39702 Federal Register / Vol. 63, No. 142 / Friday, July 24, 1998 /Rules and Regulations

the desirable carryout level is a

necessary item in that calculation; (2)

this action is a relaxation in that

increasing the desirable carryout

increases the trade demand and free

tonnage percentage making more raisins

available to handlers for immediate use

early in the season; (3) producers and

handlers are aware of this action which

was unanimously recommended by the

Committee at a public meeting; and (4)

this rule provides a 10-day comment

period and any comments received will

be considered prior to finalization of

this rule.

List of Subjects in 7 CFR Part 989

Grapes, Marketing agreements,

Raisins, Reporting and recordkeeping

requirements.

For the reasons set forth in the

preamble, 7 CFR part 989 is amended as

follows:

PART 989—RAISINS PRODUCED

FROM GRAPES GROWN IN

CALIFORNIA

1. The authority citation for 7 CFR

part 989 continues to read as follows:

Authority: 7 U.S.C. 601–674.

2. Section 989.154 is revised to read

as follows:

§ 989.154 Desirable carryout levels.

The desirable carryout levels to be

used in computing and announcing a

crop year’s marketing policy shall be

equal to the total shipments of free

tonnage of the prior crop year during

August, September, and one-half of

October, for each varietal type,

converted to a natural condition basis:

Provided, That should the prior year’s

shipments be limited because of crop

conditions, the Committee may select

the total shipments during the months

of August, September, and one-half of

October during one of the three crop

years preceding the prior crop year.

Dated: July 21, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable

Programs.

[FR Doc. 98–19874 Filed 7–22–98; 10:03 am]

BILLING CODE 3410–02–P

FEDERAL HOUSING FINANCE BOARD

12 CFR Part 934

[No. 98–32]

RIN 3069–AA70

Authority to Approve Federal Home

Loan Bank Bylaws

AGENCY: Federal Housing Finance

Board.

ACTION: Final rule.

SUMMARY: The Federal Housing Finance

Board (Finance Board) is adopting the

interim final rule that added a new

provision to its regulation on Federal

Home Loan Bank (FHLBank) operations

to devolve responsibility for approving

FHLBank bylaws or amendments

thereto from the Finance Board to the

boards of directors of the FHLBanks as

a final rule without change. The rule is

part of the Finance Board’s continuing

effort to devolve management and

governance responsibilities to the

FHLBanks and is consistent with the

goals of the Regulatory Reinvention

Initiative of the National Performance

Review.

EFFECTIVE DATE: The final rule will

become effective on August 24, 1998.

FOR FURTHER INFORMATION CONTACT:

Amy R. Maxwell, Compliance

Assistance Division, Office of Policy,

202/408–2882, or Janice A. Kaye,

Attorney-Advisor, Office of General

Counsel, 202/408–2505, Federal

Housing Finance Board, 1777 F Street,

N.W., Washington, DC 20006.

SUPPLEMENTARY INFORMATION:

I. Statutory and Regulatory Background

Subject to the approval of the Finance

Board, section 12(a) of the Federal

Home Loan Bank Act authorizes the

board of directors of each FHLBank to

‘‘prescribe, amend, and repeal by-laws,

rules, and regulations governing the

manner in which its affairs may be

administered.’’ 12 U.S.C. 1432(a). In

December 1997, the Finance Board

published an interim final rule with

request for comments that added a new

section, designated as § 934.16, to its

regulation on FHLBank operations. See

62 FR 65197 (Dec. 11, 1997), codified at

12 CFR 934.16. The 30-day public

comment period closed on January 12,

1998. See id. This new provision

authorizes the board of directors of each

FHLBank to prescribe, amend, or repeal

bylaws or bylaws amendments

governing the manner in which the

FHLBank administers its affairs without

the prior approval of the Finance Board

provided that the bylaws or bylaws

amendments are consistent with

applicable statutes, regulations, and

Finance Board policies.

II. Analysis of Public Comments and

the Final Rule

The Finance Board received one

comment in response to the interim

final rule. The commenter supports the

rule because it promotes more efficient

operations that benefit the FHLBanks,

their members, and homebuyers.

