83 FR 705 - Regulatory Capital Rules; Correction

FEDERAL RESERVE SYSTEM

Federal Register Volume 83, Issue 5 (January 8, 2018)

The Board of Governors of the Federal Reserve System (Board) published a final rule in the Federal Register on October 11, 2013, regarding Regulatory Capital Rules. This publication corrects a typographical error in those rules whereby a transition provision was unintentionally deleted. The Board also published inconsistent amendments to Regulation Q in final rules published in the Federal Register on May 1, 2014, and August 14, 2015, that pertain to firms identified as global systemically important bank holding companies (GSIBs). This publication resolves these inconsistencies.

[Federal Register Volume 83, Number 5 (Monday, January 8, 2018)]
[Rules and Regulations]
[Pages 705-706]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-00062]



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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

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Federal Register / Vol. 83, No. 5 / Monday, January 8, 2018 / Rules 
and Regulations

[[Page 705]]



FEDERAL RESERVE SYSTEM

12 CFR Part 217

[Regulation Q; Docket Nos. R-1442; R-1460; and R-1535]
RIN 7100-AD 87; RIN 7100-AD 99; and 7100 AE-49


Regulatory Capital Rules; Correction

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule; correcting amendments.

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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, 
regarding Regulatory Capital Rules. This publication corrects a 
typographical error in those rules whereby a transition provision was 
unintentionally deleted. The Board also published inconsistent 
amendments to Regulation Q in final rules published in the Federal 
Register on May 1, 2014, and August 14, 2015, that pertain to firms 
identified as global systemically important bank holding companies 
(GSIBs). This publication resolves these inconsistencies.

DATES: These correcting amendments are effective January 8, 2018.

FOR FURTHER INFORMATION CONTACT: Benjamin McDonough, Assistant General 
Counsel, (202) 452-2036, 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 an error in the 
final rule that was published in the Federal Register on October 11, 
2013.\1\ The Board is correcting a typographical error in this final 
rule that caused the unintended deletion of 12 CFR 217.300(c)(1)(i)-
(iv), which was initially adopted by the Board on July 2, 2013. Through 
this correction, the provision pertaining to the grandfathering of 
certain non-qualifying capital instruments in tier 2 capital for 
depository institution holding companies with $15 billion or more in 
total assets as of December 31, 2009, that are not advanced approaches 
banking organizations and for depository institution holding companies 
that are advanced approaches banking organization would be reflected in 
the rule.
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    \1\ 78 FR 62018 (October 11, 2013).
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    The Board is also correcting conflicting amendments in final rules 
published in the Federal Register on May 1, 2014, (79 FR 24528) and 
August 14, 2015, (80 FR 49082). The May 1, 2014, final rule amended 12 
CFR 217.11(a)(4)(ii) effective January 1, 2018. The August 14, 2015, 
final rule also amended 12 CFR 217.11(a)(4)(ii) effective December 1, 
2015, and did not alter the amendments to that paragraph contained in 
the May 1, 2014, final rule, which are effective on January 1, 2018. As 
a result, without these corrections the revisions to 12 CFR 
217.11(a)(4)(ii) that were effective December 1, 2015, would have been 
undone effective January 1, 2018. This would have been contrary to the 
Board's stated intent in the August 14, 2015, final rule that the GSIB 
surcharge augment the capital conservation buffer.\2\ In addition, this 
would have created situations where 12 CFR 217.11(a)(4)(i) and 12 CFR 
217.11(a)(4)(ii) were in conflict.
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    \2\ 80 FR 49082 (August 14, 2015).
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List of Subjects in 12 CFR Part 217

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

    For the reasons set forth in the preamble, chapter II of title 12 
of the Code of Federal Regulations is amended by the following 
correcting amendments.

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.  217.11, paragraph (a)(4)(ii) is revised to read as follows:


Sec.  217.11  Capital conservation buffer, countercyclical capital 
buffer amount, and GSIB surcharge.

    (a) * * *
    (4) * * *
    (ii) A Board-regulated institution with a capital conservation 
buffer that is greater than 2.5 percent plus 100 percent of its 
applicable countercyclical capital buffer in accordance with paragraph 
(b) of this section, and 100 percent of its applicable GSIB surcharge, 
in accordance with paragraph (c) of this section, and, if applicable, 
that has a leverage buffer that is greater than 2.0 percent, in 
accordance with paragraph (d) of this section, is not subject to a 
maximum payout amount under this section.
* * * * *

0
3. In Sec.  217.300, add paragraphs (c)(1)(i) through (iv) to read as 
follows:


Sec.  217.300  Transitions.

* * * * *
    (c) * * *
    (1) * * *
    (i) A depository institution holding company of $15 billion or more 
may include in tier 1 and tier 2 capital non-qualifying capital 
instruments up to the applicable percentage set forth in Table 8 to 
Sec.  217.300 of the aggregate outstanding principal amounts of non-
qualifying tier 1 and tier 2 capital instruments, respectively, that 
are outstanding as of January 1, 2014, beginning January 1, 2014, for a 
depository institution holding company of $15 billion or more that is 
an advanced approaches Board-regulated institution that is not a 
savings and loan holding company, and beginning January 1, 2015, for 
all other depository institution holding companies of $15 billion or 
more.
    (ii) A depository institution holding company of $15 billion or 
more must apply the applicable percentages set forth in Table 8 to 
Sec.  217.300 separately to the aggregate amounts of its tier 1 and 
tier 2 non-qualifying capital instruments.
    (iii) The amount of non-qualifying capital instruments that must be 
excluded from additional tier 1 capital

[[Page 706]]

in accordance with this section may be included in tier 2 capital 
without limitation, provided the instruments meet the criteria for tier 
2 capital set forth in Sec.  217.20(d).
    (iv) Non-qualifying capital instruments that do not meet the 
criteria for tier 2 capital set forth in Sec.  217.20(d) may be 
included in tier 2 capital as follows:
    (A) A depository institution holding company of $15 billion or more 
that is not an advanced approaches Board-regulated institution may 
include non-qualifying capital instruments that have been phased-out of 
tier 1 capital in tier 2 capital, and
    (B) During calendar years 2014 and 2015, a depository institution 
holding company of $15 billion or more that is an advanced approaches 
Board-regulated institution may include non-qualifying capital 
instruments in tier 2 capital that have been phased out of tier 1 
capital in accordance with Table 8 to Sec.  217.300. Beginning January 
1, 2016, a depository institution holding company of $15 billion or 
more that is an advanced approaches Board-regulated institution may 
include non-qualifying capital instruments in tier 2 capital that have 
been phased out of tier 1 capital in accordance with Table 8, up to the 
applicable percentages set forth in Table 9 to Sec.  217.300.
* * * * *

    By order of the Board of Governors of the Federal Reserve 
System, acting through the Secretary of the Board under delegated 
authority, December 29, 2017.
Ann E. Misback,
Secretary of the Board.
[FR Doc. 2018-00062 Filed 1-5-18; 8:45 am]
 BILLING CODE 6210-01-P