 217.100. --------------------------------------------------------------------------- Because the proposed rule is not likely to apply to any bank holding company with assets of $550 million or less, if adopted in final form, it is not expected to apply to any small bank holding company for purposes of the RFA. The Board does not believe that [[Page 20582]] the proposed rule duplicates, overlaps, or conflicts with any other Federal rules. In light of the foregoing, the Board does not believe that the proposed rule, if adopted in final form, would have a significant economic impact on a substantial number of small entities. Nonetheless, the Board seeks comment on whether the proposed rule would impose undue burdens on, or have unintended consequences for, small organizations, and whether there are ways such potential burdens or consequences could be minimized in a manner consistent with the purpose of the proposed rule. C. Riegle Community Development and Regulatory Improvement Act of 1994 In determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on state member banks, the Board is required to consider, consistent with the principles of safety and soundness and the public interest, any administrative burdens that such regulations would place on depository institutions, and the benefits of such regulations.\17\ In addition, new regulations that impose additional reporting disclosures or other new requirements on insured depository institutions generally must take effect on the first day of a calendar quarter which begins on or after the date on which the regulations are published in final form.\18\ --------------------------------------------------------------------------- \17\ See Section 302 of the Riegle Community Development and Regulatory Improvement Act of 1994 (``RCDRIA''), 12 U.S.C. 4802. \18\ 12 U.S.C. 4802(b). --------------------------------------------------------------------------- The proposed revision to the Board's GSIB surcharge rule are only applicable to advanced approaches bank holding companies. Therefore, these requirements are not applicable to this proposed rule. D. Plain Language Section 722 of the Gramm-Leach-Bliley Act requires the Board to use plain language in all proposed and final rules published after January 1, 2000. The Board has sought to present the proposed rule in a simple straightforward manner, and invites comment on the use of plain language. For example: Has the Board organized the material to suit your needs? If not, how could the Board present the proposed rule more clearly? Are the requirements in the proposed rule clearly stated? If not, how could the proposed rule be more clearly stated? Do the regulations contain technical language or jargon that is not clear? If so, which language requires clarification? Would a different format (grouping and order of sections, use of headings, paragraphing) make the regulation easier to understand? If so, what changes would achieve that? Is the section format adequate? If not, which of the sections should be changed and how? What other changes can the Board incorporate to make the regulation easier to understand? List of Subjects in 12 CFR Part 217 Administrative practice and procedure, Banks, Banking, Holding companies, Reporting and recordkeeping requirements, Securities. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM 12 CFR CHAPTER II Authority and Issuance For the reasons set forth in the preamble, the Board proposes to amend chapter II of title 12 of the Code of Federal Regulations as follows: PART 217--CAPITAL ADEQUACY OF BANK HOLDING COMPANIES, SAVINGS AND LOAN HOLDING COMPANIES, AND STATE MEMBER BANKS (REGULATION Q) 0 1. 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 2. In Sec. 217.404, paragraph (b)(1) is revised to read as follows: Sec. 217.404 Method 1 score. * * * * * (b) Systemic indicator score. (1) Except as provided in paragraph (b)(2) of this section, the systemic indicator score in basis points for a given systemic indicator is equal to: (i) The ratio of: (A) The amount of that systemic indicator, as reported by the bank holding company as of December 31 of the previous calendar year; to (B) The aggregate global indicator amount for that systemic indicator published by the Board in the fourth quarter of that year; (ii) Multiplied by 10,000; and (iii) Multiplied by the indicator weight corresponding to the systemic indicator as set forth in Table 1 of this section. * * * * * 0 3. In Sec. 217.405, paragraph (b)(1) is revised to read as follows: Sec. 217.405 Method 2 score. * * * * * (b) Systemic indicator score. A global systemically important BHC's score for a systemic indicator is equal to: (1) The amount of the systemic indicator, as reported by the bank holding company as of December 31 of the previous calendar year, expressed in billions of dollars; * * * * * By order of the Board of Governors of the Federal Reserve System, April 4, 2016. Robert deV. Frierson, Secretary of the Board. [FR Doc. 2016-08015 Filed 4-7-16; 8:45 am] BILLING CODE P
![Federal Register / Vol. 81, No. 68 / Friday, April 8, 2016 / Proposed Rules 20579
will be prohibited from shipping under workplan. This identification must be proposed rule would clarify that a bank
the systems approach until APHIS and maintained until the fruit is released for holding company subject to the GSIB
the NPPO of Ecuador both agree that the entry into the continental United States. surcharge rule is required to calculate
pest risk has been mitigated. As The pitahaya fruit are subject to its method 2 GSIB surcharge score using
conditions warrant, the average number inspection at the port of entry for all systemic indicator amounts expressed
of A. fraterculus per trap per day may quarantine pests of concern, including in billions of dollars even though the
be raised or lowered if jointly agreed to A. fraterculus. If a single larva of A. data is reported in millions of dollars.
