Federal Register / Vol. 76, No. 78 / Friday, April 22, 2011 / Proposed Rules 22665 

14Under section 171 of the Dodd-Frank Act, the 

‘‘generally applicable’’ leverage and risk-based 

capital requirements are those established by the 

appropriate Federal banking agencies to apply to 

insured depository institutions under prompt 

corrective action regulations implementing section 

38 of the Federal Deposit Insurance Act. 

15The Basel III text can be found at: http:// 

www.bis.org/publ/bcbs189.htm. 

subsumed into other rating elements (it 

is taken into account indirectly in 

assessing the capital and earnings 

components). 

Additionally, as discussed in more 

detail below, in contrast to BHCs, 

SLHCs currently are not subject to 

regulatory capital requirements. As one 

element of its overall assessment of 

capital adequacy, the (F) component of 

the RFI rating system does take into 

account regulatory capital requirements 

for BHCs. The (C) component of the 

CORE rating system takes into 

consideration both a qualitative and 

quantitative supervisory capital 

assessment that can be found in OTS 

guidance. With the exception of the 

regulatory capital requirement for BHCs, 

the methods used by the agencies to 

determine capital adequacy for purposes 

of establishing a supervisory rating are 

similar. Until such time as consolidated 

capital standards for SLHCs are 

finalized by the Board, the Board 

anticipates that it will assess SLHC 

capital using supervisory quantitative 

and qualitative methods similar to those 

currently employed by the OTS. 

The Board notes that changes to the 

RFI rating system guidance and policies 

may be necessary to accommodate 

SLHCs and differences in their statutory 

and regulatory framework. The Board is 

reviewing this guidance to determine 

where adjustments may be necessary. 

The Board is seeking comment on all 

aspects of this approach. Specifically, 

the Board requests comment with regard 

to: 

1. The burden of these potential 

modifications to supervisory activities 

on SLHCs; and 

2. Whether there are any unique 

characteristics, risks, or specific 

activities of SLHCs that should be taken 

into account when evaluating which 

supervisory program should be applied 

to SLHCs and what changes would be 

required to accommodate these unique 

characteristics. 

Capital Adequacy 

One material difference between the 

OTS and Board supervisory programs 

for holding companies is the assessment 

of capital adequacy. Currently, SLHCs 

are not subject to minimum regulatory 

capital ratio requirements. The OTS 

instead applies both a qualitative and 

quantitative supervisory capital 

assessment to SLHCs that is based in 

guidance. 

Section 171 of the Dodd-Frank Act 

requires that BHCs and SLHCs be 

subject to minimum leverage and riskbased capital requirements that are not 

less than the generally applicable 

leverage and risk-based capital 

requirements applied to depository 

institutions.14 Small BHCs that are 

subject to the Small Bank Holding 

Company Policy Statement (Appendix C 

of 12 CFR part 225) are exempt from 

these requirements. Section 171 of the 

Act did not expressly provide a similar 

exemption for small SLHCs. 

Pursuant to the Dodd-Frank Act and 

the Basel Committee on Banking 

Supervision’s ‘‘Basel III: A global 

regulatory framework for more resilient 

banks and banking systems’’ report 

(‘‘Basel III’’),15 the Board, together with 

the other Federal banking agencies, is 

reviewing consolidated capital 

requirements for all depository 

institutions and their holding 

companies. The Board is considering 

applying to SLHCs the same 

consolidated risk-based and leverage 

capital requirements as BHCs to the 

extent reasonable and feasible taking 

into consideration the unique 

characteristics of SLHCs and the 

requirements of HOLA. The Board, 

together with the other Federal banking 

agencies, expects to issue a notice of 

proposed rulemaking in 2011 that will 

outline how Basel III-based 

requirements will be implemented for 

all institutions, including any relevant 

provisions needed to comply with the 

Dodd-Frank Act. It is expected that the 

Basel III notice of proposed rulemaking 

also would address any proposed 

application of Basel III-based 

requirements to SLHCs. The Board 

expects that final rules establishing 

Basel III-based capital requirements 

would be finalized in 2012 and 

implementation would start in 2013, in 

accordance with the international 

agreement. The Board invites SLHCs to 

monitor and participate in the Basel III 

capital rulemaking process. 

