81 FR 88239 - Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB

FEDERAL RESERVE SYSTEM

Federal Register Volume 81, Issue 235 (December 7, 2016)

Page Range		88239-88241
FR Document		2016-29329

The Board of Governors of the Federal Reserve System (Board or Federal Reserve) is adopting a proposal to extend for three years all of the Financial Reports of Foreign Banking Organizations: The Financial Statements of U.S. Nonbank Subsidiaries Held by Foreign Banking Organizations (FR Y-7N), the Abbreviated Financial Statements of U.S. Nonbank Subsidiaries Held by Foreign Banking Organizations (FR Y-7NS), and the mandatory Capital and Asset Report for Foreign Banking Organizations (FR Y-7Q); with revisions to the FR Y-7Q, effective December 31, 2016, except for three new FR Y-7Q items, which are effective March 31, 2018. On June 15, 1984, the Office of Management and Budget (OMB) delegated to the Board authority under the Paperwork Reduction Act (PRA) to approve of and assign OMB control numbers to collection of information requests and requirements conducted or sponsored by the Board. In exercising this delegated authority, the Board is directed to take every reasonable step to solicit comment. In determining whether to approve a collection of information, the Board will consider all comments received from the public and other agencies.

Federal Register, Volume 81 Issue 235 (Wednesday, December 7, 2016)

[Federal Register Volume 81, Number 235 (Wednesday, December 7, 2016)]
[Notices]
[Pages 88239-88241]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-29329]


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FEDERAL RESERVE SYSTEM


Agency Information Collection Activities: Announcement of Board 
Approval Under Delegated Authority and Submission to OMB

AGENCY: Board of Governors of the Federal Reserve System.

SUMMARY: The Board of Governors of the Federal Reserve System (Board or 
Federal Reserve) is adopting a proposal to extend for three years all 
of the Financial Reports of Foreign Banking Organizations: The 
Financial Statements of U.S. Nonbank Subsidiaries Held by Foreign 
Banking Organizations (FR Y-7N), the Abbreviated Financial Statements 
of U.S. Nonbank Subsidiaries Held by Foreign Banking Organizations (FR 
Y-7NS), and the mandatory Capital and Asset Report for Foreign Banking 
Organizations (FR Y-7Q); with revisions to the FR Y-7Q, effective 
December 31, 2016, except for three new FR Y-7Q items, which are 
effective March 31, 2018.
    On June 15, 1984, the Office of Management and Budget (OMB) 
delegated to the Board authority under the Paperwork Reduction Act 
(PRA) to approve of and assign OMB control numbers to collection of 
information requests and requirements conducted or sponsored by the 
Board. In exercising this delegated authority, the Board is directed to 
take every reasonable step to solicit comment. In determining whether 
to approve a collection of information, the Board will consider all 
comments received from the public and other agencies.

FOR FURTHER INFORMATION CONTACT: Federal Reserve Board Clearance 
Officer--Nuha Elmaghrabi--Office of the Chief Data Officer, Board of 
Governors of the Federal Reserve System, Washington, DC 20551 (202) 
452-3829. Telecommunications Device for the Deaf (TDD) users may 
contact (202) 263-4869, Board of Governors of the Federal Reserve 
System, Washington, DC 20551.
    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.