between APHIS and the NPPO of fraterculus is found in a shipment from The preamble to the proposed rule also
Ecuador in the operational workplan. a place of production (either by the provides clarifying information on how
(6) The NPPO of Ecuador must NPPO in Ecuador or by inspectors at the a covered bank holding company should
maintain records of trap placement, continental United States port of entry), calculate its short-term wholesale
checking of traps, and any quarantine the entire lot of fruit will be prohibited funding score for purposes of
pest captures in accordance with the from export, and the place of production calculating its method 2 score under the
operational workplan. Trapping records of that fruit will be suspended from the GSIB surcharge rule.
must be maintained for APHIS review export program until appropriate DATES: Comments must be received May
for at least 1 year. measures agreed upon by the NPPO of 13, 2016.
(d) Packinghouse requirements. (1) Ecuador and APHIS have been taken. ADDRESSES: When submitting
The NPPO of Ecuador must monitor (f) Phytosanitary certificate. Each
packinghouse operations to verify that comments, please consider submitting
consignment of pitahaya fruit must be your comments by email or fax because
the packinghouses are complying with accompanied by a phytosanitary
the requirements of the systems paper mail in the Washington, DC area
certificate issued by the NPPO of and at the Board may be subject to
approach. If the NPPO of Ecuador finds Ecuador bearing the additional
that a packinghouse is not complying delay. You may submit comments,
declaration that the consignment was identified by Docket No. R–1535 and
with the requirements of the systems produced and prepared for export in
approach, no pitahaya fruit from the RIN 7100 AE–49, by any of the
accordance with the requirements of following methods:
packinghouse will be eligible for export § 319.56–76.
to the continental United States until • Agency Web site:
APHIS and the NPPO of Ecuador Done in Washington, DC, this 5th day of www.federalreserve.gov. Follow the
April 2016. instructions for submitting comments at
conduct an investigation and both agree
that the pest risk has been mitigated. Kevin Shea, www.federalreserve.gov/generalinfo/
(2) All packinghouses that participate Administrator, Animal and Plant Health foia/ProposedRegs.cfm.
in the pitahaya export program must be Inspection Service. • Federal eRulemaking Portal:
registered with the NPPO of Ecuador. [FR Doc. 2016–08189 Filed 4–7–16; 8:45 am] www.regulations.gov. Follow the
(3) The pitahaya fruit must be packed BILLING CODE 3410–34–P instructions for submitting comments.
within 24 hours of harvest in a pest- • Email: regs.comments@
exclusionary packinghouse. The federalreserve.gov. Include the docket
pitahaya must be safeguarded by an FEDERAL RESERVE SYSTEM number in the subject line of the
insect-proof mesh screen or plastic message.
tarpaulin while in transit to the 12 CFR Part 217 • Fax: (202) 452–3819 or (202) 452–
packinghouse and while awaiting 3102.
[Regulation Q; Docket No. R–1535] • Mail: Address to Robert de V.
packing. These safeguards must remain
intact until arrival in the continental RIN 7100 AE–49 Frierson, Secretary, Board of Governors
United States or the consignment will of the Federal Reserve System, 20th
Risk-Based Capital Guidelines: Street and Constitution Avenue NW.,
be denied entry.
(4) During the time the packinghouse Implementation of Capital Washington, DC 20551.
is in use for exporting pitahaya fruit to Requirements for Global Systemically All public comments will be made
the continental United States, the Important Bank Holding Companies available on the Board’s Web site at
packinghouse may only accept pitahaya AGENCY: Board of Governors of the www.federalreserve.gov/generalinfo/
fruit from registered production sites. Federal Reserve System. foia/ProposedRegs.cfm as submitted,
(e) Phytosanitary inspection. (1) A unless modified for technical reasons.
