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[Federal Register Volume 60, Number 61 (Thursday, March 30, 1995)]
[Notices]
[Pages 16473-16476]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-7796]

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FEDERAL RESERVE SYSTEM

Agency Forms Under Review; Bank Holding Company Reporting 
Requirements

AGENCY: Board of Governors of the Federal Reserve System
ACTION: Final Board approval of revisions to bank holding company 
reporting requirements.

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SUMMARY: Notice is hereby given of the final approval of proposed 
information collections by the Board of Governors of the Federal 
Reserve System (Board) under OMB delegated authority, as per 5 C.F.R. 
1320.9 (OMB Regulations on Controlling Paperwork Burdens on the 
Public). The Board has given final approval to the revision of the 
Consolidated Financial Statements for Bank Holding Companies (FR Y-9C; 
OMB No. 7100-0128); the extension, with revision, of the Quarterly 
Financial Statements of Nonbanking Subsidiaries of Bank Holding 
Companies (FR Y-11Q; OMB No. 7100-0244) and the Annual Financial 
Statements of Nonbanking Subsidiaries of Bank Holding Companies (FR Y-
11I; OMB No. 7100-0244); and the elimination of the Combined Financial 
Statements of Nonbank Subsidiaries of Bank Holding Companies, by Type 
of Nonbank Subsidiary (FR Y-11AS; OMB No. 7100-0244).
    The proposal was granted initial approval by the Board on December 
16, 1994. Subsequently, the proposal was published in the Federal 
Register with a thirty day public comment period that expired on 
January 26, 1995. Comment letters on the proposal were received from 
four bank holding companies. In general, the comment letters on the 
proposal were supportive of the changes to the various reports. 
However, some specific comments were not supportive. These comments 
noted the increase in burden from some aspects of the proposal and 
suggested modifications to the proposed revisions. The specific 
comments on the proposed revisions to the reports are addressed in the 
discussion of each individual report following later in this notice. 
After reviewing the comments, the Board has approved the proposed 
changes as originally issued for comment. In addition to those changes, 
the Board also has approved two further changes to the FR Y-9C--the 
elimination of two line items from Schedule HC-F.
    The reporting changes, summarized in this notice, will be effective 
for the FR Y-9C and the FR Y-11Q with the March 31, 1995 reporting date 
and effective for the FR Y-11I and the FR Y-11AS for the December 31, 
1995 reporting date. The FR Y-9C and the FR Y-11Q reports effective for 
March 31, 1995 reporting date are due to be filed May 15, 1995 and May 
30, 1995, respectively.
BACKGROUND: Under the Bank Holding Company Act of 1956, as amended, the 
Board is responsible for the supervision and regulation of all bank 
holding companies. The FR Y-9 and FR Y-11 series of reports 
historically have been, and continue to be, the primary source of 
financial information on bank holding companies and their nonbanking 
activities between on-site inspections. Financial information, as well 
as ratios developed from the Y series reports, are used to detect 
emerging financial problems, to review performance for pre-inspection 
analysis, to evaluate bank holding company [[Page 16474]] mergers and 
acquisitions, and to analyze a holding company's overall financial 
condition and performance as part of the Federal Reserve System's 
overall analytical effort.
FOR FURTHER INFORMATION CONTACT:
Federal Reserve Board Clearance Officer--Mary M. McLaughlin--Division 
of Research and Statistics, Board of Governors of the Federal Reserve 
System, Washington, D.C. 20551 (202-452-3829)
OMB Desk Officer--Milo Sunderhauf--Office of Information and Regulatory 
Affairs, Office of Management and Budget, New Executive Office 
Building, Room 3208, Washington, D.C. 20503 (202-395-7340)
    Final approval under OMB delegated authority of the revision of the 
following report:
    1. Report title: Consolidated Financial Statements for Bank Holding 
Companies.
Agency form number: FR Y-9C.
OMB Docket number: 7100-0128.
Frequency: Quarterly.
Reporters: Bank Holding Companies.
Annual reporting hours: 172,720.
Estimated average hours per response: Range from 5 to 1,250 hours.
Number of respondents: 1,346.
Small businesses are affected.
    General description of report: This information collection is 
mandatory (12 U.S.C. 1844(b) and (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.
    The Board's Legal Division has also determined that on the FR Y-9C, 
Schedule HC-H, Column A, requiring information on ``assets past due 30 
through 89 days and still accruing'' and memoranda item 2 are 
confidential pursuant to Section (b)(8) of the Freedom of Information 
Act (5 U.S.C. 552(b)(8)).
    Abstract: The FR Y-9C consolidated financial statements are 
currently filed by top-tier bank holding companies with total 
consolidated assets of $150 million or more and by lower-tier bank 
holding companies that have total consolidated assets of $1 billion or 
more. In addition, all multibank bank holding companies with debt 
outstanding to the general public or engaged in certain nonbank 
activities, regardless of size, must file the FR Y-9C.
    The report includes a balance sheet, income statement, and 
statement of changes in equity capital with supporting schedules 
providing information on securities, loans, risk-based capital, 
