[Federal Register Volume 60, Number 3 (Thursday, January 5, 1995)]
[Notices]
[Pages 1779-1781]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-269]
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FEDERAL RESERVE SYSTEM
Agency Forms Under Review
Agency: Board of Governors of the Federal Reserve System.
Action: Notice and a request for public comments.
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BACKGROUND: On June 15, 1984, the Office of Management and Budget (OMB)
delegated to the Board of Governors of the Federal Reserve System
(Board) its approval authority under the Paperwork Reduction Act of
1980, as per 5 CFR 1320.9, to approve of and assign OMB control numbers
to collection of information requests and requirements conducted or
sponsored by the Board under conditions set forth in 5 CFR 1320.9.
Board-approved collections of information will be incorporated into the
official OMB inventory of currently approved collections of
information. A copy of the OMB 83-I and supporting statement and the
approved collection of information instrument(s) will be placed into
OMB's public docket files. The following items have received initial
Board approval for publication and comment. Following review of public
comments, the proposed information collections will be considered by
the Board in light of comments and recommendations received. The Board
will then take final action on the proposal under OMB delegated
authority. The specific proposed changes to the reports are summarized
below.
DATES: Comments must be submitted on or before February 6, 1995.
ADDRESSES: Comments, which should refer to the OMB Docket number,
should be addressed to Mr. William W. Wiles, Secretary, Board of
Governors of the Federal Reserve System, 20th and C Streets, N.W.,
Washington, D.C. 20551, or delivered to the Board's mail room between
8:45 a.m. and 5:15 p.m., and to the security control room outside of
those hours. Both the mail room and the security control room are
accessible from the courtyard entrance on 20th Street between
Constitution Avenue and C Street, N.W. Comments received may be
inspected in room B-1122 between 9:00 a.m. and 5:00 p.m., except as
provided in section 261.8 of the Board's Rules Regarding Availability
of Information, 12 CFR 261.8(a).
A copy of the comments may also be submitted to the OMB desk
officer for the Board: Milo Sunderhauf, Office of Information and
Regulatory Affairs, Office of Management and Budget, New Executive
Office Building, Room 3208, Washington, DC 20503.
FOR FURTHER INFORMATION CONTACT: A copy of the proposed form, the
request for clearance (OMB No. 83-I), supporting statement,
instructions, and other documents that will be placed into OMB's public
docket files once approved may be requested from Mary M. McLaughlin,
Federal Reserve Board Clearance Officer (202-452-3829), Division of
Research and Statistics, Board of Governors of the Federal Reserve
System, Washington, DC 20551. For the hearing impaired only, contact
Telecommunications Device for the Deaf (TTD) (202-452-3544), Dorothea
Thompson, Board of Governors of the Federal Reserve System, Washington,
DC 20551.
SUPPLEMENTARY INFORMATION: Proposal to approve under OMB delegated
authority the extension with revision (or the implementation) of the
following report(s):
1. Report title: Annual Report of Foreign Banking Organizations;
Structure Report of U.S. Banking and Nonbanking Activities, Foreign
Banking Organization Confidential Report of Operations
Agency form number: FR Y-7; FR Y-7A; FR 2068
OMB Docket number: 7100-0125
Frequency: Annual. FR Y-7A frequency annual, with changes after
initial filing to be reported on a flow basis within 30 days of
occurrence.
Reporters: Foreign Banking Organizations
Annual reporting hours: 13,244
Estimated average hours per response: 20.5
Number of respondents: 323
Small businesses are not affected.
General description of report: This information collection is
mandatory [12 U.S.C. Secs. 1844(c), 3106, and 3108(a)]. Upon request
from a respondent, certain information in the FR Y-7 and FR Y-7A may be
given confidential treatment pursuant to the Freedom of Information Act
(5 U.S.C. Secs. 552(b) (4) and (6)).
The FR 2068 is a confidential report of operations that is exempted
from public disclosure pursuant to the Freedom of Information Act, 5
U.S.C. Sec. 552(b) (8) and 12 C.F.R. Sec. 261.11(h).
