This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

5571

Vol. 70, No. 22

Thursday, February 3, 2005

DEPARTMENT OF THE TREASURY 

Office of the Comptroller of the 

Currency 

12 CFR Chap. I 

[Docket No. 05–01] 

FEDERAL RESERVE SYSTEM 

12 CFR Chap. II 

[Docket No. OP–1220] 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Chap. III 

DEPARTMENT OF THE TREASURY 

Office of Thrift Supervision 

12 CFR Chap. V 

[No. 2005–02] 

Request for Burden Reduction 

Recommendations; Money 

Laundering, Safety and Soundness, 

and Securities Rules; Economic 

Growth and Regulatory Paperwork 

Reduction Act of 1996 Review

AGENCIES: Office of the Comptroller of 

the Currency (OCC), Treasury; Board of 

Governors of the Federal Reserve 

System (Board); Federal Deposit 

Insurance Corporation (FDIC); and 

Office of Thrift Supervision (OTS), 

Treasury.

ACTION: Notice of regulatory review; 

request for comments. 

SUMMARY: The OCC, Board, FDIC, and 

OTS (‘‘we’’ or ‘‘the Agencies’’) are 

reviewing our regulations to identify 

outdated, unnecessary, or unduly 

burdensome regulatory requirements 

pursuant to the Economic Growth and 

Regulatory Paperwork Reduction Act of 

1996 (EGRPRA). Today, we request your 

comments and suggestions on ways to 

reduce burden in rules we have 

categorized as Money Laundering, 

Safety and Soundness, and Securities. 

All comments are welcome. We 

specifically invite comment on the 

following issues: Whether statutory 

changes are needed; whether the 

regulations contain requirements that 

are not needed to serve the purposes of 

the statutes they implement; the extent 

to which the regulations may adversely 

affect competition; whether the cost of 

compliance associated with reporting, 

recordkeeping, and disclosure 

requirements, particularly on small 

institutions, is justified; whether any 

regulatory requirements are inconsistent 

or redundant; and whether any 

regulations are unclear. 

We will analyze the comments 

received and propose burden-reducing 

changes to our regulations where 

appropriate. Some of your suggestions 

for burden reduction might require 

legislative changes. Where legislative 

changes would be required, we will 

consider your suggestions in 

recommending appropriate changes to 

Congress.

DATES: Written comments must be 

received no later than May 4, 2005.

ADDRESSES: You may submit comments 

by any of the following methods: 

EGRPRA Web site: http://

www.EGRPRA.gov.

• Comments submitted at the 

Agencies’ joint Web site will 

automatically be distributed to all the 

Agencies. Comments received at the 

EGRPRA Web site and by other means 

will be posted on the Web site to the 

extent possible. 

Individual agency addresses: You are 

also welcome to submit comments to 

the Agencies at the following contact 

points (due to delays in paper mail 

delivery in the Washington area, 

commenters may prefer to submit their 

comments by alternative means): 

OCC: You may submit comments, 

identified by [docket 05–01], by any of 

the following methods: 

• E-mail: 

regs.comments@occ.treas.gov. Include 

[docket 05–01] in the subject line of the 

message. 

• Fax: (202) 874–4448. 

• Mail: Public Information Room, 

Office of the Comptroller of the 

Currency, 250 E Street, SW., Mailstop 

1–5, Washington, DC 20219; Attention: 

Docket ##. 

Public Inspection: You may inspect 

and photocopy comments at the Public 

Information Room. You can make an 

appointment to inspect the comments 

by calling (202) 874–5043. 

Board: You may submit comments, 

identified by Docket Number OP–1220, 

by any of the following methods: 

• Agency Web site: http://

www.federalreserve.gov. Follow the 

instructions for submitting comments at 

http://www.federalreserve.gov/

generalinfo/foia/ProposedRegs.cfm.

• Federal eRulemaking Portal: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: 

regs.comments@federalreserve.gov.

Include docket number in the subject 

line of the message. 

• Fax: (202) 452–3819 or (202) 452–

3102. 

• Mail: Jennifer J. Johnson, Secretary, 

Board of Governors of the Federal 

Reserve System, 20th Street and 

Constitution Avenue, NW., Washington, 

DC 20551. 

All public comments are available 

from the Board’s Web site at http://

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, NW.) between 9 a.m. and 

5 p.m. on weekdays. 

FDIC: You may submit comments, 

identified as EGRPRA burden reduction 

comments, by any of the following 

methods: 

• http://www.fdic.gov/regulations/

laws/federal/propose.html.

• E-mail: comments@fdic.gov.

