[Federal Register Volume 69, Number 205 (Monday, October 25, 2004)]
[Notices]
[Pages 62269-62274]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-23787]


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FEDERAL RESERVE SYSTEM


Agency information collection activities: Proposed collections; 
comment request

AGENCY: Board of Governors of the Federal Reserve System
SUMMARY: Background
    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, as 
per 5 CFR 1320.16, to approve of and assign OMB control numbers to 
collection of information requests and requirements conducted or 
sponsored by the Board under conditions set forth in 5 CFR 1320 
Appendix A.1. Board-approved collections of information are 
incorporated into the official OMB inventory of currently approved 
collections of information. Copies of the OMB 83-Is and 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.

Request for comment on information collection proposals

    The following information collections, which are being handled 
under this delegated authority, have received initial Board approval 
and are hereby published for comment. At the end of the comment period, 
the proposed information collections, 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 collections of information are 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 collections, including the validity of the 
methodology and assumptions used;
    c. ways to enhance the quality, utility, and clarity of the 
information to be collected; and
    d. ways to minimize the burden of information collections on 
respondents, including through the use of automated collection 
techniques or other forms of information technology.

DATES: Comments must be submitted on or before December 27, 2004.

ADDRESSES: You may submit comments, identified by FR 2058, FR Y-7, FR 
Y-9, FR Y-11, or FR 2314 by any of the following methods:
    <bullet> Agency Web Site: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#72001715015c111d1f1f171c0601321417161700131e001701170004175c151d04"><span class="__cf_email__" data-cfemail="82f0e7e5f1ace1edefefe7ecf6f1c2e4e7e6e7f0e3eef0e7f1e7f0f4e7ace5edf4">[email protected]</span></a>. Include docket 
number in the subject line of the message.
    <bullet> FAX: 202/452-3819 or 202/452-3102.
    <bullet> Mail: Jennifer J. Johnson, Secretary, Board of Governors 
of the Federal Reserve System, 20th Street and Constitution Avenue, 
N.W., Washington, DC 20551.
    All public comments are available from the Board's web site at 
www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, 
except as necessary 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 in Room 
MP-500 of the Board's Martin Building (20th and C Streets, N.W.) 
between 9:00 a.m. and 5:00 p.m. on weekdays.

FOR FURTHER INFORMATION CONTACT: A copy of the proposed forms and 
instructions, the Paperwork Reduction Act Submission (OMB 83-I), 
supporting statements, and other documents that will be placed into 
OMB's public docket files once approved may be requested from the 
agency clearance officer, whose name appears below.
    Cynthia Ayouch, Federal Reserve Board Clearance Officer (202-452-
3829), Division of Research and Statistics, Board of Governors of the 
Federal Reserve System, Washington, DC 20551. Telecommunications Device 
for the Deaf (TDD) users may contact (202-263-4869), Board of Governors 
of the Federal Reserve System, Washington, DC 20551.

Proposal to approve under OMB delegated authority the extension for 
three years, without revision, the following report:

    Report title: Notification of Foreign Branch Status
    Agency form number: FR 2058
    OMB control number: 7100-0069
    Frequency: on occasion
    Reporters: Member banks, bank holding companies, and Edge and 
agreement corporations
    Annual reporting hours: 20 hours
    Estimated average hours per response: 15 minutes
    Number of respondents: 79

[[Page 62270]]

    General description of report: This information collection is 
mandatory (12 U.S.C. 321, 601, and 602 (member banks)); (12 U.S.C. 615 
(Edge corporations)); (12 U.S.C. 601 (agreement corporations)); and (12 
U.S.C. 1844(c) (bank holding companies)) and is not regarded as 
confidential.
    Abstract: Member banks, bank holding companies, and Edge and 
agreement corporations are required to notify the Federal Reserve of 
the opening, closing, or relocation of a foreign branch. The Federal 
Reserve needs the information collected on the FR 2058 to fulfill 
supervisory responsibilities specified in Regulation K including the 
supervision of foreign branches of U.S. banking organizations. The 
information submitted on the FR 2058 notification is the primary means 
by which the Federal Reserve monitors the current operating status of 
foreign branches of U.S banking organizations. The information is 
needed in order to evaluate the organization's international exposure 
and to update the Federal Reserve's structure files on U.S. banking 
organizations. The information enables the Federal Reserve to evaluate 
an organization's development over time. The FR 2058 notification is 
the only source of this information.

