[Federal Register Volume 84, Number 246 (Monday, December 23, 2019)]
[Notices]
[Pages 70542-70544]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27600]
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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)
is adopting a proposal to extend for three years, with revision, the
Notice by Financial Institutions of Government Securities Broker or
Government Securities Dealer Activities and the Notice by Financial
Institutions of Termination of Activities as a Government Securities
Broker or Government Securities Dealer (Form G-FIN and Form G-FINW; OMB
No. 7100-0224). The revisions are effective immediately.
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.
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.
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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 Extension for
Three Years, With Revision, of the Following Information Collections:
Report title: Notice by Financial Institutions of Government
Securities Broker or Government Securities Dealer Activities.
Agency form number: Form G-FIN.
OMB control number: 7100-0224.
Effective Date: The revisions are effectively immediately.
Frequency: On occasion.
Respondents: State member banks, foreign banks, uninsured state
branches or state agencies of foreign banks, commercial lending
companies owned or controlled by foreign banks, and Edge corporations.
Estimated number of respondents: Reporting, 34; Recordkeeping, 2.
Estimated average hours per response: Reporting, 1; Recordkeeping,
0.25.
Estimated annual burden hours: 35.
General description of report: The Securities Exchange Act of 1934,
as amended (the Act),\1\ requires financial institutions to notify
their appropriate regulatory agency (ARA) prior to using the mails or
any means or instrumentality of interstate commerce to engage in
government securities broker or dealer activities. The Board is the ARA
for state member banks, foreign banks, uninsured state branches or
state agencies of foreign banks, commercial lending companies owned or
controlled by foreign banks, and Edge corporations (collectively,
``Board regulated financial institutions''). A Board regulated
financial institution must use Form G-FIN to register as a government
securities broker or dealer or to amend a previously submitted G-FIN.
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\1\ 15 U.S.C 78o-5.
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Form G-FIN collects such information as the company name, all
business addresses, names and titles of managers of government
securities activities, and the names of any persons involved in
disciplinary proceedings related to the sale of securities. The Board
uses the information collected by Form G-FIN to measure compliance with
the Act.
An important function of the Form G-FIN is to help financial
institutions determine whether they must file notices pursuant to the
Act. The definitions of government securities broker and government
securities dealer in the Act are very broad and, if read literally,
would encompass most banks and many thrift institutions. The Treasury
has the authority to exempt institutions from this requirement if it is
consistent with the intent of the Act. When the Treasury regulations
were first drafted to implement the reporting requirements of the Act,
the ARAs worked closely to narrow the class of financial institution
required to file the Form G-FIN (reflected in Part B of the
instructions, Who Must File).
In addition to incorporating the Treasury's exemptions from the
notice requirement in the reporting instructions, these exemptions are
prominently summarized on the cover sheet of the Form G-FIN in order to
provide a simpler and easier means for financial institutions to
determine if they are exempt.
Report title: Notice by Financial Institutions of Termination of
Activities as a Government Securities Broker or Government Securities
Dealer.
Agency form number: Form G-FINW.
OMB control number: 7100-0224.
Effective Date: The revisions are effectively immediately.
Frequency: On occasion.
Respondents: State member banks, foreign banks, uninsured state
branches or state agencies of foreign banks, commercial lending
companies owned or controlled by foreign banks, and Edge corporations.
Estimated number of respondents: Reporting, 2; Recordkeeping, 1.
Estimated average hours per response: Reporting, 0.25;
Recordkeeping, 0.25.
Estimated annual burden hours: 1.
General description of report: The Act requires financial
institutions to notify their ARA upon terminating government securities
broker or dealer activities. A Board regulated financial institution
must use Form G-FINW to notify the Board of its termination of such
activities. Form G-FINW collects information such as the company name,
address, and contact person responsible for the records associated with
the government securities broker or dealer activities. The Board uses
the information collected by Form G-FINW to measure compliance with the
Act. The information collected by Form G-FINW is not available from
other sources.
The instructions for Form G-FINW state that a notificant should
retain one exact copy of each completed Form G-FINW for the
notificant's records. These records must be kept until at least three
years after the financial institution has notified the Board that it
has ceased to function as a government securities broker or dealer.
Legal authorization and confidentiality: Forms G-FIN and G-FINW are
authorized under the Act, 15 U.S.C. 78o-5(a)(l)(B)(i), which requires a
financial institution that is a broker or dealer of government
securities to submit a written notice advising its ARA that it is a
government securities broker or a government securities dealer or that
it has ceased to act as such. The Act also directs the Board, in
consultation with the other ARAs (the Federal Deposit Insurance
Corporation and the Office of the Comptroller of the Currency),\2\ as
well as the Securities and Exchange Commission (SEC), to prescribe the
form of and the information collected in these notices (15 U.S.C. 78o-
5(a)(l)(B)(ii)). Further support for the creation and collection of
these notices by the Board is found in the Treasury regulations,
authorized by 15 U.S.C. 78o-5(b)(l), which instruct that the Form G-FIN
and Form G-FINW are promulgated by the Board and that such forms are to
be used by non-exempt \3\ financial institutions to notify the ARA of
their status as government securities brokers or dealers or the
termination of such status.\4\
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\2\ A copy of the form filed with each ARA is also made
available by the ARA to the SEC under the Act (15 U.S.C. 78o-
5(a)(1)(B)(iii)).