Accordingly, for the reasons set forth in

detail in the interim final rulemaking,

the Finance Board is adopting the

interim final rule that devolves

responsibility for approving FHLBank

bylaws and amendments thereto from

the Finance Board to the boards of

directors of the FHLBanks without

change.

III. Regulatory Flexibility Act

The Finance Board adopted this

amendment to part 934 in the form of

an interim final rule and not as a

proposed rule. Therefore, the provisions

of the Regulatory Flexibility Act do not

apply. See 5 U.S.C. 601(2), 603(a).

IV. Paperwork Reduction Act

This final rule does not contain any

collections of information pursuant to

the Paperwork Reduction Act of 1995.

See 44 U.S.C. 3501 et seq. Consequently,

the Finance Board has not submitted

any information to the Office of

Management and Budget for review.

List of Subjects in 12 CFR Part 934

Federal home loan banks, Securities,

Surety bonds.

Accordingly, the Federal Housing

Finance Board hereby adopts the

interim final rule amending 12 CFR part

934 that was published at 62 FR 65197

on December 11, 1997, as a final rule

without any change.

Dated: July 8, 1998.

By the Board of Directors of the Federal

Housing Finance Board.

Bruce A. Morrison,

Chairperson.

[FR Doc. 98–19811 Filed 7–23–98; 8:45 am]

BILLING CODE 6725–01–P

FEDERAL HOUSING FINANCE BOARD

12 CFR Part 937

[No. 98–28]

Financial Disclosure by the Federal

Home Loan Banks

AGENCY: Federal Housing Finance

Board.

ACTION: Final rule.
Federal Register / Vol. 63, No. 142 / Friday, July 24, 1998 /Rules and Regulations 39703

SUMMARY: The Federal Housing Finance

Board (Finance Board) hereby amends

its regulations to require that the

Federal Home Loan Banks (Banks)

provide information in such form and

within such timeframes as the Finance

Board may prescribe so that the Finance

Board may prepare combined Bank

System financial disclosure in a

complete and timely manner; and to

require that any financial statements

issued by the individual Banks be

consistent in both form and content

with those presented in the combined

quarterly and annual financial reports

issued for the Bank System by the

Finance Board. This amendment is

intended to ensure that the Finance

Board can issue accurate and timely

financial disclosure to the capital

markets and that all information issued

to the public concerning the Bank

System is consistent and prepared in

accordance with uniform standards.

EFFECTIVE DATE: August 24, 1998.

FOR FURTHER INFORMATION CONTACT:

Joseph A. McKenzie, Director, Financial

Analysis and Reporting Division, Office

of Policy, 202/408–2845, or Deborah F.

Silberman, General Counsel, Office of

General Counsel, 202/408–2570, Federal

Housing Finance Board, 1777 F Street,

NW., Washington, DC 20006.

SUPPLEMENTARY INFORMATION:

I. Background

The Federal Home Loan Bank Act

(Bank Act), 12 U.S.C. 1421 et seq.,

authorizes the Finance Board to issue

consolidated obligations that are the

joint and several obligations of the

Banks in order to provide funds for the

Banks. 12 U.S.C. 1431(b), (c). The Bank

Act further authorizes the individual

Banks to issue debt securities subject to

rules and regulations adopted by the

Finance Board, 12 U.S.C. 1431(a). The

Finance Board has never adopted

regulations concerning the issuance of

debt securities by the individual Banks,

and the Banks have never issued debt

securities under this authority.

Pursuant to section 3(a)(2) of the

Securities Act of 1933, 15 U.S.C.

77c(a)(2), (Securities Act), the debt

securities issued by the Finance Board

to raise funds for the Banks are exempt

from the registration requirements of the

Securities Act. Section 3(a)(2) exempts

from registration and other requirements

of the Securities Act, inter alia,

securities issued or guaranteed by ‘‘any

person controlled or supervised by and

acting as an instrumentality of the

Government of the United States

pursuant to authority granted by the

Congress of the United States.’’ 15

U.S.C. 77c(a)(2).