    Final approval under OMB delegated authority of the extension for 
three years, with revision, of the following information collection:
    Report titles: Financial Statements of U.S. Nonbank Subsidiaries 
Held by Foreign Banking Organizations, Abbreviated Financial Statements 
of U.S. Nonbank Subsidiaries Held by Foreign Banking Organizations, and 
Capital and Asset Report for Foreign Banking Organizations.
    Agency form numbers: FR Y-7N, FR Y-7NS, and FR Y-7Q.
    OMB control number: 7100-0125.
    Frequency: Quarterly and annually.
    Effective Dates: Reporting period ending on December 31, 2016, 
except for three new FR Y-7Q items, which are effective March 31, 2018.
    Respondent type: Foreign banking organizations (FBOs).
    Estimated annual reporting hours: FR Y-7N (quarterly): 1,170 hours; 
FR Y-7N (annual): 218 hours; FR Y-7NS: 40 hours; FR Y-7Q (quarterly): 
1,632 hours; FR Y-7Q (annual): 48 hours.
    Estimated average hours per response: FR Y-7N (quarterly): 6.8 
hours; FR Y-7N (annual): 6.8 hours; FR Y-7NS: 1 hour; FR Y-7Q 
(quarterly): 3 hours; FR Y-7Q (annual): 1.5 hours.
    Number of respondents: FR Y-7N (quarterly): 43; FR Y-7N (annual): 
32; FR Y-7NS: 40; FR Y-7Q (quarterly): 136; FR Y-7Q (annual): 32.
    Legal authorization and confidentiality: This information 
collection is mandatory pursuant to section 5(c) of the Bank Holding 
Company Act (12 U.S.C. 1844(c)) and sections 8(c) and 13 of the 
International Banking Act (12 U.S.C. 3106(c) and 3108)). Section 165 of 
the Dodd-Frank Act (12 U.S.C. 5365) directs the Federal Reserve to 
establish enhanced prudential standards for certain companies, 
including certain FBOs. Information disclosed in these reports is 
collected as part of the Board's supervisory process and may be 
accorded confidential treatment under Exemption 8 of the Freedom of 
Information Act (FOIA) (5 U.S.C. 552(b)(8)), but information that is 
required to be disclosed publicly is generally not considered 
confidential. However, individual respondents may request that certain 
data be protected pursuant to Exemptions 4 and 6 (5 U.S.C. 552(b)(4) & 
(6)) of FOIA, where such data relates to trade secrets and financial 
information, or to personal information, respectively. The 
applicability of these exemptions would have to be determined on a 
case-by-case basis.
    Abstract: The FR Y-7N and FR Y-7NS collect financial information 
for non-functionally regulated U.S. nonbank subsidiaries held by FBOs 
other than through a U.S. bank holding company (BHC), FHC, or U.S. 
bank. FBOs file the FR Y-7N quarterly or annually or the FR Y-7NS 
annually predominantly based on asset size thresholds. The FR Y-7Q 
collects consolidated regulatory capital information from all FBOs 
either quarterly or annually. The FR Y-7Q is filed quarterly by FBOs 
that have effectively elected to become U.S. financial holding 
companies (FHCs) and by FBOs that have total consolidated assets of $50 
billion or more, regardless of FHC status. All other FBOs file the FR 
Y-7Q annually.
    Current Actions: On April 4, 2016, the Federal Reserve published a 
notice in the Federal Register requesting public comment for 60 days on 
the extension, with revision, of the FR Y-7N, FR Y-7NS, and FR Y-7Q.\1 
\The comment period for this notice expired on June 3, 2016. In 
general, the commenters supported the proposed changes, but requested 
clarification on the home country capital adequacy certification 
requirement and the confidentiality and disclosure requirements for the 
proposed home country capital information. The Federal Reserve 
previously proposed to collect fourteen

[[Page 88240]]

new data items to monitor compliance with enhanced prudential standards 
for FBOs adopted pursuant to Subparts N and O of Regulation YY. As 
discussed below, as a result of commenters' general concerns regarding 
confidentiality, such as with respect to non-public supervisory capital 
buffers, the Federal Reserve now proposes to collect twelve new data 
items.
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    \1\ 81 FR 19179 (April 4, 2016).
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    On February 18, 2014, the Board approved a final rule, pursuant to 
section 165 of the Dodd-Frank Act, that requires an FBO with total 
consolidated assets of $50 billion or more to certify to the Board that 
it meets capital adequacy standards on a consolidated basis, as 
established by its home-country supervisor, that are consistent with 
the regulatory capital framework published by the Basel Committee on 
Banking Supervision.\2\ This requirement was intended to help ensure 
that the consolidated capital base supporting the activities of U.S. 
branches and agencies remains strong, and to lessen the degree to which 
weaknesses at the consolidated foreign parent could undermine the 
financial strength of its U.S. operations. The following new data items 
would be used to determine whether an FBO with total consolidated 
assets of $50 billion or more meets capital adequacy standards at the 
consolidated level that are consistent with the Basel Capital 
Framework.
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    \2\See 12 CFR part 252. Regulation YY provides that home country 
capital standards that are consistent with the Basel Capital 
Framework include all minimum risk-based capital ratios, any minimum 
leverage ratio, and all restrictions based on any applicable capital 
buffers set forth in ``Basel III: A global regulatory framework for 
more resilient banks and banking systems.'' Basel III was published 
in December 2010 and revised in June 2011. The text is available at 
http://www.bis.org/publ/bcbs189.htm.
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Part 1B (New Section for FBOs >$50 Billion in Total Assets)

