1362 Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices 

52See SR letter 03–5, ‘‘Amended Interagency 

Guidance on the Internal Audit Function and its 

Outsourcing.’’ 

53As described below, the internal audit function 

should examine, evaluate, and perform an 

independent assessment of the firm’s internal 

control system. 

the board, senior management, and 

others within the firm. The frequency of 

reporting should depend on needs of the 

firm and the materiality of the issues. 

Risk reporting should adapt to market 

downturns or stress events. 

C. Internal Controls 

Principle: A firm should identify its 

system of internal control and 

demonstrate that it is commensurate 

with the firm’s size, scope of 

operations, activities, risk profile, 

strategy, and risk tolerance, and 

consistent with all applicable laws 

and regulations, including those 

related to consumer protection. 

Internal controls cover a wide range of 

activities and processes, and could 

include the following: 52

• Policies and procedures that set 

expectations for and govern the firm’s 

business activities and support 

functions; establish appropriate levels of 

authority, responsibility, and 

accountability for overseeing and 

executing the firm’s activities; and 

establish standards for prudent risktaking behaviors. 

• Clear assignment of roles and 

responsibilities and appropriate 

separation of duties. 

• Physical controls for restricting 

access to tangible assets. 

• Approvals and appropriate dual 

authorizations for key decisions, 

transactions, and execution of 

processes. 

• Verifications of transaction details 

and periodic reconciliations, such as 

those comparing cash flows to account 

records and statements. 

• Access controls, change 

management controls, data entry and 

related controls. 

• Escalation procedures with a 

system of checks and balances in 

situations that allow for managerial or 

employee discretion. 

Internal controls instill confidence in 

financial reporting and are important to 

ensure the integrity of the process and 

information relied upon by the firm to 

manage itself. Developing and 

maintaining an effective system of 

internal control is the responsibility of 

several parties, including business line 

management.53 Accordingly, a firm 

should assign management 

responsibilities for the establishment 

and maintenance of internal controls. 

To foster an appropriate control culture 

within the firm, adequate control 

activities should be integrated into the 

daily functions of all relevant personnel. 

All personnel should fully understand 

and adhere to policies and procedures 

affecting their duties and 

responsibilities. 

Principle: A firm should regularly 

evaluate and test the effectiveness of 

internal controls, and monitor 

functioning of controls so that 

deficiencies are identified and 

communicated in a timely manner. 

A firm should have mechanisms to 

test its system of internal control and to 

identify and escalate issues that appear 

to compromise its effectiveness. A firm 

should regularly evaluate and test the 

quality, reliability and effectiveness of 

internal controls, and monitor any 

potential deterioration. Generally, 

testing activities are conducted at 

specific points in time, whereas 

monitoring activities are continuous 

processes. The scope, frequency, and 

depth of testing should consider the 

complexity of the firm, the results of the 

firm’s risk assessments, and the number 

and significance of the deficiencies 

identified during prior testing. A firm 

should test and monitor internal 

controls using a risk-based approach, 

prioritizing efforts on controls in areas 

of highest risk and less effective 

controls. 

A firm should evaluate and 

communicate internal control 

deficiencies in a timely manner to those 

parties responsible for taking corrective 

action, including senior management. 

Firms should establish management 

information systems that track internal 

control weaknesses and escalate serious 

matters to the board, senior 

management, and responsible business 

line management, as appropriate. 

D. Internal Audit 

Principle: The internal audit function 

should examine, evaluate, and 

perform independent assessments of 

the firm’s risk management and 

internal control systems and report 

findings to senior management and 

the firm’s audit committee. 

An effective internal audit function 

provides independent assurance to the 

board and senior management 

concerning the effectiveness of risk 

management and internal control 

systems. The Federal Reserve issued 

guidance outlining the key components 

of an effective internal audit function in 

SR letter 03–5, and followed that with 

supplemental guidance in SR letter 13– 

1/CA letter 13–1, ‘‘Supplemental Policy 

Statement on the Internal Audit 

Function and Its Outsourcing.’’ The 

supplemental guidance builds upon the 

2003 interagency guidance of SR letter 

03–5 and further addresses the 

characteristics, governance, and 

operational effectiveness of a firm’s 

internal audit function. That existing 

audit guidance remains in place and is 

not superseded by this guidance. 

By order of the Board of Governors of the 

Federal Reserve System, January 5, 2018. 