Although the Board believes it is 

important for SLHCs generally to be 

subject to the same consolidated 

leverage and risk-based capital 

requirements as BHCs, it recognizes that 

SLHCs have traditionally been 

permitted to engage in a broad range of 

nonbanking activities that were not 

contemplated when the general leverage 

and risk-based capital requirements for 

BHCs were developed. The Board is 

seeking specific comment with respect 

to any unique characteristics, risks, or 

specific activities of SLHCs the Board 

should take into consideration when 

developing consolidated capital 

requirements for SLHCs based on Basel 

III. What specific provisions, consistent 

with the Dodd-Frank Act, should be 

incorporated in the proposed rule in 

order to address such unique 

characteristics, risks, and/or specific 

activities? Additionally, the Board is 

seeking comment on the following: 

3. What instruments that are currently 

includable in SLHCs’ regulatory capital 

would be either excluded from 

regulatory capital or more strictly 

limited under Basel III? 3(a) How 

prevalent is the issuance of such 

instruments? Please comment on the 

appropriateness of the Basel III 

transitional arrangements for nonqualifying regulatory capital 

instruments. Provide specific examples 

and data to support any proposed 

alternative treatment. 

4. Are the proposed Basel III-based 

transition periods appropriate for 

SLHCs and, if not, what alternative 

transition periods would be appropriate 

and why? 

Finally, the Board is seeking specific 

comment with respect to what methods 

the Board should consider 

implementing for assessing capital 

adequacy for SLHCs during the period 

between the transfer date and 

implementation of consolidated capital 

standards for SLHCs. The Board also 

anticipates providing additional notice 

or issuing specific formal guidance or 

rules with regard to supervisory capital 

assessment after the transfer date and 

providing further opportunity for 

comment. 

By order of the Board of Governors of the 

Federal Reserve System, April 15, 2011. 

Robert deV. Frierson, 

Deputy Secretary of the Board. 

[FR Doc. 2011–9588 Filed 4–21–11; 8:45 am] 

BILLING CODE 6210–01–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 50 

[EPA–HQ–OAR–2007–0492; FRL–9298–4] 

Release of Final Document Related to 

the Review of the National Ambient Air 

Quality Standards for Particulate 

Matter 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Notice of availability. 

SUMMARY: The Office of Air Quality 

Planning and Standards (OAQPS) of 

EPA is announcing the availability of a 


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22666 Federal Register / Vol. 76, No. 78 / Friday, April 22, 2011 / Proposed Rules 

1The EPA’s initial overall plan and schedule for 

this review was presented in the Integrated Review 

Plan for the National Ambient Air Quality 

Standards for Particulate Matter (EPA 452/R–08– 

004, March 2008). Documents related to the current 

PM NAAQS review are available at: http:// 

www.epa.gov/ttn/naaqs/standards/pm/ 

s_pm_index.html. 

2See http://www.epa.gov/ttn/naaqs/review.html 

for a copy of Administrator Jackson’s May 21, 2009, 

memorandum and for additional information on the 

NAAQS review process. 

3Samet J (2010a). Letter from Dr. Jonathan M. 

Samet, Chair, Clean Air Scientific Advisory 

Committee to the Honorable Lisa P. Jackson, 

Administrator, U.S. EPA. CASAC Review of Policy 

Assessment for the Review of the PM NAAQS— 

First External Review Draft (March 2010). May 17, 

2010. Available at: http://yosemite.epa.gov/sab/ 

sabproduct.nsf/ 

264cb1227d55e02c85257402007446a4/ 

E504EE3276D87A9E8525772700647AFB/$File/ 

EPA-CASAC-10-011-unsigned.pdf. 

4Samet J (2010b). Letter from Dr. Jonathan M. 

Samet, Chair, Clean Air Scientific Advisory 

Committee to the Honorable Lisa P. Jackson, 

Administrator, U.S. EPA. CASAC Review of Policy 

Assessment for the Review of the PM NAAQS— 

Second External Review Draft (June 2010). 

September 10, 2010. Available at: http:// 

yosemite.epa.gov/sab/sabproduct.nsf/ 

264cb1227d55e02c85257402007446a4/ 

CCF9F4C0500C500F8525779D0073C593/$File/EPACASAC-10-015-unsigned.pdf. 

final document titled, Policy 

Assessment for the Review of the 

Particulate Matter National Ambient Air 

Quality Standards (PA). The PA 

contains staff analyses of the scientific 

bases for alternative policy options for 

consideration by the Agency prior to 

rulemaking. 

DATES: The PA will be available on or 

about April 19, 2011. 

ADDRESSES: The document will be 

available via the Internet at the 

following Web site: http://www.epa.gov/ 

ttn/naaqs/standards/pm/ 

s_pm_2007_pa.html. 

FOR FURTHER INFORMATION CONTACT: For 

questions related to this final document, 

please contact Ms. Beth Hassett-Sipple, 

Office of Air Quality Planning and 

Standards (Mail code C504–06), U.S. 

Environmental Protection Agency, 

Research Triangle Park, NC 27711; 

e-mail: hassett-sipple.beth@epa.gov; 

telephone: 919–541–4605; fax: 919– 

541–0237. 