Proposal to approve under OMB delegated authority the extension for 
three years, with revision, of the following reports:

    1. Report title: Reports of Foreign Banking Organizations.
    Agency form numbers: FR Y-7, FR Y-7N, FR Y-7NS, and FR Y-7Q.
    OMB control number: 7100-0125.
    Frequency: Quarterly and annually.
    Reporters: Foreign banking organizations (FBOs).
    Annual reporting hours: 5,384 hours.
    Estimated average hours per response:
    FR Y-7: 3.50 hours,
    FR Y-7N (quarterly): 6 hours,
    FR Y-7N (annual): 6 hours,
    FR Y-7NS: 1 hour,
    FR Y-7Q (quarterly): 1.25 hours,
    FR Y-7Q (annual): 1 hour.
    Number of respondents:
    FR Y-7: 257,
    FR Y-7N (quarterly): 129,
    FR Y-7N (annual): 137,
    FR Y-7NS: 170,
    FR Y-7Q (quarterly): 52,
    FR Y-7Q (annual): 136.
    General description of report: This information collection is 
mandatory (12 U.S.C. Sec. Sec.  601-604a, 611-631, 1844(c), 3106, and 
3108(a)). Confidential treatment is not routinely given to the data in 
these reports. However, the FR Y-7Q data will be held confidential 
until 120 days after the as-of date. Also, confidential treatment for 
information, in whole or in part, on any of the reporting forms can be 
requested in accordance with the instructions to the form, pursuant to 
sections (b)(4) and (b)(6) of the Freedom of Information Act [5 U.S.C. 
Sec. Sec.  522(b)(4) and (b)(6)].
    Abstract: The FR Y-7 is filed by all foreign banking organizations 
(FBOs) that engage in banking in the United States, either directly or 
indirectly, to update their financial and organizational information. 
The Federal Reserve uses information to assess an FBO's ability to be a 
continuing source of strength to its U.S. banking operations and to 
determine compliance with U.S. laws and regulations.
    The FR Y-7N collects financial information for U.S. nonbank 
subsidiaries held by FBOs other than through a U.S. bank holding 
company or bank. This report consists of a balance sheet and income 
statement; information on changes in equity capital, changes in the 
allowance for loan and lease losses, off-balance-sheet items, and 
loans; and a memoranda section. The FR Y-7NS collects net income, total 
assets, equity capital, and total off-balance-sheet items for smaller, 
less complex subsidiaries.
    The FR Y-7Q collects consolidated capital and asset information 
from all FBOs. The report collects tier 1 capital, total risk-based 
capital, risk-weighted assets, and total assets.
    Current Actions: The Federal Reserve proposes to revise the FR Y-7 
by requiring that only top-tier FBOs file the FR Y-7 report, modifying 
the cover pages, changing the order of the report and instructions, and 
clarifying several areas in the instructions. The Federal Reserve 
proposes to revise the FR Y-7 to be consistent with the reporting 
requirements detailed in the Annual Report of Bank Holding Companies 
(FR Y-6; OMB No. 7100-0124), Report of Changes in Organizational 
Structure (FR Y-10; OMB No. 7100- 0297), and the Report of Changes in 
FBO Organizational Structure (FR Y-10F; OMB No. 7100- 0297). The 
proposed revisions to the FR Y-7 would be effective beginning with 
fiscal year-ends of December 31, 2004; the Federal Reserve requests 
specific comment on this effective date. The Federal Reserve also 
proposes to revise the FR Y- 7N reporting instructions with respect to 
balances due from related organizations, to insure consistent reporting 
of unconsolidated subsidiaries, and to parallel changes proposed for 
other nonbank subsidiary reports. The revisions to the FR Y-7N would be 
effective as of the March 31, 2005, report date.
    2. Report title: Financial Statements for Bank Holding Companies
    Agency form number: FR Y-9C, FR Y-9LP, FR Y-9SP, FR Y-9CS, and FR 
Y-9ES
    OMB control number: 7100-0128
    Frequency: Quarterly, semiannually, and annually
    Reporters: Bank holding companies (BHCs)
    Annual reporting hours: 399,192
    Estimated average hours per response:
    FR Y-9C: 35.40 hours,
    FR Y-9LP: 4.75 hours,
    FR Y-9SP: 4.85 hours,
    FR Y-9ES: 30 minutes,
    FR Y-9CS: 30 minutes.
    Number of respondents:
    FR Y-9C: 2,240,
    FR Y-9LP: 2,590,
    FR Y-9SP: 3,253,
    FR Y-9ES: 87,
    FR Y-9CS: 600.
    General description of report: This information collection is 
mandatory (12 U.S.C. 1844(c)). Confidential treatment is not routinely 
given to the data in these reports. However, confidential treatment for 
the reporting information, in whole or in part, can be requested in 
accordance with the instructions to the form, pursuant to sections 
(b)(4), (b)(6)and (b)(8) of the Freedom of Information Act [5 U.S.C. 
Sec. Sec.  522(b)(4), (b)(6) and (b)(8)].
    Abstract: The FR Y-9C collects basic financial data from a domestic 
bank holding company (BHC) on a consolidated basis in the form of a 
balance sheet, an income statement, and detailed supporting schedules, 
including a schedule of off-balance-sheet items, similar to the Federal 
Financial Institutions Examination Council (FFIEC) Consolidated Reports 
of Condition and Income (Call Reports) (FFIEC 031 &041; OMB No.7100-
0036). The FR Y-9C collects data from the BHC as of the end of March, 
June, September, and December. The FR Y-9C is filed by top-tier BHCs 
with total consolidated assets of $150 million or more and lower-tier 
BHCs that have total consolidated assets of $1 billion or more. In 
addition, multibank holding companies with total consolidated assets of 
less than $150 million with debt outstanding to the general public or 
engaged in certain nonbank activities must file the FR Y-9C.
    The FR Y-9LP collects basic financial data from domestic BHCs on an 
unconsolidated, parent-only basis in the form of a balance sheet, an 
income statement, and supporting schedules relating to investments, 
cash flow, and certain memoranda items. This report is