Include ‘‘EGRPRA burden reduction 

comment’’ in the subject line of the 

message. 

• Mail: Robert E. Feldman, Executive 

Secretary, Federal Deposit Insurance 

Corporation, 550 17th Street, NW., 

Washington, DC 20429. 

• Hand Delivery: Comments may be 

hand delivered to the guard station at 

the rear of the 550 17th Street Building 

(located on F Street) on business days 

between 7 a.m. and 5 p.m. 

Public Inspection: You may inspect 

comments at the FDIC Public 

Information Center, Room 100, 801 17th 

Street, NW., between 9 a.m. and 4:30 

p.m. on business days. 

5572 Federal Register / Vol. 70, No. 22 / Thursday, February 3, 2005 / Proposed Rules 

1The National Credit Union Administration has 

participated in planning the EGRPRA review but 

has issued, and will issue, requests for comment 

separately.

2Public Law 104–208, Sept. 30, 1996, 12 U.S.C. 

3311. We published our first notice in the Federal 

Register on June 16, 2003, at 68 FR 35589; our 

second notice on January 21, 2004, at 69 FR 2852; 

and our third notice on July 20, 2004, at 69 FR 

43347. You may view the notices at our Web site, 

http://www.EGRPRA.gov.

OTS: You may submit comments, 

identified by ‘‘No. 2005–02.’’ by any of 

the following methods: 

• Federal eRulemaking Portal: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-Mail: 

regs.comments@ots.treas.gov. Include 

‘‘No. 2005–02’’ in the subject line of the 

message, and provide your name and 

telephone number. 

• Fax: (202) 906–6518. 

• Mail: Regulation Comments, Chief 

Counsel’s Office, Office of Thrift 

Supervision, 1700 G Street, NW., 

Washington, DC 20552. 

• Hand Delivery: Comments may be 

hand delivered to the Guard’s Desk, East 

Lobby Entrance, 1700 G Street, NW., 

from 9 a.m. to 4 p.m. on business days, 

Attention: Regulation Comments, Chief 

Counsel’s Office. 

Public Inspection: OTS will post 

comments and the related index on the 

OTS Internet site at http://

www.ots.treas.gov/

pagehtml.cfm?catNumber=67&an=1. In 

addition, you may inspect comments at 

the Public Reading Room, 1700 G Street, 

NW., by appointment. To make an 

appointment for access, call (202) 906–

5922, send an e-mail to 

public.info@ots.treas.gov, or send a fax 

to (202) 906–7755. (Please identify the 

material you would like to inspect to 

assist us in serving you.) OTS schedules 

appointments on business days between 

10 a.m. and 4 p.m. In most cases, 

appointments will be available the next 

business day following the date OTS 

receives a request.

FOR FURTHER INFORMATION CONTACT: 

OCC:

• Stuart Feldstein, Assistant Director, 

Legislative and Regulatory Activities 

Division, (202) 874–5090. 

• Heidi Thomas, Special Counsel, 

Legislative and Regulatory Activities 

Division, (202) 874–5090. 

• Lee Walzer, Counsel, Legislative 

and Regulatory Activities Division, 

(202) 874–5090.

Board:

• Patricia A. Robinson, Managing 

Senior Counsel, Legal Division, (202) 

452–3005. 

• Michael J. O’Rourke, Counsel, Legal 

Division, (202) 452–3288. 

• John C. Wood, Counsel, Division of 

Consumer and Community Affairs, (202) 

452–2412. 

• Kevin H. Wilson, Supervisory 

Financial Analyst, Division of Banking 

Supervision and Regulation, (202) 452–

2362. 

• For users of Telecommunications 

Device for the Deaf (TDD) only, contact 

(202) 263–4869.

FDIC:

• Claude A. Rollin, Special Assistant 

to the Vice Chairman, (202) 898–8741. 

• Steven D. Fritts, Associate Director, 

Division of Supervision and Consumer 

Protection, (202) 898–3723. 

• Ruth R. Amberg, Senior Counsel, 

Legal Division, (202) 898–3736. 

• Thomas Nixon, Counsel, Legal 

Division, (202) 898–8766.

OTS:

• Glenn Gimble, Senior Project 

Manager, Thrift Policy, Supervision 

Policy, (202) 906–7158. 

• Josephine Battle, Program Analyst, 

Thrift Policy, Supervision Policy, (202) 

906–6870. 

• Karen Osterloh, Special Counsel, 

Regulations and Legislation Division, 

Chief Counsel’s Office, (202) 906–6639.

