[Federal Register Volume 81, Number 202 (Wednesday, October 19, 2016)]
[Notices]
[Pages 72053-72055]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25203]
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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 or
Federal Reserve) is adopting a proposal to revise, with extension for
three years, the Annual Report of Holding Companies (FR Y-6), the
Annual Report of Foreign Banking Organizations (FR Y-7), and the Report
of Changes in Organizational Structure (FR Y-10). The revisions to the
mandatory FR Y-6 and FR Y-7 information collections are effective with
fiscal year-ends beginning December 31, 2016. The revisions to the
mandatory FR Y-10 information collection are effective October 14,
2016.
On June 15, 1984, the Office of Management and Budget (OMB)
delegated to the Board 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. In exercising this delegated authority, the Board is directed to
take every reasonable step to solicit comment. In determining whether
to approve a collection of information, the Board will consider all
comments received from the public and other agencies.
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. Telecommunications Device for the Deaf (TDD) users may
contact (202) 263-4869, Board of Governors of the Federal Reserve
System, Washington, DC 20551.
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.
SUPPLEMENTARY INFORMATION:
Final approval under OMB delegated authority of the revision, with
extension for three years, of the following information collection:
Report titles: Annual Report of Holding Companies; Annual Report of
Foreign Banking Organizations; Report of Changes in Organizational
Structure; Supplement to the Report of Changes in Organizational
Structure.
Agency form numbers: FR Y-6, FR Y-7, and FR Y-10 (extension, with
revision); FR Y-10E (extension, without revision).
OMB control number: 7100-0297.
Frequency: FR Y-6: Annual; FR Y-7: Annual; FR Y-10: Event-
generated; FR Y-10E: Event-generated.
Effective dates: FR Y-6 and FR Y-7: Beginning with fiscal year-ends
December 31, 2016; FR Y-10: October 14, 2016.
Respondent type: Bank holding companies (BHCs), savings and loan
holding companies (SLHCs), securities holding companies, and
intermediate holding companies (IHCs) (collectively, holding companies
(HCs)), foreign banking organizations (FBOs), state member banks
unaffiliated with a BHC, Edge Act and agreement corporations, and
nationally chartered banks that are not controlled by a BHC (with
regard to their foreign investments only).
Estimated annual reporting hours: FR Y-6 initial: 130 hours; FR Y-6
ongoing: 26,549 hours; FR Y-7: 972 hours; FR Y-10 initial: 530 hours;
FR Y-10 ongoing: 39,735 hours; FR Y-10E: 2,649 hours.
Estimated average hours per response: FR Y-6 initial: 10 hours; FR
Y-6 ongoing: 5.5 hours; FR Y-7: 4 hours; FR Y-10 initial: 1 hour; FR Y-
10 ongoing: 2.5 hours; FR Y-10E: 0.5 hour.
Number of respondents: FR Y-6 initial: 13; FR Y-6 ongoing: 4,827;
FR Y-7: 243; FR Y-10 initial: 530; FR Y-10 ongoing: 5,298; FR Y-10E:
5,298.
Legal authorization and confidentiality: These information
collections are mandatory as follows:
FR Y-6: Section 5(c)(1)(A) of the Bank Holding Company Act (BHC
Act) (12 U.S.C. 1844(c)(1)(A)); sections 8(a) and 13(a) of the
International Banking Act (IBA) (12 U.S.C. 3106(a) and 3108(a));
sections 11(a)(1), 25, and 25A of the Federal Reserve Act (FRA) (12
U.S.C. 248(a)(1), 602, and 611a); and sections 113, 165, 312, 618, and
809 of the Dodd-Frank Act (DFA) (12 U.S.C. 5361, 5365, 5412,
1850a(c)(1), and 5468(b)(1)).
FR Y-7: Sections 8(a) and 13(a) of the IBA (12 U.S.C. 3106(a) and
3108(a)); sections 113, 165, 312, 618, and 809 of the DFA (12 U.S.C.
5361, 5365, 5412, 1850a(c)(1), and 5468(b)(1)).