Classes of securities issued by the

Finance Board similarly are exempt

from the registration and reporting

requirements of the Securities Exchange

Act of 1934, (15 U.S.C. 78a et seq.)

(Exchange Act), pursuant to section

3(a)(42) of the Exchange Act. (15 U.S.C.

78c(a)(42)). Section 3(a)(42)(B)

designates as securities exempt from

registration and reporting under the

Exchange Act, ‘‘government securities,’’

including ‘‘securities which are issued

or guaranteed by corporations in which

the United States has a direct or indirect

interest and which are designated by the

Secretary of the Treasury for exemption

as necessary or appropriate in the public

interest or for the protection of

investors.’’ Id. § 78c(a)(42)(B).

The exemptions from registration and

reporting under the Securities Act and

the Exchange Act discussed above are

principally grounded in a presumption

that the securities activities of

institutions acting as government

entities, as designated under the federal

securities laws, will be conducted in the

public interest and for the protection of

investors. While securities issued by the

Finance Board are exempt from the

registration and reporting requirements

of the Securities Act and the Exchange

Act, the Finance Board believes it is in

the public interest and in the interests

of the Bank System for the disclosure

documents used in connection with the

issuance of its debt to be as state-of-theart as possible. Indeed, one of the duties

of the Finance Board specified in the

Bank Act is that it ensures that the

Banks remain adequately capitalized

and able to raise funds in the capital

markets. See 12 U.S.C.

1422a(a)(3)(B)(iii).

However, the Finance Board

heretofore had never formally addressed

the scope and content of the financial

reports issued by itself on behalf of the

Bank System nor by individual Banks to

their members. Because the Finance

Board has supervisory and examination

authority over the Banks, it is the

Finance Board’s responsibility to

regulate the securities activities of those

institutions when it finds such

regulation to be necessary or

appropriate for the protection of

investors and the Bank system.

On February 2, 1998, the Finance

Board published for notice and

comment a proposed rule to amend its

regulations to add a requirement that

the Banks file with the Finance Board

for review and provide to their members

annual audited financial statements and

quarterly unaudited financial statements

prepared in conformance with the rules

and other requirements promulgated

under the Federal securities laws by the

Securities and Exchange Commission

(SEC). See 63 FR 5315 (Feb. 2, 1998).

The SEC’s disclosure requirements

prescribe that an issuer of securities into

the capital markets make full and fair

disclosure of all information material to

an investment decision in connection

with the offer, sale, and other market

transactions in those securities.

Generally, a securities issuer’s

compliance with SEC disclosure

regulations will reduce risk of and

liability for potential fraud. The

proposed rule was designed to ensure

that a Bank’s members would receive

timely, accurate, and uniform financial

information about their respective

Banks, and to codify prevailing practice

at the Banks. Nothing in the proposed

rule was intended to subject the Banks

to the jurisdiction of any other agency,

nor to confer any private right of action

on any member or on any investor in

Bank system securities. The proposed

rule invited comment on the scope of

the existing and proposed new

disclosures and to indicate to the

Finance Board any other disclosures

that would be appropriate.

Simultaneously with the publication

of the proposed rule, the Finance Board

also published for notice and comment

a proposed policy statement regarding

the preparation of the Bank System

combined annual and quarterly

financial reports by the Finance Board

in connection with the issuance of

consolidated debt securities pursuant to

section 11(c) of the Bank Act, 12 U.S.C.

1431(c), in accordance with the

disclosure requirements promulgated by

the SEC. See Proposed Policy Statement,

Finance Board Res. No. 98–01, January

21, 1998, 63 FR 5381 (February 2, 1998).

The Finance Board received a total of

six comments on the proposed policy

statement and the proposed rule.

Commenters included three Banks, one

committee of the Banks, one trade

association, and one accounting firm.

