83 FR 705 - Regulatory Capital Rules; Correction
FEDERAL RESERVE SYSTEM Federal Register Volume 83, Issue 5 (January 8, 2018)
Federal Register Volume 83, Issue 5 (January 8, 2018)
| Page Range | 705-706 | |
| FR Document | 2018-00062 |
[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] ======================================================================== 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. ======================================================================== 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. ----------------------------------------------------------------------- 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. --------------------------------------------------------------------------- \1\ 78 FR 62018 (October 11, 2013). --------------------------------------------------------------------------- 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. --------------------------------------------------------------------------- \2\ 80 FR 49082 (August 14, 2015). --------------------------------------------------------------------------- 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
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Rules and Regulations Federal Register
Vol. 83, No. 5
Monday, January 8, 2018
This section of the FEDERAL REGISTER unintended deletion of 12 CFR Authority: 12 U.S.C. 248(a), 321–338a,
contains regulatory documents having general 217.300(c)(1)(i)–(iv), which was initially 481–486, 1462a, 1467a, 1818, 1828, 1831n,
applicability and legal effect, most of which adopted by the Board on July 2, 2013. 1831o, 1831p–l, 1831w, 1835, 1844(b), 1851,
are keyed to and codified in the Code of Through this correction, the provision 3904, 3906–3909, 4808, 5365, 5368, 5371.
Federal Regulations, which is published under pertaining to the grandfathering of ■ 2. In § 217.11, paragraph (a)(4)(ii) is
50 titles pursuant to 44 U.S.C. 1510.
certain non-qualifying capital revised to read as follows:
The Code of Federal Regulations is sold by instruments in tier 2 capital for
§ 217.11 Capital conservation buffer,
the Superintendent of Documents. depository institution holding
countercyclical capital buffer amount, and
companies with $15 billion or more in GSIB surcharge.
total assets as of December 31, 2009,
FEDERAL RESERVE SYSTEM (a) * * *
that are not advanced approaches
(4) * * *
banking organizations and for (ii) A Board-regulated institution with
12 CFR Part 217 depository institution holding a capital conservation buffer that is
[Regulation Q; Docket Nos. R–1442; R– companies that are advanced greater than 2.5 percent plus 100
1460; and R–1535] approaches banking organization would percent of its applicable countercyclical
be reflected in the rule. capital buffer in accordance with
RIN 7100–AD 87; RIN 7100–AD 99; and 7100 The Board is also correcting
AE–49 paragraph (b) of this section, and 100
conflicting amendments in final rules
percent of its applicable GSIB surcharge,
Regulatory Capital Rules; Correction published in the Federal Register on
in accordance with paragraph (c) of this
May 1, 2014, (79 FR 24528) and August
AGENCY: Board of Governors of the section, and, if applicable, that has a
14, 2015, (80 FR 49082). The May 1,
Federal Reserve System. 2014, final rule amended 12 CFR leverage buffer that is greater than 2.0
217.11(a)(4)(ii) effective January 1, 2018. percent, in accordance with paragraph
ACTION: Final rule; correcting
The August 14, 2015, final rule also (d) of this section, is not subject to a
amendments.
amended 12 CFR 217.11(a)(4)(ii) maximum payout amount under this
SUMMARY: The Board of Governors of the effective December 1, 2015, and did not section.
Federal Reserve System (Board) alter the amendments to that paragraph * * * * *
published a final rule in the Federal contained in the May 1, 2014, final rule, ■ 3. In § 217.300, add paragraphs
Register on October 11, 2013, regarding which are effective on January 1, 2018. (c)(1)(i) through (iv) to read as follows:
Regulatory Capital Rules. This As a result, without these corrections
publication corrects a typographical § 217.300 Transitions.
the revisions to 12 CFR 217.11(a)(4)(ii)
error in those rules whereby a transition that were effective December 1, 2015, * * * * *
provision was unintentionally deleted. would have been undone effective (c) * * *
The Board also published inconsistent January 1, 2018. This would have been (1) * * *
amendments to Regulation Q in final (i) A depository institution holding
contrary to the Board’s stated intent in
rules published in the Federal Register company of $15 billion or more may
the August 14, 2015, final rule that the
on May 1, 2014, and August 14, 2015, include in tier 1 and tier 2 capital non-
GSIB surcharge augment the capital
that pertain to firms identified as global qualifying capital instruments up to the
conservation buffer.2 In addition, this
systemically important bank holding applicable percentage set forth in Table
would have created situations where 12
companies (GSIBs). This publication 8 to § 217.300 of the aggregate
CFR 217.11(a)(4)(i) and 12 CFR
resolves these inconsistencies. outstanding principal amounts of non-
217.11(a)(4)(ii) were in conflict.