    The proposal would require an FBOs with total consolidated assets 
of $50 billion or more to complete a new section, Part 1B, effective 
December 31, 2016 (with three of the proposed items effective March 31, 
2018). Proposed Part 1B would contain 12 items related to home country 
regulatory capital ratios that would be reported on a quarterly 
basis.\3\ The value of each of these items would be calculated on a 
consolidated basis according to the methodologies established by the 
FBO's home-country supervisor that are consistent with the Basel 
Capital Framework, as defined in Regulation YY.\4\ If the home-country 
supervisor has not established capital adequacy standards consistent 
with the Basel Capital Framework, the value of these items would be 
calculated on a pro-forma basis as if the FBO were subject to such 
standards. The proposed line items that would be effective December 31, 
2016, include:
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    \3\The Board had initially proposed to collect two additional 
line items: The Pillar II buffer and any ``other'' applicable 
capital buffer; however, in response to comments on the proposal, 
the Board no longer proposes to collect this information.
    \4\See 12 CFR part 252.143 and 252.154.
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    (1) Common equity tier 1 capital,
    (2) Additional tier 1 capital,
    (3) Tier 1 capital (sum of items 1 and 2),
    (4) Tier 2 capital,
    (5) Total risk-based capital (sum of items 3 and 4),
    (6) Capital conservation buffer,
    (7) Countercyclical capital buffer,
    (8) GSIB buffer,
    (9) Compliance with restrictions on capital distributions and 
discretionary bonus payments associated with a capital buffer.
    The proposed line items that would be effective March 31, 2018, 
include:
    (10) Home country capital measure used in the numerator of the 
leverage ratio as set forth in the Basel Capital Framework,
    (11) Home country exposure measure used in the denominator of the 
leverage ratio as set forth in the Basel Capital Framework,
    (12) Minimum home country leverage ratio (if different from the 
leverage ratio in the Basel Capital Framework, as applicable).

Part 1A (Renaming Existing Part 1 Section Applicable to All FBOs)

    As noted above, Part 1A of the current FR Y-7Q form, which applies 
to all FBOs, collects tier 1 capital, total risk-based capital, risk-
weighted assets, total consolidated assets and total combined assets of 
U.S. operations, net of intercompany balances and transactions between 
U.S. domiciled affiliates, branches, and agencies, and total U.S. non-
branch assets. While the Federal Reserve does not propose to change 
existing items reported in Part 1A of the FR Y-7Q, the proposal would 
modify the instructions to clarify that an FBO would be required to 
report Tier 1 capital and Total risk-based capital only on Part 1B, if 
the FBO's home country methodologies are consistent with the Basel 
Capital Framework.
    The instructions would also clarify the reporting frequency of Part 
1, in light of the new proposed section. Specifically, FBOs with total 
consolidated assets of less than $50 billion and that are not FHCs 
would only file Part 1A on an annual basis. FBOs who have elected to 
become FHCs and do not have $50 billion or more in total consolidated 
assets will file Part 1A on a quarterly basis. FBOs with total 
consolidated assets of $50 billion or more would complete both Part 1A 
and Part 1B on a quarterly basis.
    The Federal Reserve recommends no changes to the reporting 
frequency of the FR Y-7N/NS and FR Y-7Q. The current reporting 
frequencies provide adequate timely data to meet the analytical and 
supervisory needs of the Federal Reserve.