SUMMARY: The Board of Governors of the Federal Reserve System proposes
to give approval, under delegated authority from the Office of
Management and Budget (OMB), to the extension, with revisions, of the
Annual Report of Foreign Banking Organizations (FR Y-7; OMB No. 7100-
0125) and the Foreign Banking Organization Confidential Report of
Operations (FR 2068; OMB No. 7100-0125) for three years through
December 31, 1997, and to discontinue the Notification Required
Pursuant to Section 211.23h of Regulation K on Acquisitions by Foreign
Banking Organizations (FR 4002; OMB No. 7100-0110). The FR Y-7 and FR
2068 reports currently are scheduled to expire on May 31, 1995. The
Federal Reserve proposes that the revisions be effective for reports
covering the period ending December 31, 1994. The deadline for filings
as of this date would be April 30, 1995. The Federal Reserve also
proposes to collect information currently in Section II of the existing
FR Y-7 and the FR 4002 in a new FR Y-7A, which will provide for more
efficient collection of structure information.
These reports reflect annual reporting requirements for foreign
banking organizations that engage in banking in the United States
either indirectly through a subsidiary bank, Edge corporation,
agreement corporation, or commercial lending company, or directly
through a branch or agency. The information contained in these reports
is used by the Federal Reserve System to assess the foreign banking
organization's ability to be a continuing source of strength to its
U.S. banking operations and to determine compliance with U.S. laws and
regulations. [[Page 1780]]
The Annual Report of Foreign Banking Organizations (FR Y-7) and the
Foreign Banking Organization Confidential Report of Operations (FR
2068) are filed as of the end of the reporter's fiscal year. These
reports are filed by all foreign banking organizations that engage in
the business of banking in the United States. The FR Y-7 collects
information on the structure of their activities in the United States,
as well as the following financial and managerial information:
financial statements prepared in accordance with home country
accounting principles and practices; separate financial statements for
U.S. nonbanking subsidiaries; an organization chart reflecting
investments in U.S. companies and foreign companies that do business in
the United States; disclosure of large shareholders of registered
shares and disclosure of known large shareholders of bearer shares; a
list of officers and directors; information to determine continuing
eligibility as a qualified foreign banking organization under sections
2(h) and 4(c)(9) of the Bank Holding Company Act; and information on
U.S. banking and nonbanking activities.
A foreign banking organization is currently exempt from filing the
FR 2068 if it meets certain criteria related to the size and type of
its U.S. banking operations. This report collects information that
enables the Federal Reserve System to carry out its responsibilities by
assessing the impact of the worldwide operations of a foreign banking
organization on its U.S. banking business. The FR 2068 currently
requires disclosure of revenues and expenses as calculated in
accordance with local accounting practices; it also requests an
explanation or general description of the accounting practices used in
the recognition and the timing of revenue and expense items. The report
requests disclosure of loan loss experience, asset quality, gains and
losses on securities, and hidden reserves not disclosed in the FR Y-7.
The report provides flexibility to enable a foreign banking
organization to submit requested information in a manner that will not
impose any undue burden.
The FR 2068 also collects financial data on non-U.S. subsidiaries.
The report requires financial statements on all majority-owned,
unconsolidated, material foreign subsidiaries. The report requires that
foreign banking organizations with investments of between 25 and 50
percent in material foreign companies provide financial data detailing
the total assets, total stockholders' equity, and net income of such
companies.
Finally, the FR 2068 requires that reporters provide an
organization chart that details all foreign companies that the foreign
banking organization directly or indirectly owns, controls, or holds
with power to vote 25 percent or more of any class of voting stock.
This requirement differs from the organization chart required by the FR
Y-7 in that the FR Y-7 is limited to all related U.S. companies and
foreign companies that engage in business in the United States. In the
instructions for both reports, foreign banking organizations are
advised that they must request alternative reporting criteria when the
specific reporting requirements would result in undue burden or expense
or when the information is otherwise unavailable in the requested
format.
Proposed Revisions
The Federal Reserve proposes the following revisions to the FR Y-7
report.
(1) Move information collected in Section II of the current FR Y-7,
Activities Conducted in the United States, to a new report: the FR Y-
7A, Structure Report on U.S. Banking and Nonbanking Activities,
containing two report items: U.S. Banking Activities and U.S.