Ann E. Misback, 

Secretary of the Board. 

[FR Doc. 2018–00294 Filed 1–10–18; 8:45 am] 

BILLING CODE P 

FEDERAL RESERVE SYSTEM 

Formations of, Acquisitions by, and 

Mergers of Bank Holding Companies 

The companies listed in this notice 

have applied to the Board for approval, 

pursuant to the Bank Holding Company 

Act of 1956 (12 U.S.C. 1841 et seq.) 

(BHC Act), Regulation Y (12 CFR part 

225), and all other applicable statutes 

and regulations to become a bank 

holding company and/or to acquire the 

assets or the ownership of, control of, or 

the power to vote shares of a bank or 

bank holding company and all of the 

banks and nonbanking companies 

owned by the bank holding company, 

including the companies listed below. 

The applications listed below, as well 

as other related filings required by the 

Board, are available for immediate 

inspection at the Federal Reserve Bank 

indicated. The applications will also be 

available for inspection at the offices of 

the Board of Governors. Interested 

persons may express their views in 

writing on the standards enumerated in 

the BHC Act (12 U.S.C. 1842(c)). If the 

proposal also involves the acquisition of 

a nonbanking company, the review also 

includes whether the acquisition of the 

nonbanking company complies with the 

standards in section 4 of the BHC Act 

(12 U.S.C. 1843). Unless otherwise 

noted, nonbanking activities will be 

conducted throughout the United States. 

Unless otherwise noted, comments 

regarding each of these applications 

must be received at the Reserve Bank 

indicated or the offices of the Board of 

Governors not later than February 6, 

2018. 

A. Federal Reserve Bank of Chicago 

(Colette A. Fried, Assistant Vice 

President) 230 South LaSalle Street, 

Chicago, Illinois 60690–1414: 

1. Emmetsburg Bank Shares Inc., 

Emmetsburg, Iowa; to acquire 100 

percent of the outstanding shares of 

Panora State Bank, Panora, Iowa. 


srobinson on DSK9F5VC42PROD with NOTICES
Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices 1363 

Board of Governors of the Federal Reserve 

System, January 8, 2018. 

Ann E. Misback, 

Secretary of the Board. 

[FR Doc. 2018–00341 Filed 1–10–18; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

[Docket No. FDA–2011–N–0275] 

Agency Information Collection 

Activities; Submission for Office of 

Management and Budget Review; 

Comment Request; Certification To 

Accompany Drug, Biological Product, 

and Device Applications or 

Submissions 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Notice. 

SUMMARY: The Food and Drug 

Administration (FDA) is announcing 

that a proposed collection of 

information has been submitted to the 

Office of Management and Budget 

(OMB) for review and clearance under 

the Paperwork Reduction Act of 1995. 

DATES: Fax written comments on the 

collection of information by February 

12, 2018. 

ADDRESSES: To ensure that comments on 

the information collection are received, 

OMB recommends that written 

comments be faxed to the Office of 

Information and Regulatory Affairs, 

OMB, Attn: FDA Desk Officer, Fax: 202– 

395–7285, or emailed to oira_

submission@omb.eop.gov. All 

comments should be identified with the 

OMB control number 0910–0616. Also 

include the FDA docket number found 

in brackets in the heading of this 

document. 

FOR FURTHER INFORMATION CONTACT: 

Amber Sanford, Office of Operations, 

Food and Drug Administration, Three 

White Flint North, 10A–12M, 11601 

Landsdown St., North Bethesda, MD 

20852, 301–796–8867, PRAStaff@

fda.hhs.gov. 

SUPPLEMENTARY INFORMATION: In 

compliance with 44 U.S.C. 3507, FDA 

has submitted the following proposed 

collection of information to OMB for 

review and clearance. 

Certification To Accompany Drug, 

Biological Product, and Device 

Applications or Submissions (Form 

FDA 3674) 

OMB Control Number 0910–0616— 

Extension 

The information required under 

section 402(j)(5)(B) of the Public Health 

Service Act (PHS Act) (42 U.S.C. 