II. Analysis of the Final Rule

A. In General.

A number of the commenters

expressed concern about the increased

legal, accounting, and administrative

costs and other burdens adoption of the

proposed regulation would impose on

the Banks, and about the unintended

adverse consequences that would result

from incorporating the SEC’s disclosure

requirements into the regulation. In

particular, the commenters urged that

future rule changes by the SEC, and SEC

interpretations, bulletins, opinions, noaction letters, and analysis about its

regulations should be explicitly

excluded from incorporation into the
39704 Federal Register / Vol. 63, No. 142 / Friday, July 24, 1998 /Rules and Regulations

Finance Board’s regulation and policy

statement. The commenters suggested

that, instead of adopting the proposed

regulation, the Finance Board should

either delay adoption of the regulation

until further analysis of the effects of the

regulation could be made, or adopt its

own disclosure requirements

specifically tailored to the business of

the Banks.

The Finance Board believes that

uniformity, completeness, and accuracy

of financial disclosure in the capital

markets is a critically important issue

and is, therefore, unwilling to delay the

adoption of a final rule regarding

financial disclosure requirements for the

Banks. However, the Finance Board

does not wish to impose unnecessary

burdens on the Banks, or to require

duplicative disclosure. Therefore, the

final rule has been revised in a number

of ways to address these concerns and

other considerations.

B. Definitions—Section 937.1.

The proposed rule sets forth certain

definitions to be used in the part. The

definitions of ‘‘Bank,’’ and ‘‘Finance

Board’’ are adopted as proposed without

change. The definitions of ‘‘Member,’’

‘‘SEC,’’ ‘‘Form 10–K,’’ ‘‘Form 10–Q,’’

and ‘‘Regulation S–X’’ have been

deleted from the final rule, for the

reasons discussed below.

C. Annual and Quarterly Financial

Statement Requirements.

Section 937.2 of the proposed rule

would have imposed a requirement that

the Banks file with the Finance Board

for review, and distribute to their

shareholders, annual and quarterly

financial statements as provided further

in the regulation. Sections 937.3 and

937.4 of the proposed rule set forth the

specific SEC regulatory requirements

with which the Banks would have had

to comply in preparing their annual and

quarterly financial statements. These

sections also set forth the timeframes in

which the reports had to be prepared.

As discussed in the notice of

proposed rulemaking, see 63 FR 5315,

5317, all of the Banks currently provide

annual financial statements to their

shareholders, but not all of the Banks

currently issue quarterly financial

statements. The Finance Board wished

to assure that all members of the Banks

were receiving timely financial

information about the Banks, and

proposed to use this regulation as the

vehicle for that disclosure.

Since the proposed policy statement

and regulation were published, and in

connection with this project, the

Finance Board has been reevaluating

how it provides disclosure about

individual Banks in the combined Bank

System annual and quarterly reports.

The combined Bank System annual

report already contains combining

schedules for the statement of

condition, the statement of income,

statements of capital, and statements of

cash flows. These combining schedules

include a column of information

supplied by and about each of the

Banks, a column of combining

adjustments that eliminate all material

interbank transactions, and a column of

information for the combined Bank

System. While the Finance Board has

not provided this information in its

combined Bank System quarterly

financial reports, it is planning to do so

in future quarterly reports.

Because the Finance Board already

includes significant financial

information about each Bank in the

Bank System combined annual report,

because it plans to provide similarly

significant financial information about

each Bank in the Bank System

combined quarterly reports, and because

the Finance Board intends to distribute

the combined annual and quarterly

reports to members of the Bank System

expeditiously after their publication, the

Finance Board no longer believes it is

necessary to require the Banks to file for

review and distribute to members

individually prepared annual and

quarterly financial statements.

Therefore, all of the requirements of

proposed sections 937.2, 937.3, and

937.4 have been deleted from the final

rule.

Instead, the final rule requires in

section 937.2 only that the Banks

provide to the Finance Board, in such

form and within such timeframes as the

Finance Board shall specify, all such

financial and other information as the

Finance Board shall need to prepare the

combined Bank System annual and

quarterly reports.

There is no longer any requirement in

the final rule that the Banks prepare or

issue individual Bank annual or

quarterly financial reports. However,

section 937.3 of the final rule provides

that if the Banks choose to issue

individual annual or quarterly financial

reports, any financial statements

contained in those reports must be

consistent in both form and content

with the financial statements presented

in the combined Bank System annual or

quarterly financial reports. This is to

assure that all financial statements

relating to the Banks in the public

domain will be consistent and accurate.