[[Page 72054]]
FR Y-10 and FR Y-10E: Sections 4(k) and 5(c)(1)(A) of the BHC Act
(12 U.S.C. 1843(k) and 1844(c)(1)(A)); section 8(a) of the IBA (12
U.S.C. 3106(a)); sections 11(a)(1), 25(7), and 25A of the FRA (12
U.S.C. 248(a)(1), 321, 601, 602, 611a, 615, and 625); sections 113,
165, 312, 618, and 809 of the DFA (12 U.S.C. 5361, 5365, 5412,
1850a(c)(1), and 5468(b)(1)); and section 10(c)(2)(H) of the Home
Owners' Loan Act (12 U.S.C. 1467a(c)(2)(H)).
The data collected in the FR Y-6, FR Y-7, FR Y-10, and FR Y-10E are
not considered confidential. With regard to information that a banking
organization may deem confidential, the institution may request
confidential treatment of such information under one or more of the
exemptions in the Freedom of Information Act (FOIA) (5 U.S.C. 552). The
most likely case for confidential treatment will be based on FOIA
exemption 4, which permits an agency to exempt from disclosure ``trade
secrets and commercial or financial information obtained from a person
and privileged and confidential'' (5 U.S.C. 552(b)(4)). To the extent
an institution can establish the potential for substantial competitive
harm, such information would be protected from disclosure under the
standards set forth in National Parks & Conservation Association v.
Morton, 498 F.2d 765 (D.C. Cir. 1974). Exemption 6 of FOIA might also
apply with regard to the respondents' submission of non-public personal
information of owners, shareholders, directors, officers and employees
of respondents. Exemption 6 covers ``personnel and medical files and
similar files the disclosure of which would constitute a clearly
unwarranted invasion of personal privacy'' (5 U.S.C. 552(b)(6)). All
requests for confidential treatment would need to be reviewed on a
case-by-case basis and in response to a specific request for
disclosure.
The Federal Reserve proposes that the disclosure of the responses
to the certification questions may interfere with home-country
regulators' administration, execution, and disclosure of their stress-
test regime and its results, and may cause substantial competitive harm
to the FBO providing the information, and thus this information may be
protected from disclosure under FOIA exemption 4.
Abstract: The FR Y-6 is an annual information collection submitted
by top-tier HCs and non-qualifying FBOs. It collects financial data, an
organization chart, verification of domestic branch data, and
information about shareholders. The Federal Reserve uses the data to
monitor HC operations and determine HC compliance with the provisions
of the BHC Act, Regulation Y (12 CFR 225), the Home Owners' Loan Act
(HOLA) and Regulation LL (12 CFR 238).
The FR Y-7 is an annual information collection submitted by
qualifying FBOs to update their financial and organizational
information with the Federal Reserve. The FR Y-7 collects financial,
organizational, shareholder, and managerial information. The Federal
Reserve uses the information to assess an FBO's ability to be a
continuing source of strength to its U.S. operations and to determine
compliance with U.S. laws and regulations.
The FR Y-10 is an event-generated information collection submitted
by FBOs; top-tier HCs; securities holding companies as authorized under
Section 618 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (the Dodd-Frank Act) (12 U.S.C. 1850a(c)(1));
state member banks unaffiliated with a bank holding company (BHC); Edge
and agreement corporations that are not controlled by a member bank, a
domestic BHC, or an FBO; and nationally chartered banks that are not
controlled by a BHC (with regard to their foreign investments only), to
capture changes in their regulated investments and activities. The
Federal Reserve uses the data to monitor structure information on
subsidiaries and regulated investments of these entities engaged in
banking and nonbanking activities. The FR Y-10E is a free-form
supplement that may be used to collect additional structural
information deemed to be critical and needed in an expedited manner.
Current Actions: On April 25, 2016, the Federal Reserve published a
notice in the Federal Register \1\ requesting public comment for 60
days on the proposal to revise, with extension, the FR Y-6, FR Y-7, FR
Y-10, and FR Y-10E. Under the proposal, the revisions were to: (1)
Modify the FR Y-6, FR Y-7, and FR Y-10 confidential treatment questions
on reporting forms and instructions to align with the recently approved
confidentiality check-box proposal,\2\ (2) modify the FR Y-7 and FR Y-
10 to incorporate U.S. IHCs formed under the final rule for enhanced
prudential standards for FBOs (Regulation YY),\3\ (3) clarifying the
differences in reporting of additional companies by BHCs and Savings
and Loan Holding Companies (SLHCs), adding a formula to calculate
ownership percentage, and clarifying the signature requirements for
employee stock ownership plans (ESOPs) and limited liability companies
(LLCs), and (4) modify the FR Y-10 by removing the instructions for
implementation of SLHCs from the General Instructions, removing the
legal authority paragraph in the General Instructions, clarifying the
instructions regarding the interest in sole partnership and sole member
LLCs, separating the LAC for SLHCs into two codes, adding several new
Glossary entries, and incorporating clarifying instructions that a
nonbank subsidiary under a savings association does not meet the
definition of a financial subsidiary. The comment period for this
notice expired on June 24, 2016. The Federal Reserve received one
comment letter from an industry association, which was outside the
scope of the proposed changes. In addition, the Federal Reserve is
extending the implementation date for the FR Y-10 to October 14, 2016.
