[Federal Register Volume 80, Number 102 (Thursday, May 28, 2015)]
[Notices]
[Pages 30459-30461]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-12738]
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FEDERAL RESERVE SYSTEM
Proposed Agency Information Collection Activities; Comment
Request
AGENCY: Board of Governors of the Federal Reserve System.
SUMMARY: On June 15, 1984, the Office of Management and Budget (OMB)
delegated to the Board of Governors of the Federal Reserve System
(Board) its approval 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. 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 instruments are placed into OMB's
public docket files. The Federal Reserve may not conduct or sponsor,
and the respondent is not required to respond to, an information
collection that has been extended, revised, or implemented on or after
October 1, 1995, unless it displays a currently valid OMB control
number.
DATES: Comments must be submitted on or before July 27, 2015.
ADDRESSES: You may submit comments, identified by FR 4199, by any of
the following methods:
Agency Web site: http://www.federalreserve.gov. Follow the
instructions for submitting comments at http://www.federalreserve.gov/apps/foia/proposedregs.aspx.
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Email: [email protected]. Include OMB
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number in the subject line of the message.
FAX: (202) 452-3819 or (202) 452-3102.
Mail: Robert deV. Frierson, Secretary, Board of Governors
of the Federal Reserve System, 20th Street and Constitution Avenue NW.,
Washington, DC 20551.
All public comments are available from the Board's Web site at
http://www.federalreserve.gov/apps/foia/proposedregs.aspx as submitted,
unless modified for technical reasons. Accordingly, your comments will
not be edited to remove any identifying or contact information. Public
comments may also be viewed electronically or in paper form in Room
3515, 1801 K Street (between 18th and 19th Streets NW.) Washington, DC
20006 between 9:00 a.m. and 5:00 p.m. on weekdays.
Additionally, commenters may send a copy of their comments to the
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.
FOR FURTHER INFORMATION CONTACT: A copy of the PRA OMB submission,
including the proposed reporting form and instructions, supporting
statement, and other documentation will be placed into OMB's public
docket files, once approved. These documents will also be made
available on the Federal Reserve Board's public Web site at: http://www.federalreserve.gov/apps/reportforms/review.aspx or may be requested
from the agency clearance officer, whose name appears below.
Federal Reserve Board Acting Clearance Officer--Mark Tokarski--
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.
SUPPLEMENTARY INFORMATION:
Request for Comment on Information Collection Proposal
The following information collection, which is being handled under
this delegated authority, has received initial Board approval and is
hereby published for comment. At the end of the comment period, the
proposed information collection, along with an analysis of comments and
recommendations received, will be submitted to the Board for final
approval under OMB delegated authority. Comments are invited on the
following:
a. Whether the proposed collection of information is necessary for
the proper performance of the Federal Reserve's functions; including
whether the information has practical utility;
b. The accuracy of the Federal Reserve's estimate of the burden of
the proposed information collection, including the validity of the
methodology and assumptions used;
c. Ways to enhance the quality, utility, and clarity of the
information to be collected;
d. Ways to minimize the burden of information collection on
respondents, including through the use of automated collection
techniques or other forms of information technology; and
e. Estimates of capital or start up costs and costs of operation,
maintenance, and purchase of services to provide information.
Proposal To Approve Under OMB Delegated Authority the Extension for
Three Years, Without Revision, of the Following Report
Report title: Basel II Interagency Pillar 2 Supervisory Guidance.
Agency form number: FR 4199.
OMB control number: 7100-0320.
Frequency: Annual.
Reporters: State member banks, bank holding companies (BHCs).
Estimated annual reporting hours: 5,460.
Estimated average hours per response: 420.
Number of respondents: 13.
General description of report: The Board's Legal Division has
determined that the FR 4199 is authorized by section 9(6) of the
Federal Reserve Act and section 5 of the Bank Holding Company Act.
Section 9(6) of the Federal Reserve Act requires state member banks to
``comply with the reserve and capital requirements of this chapter''
and to make reports of condition ``in such form'' and ``contain[ing]
such information'' as the Board may require (12 U.S.C. 324). Section 5
of the Bank Holding Company Act authorizes the Board to ``issue
regulations and orders relating to the capital requirement for bank
holding companies'' and requires BHCs to ``keep the Board informed as
to [their] financial condition, systems for monitoring and controlling
financial and operating risks . . .'' (12 U.S.C. 1844 (b) & (c)).
Because the recordkeeping requirements are contained within guidance
(and not a statute or regulation), they are voluntary. Because the FR
4199 recordkeeping requirements require that banks and BHCs retain
their own records, the Freedom of Information Act (FOIA) would only be
implicated if the Federal Reserve's examiners retained a copy of the
records as part of an examination or supervision of a bank or BHC.
However, records obtained as a part of an examination or supervision of
a bank or BHC are exempt from disclosure under FOIA exemption (b)(8),
for examination material (5 U.S.C. 552(b)(8)). In addition, the records
may also be exempt under (b)(4), which exempts from disclosure ``trade
secrets and commercial or financial information obtained from a person
and privileged or confidential,'' and under (b)(6) for non-public
personal information regarding owners, shareholders, directors,
officers or employees if the disclosure would ``constitute a clearly
unwarranted invasion of personal privacy'' (5 U.S.C. 552(b)(4) and
(b)(6)).
Abstract: The advanced approaches framework requires certain banks
and BHCs to use an internal ratings-based approach to calculate
regulatory credit risk capital requirements and advance measurement
approaches to calculate regulatory operational risk capital
requirements, and to meet the higher of the minimum requirements under
the general risk-based capital rules and the minimum requirements under
the advanced approaches framework.