Detailed Discussion of Public Comments

1. Certification Requirement

    A commenter requested guidance on whether an FBO would be deemed to 
satisfy the requirement to report and certify compliance with its home 
country capital adequacy requirements through its FR Y-7Q report. In 
addition, the commenter asked the Board to confirm the as of date and 
frequency of the certification.
    Regulation YY requires an FBO to report compliance with capital 
adequacy measures that are consistent with the Basel Capital Framework 
(as defined in 12 CFR 252.143(a) and Sec.  252.154(a)) concurrently 
with filing the FR Y-7Q; however it does not specify the frequency or 
the as of date for an FBO's certification of compliance with its home 
country capital requirements. The Board confirms that an FBO's 
completion of the FR Y-7Q on a quarterly basis would satisfy both the 
requirement to report and the requirement to certify to the Board its 
compliance with capital adequacy measures that are consistent with the 
Basel Capital Framework. If an FBO is unable to report that it is in 
compliance with such capital adequacy measures, the Board may impose 
requirements, conditions, and restrictions relating to the U.S. 
operations of the FBO.\5\
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    \5\See 12 CFR part 252.143(c) and 252.154(c).
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2. Confidentiality Determinations

    Commenters raised concerns regarding the potential confidentiality 
of two items required to be reported in the proposal that may be 
considered non-public supervisory capital buffers by an FBO's home 
country supervisor: the Pillar II buffer and any ``other'' applicable 
capital buffer. In response to these concerns, the Board has reviewed 
the information it proposed to collect on the FR Y-7Q and has revised 
the proposal to eliminate these two items from the information 
collection and only collect 12 new data items, each of which are 
expected to be disclosed

[[Page 88241]]

publicly under the Basel Capital Framework, to monitor compliance with 
enhanced prudential standards for FBOs in Regulation YY. These 12 new 
data items would include, among other items, information relating to 
the capital conservation buffer, countercyclical capital buffer, and 
global systemically important banking organization capital buffer.
    A commenter also requested that the Board expand the confidential 
treatment for certain of the proposed new items. The proposal stated 
that the Board would determine confidentiality on the proposed items 
reported on the FR Y-7Q on a case-by-case basis. However, the proposal 
noted that some jurisdictions may treat the information collected as 
confidential on a blanket basis on the grounds that a more selective 
confidential treatment could signal an FBO's financial strength or 
weakness and could thereby cause substantial competitive harm. 
Therefore, the proposal invited comment on whether these items should 
qualify for confidential treatment in all cases, such that treating 
this information as confidential on a blanket basis would be 
appropriate.
    In response to the proposal, a commenter suggested the following 
modifications to the Board's proposed ``case-by-case'' approach: (1) 
Where a home country supervisor treats an item included in Part 1B as 
confidential on a blanket basis, the Board likewise should extend 
blanket confidential treatment of that item to all FBOs supervised by 
the home country authority; and (2) where a home country supervisor 
treats an item included in Part 1B as confidential on a case-by-case 
basis, the Board should automatically treat this item as confidential 
for any FBO whose home country supervisor has extended such treatment.
    As discussed above, in response to commenters' general concerns 
regarding confidentiality, the Board has revised the FR Y-7Q to collect 
only information that is expected to be disclosed under the Basel 
Capital Framework, and therefore will be public and not considered 
confidential. The Board further notes that information disclosed in 
these reports would be collected as part of the Board's supervisory 
process and may be accorded confidential treatment under Exemption 8 of 
FOIA. However, individual respondents may request that certain data be 
protected pursuant to Exemptions 4 and 6 of FOIA, where such data 
relates to trade secrets and financial information, or to personal 
information, respectively. The applicability of these exemptions will 
be determined on a case-by-case basis.
    In addition, the proposed modification to the ``case-by-case'' 
approach set forth by one commenter would require the Federal Reserve 
to determine confidentiality for all FBOs supervised by a particular 
home-country authority on a country-by-country basis. An FBO seeking 
confidential treatment for any information reported on the FR Y-7Q must 
file a request pursuant to Exemption 4 of FOIA and state in reasonable 
detail the facts supporting the request and the legal justification for 
the request. Because the FBO is best suited to describe its home 
country supervisor's confidential treatment of information, the Federal 
Reserve relies on information provided by the FBO in making its 
determination of whether the release of that information would cause 
the FBO substantial competitive harm. In addition, the Federal Reserve 
may need additional information to support such a determination, and 
the home country supervisor's treatment of the information alone may 
not meet the standard for confidential treatment in Exemption 4 of FOIA 
in all cases. Accordingly, as proposed, the Federal Reserve would grant 
an FBO's request for confidential status for information reported on 
the FR Y-7Q, pursuant to Exemption 4 of FOIA, only on a case-by-case 
basis.