ACTION: Notice of proposed rulemaking.
biometric sample of pitahaya fruit Accordingly, comments will not be
(jointly agreed upon by APHIS and the SUMMARY: The Board of Governors of the edited to remove any identifying or
NPPO) must be inspected in Ecuador by Federal Reserve System (Board) is contact information. Public comments
the NPPO of Ecuador following post- inviting public comment on proposed may also be viewed electronically or in
harvest processing. The biometric clarifying revisions (proposed rule) to paper in Room MP–500 of the Board’s
sample must be visually inspected for the Board’s rule regarding risk-based Martin Building (20th and C Streets
any quarantine pests, and a portion of capital surcharges for U.S. based global NW., Washington, DC 20551) between 9
the fruit will be cut open to detect systemically important bank holding a.m. and 5 p.m. on weekdays.
internal signs of A. fraterculus. companies (GSIB surcharge rule). The FOR FURTHER INFORMATION CONTACT:
(2) Pitahaya fruit presented for proposed rule proposed rule would Anna Lee Hewko, Associate Director,
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS
inspection at the port of entry to the modify the GSIB surcharge rule to (202) 530–6260, Constance M. Horsley,
United States must be identified in the provide that a bank holding company Assistant Director, (202) 452–5239, Juan
shipping documents accompanying subject to the rule would continue to C. Climent, Manager, (202) 872–7526, or
each lot of fruit to specify the calculate its method 1 and method 2 Holly Kirkpatrick, Supervisory
production site or sites, in which the GSIB surcharge scores annually using Financial Analyst, (202) 452–2796,
fruit was produced, and the packing data as of December 31 of the previous Division of Banking Supervision and
shed or sheds, in which the fruit was calendar year, even though the data will Regulation; or Benjamin McDonough,
processed, in accordance with the be due quarterly beginning with the Special Counsel, (202) 452–2036, Mark
requirements in the operational June 30, 2016, report. In addition, the Buresh, Senior Attorney, (202) 452–
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Therefore, to properly use the fixed with the definition in the GSIB for the GSIB surcharge in effect
coefficients in the method 2 score surcharge rule, the draft Federal beginning January 1, 2016, and January
methodology, a firm should reflect its Register notice would state that, for 1, 2017, by averaging their weighted
systemic indicator amounts used in the purposes of calculating this short-term wholesale funding amounts
method 2 score calculation in billions of denominator during the transitional on July 31, 2015, August 24, 2015, and
dollars. period, the average risk-weighted assets September 30, 2015.14 These transition
V. Clarification of the Short-Term used in determining a firm’s short-term arrangements relate only to the
Wholesale Funding Method 2 Score wholesale funding score is the four- calculation of a firm’s average weighted
Calculation quarter average of total risk-weighted short-term wholesale funding amount
assets associated with the lower of the that is used as a component of the
A firm subject to the GSIB surcharge
firm’s common equity tier 1 capital calculation of a firm’s short-term
rule must calculate a short-term
ratios, as reported on the firm’s FR Y– wholesale funding score for the GSIB
wholesale funding score in order to
9C for each quarter of the previous surcharges in effect during calendar year
calculate the denominator of its method
2 GSIB surcharge, if any.12 Some firms calendar year.13 2016 and calendar year 2017. These
subject to the GSIB surcharge rule have As it relates to the numerator used in transition arrangements do not affect
requested clarification on what the the short-term wholesale funding score any other amount used in the
appropriate denominator should be for calculation, the GSIB surcharge rule calculation of a firm’s short-term
determining the short-term wholesale contains a transition provision that wholesale funding score, method 2
funding score during the transitional directs firms identified as GSIBs to score, method 1 score, or GSIB
period before the GSIB surcharge determine the average of their weighted surcharge. This is described further in
becomes fully phased in. Consistent short-term wholesale funding amounts the table below.
GSIB SURCHARGE CALCULATION DURING THE TRANSITIONAL PERIOD
Using RWAs
in the short-
term whole-
Using short-term wholesale sale funding
Using indicator data funding calculated as the average metric Resulting in a GSIB If the surcharge
Surcharges reported on the FR of the weighted amounts for the calculated as surcharge in effect decreases, then it is
calculated in: Y–15 as of: following days the on: in effect on:
(numerator): 4-quarter
average over
the year
(denominator):
December 2015 .. December 31, 2014 July 31, August 24, and September 2014 January 1, 2016 .......
30, 2015. January 1, 2017.
December 2016 .. December 31, 2015 July 31, August 24, and September 2015 January 1, 2018 ....... January 1, 2017
30, 2015.
December 2017 .. December 31, 2016 2016 daily values ............................ 2016 January 1, 2019 ....... January 1, 2018
December 2018 .. December 31, 2017 2017 daily values ............................ 2017 January 1, 2020 ....... January 1, 2019
December [Year] December 31, [Year¥1] daily values ..................... [Year¥1] January 1, [Year + 2] January 1, [Year + 1]
[Year¥1].
