[Federal Register Volume 84, Number 224 (Wednesday, November 20, 2019)]
[Notices]
[Pages 64070-64072]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-24967]
=======================================================================
-----------------------------------------------------------------------
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)
adopted a proposal to implement the Single-Counterparty Credit Limits
reporting form (FR 2590; OMB No. 7100-NEW). The first data collection
will occur as of the end of the first quarter of 2020 for respondents
that are U.S. and foreign global systemically important bank holding
companies (G-SIBs), and as of the end of the third quarter of 2020 for
all other respondents.
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, or by
telephone to (202) 452-3829.
Office of Management and Budget (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, or by fax to (202) 395-6974.
A copy of the Paperwork Reduction Act (PRA) OMB submission,
including the reporting form and instructions, supporting statement,
and other documentation will be placed into OMB's public docket files.
These documents also are available on the Federal Reserve Board's
public website at https://www.federalreserve.gov/apps/reportforms/review.aspx or may be requested from the agency clearance officer,
whose name appears above.
SUPPLEMENTARY INFORMATION: On June 15, 1984, OMB delegated to the Board
authority under the PRA to approve and assign OMB control numbers to
collections of information conducted or sponsored by the Board. Board-
approved collections of information are incorporated into the official
OMB inventory of currently approved collections of information. Copies
of the PRA Submission, supporting statements, and approved collection
of information instrument(s) are placed into OMB's public docket files.
Final Approval Under OMB Delegated Authority of the Implementation of
the Following Information Collection
Report title: Single-Counterparty Credit Limits.
Agency form number: FR 2590.
OMB control number: 7100-NEW.
Effective Date: The first data collection will occur as of the end
of the first quarter of 2020 for respondents that are U.S. and foreign
G-SIBs, and as of the end of the third quarter of 2020 for all other
respondents.
Frequency: Quarterly, annual, and event-generated.
Respondents: U.S. bank holding companies (BHCs) and savings and
loan holding companies (SLHCs) that are subject to Category I, II, or
III standards; foreign banking organizations (FBOs) that are subject to
Category II or III standards or that have $250 billion or more in total
global consolidated assets; and U.S. intermediate holding companies
(IHCs) that are subject to Category II or III standards.
Estimated number of respondents: 75.
Estimated average hours per response:
Reporting
One-time implementation: 1,273 hours.
Ongoing: 254 hours.
Requests for temporary relief: 10 hours.
Recordkeeping
Recordkeeping: 0.25 hours.
Estimated annual burden hours:
Reporting
One-time implementation: 95,475 hours.
Ongoing: 76,200 hours.
Requests for temporary relief: 30 hours.
Recordkeeping
Recordkeeping: 75 hours.
General description of report: The FR 2590 is being implemented in
connection with the Board's single-counterparty credit limits rule
(SCCL rule),\1\ which has been codified in the Board's Regulation YY--
Enhanced Prudential Standards (12 CFR part 252).\2\
---------------------------------------------------------------------------
\1\ 83 FR 38460 (Aug. 6, 2018).
\2\ See 12 CFR 252, subparts H and Q. The Board's SCCL rule was
amended by the Board's recent rule establishing risk-based
categories for determining prudential standards for large U.S.
banking organizations and foreign banking organizations. 84 FR 59032
(Nov. 1, 2019).
---------------------------------------------------------------------------
The information collected by the Single-Counterparty Credit Limits
[[Page 64071]]
reporting form (FR 2590 report) will allow the Board to monitor a
covered company's or a covered foreign entity's compliance with the
SCCL rule. As amended by the Board's final tailoring rule, a covered
company is any U.S. bank holding company (BHC) or savings and loan
holding company (SLHC) that is subject to Category I, II, or III
standards.\3\ A covered foreign entity is any foreign banking
organization (FBO) that is subject to Categories II or III standards or
that has total global consolidated assets that equal or exceed $250
billion and any U.S. intermediate holding company (IHC) that is subject
to Category II or III standards.\4\ In addition to the reporting form,
the FR 2590 information collection incorporates notice requirements
pertaining to requests that may be made by a covered company or covered
foreign entity to request temporary relief from specific requirements
of the SCCL rule. A respondent must retain one exact copy of each
completed FR 2590 in electronic form, and these records must be kept
for at least three years.
---------------------------------------------------------------------------
\3\ 12 CFR 252.70, 252.170; see also 84 FR 59032 (Nov. 1, 2019).
\4\ Id.
---------------------------------------------------------------------------
Legal authorization and confidentiality: The FR 2590 is authorized
pursuant to section 5(c) of the Bank Holding Company Act of 1956 (BHC
Act) (12 U.S.C. 1844(c)) for BHCs and section 10(b) of the Home Owners'
Loan Act (12 U.S.C. 1467a(b)) for SLHCs. With respect to FBOs and their
subsidiary IHCs, the FR 2590 is authorized pursuant to section 5(c) of
the BHC Act, in conjunction with section 8 of the International Banking
Act of 1978 (12 U.S.C. 3106). The FR 2590 is mandatory.
The data collected on the FR 2590 report will be kept confidential
under exemption 4 of the Freedom of Information Act (FOIA), which
protects from disclosure trade secrets and commercial or financial
information (5 U.S.C. 552(b)(4)), and exemption 8 of FOIA, which
protects from disclosure information related to the supervision or
examination of a regulated financial institution (5 U.S.C. 552(b)(8)).