3. Prohibited Items

    A commenter also requested that the Board confirm that an FBO would 
not be required to report any item where applicable home country law 
prohibits the FBO from disclosing such item to any person, except an 
appropriate home country supervisor, regardless of whether the other 
person would agree to keep such information strictly confidential.
    The Board is authorized by law to collect information from an FBO 
regarding its financial condition and, in submitting to the Board's 
jurisdiction, an FBO is required to provide the Board with adequate 
assurances that information will be made available to the Board on the 
operations or activities of the FBO and any of its affiliates that the 
Board deems necessary to determine and enforce compliance with 
applicable federal banking statutes, including information on its 
consolidated regulatory capital information. Therefore, an FBO is 
required to provide all of the information requested on the FR Y-7Q 
report. However, there could be infrequent instances that may raise 
questions about an FBO's ability to report a particular item on the FR 
Y-7Q if home country law prohibits an FBO from reporting that 
information to the Board, and, in those limited circumstances, the 
Board may consider an FBO's request not to report that information on 
the FR Y-7Q, on a case-by-case basis.

    Board of Governors of the Federal Reserve System, December 2, 
2016.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2016-29329 Filed 12-6-16; 8:45 am]
 BILLING CODE 6210-01-P

Federal Register / Vol. 81, No. 235 / Wednesday, December 7, 2016 / Notices 88239