[[Page 62271]]

filed as of the end of March, June, September, and December on a parent 
company only basis by each BHC that files the FR Y-9C. In addition, for 
tiered BHCs, a separate FR Y-9LP must be filed for each lower-tier BHC.
    The FR Y-9SP is a parent company only financial statement filed by 
smaller BHCs as of the end of June and December. Respondents include 
one-bank holding companies with total consolidated assets of less than 
$150 million and multibank holding companies with total consolidated 
assets of less than $150 million that meet certain other criteria. This 
form is a simplified or abbreviated version of the more extensive 
parent company only financial statement for large BHCs (FR Y-9LP). This 
report collects basic balance sheet and income information for the 
parent company, information on intangible assets, and information on 
intercompany transactions.
    The FR Y-9CS is a free form supplement that may be utilized to 
collect any additional information deemed to be critical and needed in 
an expedited manner. It is intended to supplement the FR Y-9C and FR Y-
9SP reports.
    The FR Y-9ES collects financial information from employee stock 
ownership plans (ESOPs) that are also BHCs on their benefit plan 
activities as of December 31. It consists of four schedules: Statement 
of Changes in Net Assets Available for Benefits, Statement of Net 
Assets Available for Benefits, Memoranda, and Notes to the Financial 
Statements.
    Current Actions: The Federal Reserve proposes to modify information 
collected on the FR Y-9C and FR Y-9SP to: identify private equity 
merchant banking activity, identify firms providing auditing services 
to the BHC, add an item for subordinated notes payable to trusts 
issuing trust preferred securities to the FR Y-9C balance sheet, and 
add a memoranda item for nonvoting equity capital to the FR Y-9SP. 
Additionally, the Federal Reserve requests public comment on modifying 
the FR Y-9LP filing deadline to be consistent with the FR Y-9C. The FR 
Y-9ES and FR Y-9CS would not be revised.