A bank is required to comply with the advanced approaches framework
if it meets either of two independent threshold criteria: (1)
Consolidated total assets of $250 billion or more, as reported on the
most recent year-end regulatory reports; or (2) consolidated total on-
balance sheet foreign exposure of $10 billion or more at the most
recent year-end.
A BHC is required to comply with the advanced approaches framework
if the BHC has (1) consolidated total assets (excluding assets held by
an insurance underwriting subsidiary) of $250 billion or more, as
reported on the most recent year-end regulatory reports; (2)
consolidated total on-balance sheet foreign exposure of $10 billion or
more at the most recent year-end; or (3) a subsidiary depository
institution (DI) that is meets the criteria to be subject to the
advanced approaches rule, or elects to adopt the advanced approaches.
As of September 30, 2014, 13 BHCs meet the above criteria and are
therefore subject to the advanced approaches rule.\1\
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\1\ Regulation YY permits a bank holding company that is a
subsidiary of a foreign banking organization to elect not to comply
with the advanced approaches rule prior to formation of an IHC with
the prior approval of the Board. 12 CFR 252.153(e)(2)(C).
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Also, some banks or BHCs may voluntarily decide to adopt the
advanced approaches framework. Both
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mandatory and voluntary respondents are required to meet certain
qualification requirements before they can use the advanced approaches
framework for risk-based capital purposes.
The Pillar 2 Guidance sets the expectation that respondents
maintain certain documentation as described in paragraphs 37, 41, 43,
and 46 of this portion of the guidance. Details of the expectations for
each section are provided below.
Setting and Assessing Capital Adequacy Goals That Relate to Risk
Paragraph 37. In analyzing capital adequacy, a banking organization
should evaluate the capacity of its capital to absorb losses. Because
various definitions of capital are used within the banking industry,
each banking organization should state clearly the definition of
capital used in any aspect of its internal capital adequacy assessment
process (ICAAP).\2\ Since components of capital are not necessarily
alike and have varying capacities to absorb losses, a banking
organization should be able to demonstrate the relationship between its
internal capital definition and its assessment of capital adequacy. If
a banking organization's definition of capital differs from the
regulatory definition, the banking organization should reconcile such
differences and provide an analysis to support the inclusion of any
capital instruments that are not recognized under the regulatory
definition. Although common equity is generally the predominant
component of a banking organization's capital structure, a banking
organization may be able to support the inclusion of other capital
instruments in its internal definition of capital if it can demonstrate
a similar capacity to absorb losses. The banking organization should
document any changes in its internal definition of capital, and the
reason for those changes.
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\2\ A bank holding company with total consolidated assets of $50
billion or more is required to develop and maintain a capital plan,
which must set forth a capital adequacy process. 76 FR 74631
(December 1, 2011). ICAAP would constitute an internal capital
adequacy process for purposes of the final rule, and bank holding
companies that have a satisfactory ICAAP generally would be
considered to have a satisfactory internal capital adequacy process
for purposes of the final rule.
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Ensuring Integrity of Internal Capital Adequacy Assessments
Paragraph 41. A banking organization should maintain thorough
documentation of its ICAAP to ensure transparency. At a minimum, this
should include a description of the banking organization's overall
capital-management process, including the committees and individuals
responsible for the ICAAP; the frequency and distribution of ICAAP-
related reporting; and the procedures for the periodic evaluation of
the appropriateness and adequacy of the ICAAP. In addition, where
applicable, ICAAP documentation should demonstrate the banking
organization's sound use of quantitative methods (including model
selection and limitations) and data-selection techniques, as well as
appropriate maintenance, controls, and validation. A banking
organization should document and explain the role of third-party and
vendor products, services and information--including methodologies,
model inputs, systems, data, and ratings--and the extent to which they
are used within the ICAAP. A banking organization should have a process
to regularly evaluate the performance of third-party and vendor
products, services and information. As part of the ICAAP documentation,
a banking organization should document the assumptions, methods, data,
information, and judgment used in its quantitative and qualitative
approaches.
Paragraph 43. The board of directors and senior management have
certain responsibilities in developing, implementing, and overseeing
the ICAAP. The board should approve the ICAAP and its components. The
board or its appropriately delegated agent should review the ICAAP and
its components on a regular basis, and approve any revisions. That
review should encompass the effectiveness of the ICAAP, the
appropriateness of risk tolerance levels and capital planning, and the
strength of control infrastructures. Senior management should
continually ensure that the ICAAP is functioning effectively and as
intended, under a formal review policy that is explicit and well
documented. Additionally, a banking organization's internal audit
function should play a key role in reviewing the controls and
governance surrounding the ICAAP on an ongoing basis.
Paragraph 46. As part of the ICAAP, the board or its delegated
agent, as well as appropriate senior management, should periodically
review the resulting assessment of overall capital adequacy. This
review, which should occur at least annually, should include an
analysis of how measures of internal capital adequacy compare with
other capital measures (such as regulatory, accounting-based or market-
determined). Upon completion of this review, the board or its delegated
agent should determine that, consistent with safety and soundness, the
banking organization's capital takes into account all material risks
and is appropriate for its risk profile. However, in the event a
capital deficiency is uncovered (that is, if capital is not consistent
with the banking organization's risk profile or risk tolerance)
management should consult and adhere to formal procedures to correct
the capital deficiency.
Board of Governors of the Federal Reserve System, May 21, 2015.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2015-12738 Filed 5-27-15; 8:45 am]
BILLING CODE 6210-01-P