SUPPLEMENTARY INFORMATION: Under 

section 108(a) of the Clean Air Act 

(CAA), the Administrator identifies and 

lists certain pollutants which ‘‘cause or 

contribute to air pollution which may 

reasonably be anticipated to endanger 

public health or welfare.’’ The EPA then 

issues air quality criteria for these listed 

pollutants, which are commonly 

referred to as ‘‘criteria pollutants.’’ The 

air quality criteria are to ‘‘accurately 

reflect the latest scientific knowledge 

useful in indicating the kind and extent 

of all identifiable effects on public 

health or welfare which may be 

expected from the presence of [a] 

pollutant in the ambient air, in varying 

quantities.’’ Under section 109 of the 

CAA, EPA establishes primary (healthbased) and secondary (welfare-based) 

national ambient air quality standards 

(NAAQS) for pollutants for which air 

quality criteria are issued. Section 

109(d) of the CAA requires periodic 

review and, if appropriate, revision of 

existing air quality criteria. The revised 

air quality criteria reflect advances in 

scientific knowledge on the effects of 

the pollutant on public health or 

welfare. The EPA is also required to 

periodically review and revise the 

NAAQS, if appropriate, based on the 

revised criteria. 

Presently, EPA is reviewing the 

NAAQS for particulate matter (PM).1

The document announced today, Policy 

Assessment for the Review of the 

Particulate Matter National Ambient Air 

Quality Standards, contains staff 

analyses of the scientific bases for 

alternative policy options for 

consideration by the Agency prior to 

rulemaking. This document, which 

builds upon the historical ‘‘Staff Paper,’’ 

will serve to ‘‘bridge the gap’’ between 

the available scientific information and 

the judgments required of the 

Administrator in determining whether it 

is appropriate to retain or revise the 

standards.2 The current and potential 

alternative PM standards are considered 

in terms of the basic elements of the 

NAAQS: indicator, averaging time, 

form, and level. The PA builds upon 

information presented in the Integrated 

Science Assessment for Particulate 

Matter (ISA, EPA 600/R–08/139F and 

EPA 600/R–08/139FA, December 2009) 

and two quantitative risk and exposure 

assessment documents (REAs)— 

Quantitative Health Risk Assessment for 

Particulate Matter (EPA 452/R–10–005; 

June 2010) and Particulate Matter 

Urban-Focused Visibility Assessment 

(EPA 452/R–10–004, July 2010). 

A preliminary draft PA (EPA–452/P– 

09–007) was released in September 2009 

for informational purposes and to 

facilitate discussion with the Clean Air 

Scientific Advisory Committee (CASAC) 

at an October 5–6, 2009, meeting on the 

overall structure, areas of focus, and 

level of detail to be included in the PA 

(74 FR 46586, September 10, 2009). 

CASAC’s comments on the preliminary 

draft PA encouraged the development of 

a document focused on the key policyrelevant issues that draws from and is 

not repetitive of information in the 

Integrated Science Assessment (ISA) 

and REAs. These comments were 

considered in developing a first draft PA 

(EPA–452/P–10–003, March 2010; 75 FR 

4067, January 26, 2010) that built upon 

the information presented and assessed 

in the ISA and second draft REAs (EPA– 

452/P–10–001, February 2010; EPA– 

452/P–10–002, January 2010). The EPA 

presented an overview of the first draft 

PA at a CASAC meeting on March 10, 

2010 (75 FR 8062, February 23, 2010). 

CASAC and public review of the first 

draft PA was discussed during public 

teleconferences on April 8–9, 2010, (75 

FR 8062, February 23, 2010) and May 7, 

2010 (75 FR19971, April 16, 2010). 

CASAC (Samet, 2010a) 3 and public 

comments on the first draft PA were 

considered by EPA staff in developing a 

second draft PA (EPA 452/P–10–007, 

June 2010) based on the ISA and final 

REAs. The EPA solicited advice and 

recommendations from CASAC 

regarding the second draft PA at a 

public meeting that was held on July 

26–27, 2010 (75 FR 32763, June 9, 

2010). Following the CASAC meeting, 

EPA considered comments received 

from CASAC (Samet, 2010b) 4 and the 

public in preparing the final PA. The 

final PA is available through the 

Agency’s Technology Transfer Network 

(TTN) Web site at http://www.epa.gov/ 

ttn/naaqs/standards/pm/ 

s_pm_2007_pa.html. 

Dated: April 15, 2011. 

Mary Henigin, 

Acting Director, Office of Air Quality Planning 

and Standards. 

[FR Doc. 2011–9688 Filed 4–21–11; 8:45 am] 

BILLING CODE 6560–50–P 


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