Notice2023-19475
Proposed Agency Information Collection Activities; Comment Request
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 11, 2023
Issuing agencies
Federal Reserve System
Abstract
The Board of Governors of the Federal Reserve System (Board) invites comment on a proposal to extend for three years, with revision, the Single-Counterparty Credit Limits (FR 2590; OMB No. 7100-0377).
Full Text
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<title>Federal Register, Volume 88 Issue 174 (Monday, September 11, 2023)</title>
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[Federal Register Volume 88, Number 174 (Monday, September 11, 2023)]
[Notices]
[Pages 62364-62366]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-19475]
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FEDERAL RESERVE SYSTEM
Proposed Agency Information Collection Activities; Comment
Request
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Notice, request for comment.
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SUMMARY: The Board of Governors of the Federal Reserve System (Board)
invites comment on a proposal to extend for three years, with revision,
the Single-Counterparty Credit Limits (FR 2590; OMB No. 7100-0377).
DATES: Comments must be submitted on or before November 13, 2023.
ADDRESSES: You may submit comments, identified by FR 2590, by any of
the following methods:
<bullet> Agency Website: <a href="https://www.federalreserve.gov/">https://www.federalreserve.gov/</a>. Follow
the instructions for submitting comments at <a href="https://www.federalreserve.gov/apps/foia/proposedregs.aspx">https://www.federalreserve.gov/apps/foia/proposedregs.aspx</a>.
<bullet> Email: <a href="/cdn-cgi/l/email-protection#7a081f1d0954191517171f140e093a1c1f1e1f081b16081f091f080c1f541d150c"><span class="__cf_email__" data-cfemail="30425557431e535f5d5d555e4443705655545542515c425543554246551e575f46">[email protected]</span></a>. Include the OMB
number or FR number in the subject line of the message.
<bullet> Fax: (202) 452-3819 or (202) 452-3102.
<bullet> Mail: Federal Reserve Board of Governors, Attn: Ann E.
Misback, Secretary of the Board, Mailstop M-4775, 2001 C St. NW,
Washington, DC 20551.
All public comments are available from the Board's website at
<a href="https://www.federalreserve.gov/apps/foia/proposedregs.aspx">https://www.federalreserve.gov/apps/foia/proposedregs.aspx</a> as
submitted, unless modified for technical reasons or to remove
personally identifiable information at the commenter's request.
Accordingly, comments will not be edited to remove any confidential
business information, identifying information, or contact information.
Public comments may also be viewed electronically or in paper in Room
M-4365A, 2001 C St. NW, Washington, DC 20551, between 9:00 a.m. and
5:00 p.m. on weekdays, except for Federal holidays. For security
reasons, the Board requires that visitors make an appointment to
inspect comments. You may do so by calling (202) 452-3684. Upon
arrival, visitors will be required to present valid government-issued
photo identification and to submit to security screening in order to
inspect and photocopy comments.
Additionally, commenters may send a copy of their comments to the
Office of Management and Budget (OMB) Desk Officer for the Federal
Reserve Board, 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: Federal Reserve Board Clearance
Officer--Nuha Elmaghrabi--Office of the Chief Data Officer, Board of
Governors of the Federal Reserve System, <a href="/cdn-cgi/l/email-protection#cea0bba6afe0aba2a3afa9a6bcafaca78ea8bcace0a9a1b8"><span class="__cf_email__" data-cfemail="80eef5e8e1aee5ecede1e7e8f2e1e2e9c0e6f2e2aee7eff6">[email protected]</span></a>, (202)
452-3884.
SUPPLEMENTARY INFORMATION: On June 15, 1984, OMB delegated to the Board
authority under the Paperwork Reduction Act (PRA) to approve and assign
OMB control numbers to collections of information 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.
During the comment period for this proposal, a copy of the proposed
PRA OMB submission, including the draft reporting form and
instructions, supporting statement (which contains more detail about
the information collection and burden estimates than this notice), and
other documentation, will be made available on the Board's public
website at <a href="https://www.federalreserve.gov/apps/reportingforms/home/review">https://www.federalreserve.gov/apps/reportingforms/home/review</a> or may be requested from the agency clearance officer, whose
name appears above. Final versions of these documents will be made
available at <a href="https://www.reginfo.gov/public/do/PRAMain">https://www.reginfo.gov/public/do/PRAMain</a>, if approved.