FR Y-9C

    The Federal Reserve proposes to make the following revisions to the 
FR Y-9C, effective as of March 31, 2005. Implementation of the proposed 
revisions to Schedule HC-M would be concurrent with the proposed 
changes to the Consolidated Bank Holding Company Report of Equity 
Investments in Nonfinancial Companies (FR Y-12; OMB No. 7100-0300), 
effective March 31, 2005.
    Proposed Revisions to the Accelerated Filing Deadline. The U.S. 
Securities and Exchange Commission (SEC) announced on August 26, 2004, 
a proposal to postpone, for one year, the final phase-in period for 
acceleration of report deadlines for certain larger companies. The SEC 
has proposed this change to allow additional time and opportunity for 
accelerated filers and their auditors to focus on the new requirements 
regarding internal control over financial reporting mandated by Section 
404 of the Sarbanes-Oxley Act. In keeping with the SEC's proposed 
postponement, the Federal Reserve proposes to postpone for one year the 
accelerated filing deadline for quarterly reporting for top-tier BHCs 
to 35 days until the June 2006 reporting date. The 35-day filing 
deadline would be effective for each quarter thereafter, except for the 
December reporting date, which would remain at 45 days.

Schedule HC - Balance Sheet

    (1) The Federal Reserve proposes to add a new item 19.b, 
``Subordinated notes payable to trusts issuing trust preferred 
securities,'' and renumber current item 19, ``Subordinated notes and 
debentures'' as item 19.a. Information on subordinated notes payable to 
trusts issuing trust preferred securities (TPS) would no longer be 
included in Schedule HC, item 20, ``Other liabilities.'' In addition, 
TPS would no longer be reported in Schedule HC-R, memoranda item 3.d, 
``Other cumulative preferred stock eligible for inclusion in Tier 1 
capital (e.g., trust preferred securities) (included in Schedule HC, 
item 20 or 22).'' The caption for memoranda item 3.d would be modified 
to remove the reference to TPS.
    Currently, the amount of TPS eligible for inclusion in Tier 1 
capital is included in Schedule HC-R, memoranda item 3.d, ``Other 
cumulative preferred stock eligible for inclusion in Tier 1 capital,'' 
along with any other hybrid instruments that are eligible for inclusion 
in Tier 1 capital. In addition, TPS are included in Schedule HC, item 
20, on the balance sheet. The Federal Reserve proposes to move the 
reporting of TPS directly to the balance sheet as a separate line item 
and to exclude TPS as part of Schedule HC, item 20 and as part of 
Schedule HC-R, memoranda item 3.d. Therefore memoranda item 3.d would 
only collect information on the amount of any other hybrid securities 
(other than TPS) that are eligible for inclusion in Tier 1 capital and 
reported in ``Other liabilities'' or as minority interest on the 
balance sheet. This change does not represent any change to the risk-
based capital treatment for trust preferred securities. BHCs should 
continue to include the allowable amount of eligible TPS in their tier 
1 capital for regulatory purposes.
    The proper reporting classification (debt or equity) of TPS has 
been under debate and scrutiny during the past several years. In the 
last two years, the Financial Accounting Standards Board (FASB) has 
ruled that trust preferred securities should be reported as liabilities 
on the balance sheet. In March 2004, BHCs were instructed to include 
TPS in ``Other liabilities.'' Subsequently, the Federal Reserve decided 
that the reporting of TPS separately on the balance sheet would be 
consistent with how TPS are presented in other BHC public financial 
statements. The Federal Reserve believes it is more appropriate to 
report these instruments in a separate line item than to require them 
to be reported with many other items in ``Other liabilities.'' The 
proposed revisions would allow the Federal Reserve to continue to 
measure and monitor all TPS issued out of special purpose entities.
    (2) The Federal Reserve proposes to add a new memoranda item 1 to 
collect the name and address of the BHC's external auditing firm and 
the name and email address of the engagement partner. The item would be 
collected initially in the March 31, 2005, report and then annually as 
of December 31.
    This information would identify firms providing full-scope auditing 
services to top-tier BHCs in which an opinion is rendered on their 
financial statements. BHCs that do not have a full-scope audit 
conducted of their financial statements would not need to complete this 
item. This information would be used by the Federal Reserve to 
facilitate more efficient supervision of the banking industry on issues 
related to accounting and auditing. The information would also enable 
the Federal Reserve to more readily identify firms that may be 
interested in participating in regional CPA and examiner roundtable 
discussions and similar programs designed to improve communication 
between the accounting profession and the regulatory community. The 
name and email address of the engagement partner would be considered 
confidential, consistent with the treatment given to other contact 
information provided on the FR Y-9C.