deposits, interest sensitivity, average balances, off-balance sheet 
activities, past due loans, and loan charge-offs and recoveries.
    The Board has approved the revisions to the FR Y-9C following 
public comment. Most of the new items are required to maintain 
consistency with comparable items recently incorporated into the 
commercial bank Reports of Condition and Income (Call Report) by the 
Federal Financial Institutions Examination Council (FFIEC).
Public Comments: Three bank holding companies addressed the revisions 
to the FR Y-9C. As previously discussed, the proposed changes to this 
report keep the reporting requirements consistent with those changes 
being incorporated in the ``Call Report'' to be filed by commercial 
banks as of March 31, 1995. In the past, bank holding companies have 
commented that reporting burden is minimized by keeping the changes in 
the Call Report and the FR Y-9C consistent and by implementing the 
changes as of the same date.
    In their comment letters, two bank holding companies supported the 
proposed changes to the report. Another bank holding company commented 
that the proposal expanded the information collected and increased the 
reporting burden and recommended generally that the Board eliminate all 
requirements not essential for the performance of the Board's 
supervisory responsibilities. Specifically, the company recommended 
that the Board eliminate the proposed requirement for bank holding 
companies to report gross redemptions of mutual funds and annuities. 
This item is one of several items relating to the sale of mutual funds 
by banking organizations added to the report. The Call Report collects 
some data, but does not collect the amount of redemptions. The Board 
believes that reporting the amount of redemptions, in addition to the 
amount of sales, is essential to measure the flow of funds into these 
new products and, accordingly, has approved the collection of these 
data. The measurement of the flow of funds is important in assessing 
the growth of these products. The Board also plans to propose to the 
FFIEC that these data be collected on the Call Report.
    The commenter also recommended that the Board delay implementation 
of the changes until June 30, 1995. The Board believes that the burden 
on the majority of companies is lessened by making the changes to the 
FR Y-9C at the same time as the changes are implemented in the Call 
Report and has approved the changes for the FR Y-9C as of the March 31, 
1995, report. The reports are due forty-five days after March 31, 1995.
    Following the review of the public comments, the revisions to the 
FR Y-9C approved by the Board include:
Schedule HC-A, Securities:
    (1) Memoranda items to collect the amortized cost and fair (market) 
value of high-risk mortgage securities and structured notes have been 
added.
    (2) The reporting instructions for the category labeled ``mortgage-
backed securities'' have been revised to ensure that all such 
securities are reported. In addition, the line items for collateralized 
mortgage obligations (CMOs) and real estate mortgage investment 
conduits (REMICs) issued by the Federal National Mortgage Association 
(FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC) have been 
modified to explicitly include REMICs issued by Government National 
Mortgage Association (GNMA).
Schedule HC-F, Off-Balance Sheet Items:
    Part 2 of this schedule has been revised to collect additional 
information on derivative instruments, including breakdowns of notional 
contract amounts by instrument type, by risk exposure underlying the 
contract, and by whether the contract is traded on the exchange or over 
the counter. In addition, the total notional amount and gross positive 
and gross negative fair values of contracts held for trading purposes 
and for purposes other than trading have been included on the schedule.
Schedule HI, Income Statement:
    Memoranda items have been included to collect trading revenue that 
reflects the combined revenues from cash and derivative instruments, 
with a breakdown by underlying risk exposure, and information on the 
effect on earnings of derivatives held for purposes other than trading.
Schedules HC-I and HC-J, Risk-Based Capital:
    (1) An item has been included to collect the net credit exposure of 
all derivative contracts taking into consideration netting arrangements 
permissible under the risk-based capital standards.
    (2) The risk-based capital ``notional principal value, maturity and 
replacement cost matrix'' for derivatives has been expanded to include 
an additional remaining maturity time band and four additional 
categories of derivative contracts (gold, other precious metals, other 
commodity and equity contracts). [[Page 16475]] 
Schedule HI-B, Charge-offs and Recoveries and Changes in Allowance for 
Loan and Lease Losses:
    The reconciliation of the allocated transfer risk reserve on 
Memoranda, Part 2, Column B has been deleted.
Schedule Of Trading Account Assets and Liabilities:
    A schedule for the reporting of trading account assets and 
liabilities in a manner consistent with the schedule included in the 
Call Report has been added to the report. This schedule is to be 
completed by bank holding companies with total consolidated assets of 
$1 billion or more, or with $2 billion or more in par/notional amounts 
of interest rate, foreign exchange rate and other commodity and equity 
contracts.
Mutual Funds and Annuities Information:
    Line items to collect quarterly gross sales of mutual funds (by 
type of fund) and annuities, including sales of proprietary mutual 
funds and annuities, and the fee income generated from the sale and 
servicing of mutual funds and annuities in domestic offices have been 
added to the report. In addition, a line item to collect the total 
amount of gross redemptions of mutual funds and annuities during the 
quarter has been included.
Deletion of Line Items:
    In addition to the above changes that were addressed in the Federal 
Register notice (59 FR 66540), the Board also has approved two further 
changes to the FR Y-9C--the elimination of two line items from Schedule 
HC-F. These two items are: Memorandum item 1, ``Mortgages sold with 
recourse that incur no capital charge,'' and Memorandum item 2, 
``Mortgages sold with recourse prior to October 12, 1990.'' The Board 
noted that one item is no longer needed following the revisions to the 
Capital Guidelines required by the Riegle Community Development and 
Regulatory Improvement Act of 1994, and the second item related to 
recourse is also no longer necessary.
    Final approval under OMB delegated authority of the extension, with 
revision, of the following reports:
    1. Report title: Quarterly Financial Statements of Nonbanking 
Subsidiaries of Bank Holding Companies
Agency form number: FR Y-11Q.
OMB Docket number: 7100-0244.
Frequency: Quarterly.
Reporters: Bank Holding Companies.
Annual reporting hours: 6,696.
Estimated average hours per response: Range from 3.0 to 8.0 hours.
Number of respondents: 270.
Small businesses are affected.
    General description of report: This information collection is 
mandatory (12 U.S.C. 1844(b) and (c) and 12 CFR 225.5(b). 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.
Abstract: The Board has approved the revision of the FR Y-11Q. As 
approved, the FR Y-11Q will:
    (1) Expand the report to collect more detailed financial 
information, comparable to items collected on the FR Y-9C and
    (2) Revise the reporting criteria for bank holding companies with 
assets of $150 million or more to collect information on an individual 
basis from each nonbank subsidiary viewed as having a significant 
effect on the condition of the bank holding company. The revised 
comprehensive financial statements include a balance sheet, off-balance 
sheet items, a memoranda section, an income statement, and a statement 
of changes in equity capital. All bank holding companies with total 
consolidated assets of $150 million or more would file a report for 
each individual nonbank subsidiary with total assets equal to 5 percent 
or more of the bank holding company's consolidated Tier 1 capital, or 
where the subsidiary's total operating revenue equals 5 percent or more 
of the bank holding company's consolidated total operating revenue.
    Under the prior reporting requirements, the Board collected free-
form financial data from each nonbank subsidiary on the FR Y-6, Annual 
Report of Bank Holding Companies. In addition, nonbank subsidiary data 
were collected on three automated forms. Large bank holding companies 
with significant nonbanking assets submitted the FR Y-11Q and the FR Y-
11AS. The prior FR Y-11Q was submitted quarterly and collected data 
from all nonbank subsidiaries on a combined basis. The FR Y-11AS was 
submitted annually and collected nonbank data on a combined basis by 
the principal line of business of the nonbank subsidiaries. The third 
form, FR Y-11I, collected selected financial data from all bank holding 
companies on each of their nonbank subsidiaries on an annual basis. 
Under the proposal issued for public comment and now given final 
approval by the Board, the Board eliminated the collection of free-form 
nonbank financial data in the FR Y-6, Annual Report of Bank Holding 
Companies, to offset the increase in the burden of the collection of 
automated data on the revised FR Y-11Q and the revised FR Y-11I. The 
Board gave final approval to the deletion of the free-form nonbank 
financial data in the FR Y-6 on February 7, 1995 (60 FR 12215). The 
Board also proposed to delete the requirement to submit the FR Y-11AS, 
and all commenters favored the deletion of this report. Thus, the Board 
has eliminated the requirement for certain bank holding companies to 
submit the FR Y-11AS.
Public Comments: Comments on the proposed revisions to the reports 
collecting data from nonbank subsidiaries were received from four bank 
holding companies. In addition to those commenting on the FR Y-9C, one 
commenter only commented on the FR Y-11 series. This commenter 
supported the proposed revisions and stated that under the revised 
report that they would only have to file a report for one subsidiary on 
a quarterly basis rather than providing quarterly data on all 
subsidiaries on a combined basis. Another commenter welcomed the 
deletion of certain nonbanking data, but stated their opposition to the 
increased burden of the FR Y-11Q.
    A third commenter proposed increasing the materiality test for 
completing the FR Y-11Q and suggested several options. These include: 
nonbank assets as a percentage of total consolidated assets; investment 
in nonbank subsidiaries as a percentage of Tier 1 capital; or 
increasing the test of nonbank assets as a percent of Tier 1 capital. 
The materiality test proposed and adopted by the Board is based on the 
criteria utilized by Federal Reserve examination staff in determining 
those nonbanking subsidiaries subject to on-site examinations. In 