282(j)(5)(B)) is submitted in the form of 

a certification, Form FDA 3674, which 

accompanies applications and 

submissions currently submitted to FDA 

and already approved by OMB. The 

OMB control numbers and expiration 

dates for those applications and 

submissions are: 21 CFR parts 312 and 

314 (human drugs), OMB control 

number 0910–0014, expiring February 

28, 2019, and OMB control number 

0910–0001, expiring December 31, 2017; 

21 CFR parts 312 and 601 (biological 

products), OMB control number 0910– 

0014, expiring February 28, 2019, and 

OMB control number 0910–0338, 

expiring March 31, 2020; and 21 CFR 

parts 807 and 814 (devices), OMB 

control number 0910–0120, expiring 

June 30, 2020, and OMB control number 

0910–0231, expiring March 31, 2020. 

Title VIII of the Food and Drug 

Administration Amendments Act of 

2007 (Pub. L. 110–85) amended the PHS 

Act by adding section 402(j). The 

provisions broadened the scope of 

clinical trials subject to submitting 

information and required additional 

information to be submitted to the 

clinical trials databank (https://

clinicaltrials.gov) (FDA has verified the 

website address, but FDA is not 

responsible for any subsequent changes 

to the website after this document 

publishes in the Federal Register) 

previously established by the National 

Institutes of Health (NIH)/National 

Library of Medicine. This includes 

expanded information on applicable 

clinical trials and summary information 

on the results of certain clinical trials. 

The provisions include responsibilities 

for FDA as well as several amendments 

to the Federal Food, Drug, and Cosmetic 

Act (FD&C Act). 

One provision, section 402(j)(5)(B) of 

the PHS Act, requires that a certification 

accompany human drug, biological, and 

device product submissions made to 

FDA. Specifically, at the time of 

submission of an application under 

sections 505, 515, or 520(m) of the 

FD&C Act (21 U.S.C. 355, 360e, or 

360j(m)), or under section 351 of the 

PHS Act (42 U.S.C. 262), or submission 

of a report under section 510(k) of the 

FD&C Act (21 U.S.C. 360(k)), such 

application or submission must be 

accompanied by a certification, Form 

FDA 3674, that all applicable 

requirements of section 402(j) of the 

PHS Act have been met. Where 

available, such certification must 

include the appropriate National 

Clinical Trial (NCT) numbers that are 

assigned upon submission of required 

information to the NIH databank at 

https://clinicaltrials.gov. 

The proposed extension of the 

collection of information is necessary to 

satisfy the previously mentioned 

statutory requirement. The importance 

of obtaining these data relates to 

adherence to the legal requirements for 

submissions to the clinical trials registry 

and results databank, and ensuring that 

individuals and organizations 

submitting applications or reports to 

FDA under the listed provisions of the 

FD&C Act or the PHS Act adhere to the 

appropriate legal and regulatory 

requirements for certifying to having 

complied with those requirements. The 

failure to submit the certification 

required by section 402(j)(5)(B) of the 

PHS Act, and the knowing submission 

of a false certification, are both 

prohibited acts under section 301 of the 

FD&C Act (21 U.S.C. 331). Violations are 

subject to civil money penalties. The 

Form FDA 3674 provides a convenient 

mechanism for sponsors/applicants/ 

submitters to satisfy the certification 

requirements of the statutory provision. 

To assist sponsors/applicants/ 

submitters in understanding the 

statutory requirements associated with 

Form FDA 3674, we have provided a 

guidance available at: https://

www.fda.gov/RegulatoryInformation/ 

Guidances/ucm125335.htm. This 

guidance recommends the applications 

and submissions FDA considers should 

be accompanied by the certification 

form, Form FDA 3674. The applications 

and submissions identified in the 

guidance are reflected in the burden 

analysis. In 2017, we updated the 

guidance to include references to the 

NIH Final Rule implementing 402(j) of 

the PHS Act (42 U.S.C. 282(j)). The final 

rule, published on September 21, 2016 

(81 FR 64982) (42 CFR part 11), clarifies 

the requirements for submission of 

clinical trial information to https://

clinicaltrials.gov. 

Investigational New Drug 

Applications. FDA’s Center for Drug 

Evaluation and Research (CDER) 

received 1,669 investigational new drug 

applications (INDs) and 15,285 clinical 

protocol IND amendments in calendar 

year (CY) 2016. CDER anticipates that 

IND and clinical protocol amendment 

submission rates will remain at or near 

this level in the near future. 

FDA’s Center for Biologics Evaluation 

and Research (CBER) received 381 new 


srobinson on DSK9F5VC42PROD with NOTICES