new or changed pledges of capital stock On June 15, 1984, the Office of Legal authorization and
of any subsidiary savings association Management and Budget (OMB) confidentiality: This information
that secures short-term or long-term delegated to the Board authority under collection is mandatory pursuant to
debt or other borrowings of the SLHC; the Paperwork Reduction Act (PRA) to section 5(c) of the Bank Holding
changes to any class of securities of the approve of and assign OMB control Company Act (12 U.S.C. 1844(c)) and
SLHC or any of its subsidiaries that numbers to collection of information sections 8(c) and 13 of the International
would negatively impact investors; and requests and requirements conducted or Banking Act (12 U.S.C. 3106(c) and
any default of the SLHC or any of its sponsored by the Board. In exercising 3108)). Section 165 of the Dodd-Frank
subsidiaries during the quarter. this delegated authority, the Board is Act (12 U.S.C. 5365) directs the Federal
Disclosure of this type of information is directed to take every reasonable step to Reserve to establish enhanced
likely to cause substantial competitive solicit comment. In determining prudential standards for certain
harm to the SLHC providing the whether to approve a collection of companies, including certain FBOs.
information and thus this information information, the Board will consider all Information disclosed in these reports is
may be protected from disclosure under comments received from the public and collected as part of the Board’s
FOIA exemption 4 (5 U.S.C. 522(b)(4)). other agencies. supervisory process and may be
With regard to the supplemental FOR FURTHER INFORMATION CONTACT: accorded confidential treatment under
information for other FR 2320 questions Federal Reserve Board Clearance Exemption 8 of the Freedom of
that would be provided in item 3 of the Officer—Nuha Elmaghrabi—Office of Information Act (FOIA) (5 U.S.C.
FR H–(b)11, as well as item 4 (Other the Chief Data Officer, Board of 552(b)(8)), but information that is
Materially Important Events), item 5 Governors of the Federal Reserve required to be disclosed publicly is
(Financial Statements) and item 6 System, Washington, DC 20551 (202) generally not considered confidential.
(Exhibits—essentially copies not 452–3829. Telecommunications Device However, individual respondents may
previously filed of its charter or bylaws), for the Deaf (TDD) users may contact request that certain data be protected
the respondent may request confidential (202) 263–4869, Board of Governors of pursuant to Exemptions 4 and 6 (5
treatment of such information under one the Federal Reserve System, U.S.C. 552(b)(4) & (6)) of FOIA, where
or more of the exemptions in the FOIA. Washington, DC 20551. such data relates to trade secrets and
The most likely case for confidential OMB Desk Officer—Shagufta financial information, or to personal
treatment will be exemption 4 (5 U.S.C. Ahmed—Office of Information and information, respectively. The
522(b)(4)). However, all such requests Regulatory Affairs, Office of applicability of these exemptions would
for confidential treatment would need to Management and Budget, New have to be determined on a case-by-case
be reviewed on a case-by-case basis and Executive Office Building, Room 10235, basis.
in response to a specific request for 725 17th Street NW., Washington, DC Abstract: The FR Y–7N and FR Y–
20503. 7NS collect financial information for
disclosure.
non-functionally regulated U.S.
Board of Governors of the Federal Reserve Final approval under OMB delegated
nonbank subsidiaries held by FBOs
System, December 2, 2016. authority of the extension for three
other than through a U.S. bank holding
Robert deV. Frierson, years, with revision, of the following
company (BHC), FHC, or U.S. bank.
Secretary of the Board.
information collection:
Report titles: Financial Statements of FBOs file the FR Y–7N quarterly or
[FR Doc. 2016–29330 Filed 12–6–16; 8:45 am]
U.S. Nonbank Subsidiaries Held by annually or the FR Y–7NS annually
BILLING CODE 6210–01–P Foreign Banking Organizations, predominantly based on asset size
Abbreviated Financial Statements of thresholds. The FR Y–7Q collects
U.S. Nonbank Subsidiaries Held by consolidated regulatory capital
FEDERAL RESERVE SYSTEM Foreign Banking Organizations, and information from all FBOs either
Capital and Asset Report for Foreign quarterly or annually. The FR Y–7Q is
Agency Information Collection filed quarterly by FBOs that have
Activities: Announcement of Board Banking Organizations.
Agency form numbers: FR Y–7N, FR effectively elected to become U.S.
Approval Under Delegated Authority financial holding companies (FHCs) and
Y–7NS, and FR Y–7Q.
and Submission to OMB OMB control number: 7100–0125. by FBOs that have total consolidated
Frequency: Quarterly and annually. assets of $50 billion or more, regardless
AGENCY: Board of Governors of the
Effective Dates: Reporting period of FHC status. All other FBOs file the FR
Federal Reserve System.
ending on December 31, 2016, except Y–7Q annually.
SUMMARY: The Board of Governors of the for three new FR Y–7Q items, which are Current Actions: On April 4, 2016, the
Federal Reserve System (Board or effective March 31, 2018. Federal Reserve published a notice in
Federal Reserve) is adopting a proposal Respondent type: Foreign banking the Federal Register requesting public
to extend for three years all of the organizations (FBOs). comment for 60 days on the extension,
Financial Reports of Foreign Banking Estimated annual reporting hours: FR with revision, of the FR Y–7N, FR Y–
Organizations: The Financial Statements Y–7N (quarterly): 1,170 hours; FR Y–7N 7NS, and FR Y–7Q.1 The comment
of U.S. Nonbank Subsidiaries Held by (annual): 218 hours; FR Y–7NS: 40 period for this notice expired on June 3,
Foreign Banking Organizations (FR Y– hours; FR Y–7Q (quarterly): 1,632 hours; 2016. In general, the commenters
7N), the Abbreviated Financial FR Y–7Q (annual): 48 hours. supported the proposed changes, but
Statements of U.S. Nonbank Estimated average hours per response: requested clarification on the home
asabaliauskas on DSK3SPTVN1PROD with NOTICES

Subsidiaries Held by Foreign Banking FR Y–7N (quarterly): 6.8 hours; FR Y– country capital adequacy certification
Organizations (FR Y–7NS), and the 7N (annual): 6.8 hours; FR Y–7NS: 1 requirement and the confidentiality and
mandatory Capital and Asset Report for hour; FR Y–7Q (quarterly): 3 hours; FR disclosure requirements for the
Foreign Banking Organizations (FR Y– Y–7Q (annual): 1.5 hours. proposed home country capital
7Q); with revisions to the FR Y–7Q, Number of respondents: FR Y–7N information. The Federal Reserve
effective December 31, 2016, except for (quarterly): 43; FR Y–7N (annual): 32; previously proposed to collect fourteen
three new FR Y–7Q items, which are FR Y–7NS: 40; FR Y–7Q (quarterly):
effective March 31, 2018. 136; FR Y–7Q (annual): 32. 1 81 FR 19179 (April 4, 2016).