The requirements of section 937.3

will not preclude a Bank from including

abbreviated balance sheets or other

abbreviated financial statement

information in marketing materials, so

long as those materials provide clear

disclosure of how and where the reader

may obtain a complete set of the

financial statements of the Bank or the

Bank System.

III. Regulatory Flexibility Act

The final rule applies only to the

Banks, which are not ‘‘small entities’’ as

defined in the Regulatory Flexibility Act

(RFA). See 5 U.S.C. 601(6). Therefore, in

accordance with section 605(b) of the

RFA, see id. 605(b), the Finance Board

hereby certifies that the final rule will

not have a significant economic impact

on a substantial number of small

entities.

IV. Paperwork Reduction Act

The final rule does not contain any

collections of information pursuant to

the Paperwork Reduction Act of 1995.

See 44 U.S.C. 3501 et seq. Consequently,

the Finance Board has not submitted

any information to the Office of

Management and Budget for review.

List of Subjects in 12 CFR Part 937

Federal home loan banks, Reporting

and recordkeeping requirements.

Accordingly, the Federal Housing

Finance Board hereby amends title 12,

chpate IX, of the Code of Federal

Regulations, to add a new part 937, as

follows:

PART 937—FINANCIAL STATEMENTS

OF THE BANKS

Sec.

937.1 Definitions.

937.2 Requirement to provide financial and

other information to the Finance Board.

937.3 Requirement for voluntary bank

disclosure.

Authority: 12 U.S.C. 1422a, 1422b, 1426,

1431, and 1440.

§ 937.1 Definitions.

As used in this part:

Bank means a Federal Home Loan

Bank established under the authority of

the Federal Home Loan Bank Act, as

amended (12 U.S.C. 1421 et seq.).

Finance Board means the agency

established as the Federal Housing

Finance Board.

§ 937.2 Requirement to provide financial

and other information to the Finance Board.

In order to facilitate the preparation

by the Finance Board of combined Bank

System annual and quarterly reports,

each Bank shall provide to the Finance
Federal Register / Vol. 63, No. 142 / Friday, July 24, 1998 /Rules and Regulations 39705

Board in such form and within such

timeframes as the Finance Board shall

specify, all financial and other

information the Finance Board shall

request for that purpose.

§ 937.3 Requirement for voluntary bank

disclosure.

Any financial statements contained in

an annual or quarterly financial report

issued by an individual Bank must be

consistent in both form and content

with the financial statements presented

in the combined Bank System annual or

quarterly financial reports prepared and

issued by the Finance Board.

Dated: June 24, 1998.

By the Board of Directors of the Federal

Housing Finance Board.

Bruce A. Morrison,

Chairperson.

[FR Doc. 98–19810 Filed 7–23–98; 8:45 am]

BILLING CODE 6725–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Airspace Docket No. 98–AGL–27]

Establishment of Class E Airspace;

Waupun, WI

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Final rule.

SUMMARY: This action establishes Class

E airspace at Waupun, WI. A Global

Positioning System (GPS) Standard

Instrument Approach Procedure (SIAP),

102° helicopter point in space approach,

has been developed for Waupun

Memorial Hospital Heliport. Controlled

airspace extending upward from 700 to

1200 feet above ground level (AGL) is

needed to contain aircraft executing the

approach. This action creates controlled

airspace with a radius of 6.0 miles for

the point in space serving Waupun

Memorial Hospital Heliport.

EFFECTIVE DATE: 0901 UTC, October 8,

1998.

FOR FURTHER INFORMATION CONTACT:

Michelle M. Behm, Air Traffic Division,

Airspace Branch, AGL–520, Federal

Aviation Administration, 2300 East

Devon Avenue, Des Plaines, Illinois

60018, telephone (847) 294–7568.

SUPPLEMENTARY INFORMATION:

History

On Thursday, May 28, 1998, the FAA

proposed to amend 14 CFR part 71 to

establish Class E airspace at Waupun,

WI (63 FR 29161). The proposal was to

add controlled airspace extending

upward from 700 to 1200 feet AGL to

contain Instrument Flight Rules (IFR)

operations in controlled airspace during

portions of the terminal operation and

while transiting between the enroute

and terminal environments.