VI. Request for Comment agency prepare and make available an balance sheet foreign exposures of $10
initial regulatory flexibility analysis in billion or more, that have subsidiary
The Board seeks comment on all connection with a notice of proposed depository institutions that are
aspects of the proposed revisions to the rulemaking. Under regulations issued by advanced approaches institutions, or
GSIB surcharge rule. the Small Business Administration, a that elect to use the advanced
VII. Regulatory Analysis small entity includes a depository approaches framework.16 Bank holding
institution, bank holding company, or companies that are subject to the
A. Paperwork Reduction Act (PRA) savings and loan holding company with proposed rule therefore are expected to
There is no new collection of assets of $550 million or less (small substantially exceed the $550 million
information pursuant to the PRA (44 banking organizations).15 As of asset threshold at which a banking
U.S.C. 3501 et seq.) contained in this December 31, 2014, there were entity would qualify as a small bank
proposed rule. approximately 3,833 small bank holding holding company.
companies. Because the proposed rule is not
B. Regulatory Flexibility Act Analysis
The proposed rule would apply only likely to apply to any bank holding
The Board is providing an initial to advanced approaches bank holding company with assets of $550 million or
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS
regulatory flexibility analysis with companies, which, generally, are bank less, if adopted in final form, it is not
respect to this proposed rule. The holding companies with total expected to apply to any small bank
Regulatory Flexibility Act, 5 U.S.C. 601 consolidated assets of $250 billion or holding company for purposes of the
et seq. (RFA), generally requires that an more, that have total consolidated on- RFA. The Board does not believe that
12 12 CFR 217.401(c). with items that are reported on the Board’s standards for banking organizations to $550 million
13 12 CFR 217.401(c). Complex Institution Liquidity Monitoring Report on in assets from $500 million in assets. 79 FR 33647
14 12 CFR 217.400(b)(3). The funding sources Form FR 2052a. (June 12, 2014).
were defined using terminology from the Liquidity 15 See 13 CFR 121.201. Effective July 14, 2014, the 16 See 12 CFR 217.100.
Coverage Ratio rule (12 CFR part 249) and aligned Small Business Administration revised the size
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![20582 Federal Register / Vol. 81, No. 68 / Friday, April 8, 2016 / Proposed Rules
the proposed rule duplicates, overlaps, • Would a different format (grouping and (b) Systemic indicator score. A global
or conflicts with any other Federal order of sections, use of headings, systemically important BHC’s score for
rules. In light of the foregoing, the Board paragraphing) make the regulation easier to a systemic indicator is equal to:
does not believe that the proposed rule, understand? If so, what changes would (1) The amount of the systemic
achieve that?
if adopted in final form, would have a indicator, as reported by the bank
• Is the section format adequate? If not,
significant economic impact on a which of the sections should be changed and holding company as of December 31 of
substantial number of small entities. how? the previous calendar year, expressed in
Nonetheless, the Board seeks comment • What other changes can the Board billions of dollars;
on whether the proposed rule would incorporate to make the regulation easier to * * * * *
impose undue burdens on, or have understand?
By order of the Board of Governors of the
unintended consequences for, small
List of Subjects in 12 CFR Part 217 Federal Reserve System, April 4, 2016.
organizations, and whether there are
Administrative practice and Robert deV. Frierson,
ways such potential burdens or
consequences could be minimized in a procedure, Banks, Banking, Holding Secretary of the Board.
manner consistent with the purpose of companies, Reporting and [FR Doc. 2016–08015 Filed 4–7–16; 8:45 am]
the proposed rule. recordkeeping requirements, Securities. BILLING CODE P
C. Riegle Community Development and BOARD OF GOVERNORS OF THE
Regulatory Improvement Act of 1994 FEDERAL RESERVE SYSTEM
DEPARTMENT OF TRANSPORTATION
In determining the effective date and 12 CFR CHAPTER II
administrative compliance requirements Federal Aviation Administration
Authority and Issuance
for new regulations that impose
additional reporting, disclosure, or other For the reasons set forth in the 14 CFR Part 71
requirements on state member banks, preamble, the Board proposes to amend
the Board is required to consider, chapter II of title 12 of the Code of Proposed Modification of the San
consistent with the principles of safety Federal Regulations as follows: Diego, CA, Class B Airspace Area;
and soundness and the public interest, Public Meetings
any administrative burdens that such PART 217—CAPITAL ADEQUACY OF
BANK HOLDING COMPANIES, AGENCY: Federal Aviation
regulations would place on depository Administration (FAA), DOT.
institutions, and the benefits of such SAVINGS AND LOAN HOLDING
COMPANIES, AND STATE MEMBER ACTION: Notice of meetings.