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88240 Federal Register / Vol. 81, No. 235 / Wednesday, December 7, 2016 / Notices

new data items to monitor compliance Regulation YY.4 If the home-country and do not have $50 billion or more in
with enhanced prudential standards for supervisor has not established capital total consolidated assets will file Part
FBOs adopted pursuant to Subparts N adequacy standards consistent with the 1A on a quarterly basis. FBOs with total
and O of Regulation YY. As discussed Basel Capital Framework, the value of consolidated assets of $50 billion or
below, as a result of commenters’ these items would be calculated on a more would complete both Part 1A and
general concerns regarding pro-forma basis as if the FBO were Part 1B on a quarterly basis.
confidentiality, such as with respect to subject to such standards. The proposed The Federal Reserve recommends no
non-public supervisory capital buffers, line items that would be effective changes to the reporting frequency of
the Federal Reserve now proposes to December 31, 2016, include: the FR Y–7N/NS and FR Y–7Q. The
collect twelve new data items. (1) Common equity tier 1 capital, current reporting frequencies provide
On February 18, 2014, the Board (2) Additional tier 1 capital, adequate timely data to meet the
approved a final rule, pursuant to (3) Tier 1 capital (sum of items 1 and analytical and supervisory needs of the
section 165 of the Dodd-Frank Act, that 2), Federal Reserve.
requires an FBO with total consolidated (4) Tier 2 capital,
(5) Total risk-based capital (sum of Detailed Discussion of Public
assets of $50 billion or more to certify Comments
to the Board that it meets capital items 3 and 4),
adequacy standards on a consolidated (6) Capital conservation buffer, 1. Certification Requirement
basis, as established by its home- (7) Countercyclical capital buffer,
(8) GSIB buffer, A commenter requested guidance on
country supervisor, that are consistent whether an FBO would be deemed to
(9) Compliance with restrictions on
with the regulatory capital framework satisfy the requirement to report and
capital distributions and discretionary
published by the Basel Committee on certify compliance with its home
bonus payments associated with a
Banking Supervision.2 This requirement country capital adequacy requirements
capital buffer.
was intended to help ensure that the through its FR Y–7Q report. In addition,
The proposed line items that would
consolidated capital base supporting the the commenter asked the Board to
be effective March 31, 2018, include:
activities of U.S. branches and agencies confirm the as of date and frequency of
(10) Home country capital measure
remains strong, and to lessen the degree the certification.
used in the numerator of the leverage
to which weaknesses at the consolidated Regulation YY requires an FBO to
ratio as set forth in the Basel Capital
foreign parent could undermine the report compliance with capital
Framework,
financial strength of its U.S. operations. (11) Home country exposure measure adequacy measures that are consistent
The following new data items would be used in the denominator of the leverage with the Basel Capital Framework (as
used to determine whether an FBO with ratio as set forth in the Basel Capital defined in 12 CFR 252.143(a) and
total consolidated assets of $50 billion Framework, § 252.154(a)) concurrently with filing
or more meets capital adequacy (12) Minimum home country leverage the FR Y–7Q; however it does not
standards at the consolidated level that ratio (if different from the leverage ratio specify the frequency or the as of date
are consistent with the Basel Capital in the Basel Capital Framework, as for an FBO’s certification of compliance
Framework. applicable). with its home country capital
Part 1B (New Section for FBOs >$50 requirements. The Board confirms that
Part 1A (Renaming Existing Part 1
Billion in Total Assets) an FBO’s completion of the FR Y–7Q on
Section Applicable to All FBOs)
a quarterly basis would satisfy both the
The proposal would require an FBOs As noted above, Part 1A of the current requirement to report and the
with total consolidated assets of $50 FR Y–7Q form, which applies to all requirement to certify to the Board its
billion or more to complete a new FBOs, collects tier 1 capital, total risk- compliance with capital adequacy
section, Part 1B, effective December 31, based capital, risk-weighted assets, total measures that are consistent with the
2016 (with three of the proposed items consolidated assets and total combined Basel Capital Framework. If an FBO is
effective March 31, 2018). Proposed Part assets of U.S. operations, net of unable to report that it is in compliance
1B would contain 12 items related to intercompany balances and transactions with such capital adequacy measures,
home country regulatory capital ratios between U.S. domiciled affiliates, the Board may impose requirements,
that would be reported on a quarterly branches, and agencies, and total U.S. conditions, and restrictions relating to
basis.3 The value of each of these items non-branch assets. While the Federal the U.S. operations of the FBO.5
would be calculated on a consolidated Reserve does not propose to change
basis according to the methodologies existing items reported in Part 1A of the 2. Confidentiality Determinations
established by the FBO’s home-country FR Y–7Q, the proposal would modify Commenters raised concerns
supervisor that are consistent with the the instructions to clarify that an FBO regarding the potential confidentiality of
Basel Capital Framework, as defined in would be required to report Tier 1 two items required to be reported in the
capital and Total risk-based capital only proposal that may be considered non-
2See 12 CFR part 252. Regulation YY provides
on Part 1B, if the FBO’s home country public supervisory capital buffers by an
that home country capital standards that are
consistent with the Basel Capital Framework
methodologies are consistent with the FBO’s home country supervisor: the
include all minimum risk-based capital ratios, any Basel Capital Framework. Pillar II buffer and any ‘‘other’’
minimum leverage ratio, and all restrictions based The instructions would also clarify applicable capital buffer. In response to
on any applicable capital buffers set forth in ‘‘Basel the reporting frequency of Part 1, in
asabaliauskas on DSK3SPTVN1PROD with NOTICES