SUPPLEMENTARY INFORMATION: 

I. Overview of the EGRPRA Review and 

the Steps Taken so Far 

The Agencies 1 are asking for your 

comments and suggestions on ways in 

which we can reduce regulatory 

burdens consistent with our statutory 

obligations. Today, we request your 

input to help us identify which 

regulatory requirements in three 

categories—Money Laundering, Safety 

and Soundness, and Securities—are 

outdated, unnecessary, or unduly 

burdensome. We list the rules in these 

categories in a chart at the end of this 

notice. Please send us your 

recommendations at our Web site,

http://www.EGRPRA.gov, or to one of 

the listed addresses.

Today’s request for comment is the 

fourth notice in our multi-year review of 

regulations for burden reduction 

required by section 2222 of EGRPRA.2

We described the EGRPRA review’s 

requirements in our first EGRPRA 

notice. In summary, EGRPRA requires 

us to:

• Categorize our regulations by type. 

• Publish the regulations by category 

to request comments on which 

regulations contain requirements that 

are: outdated, unnecessary, or unduly 

burdensome. 

• Publish a summary of those 

comments. 

• Eliminate unnecessary regulations 

to the extent appropriate. 

• Report to Congress: summarizing 

the significant issues raised and their 

relative merits, and analyzing whether 

legislative change is required to reduce 

burden. 

The first publication cycle must be 

complete by September 2006. 

We have identified 13 categories of 

rules to implement our EGRPRA review. 

The categories are: Applications and 

Reporting; Banking Operations; Capital; 

Community Reinvestment Act; 

Consumer Protection: Lending Related 

Rules; Consumer Protection: Account/

Deposit Relationships and 

Miscellaneous Consumer Rules; 

Directors, Officers and Employees; 

International Operations; Money 

Laundering; Powers and Activities; 

Rules of Procedure; Safety and 

Soundness; and Securities. You may see 

the categories and the rules placed 

within them at our Web site, http://

www.EGRPRA.gov.

We previously requested public 

comment about possible burden 

reduction in five categories of rules. Our 

June 16, 2003, notice requested 

comment on three categories: 

Applications and Reporting, Powers and 

Activities, and International Operations. 

Our January 21, 2004, notice requested 

comment on Consumer Protection: 

Lending Related Rules. Our July 20, 

2004, notice requested comment on 

Consumer Protection: Account/Deposit 

Relationships and Miscellaneous 

Consumer Rules. Today, we request 

comment on rules related to Money 

Laundering, Safety and Soundness, and 

Securities. 

We plan to continue to publish one or 

more categories of rules approximately 

every six months between 2003 and 

2006 and provide a 90-day comment 

period for each publication. As noted 

earlier, we must publish all our covered 

categories of rules for comment and 

review them by the end of September 

2006.

In addition to soliciting written 

comments, we held banker outreach 

meetings in Orlando, St. Louis, Denver, 

San Francisco, New York City, 

Nashville, Seattle, and Chicago to hear 

directly from the industry about ways 

the Agencies could reduce regulatory 

burden. More than 400 representatives 

from the industry have attended the 

outreach meetings. The Agencies have 

also held three outreach meetings with 

over 100 participants for representatives 

of consumer and community groups to 

obtain their input on regulatory burden 

reduction. The consumer meetings were 

held in Arlington, Virginia; San 

Francisco; and Chicago. These meetings 

have helped focus our regulatory burden 

reduction efforts. We anticipate holding 

Federal Register / Vol. 70, No. 22 / Thursday, February 3, 2005 / Proposed Rules 5573

3On May 12, 2004, FDIC Vice Chairman John M. 

Reich testified about burden reduction before the 

Subcommittee on Financial Institutions and 

Consumer Credit of the House Committee on 

Financial Services. On June 22, agency and industry 

leaders testified about regulatory reform before the 

Senate Committee on Banking, Housing and Urban 

Affairs. Agency leaders included: Federal Reserve 

Board Governor Donald Kohn, FDIC Vice Chairman 

John M. Reich, NCUA Chairman JoAnn Johnson, 

OCC First Senior Deputy Comptroller and Chief 

Counsel Julie L. Williams, and OTS Chief Counsel 

John E. Bowman. On August 27, Senator Mike 

Crapo, who is leading a financial services regulatory 

reform effort for the Senate Banking Committee, 

released a matrix detailing more than 130 burden 

reduction proposals that were made in the June 

2004 hearing.

additional outreach events this year. 

You may learn more about the meetings 

and related recommendations at our 

EGRPRA Web site, http://

www.EGRPRA.gov. 

