Federal Register / Vol. 86, No. 115 / Thursday, June 17, 2021 / Notices 32267 

1Reguation XX implements section 622 of the 

Dodd-Frank Wall Street Reform and Consumer 

Protection Act. See 12 U.S.C. 1852. 

2 12 U.S.C. 1852(a)(2), (b); 12 CFR 251.3. 

3This number reflects the average of the financial 

sector liabilities figure for the years ending 

December 31, 2019 ($21,618,290,757,000) and 

December 31, 2020 (21,957,634,194,000). 

4A financial company may request to use an 

accounting standard or method of estimation other 

than GAAP if it does not calculate its total 

consolidated assets or liabilities under GAAP for 

any regulatory purpose (including compliance with 

applicable securities laws). 12 CFR 251.3(e). In 

previous years, the Board received and approved 

requests from eleven financial companies to use an 

accounting standard or method of estimation other 

than GAAP to calculate liabilities. Ten of the 

companies were insurance companies that reported 

financial information under Statutory Accounting 

Principles (‘‘SAP’’), and one was a foreign company 

that controlled a U.S. industrial loan company that 

reported financial information under International 

Financial Reporting Standards (‘‘IFRS’’). For the 

insurance companies, the Board approved a method 

of estimation that was based on line items from 

SAP-based reports, with adjustments to reflect 

certain differences in accounting treatment between 

GAAP and SAP. For the foreign company, the Board 

approved the use of IFRS. Such companies that 

continue to be subject to Regulation XX continue 

to use the previously approved methods. The Board 

did not receive any new requests this year. 

FEDERAL RESERVE SYSTEM 

[Docket No. OP–1751] 

Announcement of Financial Sector 

Liabilities 

The Board’s Regulation XX prohibits 

a merger or acquisition that would 

result in a financial company that 

controls more than 10 percent of the 

aggregate consolidated liabilities of all 

financial companies (‘‘aggregate 

financial sector liabilities’’).1

Specifically, an insured depository 

institution, a bank holding company, a 

savings and loan holding company, a 

foreign banking organization, any other 

company that controls an insured 

depository institution, and a nonbank 

financial company designated by the 

Financial Stability Oversight Council 

(each, a ‘‘financial company’’) is 

prohibited from merging or 

consolidating with, acquiring all or 

substantially all of the assets of, or 

acquiring control of, another company if 

the resulting company’s consolidated 

liabilities would exceed 10 percent of 

the aggregate financial sector liabilities.2

Under Regulation XX, the Federal 

Reserve will publish the aggregate 

financial sector liabilities by July 1 of 

each year. Aggregate financial sector 

liabilities are equal to the average of the 

year-end financial sector liabilities 

figure (as of December 31) of each of the 

preceding two calendar years. 

FOR FURTHER INFORMATION CONTACT: 

Lesley Chao, Lead Financial Institution 

Policy Analyst, (202) 974–7063; 

Matthew Suntag, Senior Counsel, (202) 

452–3694; Laura Bain, Counsel, (202) 

736–5546; for the hearing impaired, 

TTY (202) 263–4869. 

Aggregate Financial Sector Liabilities 

‘‘Aggregate financial sector liabilities’’ 

is equal to $21,787,962,476,000.3 This 

measure is in effect from July 1, 2021 

through June 30, 2022. 

Calculation Methodology 

The aggregate financial sector 

liabilities measure equals the average of 

the year-end financial sector liabilities 

figure (as of December 31) of each of the 

preceding two calendar years. The yearend financial sector liabilities figure 

equals the sum of the total consolidated 

liabilities of all top-tier U.S. financial 

companies and the U.S. liabilities of all 

top-tier foreign financial companies, 

calculated using the applicable 

methodology for each financial 

company, as set forth in Regulation XX 

and summarized below. 

Consolidated liabilities of a U.S. 

financial company that was subject to 

consolidated risk-based capital rules as 

of December 31 of the year being 

measured, equal the difference between 

the U.S. financial company’s riskweighted assets (as adjusted upward to 

reflect amounts that are deducted from 

regulatory capital elements pursuant to 

the Federal banking agencies’ risk-based 

capital rules) and total regulatory 

capital, as calculated under the 

applicable risk-based capital rules. 

Companies in this category include 

(with certain exceptions listed below) 

bank holding companies, savings and 

loan holding companies, and insured 

depository institutions. The Federal 

Reserve used information collected on 

the Consolidated Financial Statements 

for Holding Companies (‘‘FR Y–9C’’) 

and the Bank Consolidated Reports of 

Condition and Income (‘‘Call Report’’) to 

calculate liabilities of these institutions. 

Consolidated liabilities of a U.S. 

financial company not subject to 

consolidated risk-based capital rules as 

of December 31 of the year being 

measured, equal liabilities calculated in 

accordance with applicable accounting 

standards. Companies in this category 

include nonbank financial companies 

supervised by the Board, bank holding 

companies and savings and loan 

holding companies subject to the 

Federal Reserve’s Small Bank Holding 

Company Policy Statement, savings and 

loan holding companies substantially 

engaged in insurance underwriting or 

commercial activities, and U.S. 

companies that control insured 

depository institutions but are not bank 

holding companies or savings and loan 

holding companies. ‘‘Applicable 

accounting standards’’ is defined as 

Generally Accepted Accounting 

Principles (‘‘GAAP’’), or such other 

accounting standard or method of 

estimation that the Board determines is 

appropriate.4 The Federal Reserve used 

information collected on the FR Y–9C, 

the Parent Company Only Financial 

Statements for Small Holding 

Companies (‘‘FR Y–9SP’’), and the 

Financial Company Report of 

Consolidated Liabilities (‘‘FR XX–1’’) to 

calculate liabilities of these institutions. 

Under Regulation XX, liabilities of a 

foreign banking organization’s U.S. 

operations are calculated using the riskweighted asset methodology for 

subsidiaries subject to the risk-based 

capital rule, plus the assets of all 

branches, agencies, and nonbank 

subsidiaries, calculated in accordance 

with applicable accounting standards. 

Liabilities attributable to the U.S. 

operations of a foreign financial 

company that is not a foreign banking 

organization are calculated in a similar 

manner to the method described for 

foreign banking organizations, and 

liabilities of a U.S. subsidiary not 

subject to the risk-based capital rule are 

calculated based on the U.S. 

subsidiary’s liabilities under applicable 

accounting standards. The Federal 

Reserve used information collected on 

the Capital and Asset Report for Foreign 

Banking Organizations (‘‘FR Y–7Q’’), the 

FR Y–9C, and the FR XX–1 to calculate 

liabilities of these institutions. 

By order of the Board of Governors of the 

Federal Reserve System, acting through the 

Director of Supervision and Regulation under 

delegated authority. 

Michele Taylor Fennell, 

Deputy Associate Secretary of the Board. 

[FR Doc. 2021–12744 Filed 6–16–21; 8:45 am] 

BILLING CODE P 

FEDERAL RESERVE SYSTEM 

Notice of Proposals To Engage in or 

To Acquire Companies Engaged in 

Permissible Nonbanking Activities 

The companies listed in this notice 

have given notice under section 4 of the 

Bank Holding Company Act (12 U.S.C. 

1843) (BHC Act) and Regulation Y, (12 

CFR part 225) to engage de novo, or to 

acquire or control voting securities or 

assets of a company, including the 

companies listed below, that engages 

either directly or through a subsidiary or 

other company, in a nonbanking activity 

that is listed in § 225.28 of Regulation Y 

(12 CFR 225.28) or that the Board has 

determined by Order to be closely 


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