general, this materiality test is used to define those material 
nonbanking subsidiaries that can have a significant impact on the 
financial condition of the bank holding company.
    The fourth commenter agreed that a revision of the information 
reported by nonbank subsidiaries is warranted, but suggested that the 
reporting format follow that of the FR 2314, Report of Condition of 
Foreign Subsidiaries. However, since the proposed format of the FR Y-
11Q and FR Y-11I is consistent with the format of other bank holding 
company reports and the Call Report filed by commercial banks, the 
Board approved the format as proposed. The Board believes that 
conforming the format to that of the Call Report and the other holding 
company reports should reduce the burden on most bank holding 
companies. The commenter also recommended that the criteria for 
determining material nonbank subsidiaries exclude intercompany 
transactions. The Board believes that intercompany transactions should 
be [[Page 16476]] included as these nonbank subsidiaries serve as 
funding vehicles for other credit extending nonbank subsidiaries and 
pose liquidity risks to the bank holding company. Finally, the 
commenter recommended that the proposed FR Y-11I be further summarized. 
The revised format is composed of significant asset and liability 
accounts. Additional schedules are required to be completed only if the 
nonbank subsidiary is engaged in extensions of credit. The Board 
believes that the revised report represents the minimum information 
that should be collected from nonbank subsidiaries to evaluate their 
financial position and to monitor their potential impact on the bank 
holding company.
    2.Report title: Annual Financial Statements for Nonbanking 
Subsidiaries.
Agency form number: FR Y-11I.
OMB Docket number: 7100-0244.
Frequency: Annual.
Reporters: Bank Holding Companies.
Annual reporting hours: 13,216.
Estimated average hours per response: Range from 0.4 to 8.0 hours.
Number of respondents: 4130.
    Small businesses are affected.
General description of report: This information collection is mandatory 
(12 U.S.C. 1844(b) and (c)) and 12 CFR 225.5(b). 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.
Abstract and Public Comments: The prior FR Y-11I report was filed by a 
top-tier bank holding company for each of its nonbank subsidiaries, 
whether directly or indirectly owned. Combined and consolidated 
reporting was permitted in some instances. The report consisted of ten 
summary financial items and two items providing consolidation 
information.
    The Federal Reserve has approved the following revisions to the FR 
Y-11I:
    (1) Expand the report to collect more detailed financial 
information, comparable to items proposed for the FR Y-11Q but with 
certain detail reported only as summary items and
    (2) Revise the reporting criteria to collect information on an 
individual basis annually from each nonbank subsidiary not required to 
file the proposed FR Y-11Q. The revised financial statements will 
include a balance sheet, income statement, off-balance sheet, and a 
statement on changes in equity capital. The FR Y-11I will also include 
a loan schedule to be submitted only by respondents engaged in credit 
extending activities. The public comments are discussed under the FR Y-
11Q report.
    Final approval under OMB delegated authority of the elimination of 
the following report:
    1. Report title: Combined Financial Statements of Nonbank 
Subsidiaries of Holding Companies, by Type of Nonbank Subsidiary.
Agency form number: FR Y-11AS.
OMB Docket number: 7100-0244.
Frequency: Annual.
Reporters: Bank Holding Companies.
Annual reporting hours: 1,680.
Estimated average hours per response: Range from 1.0 to 17.0 hours.
Number of respondents: 271.
Small businesses are affected.
    General description of report: This information collection is 
mandatory (12 U.S.C. 1844(b) and (c) and 12 CFR 225.5(b). 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.
    Abstract: The FR Y-11AS was filed by all bank holding companies 
meeting the prior reporting criteria for the FR Y-11Q. The report 
collected the same report items as the FR Y-11Q by type of nonbank 
activity and consists of a balance sheet, income statement, and a 
memoranda section. The Board has eliminated this reporting requirement, 
and all commenters supported this action.

REGULATORY FLEXIBILITY ACT ANALYSIS

    The Board certifies that the above bank holding company reporting 
requirements are not expected to have a significant economic impact on 
small entities within the meaning of the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.). The reporting requirements for the small companies 
require significantly fewer items of data to be submitted than the 
amount of information required of large bank holding companies.
    The information that is collected on the reports is essential for 
the detection of emerging financial problems, the assessment of a 
holding company's financial condition and capital adequacy, the 
performance of pre-inspection reviews, and the evaluation of expansion 
activities through mergers and acquisitions. The imposition of the 
reporting requirements is essential for the Board's supervision of bank 
holding companies under the Bank Holding Company Act.

    By order of the Board of Governors of the Federal Reserve 
System, March 24, 1995.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 95-7796 Filed 3-29-95; 8:45AM]
Billing Code 6210-01-F
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