\3\ The Act permits the Secretary of the Treasury to exempt
certain government securities brokers or dealers, 15 U.S.C. 78o-
5(a)(5), and the Secretary of the Treasury has promulgated
regulations exempting certain types of firms. See 17 CFR part 401.
\4\ See 17 CFR 400.1(d), 449.1, and 449.2; see also 17 CFR
400.5(b) (requiring that any amendments or corrections to the notice
of status of government securities broker or dealer be filed by the
financial institution on Form G-FIN within 30 days).
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Section 15C of the Act, 15 U.S.C. 78o-5(b)(1)(C), also instructs
the Secretary of the Treasury to promulgate recordkeeping requirements
regarding the forms and records to be retained by government securities
brokers and dealers and to specify the time period for which such
records shall be
[[Page 70544]]
preserved. Accordingly, the recordkeeping requirement associated with
these forms is contained in 17 CFR 404.4, which requires state member
banks and uninsured state branches or state agencies of foreign banks,
as well as other institutions, to retain these forms for three years
after the financial institution notifies its ARA that it has ceased to
function as a government securities broker or dealer. Although
Treasury's recordkeeping requirement does not explicitly apply to
foreign banks, Edge corporations, or commercial lending companies that
are owned or controlled by foreign banks, the Board has the authority
to ``issue such rules and regulations with respect to transactions in
government securities as may be necessary to prevent fraudulent and
manipulative acts and practices and to promote just and equitable
principles of trade'' (15 U.S.C. 78o-5(b)(3)(A)). Imposing a
recordkeeping requirement on foreign banks, Edge corporations, and
commercial lending companies owned or controlled by foreign banks is
necessary for the public interest and protection of investors in order
to ensure that the proper notification has been provided when these
institutions are transacting in government securities (15 U.S.C. 78o-
5(a)(1)(B)). In addition, the Board is authorized to impose a
recordkeeping requirement on foreign banking organizations \5\ (12
U.S.C. 3108), on Edge corporations (12 U.S.C. 625), and on commercial
lending companies that are owned or controlled by foreign banks (12
U.S.C. 3106, as applied through 12 U.S.C. 1844(c)).
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\5\ A foreign banking organization is a foreign bank that
operates a branch, agency, or commercial lending company subsidiary
in the United States; controls a bank in the United States; or
controls an Edge corporation acquired after March 5, 1987; and any
company of which the foreign bank is a subsidiary.
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The obligation to file the Form G-FIN and Form G-FINW with the
Board, and the obligation for the government securities broker or
dealer to retain a copy of the Form G-FIN and Form G-FINW, is mandatory
for those financial institutions for which the Board serves as the ARA,
unless the financial institution is exempt from the reporting
requirement under Treasury's regulations. The filing of these forms and
the records retention period is event-generated.
Under the Act, each ARA is instructed to make these forms available
to the SEC, and the SEC is instructed to make the notices available to
the public (15 U.S.C. 78o-5(a)(l)(B)(iii)). Thus, the information
collected on Form G-FIN and Form G-FINW is ordinarily not treated as
confidential. However, given that Item 6 of Form G-FIN instructs the
filer to attach copies of the confidential Form G-FIN-4, or if
applicable, to attach copies of any previously filed confidential Form
MSD-4 or confidential Form U-4, these attachments may be treated as
confidential under exemptions 4 and/or 6 of the Freedom of Information
Act, which protect, respectively, ``trade secrets and commercial or
financial information obtained from a person [that is] privileged or
confidential'' and information about individuals in ``personnel and
medical files and similar files'' when the disclosure of such
information ``would constitute a clearly unwarranted invasion of
personal privacy'' (5 U.S.C. 552(b)(4) and 5 U.S.C. 552(b)(6)).
Current actions: On August 29, 2019, the Board published a notice
in the Federal Register (84 FR 45491) requesting public comment for 60
days on the extension, with revision, of the Notice by Financial
Institutions of Government Securities Broker or Government Securities
Dealer Activities and the Notice by Financial Institutions of
Termination of Activities as a Government Securities Broker or
Government Securities Dealer (Form G-FIN and Form G-FINW). The changes
proposed include revising the Form G-FIN and Form G-FINW to (1) require
respondents to submit PDF versions of the forms and any attachments to
a designated email address, and (2) to correct cross-references on the
following forms: G-FIN-4, Form MSD-4, and Form U-4, which are
incorporated by reference in Item 7 of the Form G-FIN. The comment
period for this notice expired on October 28, 2019. One public comment
was received, but it was outside the scope of the Board's review under
the PRA.
Board of Governors of the Federal Reserve System, December 17, 2019.
Michele Taylor Fennell,
Assistant Secretary of the Board.
[FR Doc. 2019-27600 Filed 12-20-19; 8:45 am]
BILLING CODE 6210-01-P