Request for Comment on Information Collection Proposal
The Board invites public comment on the following information
collection, which is being reviewed under authority delegated by the
OMB under the PRA. Comments are invited on the following:
a. Whether the proposed collection of information is necessary for
the proper performance of the Board's functions, including whether the
information has practical utility;
b. The accuracy of the Board'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 startup costs and costs of operation,
maintenance, and purchase of services to provide information.
At the end of the comment period, the comments and recommendations
received will be analyzed to determine the extent to which the Board
should modify the proposal.
Proposal Under OMB Delegated Authority To Extend for Three Years, With
Revision, the Following Information Collection
Collection title: Single-Counterparty Credit Limits.
Collection identifier: FR 2590.
[[Page 62365]]
OMB control number: 7100-0377.
General description of collection: The FR 2590 was implemented in
connection with the Board's single-counterparty credit limits rule
(SCCL rule),\1\ codified in the Board's Regulation YY--Enhanced
Prudential Standards (12 CFR part 252) \2\ and the Board's Regulation
LL--Savings and Loan Holding Companies (12 CFR part 238).\3\
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\1\ 83 FR 38460 (August 6, 2018). See also 84 FR 59032 (November
1, 2019) (finalizing the SCCL rule for SLHCs).
\2\ See 12 CFR part 252, subparts H and Q.
\3\ See 12 CFR part 238, subpart Q.
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The information collected by the FR 2590 reporting form allows the
Board to monitor a covered company's or a covered foreign entity's
compliance with the SCCL rule. A covered company is any U.S. bank
holding company (BHC) that is subject to Category I, II, or III
standards or any savings and loan holding company (SLHC) that is
subject to Category II or III standards. A covered foreign entity is a
foreign banking organization (FBO) that is subject to Category II or
III standards or that has total global consolidated assets of $250
billion or more, and any U.S. intermediate holding company (IHC) that
is subject to Category II or III standards. 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, as well as a requirement that
filers of the FR 2590 reporting form retain an exact copy of each
completed FR 2590.
Proposed revisions: The Board proposes to make four clarifications
and one revision to the FR 2590 form and instructions. The Board
proposes to clarify that a respondent that is an FBO subject to a large
exposure standard on a consolidated basis established by its home-
country supervisor that is consistent with the framework established by
the Basel Committee on Banking Supervision (BCBS) may simply report
that on line 1 of the FR 2590 and is not required to submit additional
documentation of compliance. This clarification is intended to confirm
the intention expressed in the Federal Register notice for the final FR
2590 form, which states that ``submission of the FR 2590 report with
this [certification] box checked generally will be sufficient to meet
the reporting requirement of the SCCL rule.'' \4\ The proposed revised
instructions specify that a respondent may be required to provide
additional information or reporting concerning its counterparty credit
exposures upon written request by the Board, consistent with the SCCL
rule.
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\4\ 84 FR 64070, 64071 (November 20, 2019).
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The Board further proposes to clarify that a respondent
organization should use the tier 1 capital amount reported on the
Consolidated Financial Statements for Holding Companies (FR Y-9C; OMB
No. 7100-0128) or on the Capital and Asset Report for Foreign Banking
Organization (FR Y-7Q; OMB No. 7100-0125) for the same reporting period
as the FR 2590 form being submitted when calculating and reporting
compliance with the SCCL rule (meaning that the FR 2590 form reporting
compliance for Q1 of a given year should use the tier 1 capital amount
reported by the firm on the FR Y-9C or FR Y-7Q for Q1 of that same
year). Similarly, the amount included for the most recent quarter for
calculating total consolidated assets on the FR Y-9C or FR Y-7Q should
be that which is reported for the same reporting period as the FR 2590
form being submitted. To the extent that a firm's tier 1 capital or
total consolidated assets change significantly within a given quarter
due to unplanned events (e.g., asset deterioration), the Board believes
that it would be appropriate for a respondent organization to manage
and to limit its net credit exposure to counterparties based on its
actual tier 1 capital or assets, including, if necessary, by reducing
net credit exposure to a specific counterparty. This would be
consistent with the purpose of the SCCL rule, which is to limit the
risks posed to covered companies by the failure of any individual
firm.\5\
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\5\ 83 FR 38460, 38461 (August 6, 2018); see also 12 U.S.C.