Schedule HC-M-Memoranda

    The Federal Reserve proposes to modify or delete items used to

[[Page 62272]]

determine if the reporting bank holding company must complete the FR Y-
12 and add items to identify private equity merchant banking (PEMB) 
activity by institutions exempt from filing the FR Y-12.
    (1) Modify item 17, ``Do your aggregate nonfinancial equity 
investments equal or exceed the lesser of $200 million (on an 
acquisition cost basis) or 5 percent of the BHC's consolidated Tier 1 
capital as of the report date?'' to decrease the aggregate nonfinancial 
equity investments threshold from $200 million to $100 million and 
increase the consolidated Tier 1 capital threshold from 5 percent to 10 
percent. The current reporting criterion tends to require information 
to be reported by the very largest and the very smallest PEMB 
investors, but fails to identify mid-level participants. The reduction 
in the dollar threshold should lead to retrieving information from 
midsize participants, broadening the scope of monitoring PEMB activity. 
The proposed increase in the Tier 1 capital threshold would reduce 
burden for respondents, while continuing to screen for the smaller BHCs 
with a significant concentration of capital invested in this asset 
class. The Federal Reserve notes that there is limited usefulness in 
collecting detailed information on this type of activity from small 
BHCs with a minor concentration of capital invested in this asset 
class. This item would be renumbered as item 18.
    (2) Delete item 18, ``Has the bank holding company made an 
effective election to become a financial holding company?'' This 
information is readily available on the National Information Center 
database.
    (3) Add new item 19(a), ``Has the bank holding company sold or 
otherwise liquidated its holding of any nonfinancial equity investment 
since the previous reporting period?'' This information would be used 
as a measure to track PEMB transaction activity, including activity by 
BHCs that are not required to file the FR Y-12. This indicator would 
alert the Federal Reserve to the BHC's heightened risk profile in this 
activity and could lead to increased supervisory scrutiny.
    (4) Modify item 19, ``Does the bank holding company hold, directly 
or indirectly, an Edge corporation, Agreement corporation or Small 
Business Investment Company (SBIC) subsidiary or hold equities under 
section 4(c)(6) or 4(c)(7) of the Bank Holding Company Act?'' to 
clarify the legal authority by restating the question as ``Does the 
bank holding company hold, either directly or indirectly through a 
subsidiary or affiliate, any nonfinancial equity investments (see 
instructions for definition) within a Small Business Investment Company 
(SBIC) structure, or under section 4(c)(6) or 4(c)(7) of the Bank 
Holding Company Act, or pursuant to the merchant banking authority of 
section 4(k)4(H) of the Bank Holding Company Act, or pursuant to the 
investment authority granted by Regulation K?'' This item would be 
renumbered as item 17.
    (5) Add new item 19(b), ``Does the bank holding company manage any 
nonfinancial equity investments for the benefit of others?'' This 
information would be used to identify PEMB participants, including 
participants that are not required to file the FR Y-12, and would 
provide a measure of the assumed additional legal and reputational risk 
associated with managing these investments for others.
    Proposed items 17 and 18 would be used to determine if the 
reporting BHC must complete the FR Y-12. If the answer to item 17 is 
no, then the BHC does not need to complete the FR Y-12 and can skip 
item 18. If the answer to item 17 is yes and the answer to item 18 is 
no, then the BHC does not need to complete the FR Y-12. If the answer 
to both item 17 and item 18 is yes, then the BHC must complete the FR 
Y-12 report. All respondents that are not required to file the FR Y-12 
must complete items 19(a) and 19(b).
    The changes to Schedule HC-M are intended to dovetail with changes 
to information collected on the FR Y-12 regarding the supervision of 
merchant banking investments.