We received 19 comments in response 

to the first notice, about 560 to the 

second notice, and over 100 to the third 

notice. The Agencies appreciate the 

response to our notices and the outreach 

meetings. The written comments and 

remarks at the meetings came from 

individuals, banks, savings associations, 

holding companies, industry trade 

groups, and consumer and community 

groups. You may view the comments at 

our EGRPRA Web site, http://

www.EGRPRA. We are actively 

reviewing the feedback received about 

specific ways to reduce regulatory 

burden, as well as conducting our own 

analyses. 

In addition, Congress considered 

various legislative proposals to reduce 

burden on the financial services 

industry in 2004. Representatives of the 

Agencies and industry leaders testified 

before congressional committees about 

these legislative reform proposals and 

other ideas for reducing burden on the 

financial services industry.3 We will 

continue to post information about 

legislative and regulatory reform efforts 

on our Web site.

II. Request for Comment on Money 

Laundering, Safety and Soundness, and 

Securities Rules 

Today, we are asking the public to 

identify ways in which the rules related 

to Money Laundering, Safety and 

Soundness, and Securities may be 

outdated, unnecessary, or unduly 

burdensome. As shown on the chart at 

the end of this notice, there are 28 

regulations in these categories. The 

Agencies note that other non-banking 

agencies, such as the Department of 

Treasury under the Bank Secrecy Act, 

have issued rules within these three 

categories that apply to our regulated 

institutions. Some of the rules of these 

other agencies are beyond our 

jurisdiction. However, to the extent that 

we receive comments raising significant 

issues about these related rules, we will 

identify the issues in our Report to 

Congress and make those comments 

available to the appropriate agencies. 

We encourage comments that address 

not only individual rules or 

requirements but also pertain to certain 

product lines. For example, in the case 

of an institution’s securities activities, 

are any of the reporting, recordkeeping 

or other requirements of one regulation 

inconsistent with or duplicative of the 

requirements under another regulation? 

A product line approach is consistent 

with EGRPRA’s focus on how rules 

interact, and may be especially helpful 

in exposing redundant or potentially 

inconsistent regulatory requirements. 

We recognize that commenters using a 

product line approach may want to 

make recommendations about rules that 

are not in our current request for 

comment. They should do so since we 

designed the EGRPRA categories to 

stimulate creative approaches rather 

than limiting them. 

Specific issues to consider. While all 

comments are welcome, we specifically 

invite comment on the following issues: 

A. Need for Statutory Change. (1) Do 

any statutory requirements underlying 

the rules impose unnecessary, 

redundant, conflicting or unduly 

burdensome requirements? (2) Are there 

less burdensome alternatives? 

B. Need and Purpose of the 

Regulations. (1) Are the regulations 

consistent with the purposes of the 

statutes that they implement? (2) Have 

circumstances changed so that a rule is 

no longer necessary? (3) Do changes in 

the financial products and services 

offered to consumers suggest a need to 

revise certain regulations (or statutes)? 

(4) Do any of the regulations impose 

compliance burdens not required by the 

statutes they implement? 

C. General Approach/Flexibility. (1) 

Would a different general approach to 

regulating achieve statutory goals with 

less burden? (2) Do any of these rules 

impose unnecessarily inflexible 

requirements?

D. Effect of the Regulations on 

Competition. Do any of the regulations 

or statutes create competitive 

disadvantages for insured depository 

institutions compared to the rest of the 

financial services industry or 

competitive disadvantages for one type 

of insured depository institution over 

another? 

E. Reporting, Recordkeeping, and 

Disclosure Requirements. (1) Which 

reporting, recordkeeping, or disclosure 

requirements impose the most 

compliance burdens? (2) Are any of the 

reporting or recordkeeping requirements 

unnecessary to demonstrate compliance 

with the law? 

F. Consistency and Redundancy. (1) 

Are any of the requirements under one 

regulation inconsistent with or 

duplicative of requirements under 

another regulation? (2) If so, are the 

inconsistencies not warranted by the 

purposes of the regulations? 

G. Clarity. Are any of the regulations 

drafted unclearly? 

H. Burden on Small Insured 

Institutions. We have particular interest 

in minimizing burden on small insured 

institutions (those with assets of $150 

million or less). Are there appropriate 

ways to amend these rules to minimize 

adverse economic impact on small 

insured institutions? 

The Agencies appreciate the efforts of 

all interested parties to help us 

eliminate outdated, unnecessary, or 

unduly burdensome regulatory 

requirements. 