Regarding notices associated with requests for temporary relief
from specific requirements of the SCCL rule, a firm may request
confidential treatment under the Board's rules regarding confidential
treatment of information at 12 CFR 261.15. The Board will consider
whether such information may be kept confidential in accordance with
exemption 4 of FOIA (5 U.S.C. 552(b)(4)) or any other applicable FOIA
exemption.
Current actions: On August 6, 2018, the Board published a notice in
the Federal Register (83 FR 38303) requesting public comment for 60
days on the implementation of the FR 2590. The comment period for this
notice expired on October 5, 2018. The Board received two comment
letters in response to the proposal to implement FR 2590.
Commenters generally requested that the required number of reported
counterparties be lowered to only the top 20 counterparties plus
certain other counterparties to whom exposure is more than 10 percent
of the firm's tier 1 capital or capital stock and surplus, as
applicable, and that proposed data fields beyond those required to
monitor compliance with the SCCL rule (including those seeking data on
exposures to counterparties that are excluded or exempt under the SCCL
rule) be removed. The Board continues to believe it is appropriate to
require a firm to report its top 50 counterparties, as that would
provide the Board with greater ability to monitor a wider network of
counterparty relationships and potential channels of contagion,
consistent with the SCCL rule. Further, requiring a firm to report its
top 50 counterparties will enhance a substantial supervisory interest
in identifying where similar risks occur in different forms across a
firm's balance sheet, which, for instance, may influence the future
design of different stress testing counterparty default scenarios. The
Board also believes it is appropriate to require firms to report
exposures to excluded or exempt counterparties in order to help ensure
that firms properly calculate their exposures for purposes of the SCCL
rule. The Board notes that the Basel Committee on Banking Supervision's
large exposure standard (BCBS Large Exposure Standard) includes certain
reporting requirements related to excluded and exempt entities.
Therefore, the Board has not made any changes to the FR 2590 in
response to these comments.
Commenters also sought clarification on the process by which FBOs
could comply with the SCCL rule's requirements with respect to their
combined U.S. operations by certifying that they meet limits
established by home country supervision frameworks consistent with the
BCBS Large Exposure Standard, as well as the reporting requirements
associated with such certification. The reporting form includes a
checkbox that FBOs can use to indicate that they meet the requirements
of a home country supervisory regime consistent with the BCBS Large
Exposure Standard. Further, the preamble to the SCCL rule clarifies
that submission of the FR 2590 report with this box checked generally
will be sufficient to meet the reporting requirements of the SCCL rule
with respect to the single-counterparty credit limits that apply to an
FBO's combined U.S. operations. However, an FBO may be required to
provide additional information or reporting concerning its counterparty
credit exposures upon written request by the Board.
Commenters further requested that the Board permit the executive
officer responsible for oversight of compliance or for preparation of
the reporting form, rather than the Chief Financial Officer, to sign
the FR 2590 report and that firms be permitted to maintain an
electronic rather than a hard copy of the form for their records. In
addition, commenters requested certain technical corrections and
clarifications to the form's fields (e.g., headers, titles) and
instructions. In response to these comments, the FR 2590 report permits
the executive officer responsible for SCCL compliance or the Chief
Financial Officer (or an individual performing this equivalent
function) to sign the form certifying compliance, electronic submission
of the form, and the maintenance of electronic, rather than hard copy,
forms.
In addition to comments on the proposed form, commenters also
requested changes to the SCCL rule. One commenter requested that the
Board delay implementation of the SCCL rule until the Board finalizes
its proposals to tailor enhanced prudential standards applicable to
U.S. BHCs, savings and loan holding companies, and FBOs with operations
in the United States. Commenters further requested that the Board
permit the U.S. IHCs of FBOs to value certain credit exposures for
purposes of the SCCL rule using models approved by the FBOs' home
country supervisors. The Board has determined that these comments,
which relate to the content of the SCCL rule itself, are outside of the
scope of the Board's Paperwork Reduction Act review of the FR 2590.\5\
The Board notes also that it finalized its rule to tailor enhanced
prudential standards to those entities on October 10, 2019.\6\
Commenters also requested that the Board permit an FBO to comply with
the SCCL rule, with respect to its combined U.S. operations, through
certification concerning its home country supervision framework
[[Page 64072]]
prior to effectiveness of the home country supervision framework, so
long as the home country supervisor is working towards a framework
consistent with the BCBS Large Exposure Standard or, in the
alternative, to extend the initial compliance dates for FBOs to comply
with the SCCL applicable to their U.S. operations. The Board has
proposed separately to amend the SCCL rule to extend the initial
compliance dates for FBOs to comply with the SCCL applicable to their
U.S. operations published elsewhere in this issue of the Federal
Register. Therefore, no changes to the FR 2590 report have been made in
response to this comment at this time.
---------------------------------------------------------------------------
\5\ A similar comment concerning the use of models approved by
foreign supervisors was received and discussed in connection with
the Board's finalization of the SCCL rule. 83 FR 38460, 38490 (Aug.
6, 2018).
\6\ 84 FR 59032 (Nov. 1, 2019).
Board of Governors of the Federal Reserve System, November 8,
2019.
Ann Misback,
Secretary of the Board.
[FR Doc. 2019-24967 Filed 11-19-19; 8:45 am]
BILLING CODE 6210-01-P