DATES: These correcting amendments
qualifying tier 1 and tier 2 capital
List of Subjects in 12 CFR Part 217 instruments, respectively, that are
are effective January 8, 2018.
Administrative practice and outstanding as of January 1, 2014,
FOR FURTHER INFORMATION CONTACT:
procedure, Banks, Banking, Holding beginning January 1, 2014, for a
Benjamin McDonough, Assistant depository institution holding company
General Counsel, (202) 452–2036, or companies, Reporting and
recordkeeping requirements, Securities. of $15 billion or more that is an
Mark Buresh, Senior Attorney, (202) advanced approaches Board-regulated
452–5270, Legal Division, Board of For the reasons set forth in the
preamble, chapter II of title 12 of the institution that is not a savings and loan
Governors of the Federal Reserve holding company, and beginning
System, 20th Street and Constitution Code of Federal Regulations is amended
by the following correcting January 1, 2015, for all other depository
Avenue NW, Washington, DC 20551. institution holding companies of $15
Telecommunications Device for the Deaf amendments.
billion or more.
(TDD) users may contact (202) 263– (ii) A depository institution holding
4869. PART 217—CAPITAL ADEQUACY OF
BANK HOLDING COMPANIES, company of $15 billion or more must
SUPPLEMENTARY INFORMATION: The Board SAVINGS AND LOAN HOLDING apply the applicable percentages set
jstallworth on DSKBBY8HB2PROD with RULES
is correcting an error in the final rule COMPANIES, AND STATE MEMBER forth in Table 8 to § 217.300 separately
that was published in the Federal BANKS (REGULATION Q) to the aggregate amounts of its tier 1 and
Register on October 11, 2013.1 The tier 2 non-qualifying capital
Board is correcting a typographical error ■ 1. The authority citation for part 217 instruments.
in this final rule that caused the continues to read as follows: (iii) The amount of non-qualifying
capital instruments that must be
1 78 FR 62018 (October 11, 2013). 2 80 FR 49082 (August 14, 2015). excluded from additional tier 1 capital
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![706 Federal Register / Vol. 83, No. 5 / Monday, January 8, 2018 / Rules and Regulations
in accordance with this section may be (Department of Commerce). The Federal collected. On October 24, 1996,
included in tier 2 capital without Civil Penalties Inflation Adjustment Act November 1, 2000, December 14, 2004,
limitation, provided the instruments of 1990, as amended by the Debt December 11, 2008, and December 7,
meet the criteria for tier 2 capital set Collection Improvement Act of 1996 2012, the Department of Commerce
forth in § 217.20(d). and the Federal Civil Penalties Inflation published in the Federal Register a
(iv) Non-qualifying capital Adjustment Act Improvements Act of schedule of CMPs adjusted for inflation
instruments that do not meet the criteria 2015, required the head of each agency as required by law.
for tier 2 capital set forth in § 217.20(d) to adjust for inflation its CMP levels in A CMP is defined as any penalty, fine,
may be included in tier 2 capital as effect as of November 2, 2015, under a or other sanction that:
follows: revised methodology that was effective 1. Is for a specific monetary amount
(A) A depository institution holding for 2016 which provided for initial as provided by Federal law, or has a
company of $15 billion or more that is catch up adjustments for inflation in maximum amount provided for by
not an advanced approaches Board- 2016, and requires adjustments for Federal law; and,
regulated institution may include non- inflation to CMPs under a revised 2. Is assessed or enforced by an
qualifying capital instruments that have methodology for each year thereafter. agency pursuant to Federal law; and,
been phased-out of tier 1 capital in tier The 2017 adjustments for inflation to 3. Is assessed or enforced pursuant to
2 capital, and CMPs to the Department of Commerce’s an administrative proceeding or a civil
(B) During calendar years 2014 and CMPs were published in the Federal action in the Federal courts.