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\1\ 81 FR 24101 (April 25, 2016).
\2\ 80 FR 52282 (August 28, 2015).
\3\ The draft FR Y-6 reporting form and instructions associated
with this proposal also include the language to collect information
for U.S. IHCs of FBOs as discussed in the IHC proposal. See 81 FR
6265 (February 5, 2016) and 81 FR 35016 (June 1, 2016).
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Detailed Discussion of Public Comments
The following is a detailed discussion of the comments and
responses.
The commenter requested an electronic filing option for the FR Y-6
Organizational Chart. After review and consideration, the Federal
Reserve will provide the option of submitting the FR Y-6 report as a
PDF file in an email attachment to reduce burden. The instructions will
be updated to reflect this change.
The commenter stated the method for validating Legal Entity
Identifiers (LEIs) is inaccurate particularly for LEIs issued prior to
2012. While the validation method is accurate based on the current
standards for issuing an LEI, the Federal Reserve believes it can be
removed since the one-time collection for existing LEIs has been
completed. Upon consideration of the comment, the Federal Reserve will
remove the LEI validation from the FR Y-10 online application.
Although the proposal did not include amendments to item 10 or the
definition of an LLC on the FR Y-10, the commenter requested guidance
on how to report foreign entities for that line item in the FR Y-10 and
suggested that a mapping document be provided, which would list foreign
entities with their corresponding U.S. legal structure. Alternatively,
the commenter made a number of suggestions regarding how LLCs, in
particular, are reported on the form, and one suggestion was to modify
the definition of LLC to clarify when a
[[Page 72055]]
foreign entity should be reported as an LLC. After review and
consideration, the Federal Reserve decided not to make these changes.
Given the vast number of diverse organizational structures, the Federal
Reserve believes that it is up to each respondent to apply judgement in
determining whether a particular entity type fits within the legal
entity structures listed in the form, including whether a foreign
entity should be reported as an LLC. If a respondent determines that a
business organization does not fit within any of the legal entity
structures listed in the form, including the definition of LLC, it may
report the legal entity as ``Other'' and provide a description of its
unique characteristics.
The commenter requested clarification on how to report ownership
interests in LLCs when the organization's governing documents are
silent regarding the designation of a managing member and where an
entity is designated as a manager (i.e., actively manages the day-to-
day operation of the LLC), but has no ownership interest in the LLC. In
addition, the commenter suggested that a flowchart be provided in the
instructions to indicate how to report these interests. After review
and consideration, the Federal Reserve decided not to make these
changes. Since each respondent's relationship with the LLC will vary
and the determination of whether to report its ownership interest as a
managing or non-managing member may depend upon a combination of
factors, including applicable state laws, the respondent should consult
with its legal staff to take into account these unique facts and
circumstances and report its interest in the manner it deems most
appropriate.
The commenter requested an established and consistent process for
withdrawing an erroneous FR Y-10 report that should not have been
filed. The Federal Reserve support incorporating procedures for this
process and will consider adding them as part of a future proposal.
Finally, the commenter requested several other technical
enhancements to the FR Y-10 online application: (1) Establish a process
for withdrawing an FR Y-10 report that should not have been filed, (2)
add straight-through processing of the FR Y-10 either directly from
internal systems or through a data load process, (3) add a notification
that informs the reporter after an event has been processed, (4) add
foreign branch entities, (5) remove restriction in the FR Y-10 online
application to allow reporters that own interest in the same entity to
report their holdings differently, and (6) update the RSSD search
function. The Federal Reserve need additional time to investigate
whether these enhancements are feasible and may consider them as a part
of a future proposal as costs and resources permit.
Board of Governors of the Federal Reserve System, October 13,
2016.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2016-25203 Filed 10-18-16; 8:45 am]
BILLING CODE 6210-01-P