BILLING CODE 4810–33–P; 6210–01–P; 6714–01–P; 

6720–01–P

5574 Federal Register / Vol. 70, No. 22 / Thursday, February 3, 2005 / Proposed Rules 


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Federal Register / Vol. 70, No. 22 / Thursday, February 3, 2005 / Proposed Rules 5577

Dated: January 13, 2005. 

Julie L. Williams, 

Acting Comptroller of the Currency. 

By order of the Board of Governors of the 

Federal Reserve System on January 26, 2005. 

Jennifer J. Johnson, 

Secretary of the Board.

Federal Deposit Insurance Corporation.

By order of the Board of Directors.

Dated at Washington, DC, this 18th day of 

January, 2005. 

Robert E. Feldman, 

Executive Secretary. 

Dated: January 25, 2005. 

James E. Gilleran, 

Director, Office of Thrift Supervision.

[FR Doc. 05–2079 Filed 2–2–05; 8:45 am] 

BILLING CODE 4810–33–C; 6210–01–C; 6714–01–C; 

6720–01–C

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 1 

RIN 3038–AC15 

Investment of Customer Funds and 

Record of Investments

AGENCY: Commodity Futures Trading 

Commission.

ACTION: Proposed rule.

SUMMARY: The Commodity Futures 

Trading Commission (‘‘Commission’’) is 

proposing to amend its regulations 

regarding investment of customer funds 

and related recordkeeping requirements. 

The proposed amendments address 

standards for investing in instruments 

with embedded derivatives, 

requirements for adjustable rate 

securities (including auction rate 

securities), concentration limits on 

reverse repurchase agreements (‘‘reverse 

repos’’), transactions by futures 

commission merchants (‘‘FCMs’’) that 

are also registered as securities brokerdealers (‘‘FCM/BDs’’), rating standards 

and registration requirement for money 

market mutual funds (‘‘MMMFs’’), 

auditability standard for investment 

records, and certain technical changes. 

Among those technical changes is an 

amendment to the Commission’s 

recordkeeping rules in connection with 

repurchase agreements (‘‘repos’’) and 

proposed transactions by FCM/BDs.

DATES: Comments must be received on 

or before March 7, 2005.

ADDRESSES: Comments on the proposed 

amendments should be sent to Jean A. 

Webb, Secretary, Commodity Futures 

Trading Commission, Three Lafayette 

Centre, 1155 21st Street, NW., 

Washington, DC 20581. Comments may 

be sent by facsimile transmission to 

(202) 418–5521, by e-mail to 

secretary@cftc.gov, or electronically by 

accessing http://www.regulations.gov.

Reference should be made to ‘‘Proposed 

Amendments to Rule 1.25.’’

FOR FURTHER INFORMATION CONTACT:

Phyllis P. Dietz, Special Counsel, 

Division of Clearing and Intermediary 

Oversight, Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1155 21st Street, NW., Washington, DC 

20581. Telephone (202) 418–5430.

Table of Contents 

I. Background 

II. Discussion of the Proposed Rules 

A. Instruments With Embedded Derivatives 

B. Adjustable Rate Securities 

1. Permitted Benchmarks 

2. Supplemental Requirements 

3. Technical Amendments 

4. Auction Rate Securities 

C. Reverse Repos—Concentration Limits 

D. Transactions by FCM/BDs 

E. Rating Standards for MMMFs 

F. Registration Requirement for MMMFs 

G. Auditability Standard for Investment 

Records 

H. Additional Technical Amendments 

1. Clarifying and Codifying MMMF 

Redemption Requirements 

(i) Next-Day Redemption Requirement 

(ii) Exceptions to the Next-Day Redemption 

Requirement

2. Clarifying Rating Standards for 

Certificates of Deposit 

3. Clarifying Corporate Bonds as Permitted 

Investments 

4. Clarifying References to Transferred 

Securities 

5. Clarifying Payment and Delivery 

Procedures for Reverse Repos and Repos 

6. Changing Paragraph (a)(1) ‘‘Customer 

Funds’’ to ‘‘Customer Money’’

7. Conforming Reference to 

‘‘Marketability’’ Requirement 

8. Conforming Terminology for 

‘‘Derivatives Clearing Organizations’’

9. Conforming Terminology for 

‘‘Government Sponsored Enterprise’’

10. Conforming Terminology for ‘‘Futures 

Commission Merchant’’

11. Clarifying the Meaning of ‘‘NRSRO’’

III. Time to Maturity—Treasury Portfolio 

IV. Section 4(c) 

V. Related Matters 

A. Regulatory Flexibility Act 

B. Paperwork Reduction Act 


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