Instructions

    In addition to modifying instructions to incorporate the proposed 
reporting changes, instructions would be revised and clarified in an 
attempt to achieve greater consistency in reporting by respondents.

FR Y-9LP

    The Federal Reserve proposes to make the following revisions to the 
FR Y-9LP, effective as of March 31, 2005.
    Filing Deadline - A number of BHCs have requested that the filing 
deadline for the FR Y-9LP be made consistent with the FR Y-9C. Because 
the FR Y-9LP serves as source information for completing the FR Y-9C, 
information on the FR Y-9LP must be compiled prior to filing the FR Y-
9C. Therefore filing the FR Y-9LP on the same time frame as the FR Y-9C 
would not entail any additional reporting burden and could actually 
result in less reporting burden due to fewer follow-up calls from the 
Federal Reserve. Instructions would be clarified in an attempt to 
achieve greater consistency in reporting by respondents.

FR Y-9SP

    The FR Y-9SP is a parent company only financial statement filed by 
smaller BHCs as of the end of June and December. Respondents include 
one-bank holding companies with total consolidated assets of less than 
$150 million and multibank holding companies with total consolidated 
assets of less than $150 million that meet certain other criteria. This 
form is a simplified or abbreviated version of the more extensive 
parent company only financial statement for large BHCs (FR Y-9LP). This 
report collects basic balance sheet and income information for the 
parent company, information on intangible assets, and information on 
intercompany transactions.
    The Federal Reserve proposes to make the following changes to the 
FR Y-9SP, effective as of June 30, 2005. Implementation of the proposed 
revisions to Schedule SC-M would be concurrent with the proposed 
changes to the FR Y-12, effective March 31, 2005.

Schedule SC-Balance Sheet

    The Federal Reserve proposes to add a new memoranda item 1 to 
collect the name and address of the BHC's external auditing firm and 
the name and email address of the engagement partner. The item would be 
collected initially in the June 30, 2005, report and then annually as 
of December 31. This information would identify firms providing full-
scope auditing services to top-tier BHCs in which an opinion is 
rendered on the financial statements. BHCs that do not have a full-
scope audit conducted of their financial statements would not need to 
complete this item. This information would be used by the Federal 
Reserve to facilitate more efficient supervision of the banking 
industry on issues related to accounting and auditing. The information 
would also enable the Federal Reserve to more readily identify firms 
that may be interested in participating in regional CPA and examiner 
roundtable discussions and similar programs designed to improve 
communication between the accounting profession and the regulatory 
community. The name and email address of the engagement partner would 
be considered confidential, consistent with the treatment given to 
other contact information provided on the FR Y-9SP.

Schedule SC-M-Memoranda

    Private Equity Merchant Banking-The Federal Reserve proposes to 
modify

[[Page 62273]]