2015, a depository institution holding On November 2, 2015, the Federal
Register on December 28, 2016 and
company of $15 billion or more that is Civil Penalties Inflation Adjustment Act
became effective January 15, 2017. The
an advanced approaches Board- Improvements Act of 2015 (Section 701
revised annual methodology provides of Pub. L. 114–74) further amended the
regulated institution may include non- for the improvement of the effectiveness
qualifying capital instruments in tier 2 Federal Civil Penalties Inflation
of CMPs and to maintain their deterrent Adjustment Act of 1990 to improve the
capital that have been phased out of tier effect. Agencies’ annual adjustments for
1 capital in accordance with Table 8 to effectiveness of CMPs and to maintain
inflation to CMPs shall take effect not their deterrent effect. This amendment
§ 217.300. Beginning January 1, 2016, a later than January 15. The Department
depository institution holding company (1) required agencies to adjust the CMP
of Commerce’s 2018 adjustments for levels in effect as of November 2, 2015,
of $15 billion or more that is an inflation to CMPs apply only to CMPs
advanced approaches Board-regulated with initial catch up adjustments for
with a dollar amount, and will not inflation through a final rulemaking to
institution may include non-qualifying apply to CMPs written as functions of
capital instruments in tier 2 capital that take effect no later than August 1, 2016;
violations. The Department of and (2) requires agencies to make
have been phased out of tier 1 capital Commerce’s 2018 adjustments for
in accordance with Table 8, up to the subsequent annual adjustments for
inflation to CMPs apply only to those inflation to CMPs that shall take effect
applicable percentages set forth in Table CMPs, including those whose associated
9 to § 217.300. not later than January 15.
violation predated such adjustment, The Department of Commerce’s initial
* * * * * which are assessed by the Department of catch up adjustments for inflation to
By order of the Board of Governors of the Commerce after the effective date of the CMPs were published in the Federal
Federal Reserve System, acting through the new CMP level. Register on June 7, 2016, and the new
Secretary of the Board under delegated DATES: This rule is effective January 15, CMP levels became effective July 7,
authority, December 29, 2017. 2018. 2016. The Department of Commerce’s
Ann E. Misback, FOR FURTHER INFORMATION CONTACT: 2017 adjustments for inflation to CMPs
Secretary of the Board. Stephen Kunze, Deputy Chief Financial were published in the Federal Register
[FR Doc. 2018–00062 Filed 1–5–18; 8:45 am] Officer and Director for Financial on December 28, 2016, and the new
BILLING CODE 6210–01–P Management, Office of Financial CMP levels became effective January 15,
Management, at (202) 482–1207, 2017.
Department of Commerce, 1401 The Department of Commerce’s 2018
DEPARTMENT OF COMMERCE Constitution Avenue NW, Room D200, adjustments for inflation to CMPs apply
Washington, DC 20230. The Department only to CMPs with a dollar amount, and
Office of the Secretary of Commerce’s Civil Monetary Penalty will not apply to CMPs written as
Adjustments for Inflation are available functions of violations. These 2018
15 CFR Part 6 for downloading from the Department of adjustments for inflation to CMPs apply
[Docket No. 171219999–7999–01]
Commerce, Office of Financial only to those CMPs, including those
Management’s website at the following whose associated violation predated
RIN 0605–AA48 address: http://www.osec.doc.gov/ofm/ such adjustment, which are assessed by
OFM_Publications.html. the Department of Commerce after the
Civil Monetary Penalty Adjustments for effective date of the new CMP level.
SUPPLEMENTARY INFORMATION:
Inflation This regulation adjusts for inflation
Background CMPs that are provided by law within
AGENCY: Office of the Chief Financial
Officer and Assistant Secretary for The Federal Civil Penalties Inflation the jurisdiction of the Department of
Administration, Department of Adjustment Act of 1990 (Pub. L. 101– Commerce. The actual CMP assessed for
Commerce. 410; 28 U.S.C. 2461), as amended by the a particular violation is dependent upon
jstallworth on DSKBBY8HB2PROD with RULES
ACTION: Final rule. Debt Collection Improvement Act of a variety of factors. For example, the
1996 (Pub. L. 104–134), provided for National Oceanic and Atmospheric
SUMMARY: This final rule is being issued agencies’ adjustments for inflation to Administration’s (NOAA) Policy for the
to adjust for inflation each civil CMPs to ensure that CMPs continue to Assessment of Civil Administrative
monetary penalty (CMP) provided by maintain their deterrent value and that Penalties and Permit Sanctions (Penalty
law within the jurisdiction of the United CMPs due to the Federal Government Policy), a compilation of NOAA internal
States Department of Commerce were properly accounted for and guidelines that are used when assessing
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Document Created: 2018-01-06 02:32:06
Document Modified: 2018-01-06 02:32:06
| 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 | Rules and Regulations | |
| Action | Final rule; correcting amendments. | |
| Dates | These correcting amendments are effective January 8, 2018. | |
| 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. | |
| FR Citation | 83 FR 705 | |
| RIN Number | 7100 AE49 | |
| CFR Associated | Administrative Practice and Procedure; Banks; Banking; Holding Companies; Reporting and Recordkeeping Requirements and Securities |
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