these concerns, the Board has reviewed
III: A global regulatory framework for more resilient
banks and banking systems.’’ Basel III was
light of the new proposed section. the information it proposed to collect on
published in December 2010 and revised in June Specifically, FBOs with total the FR Y–7Q and has revised the
2011. The text is available at http://www.bis.org/ consolidated assets of less than $50 proposal to eliminate these two items
publ/bcbs189.htm. billion and that are not FHCs would from the information collection and
3The Board had initially proposed to collect two
only file Part 1A on an annual basis. only collect 12 new data items, each of
additional line items: The Pillar II buffer and any
‘‘other’’ applicable capital buffer; however, in FBOs who have elected to become FHCs which are expected to be disclosed
response to comments on the proposal, the Board
no longer proposes to collect this information. 4See 12 CFR part 252.143 and 252.154. 5See 12 CFR part 252.143(c) and 252.154(c).

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Document Created: 2016-12-07 05:31:37
Document Modified: 2016-12-07 05:31:37

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		On April 4, 2016, the Federal Reserve published a notice in the Federal Register requesting public comment for 60 days on the extension, with revision, of the FR Y-7N, FR Y-7NS, and FR Y-7Q.\1 \The comment period for this notice expired on June 3, 2016. In general, the commenters supported the proposed changes, but requested clarification on the home country capital adequacy certification requirement and the confidentiality and disclosure requirements for the proposed home country capital information. The Federal Reserve previously proposed to collect fourteen new data items to monitor compliance with enhanced prudential standards for FBOs adopted pursuant to Subparts N and O of Regulation YY. As discussed below, as a result of commenters' general concerns regarding confidentiality, such as with respect to non-public supervisory capital buffers, the Federal Reserve now proposes to collect twelve new data items.
Dates		Reporting period ending on December 31, 2016, except for three new FR Y-7Q items, which are effective March 31, 2018.
Contact		Federal Reserve Board Clearance Officer--Nuha Elmaghrabi--Office of the Chief Data Officer, Board of Governors of the Federal Reserve System, Washington, DC 20551 (202) 452-3829. Telecommunications Device for the Deaf (TDD) users may contact (202) 263-4869, Board of Governors of the Federal Reserve System, Washington, DC 20551.
FR Citation		81 FR 88239