Nonbanking Activities. Existing reporters would complete the FR Y-7A as
of December 31, 1994; new FR Y-7 filers would complete the FR Y-7A at
the time of their first filing. Subsequent changes would be reported
within 30 days of the change.
As a result, the FR 4002, Notification Pursuant to Section
211.23(h) of Regulation K on Acquisitions by Foreign Banking
Organizations (OMB No. 7100-0100), will no longer be needed.
(2) Add a new schedule to the FR Y-7 report item 1, Financial
Statements, that breaks out the details of a foreign banking
organization's risk-based capital computations. Foreign banking
organizations would have the option of providing this information in
the FR 2068. For banks from countries that do not follow a risk-based
capital format, information on their capital computations, as required
by the home country banking supervisor(s), would be required.
(3) Include with report item 1 copies of the foreign banking
organizations' most recent 20-F filing with the SEC, if applicable.
(4) Replace the existing free form financial statements for U.S.
nonbank subsidiaries with specific schedules to gather core financial
information that will be processed electronically. The proposed
reporting format will include a principal schedule consisting of
thirty-one balance sheet and income statement items (such as loans,
securities, assets, capital, and income) and four supporting schedules.
U.S. nonbanking subsidiaries with total assets of more than $1 billion
would complete the principal and supporting schedules; U.S. nonbanking
subsidiaries with total assets between $150 million and $1 billion
would complete only the principal schedule; and U.S.nonbanking
subsidiaries with total assets of less than $150 million would respond
to only four core items: total assets, equity capital, net income, and
total off-balance-sheet items.
(5) Eliminate report item 5B which currently requires foreign
banking organizations to report the ownership of shares by directors
and officers of the foreign banking organization in that organization
and each related company.
(6) Expand the organization chart to identify U.S. companies that
are owned by individuals who own 25 percent or more of the foreign
banking organization.
(7) Add several questions that require a yes or no response to
assist the respondents in providing a complete report. These include
questions relating to certification and consolidation of financial
statements, home country requirements regarding the Basle Capital
Accord and changes, if any, in accounting policies, and ownership of
nonbank subsidiaries since the most recent filing of the FR Y-7.
(8) Add a glossary as part of the FR Y-7 and FR 2068 instructions,
and require that the general discussion provided by respondents of the
accounting principles used in the preparation of the initial submission
of the FR Y-7 be updated by all respondents every five years, beginning
with the 1995 fiscal year filing.
The Federal Reserve proposes the following revisions to the FR 2068
report.
(1) Eliminate the filing exemption for those foreign banking
organizations with small U.S. operations. The exemption was made
several years ago under the premise that ``small'' organizations,
because of their size, would not pose a threat to the financial system.
The Federal Reserve no longer supports this premise.
(2) Eliminate the ``Earnings'' item on the current page 5.
(3) Collect information on past due loans in a more comprehensive
and consistent format.
(4) As with the FR Y-7, expand the organization chart to include
non-U.S. companies that are owned by [[Page 1781]] individuals who own
25 percent or more of the foreign banking organization.
(5) Change the official place of filing from the Board to the
appropriate Federal Reserve Bank in a manner consistent with all other
regulatory filings. This will promote more timely analysis of financial
information by the Federal Reserve System.
Legal Status
The Legal Division of the Board of Governors of the Federal Reserve
System has determined that 12 U.S.C. Secs. 1844(c), 3106, and 3108(a)
authorize the Federal Reserve to require each report.
Upon request from a respondent, certain information in the FR Y-7
and FR Y-7A may be given confidential treatment pursuant to the Freedom
of Information Act (5 U.S.C. Secs. 552(b) (4) and (6)).
All information provided in the FR 2068 report is confidential. The
Legal Division, in consultation with the Department of Justice, has
determined that the data are exempt from disclosure pursuant to section
(b)(8) of the Freedom of Information Act (5 U.S.C. Sec. 552(b)(8)).
Section (b)(8) provides exemption for information ``contained in or
related to examinations, operating or condition reports prepared by, or
on behalf of, or for the use of an agency responsible for the
regulation or supervision of financial institutions.''
Board of Governors of the Federal Reserve System, December 30,
1994.
William W. Wiles,
Secretary of the Board.
[FR Doc. 95-269 Filed 1-4-95; 8:45 am]
BILLING CODE 6210-01-P