regulations.17 In addition, new
regulations that impose additional BANKS (REGULATION Q)
SUMMARY: This notice announces three
reporting disclosures or other new ■ 1. The authority citation for part 217 fact-finding informal airspace meetings
requirements on insured depository continues to read as follows: to solicit information from airspace
institutions generally must take effect users and others concerning a proposal
on the first day of a calendar quarter Authority: 12 U.S.C. 248(a), 321–338a,
to amend the Class B airspace area at
481–486, 1462a, 1467a, 1818, 1828, 1831n,
which begins on or after the date on San Diego, CA. The purpose of these
1831o, 1831p–l, 1831w, 1835, 1844(b), 1851,
which the regulations are published in 3904, 3906–3909, 4808, 5365, 5368, 5371. meetings is to provide interested parties
final form.18 an opportunity to present views,
The proposed revision to the Board’s ■ 2. In § 217.404, paragraph (b)(1) is recommendations, and comments on the
GSIB surcharge rule are only applicable revised to read as follows: proposal. All comments received during
to advanced approaches bank holding § 217.404 Method 1 score. these meetings will be considered prior
companies. Therefore, these to any revision or issuance of a notice
requirements are not applicable to this * * * * *
of proposed rulemaking.
proposed rule. (b) Systemic indicator score. (1)
Except as provided in paragraph (b)(2) DATES: The meetings will be held on
D. Plain Language of this section, the systemic indicator Tuesday, June 28, 2016, at 6:00 p.m.;
score in basis points for a given Wednesday, June 29, 2016, at 6:00 p.m.;
Section 722 of the Gramm-Leach-
systemic indicator is equal to: and Thursday, June 30, 2016, at 6:00
Bliley Act requires the Board to use
(i) The ratio of: p.m. Doors open 30 minutes prior to the
plain language in all proposed and final
(A) The amount of that systemic beginning of each meeting. Comments
rules published after January 1, 2000.
indicator, as reported by the bank must be received on or before August
The Board has sought to present the
holding company as of December 31 of 15, 2016.
proposed rule in a simple
straightforward manner, and invites the previous calendar year; to ADDRESSES: All meetings will be held at
comment on the use of plain language. (B) The aggregate global indicator San Diego International Airport,
For example: amount for that systemic indicator Commuter Airport Terminal, 3225
published by the Board in the fourth North Harbor Drive, San Diego, CA
• Has the Board organized the material to 92101.
suit your needs? If not, how could the Board quarter of that year;
present the proposed rule more clearly? (ii) Multiplied by 10,000; and Comments: Send comments on the
• Are the requirements in the proposed (iii) Multiplied by the indicator proposal, in triplicate, to: Tracey
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS
rule clearly stated? If not, how could the weight corresponding to the systemic Johnson, Manager, Operations Support
proposed rule be more clearly stated? indicator as set forth in Table 1 of this Group, Western Service Center, Air
• Do the regulations contain technical section. Traffic Organization Federal Aviation
language or jargon that is not clear? If so, Administration, 1601 Lind Avenue SW.,
which language requires clarification? * * * * *
■ 3. In § 217.405, paragraph (b)(1) is
Renton, WA 98057, or by fax to (425)
revised to read as follows: 203–4505.
17 See Section 302 of the Riegle Community
Development and Regulatory Improvement Act of FOR FURTHER INFORMATION CONTACT:
1994 (‘‘RCDRIA’’), 12 U.S.C. 4802. § 217.405 Method 2 score. Brian Fagan, FAA Support Manager,
18 12 U.S.C. 4802(b). * * * * * Southern California TRACON, 9175
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Document Created: 2018-02-07 13:50:00
Document Modified: 2018-02-07 13:50:00
| 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 | Proposed Rules | |
| Action | Notice of proposed rulemaking. | |
| Dates | Comments must be received May 13, 2016. | |
| Contact | Anna Lee Hewko, Associate Director, (202) 530-6260, Constance M. Horsley, Assistant Director, (202) 452- 5239, Juan C. Climent, Manager, (202) 872-7526, or Holly Kirkpatrick, Supervisory Financial Analyst, (202) 452-2796, Division of Banking Supervision and Regulation; or Benjamin McDonough, Special Counsel, (202) 452-2036, Mark Buresh, Senior Attorney, (202) 452- 5270, or Mary Watkins, Attorney, (202) 452-3722, Legal Division. Board of Governors of the Federal Reserve System, 20th and C Streets NW., Washington, DC 20551. For the hearing impaired only, Telecommunications Device for the Deaf (TDD) users may contact (202) 263-4869. | |
| FR Citation | 81 FR 20579 | |
| RIN Number | 7100 AE49 | |
| CFR Associated | Administrative Practice and Procedure; Banks; Banking; Holding Companies; Reporting and Recordkeeping Requirements and Securities |
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