or delete items used to determine if the reporting bank holding company 
must complete the FR Y-12 and add items to identify private equity 
merchant banking (PEMB) activity by institutions exempt from filing the 
FR Y-12.
    (1) Modify item 18, ``Do your aggregate nonfinancial equity 
investments equal or exceed (on an acquisition cost basis) 5 percent of 
the BHC's total capital as of the report date?'' to increase the total 
capital threshold from 5 percent to 10 percent. The proposed increase 
in the total capital threshold would reduce burden for respondents, 
while continuing to screen for the smaller BHCs with a significant 
concentration of capital invested in this asset class. The Federal 
Reserve notes that there is limited usefulness in collecting detailed 
information on this type of activity from small BHCs with a minor 
concentration of capital invested in this asset class. This item would 
be renumbered as item 19.
    (2) Delete item 19, ``Has the bank holding company made an 
effective election to become a financial holding company?'' This 
information is readily available on the National Information Center 
database.
    (3) Add new item 20(a), ``Has the bank holding company sold or 
otherwise liquidated its holding of any nonfinancial equity investment 
since the previous reporting period?'' This information would be used 
as a measure to track PEMB transaction activity, including activity by 
BHCs that are not required to file the FR Y-12. This indicator would 
alert the Federal Reserve to the BHC's heightened risk profile in this 
activity and could lead to increased supervisory scrutiny.
    (4) Modify item 20, ``Does the bank holding company hold, directly 
or indirectly, an Edge corporation, Agreement corporation or Small 
Business Investment Company (SBIC) subsidiary or hold equities under 
section 4(c)(6) or 4(c)(7) of the Bank Holding Company Act?'' to 
clarify the legal authority by restating the question as ``Does the 
bank holding company hold, either directly or indirectly through a 
subsidiary or affiliate, any nonfinancial equity investments (see 
instructions for definition) within a Small Business Investment Company 
(SBIC) structure, or under section 4(c)(6) or 4(c)(7) of the Bank 
Holding Company Act, or pursuant to the merchant banking authority of 
section 4(k)4(H) of the Bank Holding Company Act, or pursuant to the 
investment authority granted by Regulation K?'' This item would be 
renumbered as item 18.
    (5) Add new item 20(b), ``Does the bank holding company manage any 
nonfinancial equity investments for the benefit of others?'' This 
information would be used to identify PEMB participants, including 
participants that are not required to file the FR Y-12, and would 
provide a measure of the assumed additional legal and reputational risk 
associated with managing these investments for others.
    Proposed items 18 and 19 would be used to determine if the 
reporting BHC must complete the FR Y-12. If the answer to item 18 is 
no, then the BHC does not need to complete the FR Y-12 and can skip 
item 19. If the answer to item 18 is yes and the answer to item 19 is 
no, then the BHC does not need to complete the FR Y-12. If the answer 
to both item 18 and item 19 is yes, then the BHC must complete the FR 
Y-12 report. All respondents that are not required to file the FR Y-12 
must complete items 20(a) and 20(b).
    The changes to Schedule SC-M are intended to dovetail with changes 
to information collected on the FR Y-12 regarding the supervision of 
merchant banking investments.
    Nonvoting Equity Capital - The Federal Reserve proposes to add a 
new item 4, ``Amount of nonvoting equity capital, including related 
surplus (included in balance sheet items 16.a, 16.b, 16.c, and 16.d).'' 
This item would include the amount of retained earnings and accumulated 
other comprehensive income that is associated with perpetual preferred 
and other stock which does not possess voting rights.
    Collecting nonvoting equity information would enable examiners and 
analysts to more readily evaluate the adequacy of the quality of 
capital in BHCs and to assess the significance of any changes that 
occur in the quality of capital in the organization. This additional 
detail has become necessary as the Federal Reserve's supervision 
function performs more off-site monitoring of BHCs in lieu of 
inspections or other on-site supervision. This information would 
facilitate monitoring the proportion of nonvoting and voting stock of a 
BHC as it approaches the threshold for filing the FR Y-9C, and becomes 
subject to the consolidated Capital Adequacy Guidelines.