Interested parties were invited to

participate in this rulemaking

proceeding by submitting written

comments on the proposal to the FAA.

No comments objecting to the proposal

were received. Class E airspace

designations for airspace areas

extending upward from 700 feet or more

above the surface of the earth are

published in paragraph 6005 of FAA

Order 7400.9E dated September 10,

1997, and effective September 16, 1997,

which is incorporated by reference in 14

CFR 71.1. The Class E airspace

designation listed in this document will

be published subsequently in the Order.

The Rule

The amendment to 14 CFR part 71

establishes Class E airspace at Waupun,

WI to accommodate aircraft executing

the proposed GPS SIAP, 102° helicopter

point in space approach, at Waupun

Memorial Hospital Heliport by creating

controlled airspace for the heliport.

Controlled airspace extending upward

from 700 to 1200 feet AGL is needed to

contain aircraft executing the approach.

The area will be depicted on

appropriate aeronautical charts.

The FAA has determined that this

regulation only involves an established

body of technical regulations for which

frequent and routine amendments are

necessary to keep them operationally

current. Therefore, this regulation—(1)

is not a ‘‘significant regulatory action’’

under Executive Order 12866; (2) is not

a ‘‘significant rule’’ under DOT

Regulatory Policies and Procedures (44

FR 11034; February 26, 1979); and (3)

does not warrant preparation of a

Regulatory Evaluation as the anticipated

impact is so minimal. Since this is a

routine matter that will only affect air

traffic procedures and air navigation, it

is certified that this rule will not have

a significant economic impact on a

substantial number of small entities

under the criteria of the Regulatory

Flexibility Act.

List of Subjects in 14 CFR Part 71

Airspace, Incorporation by reference,

Navigation (air).

Adoption of the Amendment

In consideration of the foregoing, the

Federal Aviation Administration

amends 14 CFR part 71 as follows:

PART 71—DESIGNATION OF CLASS A,

CLASS B, CLASS C, CLASS D, AND

CLASS E AIRSPACE AREAS;

AIRWAYS; ROUTES; AND REPORTING

POINTS

1. The authority citation for part 71

continues to read as follows:

Authority: 49 U.S.C. 106(g), 40103, 40113,

40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–

1963 Comp., p. 389.

§ 71.1 [Amended]

2. The incorporation by reference in

14 CFR 71.1 of the Federal Aviation

Administration Order 7400.9E, Airspace

Designations and Reporting Points,

dated September 10, 1997, and effective

September 16, 1997, is amended as

follows:

Paragraph 6005 Class E airspace areas

extending upward from 700 feet or more

above the surface of the earth.

* * * * *

AGL WI E5 Waupun, WI [New]

Waupun Memorial Hospital Heliport, WI

Point in Space Coordinates

(Lat. 43°38′00′′N., long. 88°45′46′′W.)

That airspace extending upward from 700

feet above the surface within a 6.0-mile

radius of the Point in Space serving Waupun

Memorial Hospital Heliport excluding that

airspace within the Oshkosh, WI, Juneau, WI,

and Beaver Dam, WI, Class E airspace areas.

* * * * *

Issued in Des Plaines, Illinois on July 15,

1998.

Richard K. Petersen,

Acting Assistant Manager, Air Traffic

Division.

[FR Doc. 98–19854 Filed 7–23–98; 8:45 am]

BILLING CODE 4910–13–M

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Airspace Docket No. 98–AGL–30]

Establishment of Class E Airspace;

Richland Center, WI

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Final rule.

SUMMARY: This action establishes Class

E airspace at Richland Center, WI. A

Global Positioning System (GPS)

Standard Instrument Approach

Procedure (SIAP), 168° helicopter point

in space approach, has been developed

for Richland Center Hospital Heliport.

Controlled airspace extending upward

from 700 to 1200 feet above ground

level (AGL) is needed to contain aircraft

executing the approach. This action