5365(e)(1).
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The Board also proposes to clarify that a respondent organization
must maintain in their files a physical or electronic scanned copy of
the manually signed and attested printout of the data being submitted
for a period of three years after submission, with the signed cover
page of the FR 2590 being sufficient to fulfill the signature and
attestation requirement. This requirement is aligned with other
regulatory reporting forms and is intended to ensure appropriate
oversight and accountability regarding submitted data. Currently, FR
2590 respondents are required to maintain these records, but the
instructions do not specify the duration of the recordkeeping
requirement.
The Board also proposes to clarify in the FR 2590 form that the
order of counterparties should be the same across Schedules G-1 through
G-4, M-1 through M-2, and the Summary of Net Credit Exposures.
The Board also proposes to revise Schedule M-1 of the FR 2590 to
allow respondents calculating derivative transaction exposures using
standardized approach for counterparty credit risk (SA-CCR) to report
collateral received in connection with those derivative transactions in
a new Table B. Table B would not be included in the respondent's
summary of net credit exposures. For valuing credit exposure resulting
from derivative transactions, firms are authorized to use any method
they would be authorized to use for purposes of calculating compliance
with the Board's risk-based capital requirements, including the
internal models method (IMM), the current exposure method (CEM), or SA-
CCR.\6\ Firms using either CEM or IMM are currently able to report
accurate derivative exposures.\7\ Firms calculating derivative
exposures under SA-CCR, however, have experienced difficulties under
the FR 2590 and current instructions in reporting accurately their
gross credit exposure, collateral, and net credit exposure because
collateral is factored directly into the SA-CCR calculation and cannot
truly be separated out into the elements specified on FR 2590.\8\ For
example, a respondent reporting both its gross credit exposure as
calculated using SA-CCR and collateral received as separate items would
cause collateral to be double-counted when calculating its net credit
exposures, resulting in artificially lower net credit exposures with
respect to the SCCL rule. To avoid this double-counting, some
respondents chose to not report collateral in such cases.
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\6\ Note that only advanced approaches firms may request to use
internal models. See 12 CFR 217, subpart E.
\7\ Firms using IMM use two dedicated columns on Schedule G-4. A
firm using CEM would report the gross credit exposure of derivative
netting sets (pre-collateral exposure at default) on Schedule G-4,
report collateral on Schedule M-1, report net credit exposures by
deducting the collateral reported on Schedules M-1 from the gross
credit exposures in Schedule G-4, and report risk-shifted exposures
on Schedule G-5 for the adjusted market value of non-cash
collateral.
\8\ Under SA-CCR, collateral is included in both the recovery
cost and the potential future exposure. See 12 CFR 217, subpart D.
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Because of the importance of collateral as a risk mitigant,
especially in exiting defaulted positions, the Board proposes creating
a new table (Table B) in Schedule M-1 to allow respondents calculating
derivative transaction exposures using SA-CCR to accurately report
their exposure and collateral in connection with those derivative
[[Page 62366]]
transactions. This information is consistent with other information
requested by FR 2590 and is not readily available through other
regulatory reporting forms.
Frequency: Quarterly, event-generated.
Respondents: U.S. BHCs that are subject to Category I, II, or III
standards, FBOs that are subject to Category II or III standards or
that have total global consolidated assets of $250 billion or more, and
SLHCs and U.S. IHCs that are subject to Category II or III standards.
Total estimated number of respondents: 83.
Estimated average hours per response:
Reporting FR 2590 Form: 170.56.
Reporting Requests for temporary relief: 10.
Recordkeeping: 0.25.
Total estimated change in burden: 0.
Total estimated annual burden hours: 56,719.\9\
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\9\ More detailed information regarding this collection,
including more detailed burden estimates, can be found in the OMB
Supporting Statement posted at <a href="https://www.federalreserve.gov/apps/reportingforms/home/review">https://www.federalreserve.gov/apps/reportingforms/home/review</a>. On the page displayed at the link, you
can find the OMB Supporting Statement by referencing the collection
identifier, FR 2590.
Board of Governors of the Federal Reserve System, September 5,
2023.
Michele Taylor Fennell,
Deputy Associate Secretary of the Board.
[FR Doc. 2023-19475 Filed 9-8-23; 8:45 am]
BILLING CODE 6210-01-P
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