Instructions

    In addition to modifying instructions to incorporate the proposed 
reporting changes, instructions would be revised and clarified in an 
attempt to achieve greater consistency in reporting by respondents.
    3. Report title: Financial Statements of U.S. Nonbank Subsidiaries 
of U.S. Bank Holding Companies.
    Agency form number: FR Y-11 and FR Y-11S
    OMB control number: 7100-0244.
    Frequency: Quarterly and annually.
    Reporters: Bank holding companies (BHCs).
    Annual reporting hours: 31,877 hours.
    Estimated average hours per response:
    FR Y-11 (quarterly): 6 hours,
    FR Y-11 (annual): 6 hours,
    FR Y-11S (annual): 1 hour.
    Number of respondents:
    FR Y-11 (quarterly): 1,246,
    FR Y-11 (annual): 218,
    FR Y-11S (annual): 665.
    General description of report: This information collection is 
mandatory (12 U.S.C. Sec. Sec.  1844(c)). Confidential treatment is not 
routinely given to the data in these reports. However, confidential 
treatment for the reporting information, in whole or in part, can be 
requested in accordance with the instructions to the form, pursuant to 
sections (b)(4), (b)(6)and (b)(8) of the Freedom of Information Act [5 
U.S.C. Sec. Sec.  522(b)(4), (b)(6) and (b)(8)].
    Abstract: The FR Y-11 and FR Y-11S collect financial information 
for individual U.S. nonbank subsidiaries of BHCs located in the United 
States. The FR Y-11 consists of a balance sheet and income statement; 
information on changes in equity capital, changes in the allowance for 
loan and lease losses, off-balance-sheet items, and loans; and a 
memoranda section. The FR Y-11S is an abbreviated form that comprises 
four data items: net income, total assets, equity capital, and total 
off-balance-sheet items. The data are used in conjunction with data 
from other BHC reports to assess the condition of BHCs that are heavily 
engaged in nonbanking activities and to monitor the volume, nature, and 
condition of their nonbanking operations.
    Current Actions: The Federal Reserve proposes to revise the FR Y-11 
reporting instructions with respect to balances due from related 
organizations, to insure consistent reporting of unconsolidated 
subsidiaries. The revisions to the FR Y-11 would be effective as of the 
March 31, 2005, report date.
    4. Report title: Financial Statements of Foreign Subsidiaries of 
U.S. Banking Organizations.
    Agency form number: FR 2314 and FR 2314S.
    OMB control number: 7100-0073.
    Frequency: Quarterly and annually.
    Reporters: Foreign subsidiaries of U.S. state member banks, bank 
holding companies, and Edge or agreement corporations.

[[Page 62274]]

    Annual reporting hours: 4,855 hours.
    Estimated average hours per response:
    FR 2314 (quarterly): 6 hours,
    FR 2314 (annual): 6 hours,
    FR 2314S (annual): 1 hour.
    Number of respondents:
    FR 2314 (quarterly): 156,
    FR 2314 (annual): 143,
    FR 2314S (annual): 253.
    General description of report: This information collection is 
mandatory (12 U.S.C. Sec. Sec.  324, 602, 625, and 1844). Confidential 
treatment is not routinely given to the data in these reports. However, 
confidential treatment for the reporting information, in whole or in 
part, can be requested in accordance with the instructions to the form, 
pursuant to sections (b)(4), (b)(6) and (b)(8) of the Freedom of 
Information Act [5 U.S.C. Sec. Sec.  522(b)(4) (b)(6) and (b)(8)].
    Abstract: The FR 2314 reports are collected from U.S. member banks, 
Edge and agreement corporations, and BHCs for their direct or indirect 
foreign subsidiaries. The FR 2314 reports collect information on 
assets, income, equity capital, and off-balance sheet items. The FR 
2314S is an abbreviated form that comprises four data items: net 
income, total assets, equity capital, and total off-balance sheet 
items. The data are used to identify current and potential problems at 
the foreign subsidiaries of U.S. parent companies, to monitor the 
activities of U.S. banking organizations in specific countries, and to 
develop a better understanding of activities within the industry, in 
general, and of individual institutions, in particular. The FR 2314 is 
the only source of comprehensive and systematic data on the assets, 
liabilities, and earnings of the foreign bank and nonbank subsidiaries 
of U.S. SMBs, BHCs, and Edge and agreement corporations.
    Current Actions: The Federal Reserve proposes to revise the FR 2314 
reporting instructions with respect to balances due from related 
organizations, to insure consistent reporting of unconsolidated 
subsidiaries. The revisions to the FR 2314 would be effective as of the 
March 31, 2005, report date.

    Board of Governors of the Federal Reserve System, October 19, 
2004.
Robert deV. Frierson,
Deputy Secretary of the Board.
[FR Doc. 04-23787 Filed 10-22-04; 8:45 am]
BILLING CODE: 6210-01-S


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