Repeal of Disclosure Regulations, 15869-15870 [2013-05765]

Agencies

• Federal Housing Enterprise Oversight Office
• Federal Housing Finance Board
• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
• FEDERAL HOUSING FINANCE AGENCY

[Federal Register Volume 78, Number 49 (Wednesday, March 13, 2013)]
[Rules and Regulations]
[Pages 15869-15870]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-05765]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 78, No. 49 / Wednesday, March 13, 2013 / 
Rules and Regulations

[[Page 15869]]



FEDERAL HOUSING FINANCE AGENCY

FEDERAL HOUSING FINANCE BOARD

12 CFR Part 998

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of Federal Housing Enterprise Oversight

12 CFR Part 1730

RIN 2590-AA64


Repeal of Disclosure Regulations

AGENCIES: Federal Housing Finance Agency; Federal Housing Finance 
Board; and Office of Federal Housing Enterprise Oversight.

ACTION: Final rule.

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SUMMARY: The Federal Housing Finance Agency (FHFA) is repealing two 
obsolete regulations issued by its predecessor agencies, the Office of 
Federal Housing Enterprise Oversight (OFHEO) and the Federal Housing 
Finance Board (Finance Board) with respect to the entities regulated by 
OFHEO and by the Finance Board. The regulations being repealed govern 
public financial disclosures made by the entities with respect to 
certain federal securities laws. The Housing and Economic Recovery Act 
of 2008 obviates the need for these rules, making them obsolete and 
unnecessary. This final rule repeals the two regulations in their 
entirety.

DATES: This rule is effective on April 12, 2013.

FOR FURTHER INFORMATION CONTACT: Peggy K. Balsawer, Assistant General 
Counsel, Office of General Counsel, Federal Housing Finance Agency, 400 
Seventh Street SW., Washington, DC 20024, (202) 649-3060 (not a toll-
free number). The telephone number for the Telecommunications Device 
for the Deaf is 800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background and Analysis

A. Creation of the Federal Housing Finance Agency

    Effective July 30, 2008, the Housing and Economic Recovery Act of 
2008 (HERA), Public Law 110-289, 122 Stat. 2654, established FHFA as an 
independent agency of the Federal Government to regulate and oversee 
the Federal National Mortgage Association, the Federal Home Loan 
Mortgage Corporation (collectively, the Enterprises), and the Federal 
Home Loan Banks (Bank(s)) (collectively, the regulated entities). HERA 
transferred to FHFA the supervisory and oversight responsibilities of 
OFHEO over the Enterprises, the oversight responsibilities of the 
Finance Board over the Banks and the Office of Finance (OF), and 
certain functions of the Department of Housing and Urban Development. 
See id. at section 1101, 122 Stat. 2661-63. FHFA's mission is to 
ensure, among other things, that the regulated entities operate ``in a 
safe and sound manner'' and that their activities ``foster liquid, 
efficient, competitive and resilient national housing finance 
markets.'' Id. at section 1102, 122 Stat. 2663-64. The regulations 
promulgated by OFHEO and the Finance Board continue to remain in effect 
with respect to the regulated entities until they are superseded by 
FHFA-issued regulations. See id. at sections 1301, 1302, 1311, 1312, 
122 Stat. 2794-95, 2797-98.

B. Part 1730 (Disclosure of Financial and Other Information)

    The Enterprises' securities were expressly exempted from the 
Securities Exchange Act of 1934 (the 1934 Act) by their respective 
charters. In 2002, both Enterprises agreed to voluntarily register 
their common stock with the Securities and Exchange Commission (SEC) 
under section 12(g) of the 1934 Act. Section 12(g) registration also 
subjects registrants to the requirement that they submit periodic 
disclosures to the SEC in accordance with the 1934 Act and associated 
SEC rules. OFHEO's issuance of Part 1730 in 2003 was expressly intended 
in part to ``facilitate the process'' of registration. 68 FR 16715, 
16716 (Apr. 7, 2003). The rule provides that compliance with related 
disclosure obligations under the securities laws would satisfy OFHEO's 
disclosure requirements.
    In July 2008, HERA expressly removed the exemption for Enterprise 
equity securities from sections 12, 13, 14 and 16 of the 1934 Act. See 
HERA section 1112, 122 Stat. 2677, adding 1934 Act section 38(a), 15 
U.S.C. Section 78oo(a). As a result, the Enterprises were statutorily 
required to register their equity securities under section 12 of the 
1934 Act and comply with the SEC disclosure rules attendant to 
registration. The need for OFHEO's regulation was thus obviated by 
Congressional action, and consequently the regulation is obsolete and 
unnecessary, warranting repeal and removal from the Code of Federal 
Regulations.\1\ Therefore, FHFA is hereby repealing part 1730 in its 
entirety.
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    \1\ The 1934 Act permits termination of registration under some 
narrow circumstances. In the unlikely event an Enterprise becomes 
eligible to terminate its securities registration during 
conservatorship, FHFA would take appropriate action, should the 
Conservator consent to such a course, to ensure that periodic 
disclosures are not suspended.
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C. Part 998 (Registration of Federal Home Loan Bank Equity Securities)

    Part 998 was issued by the Finance Board to require each Bank to 
register (voluntarily from the perspective of the 1934 Act) a class of 
its equity securities under section 12(g) of the 1934 Act and make the 
attendant required periodic disclosures to the SEC. Prior to the 
Finance Board's issuance of Part 998, the Banks did not register their 
equity securities under the 1934 Act, but had been supplying 
information to the OF, the Banks' fiscal agent, to enable the OF to 
prepare combined annual and quarterly financial reports on behalf of 
the entire Bank system. However, those reports were submitted to the 
Finance Board rather than the SEC, and otherwise did not fully comply 
with 1934 Act standards and associated SEC rules.
    The enactment of HERA in 2008 imposed a statutory requirement on 
each Bank to register a class of its common stock under section 12(g) 
and continue to maintain such registration regardless of the number of 
members holding such stock at any given time. See HERA section 1112, 
122 Stat. 2677, adding 1934 Act section 38(b), 15 U.S.C.

[[Page 15870]]

Section 78oo(b)(1).\2\ As a result of SEC mandatory registration, each 
Bank is now required to make the periodic public disclosures made by 
similarly situated SEC registrants. Thus, the reason for the Finance 
Board regulation was superseded by Congressional action, and 
consequently the regulation is obsolete and warrants repeal and removal 
from the Code of Federal Regulations. Therefore, FHFA is hereby 
repealing part 998 in its entirety.
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    \2\ This provision applies only to the Banks and effectively 
precludes the termination of a Bank's registration.
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D. Considerations of Differences Between the Banks and the Enterprises

    Section 1201 of HERA requires FHFA's Director, when promulgating 
regulations ``of general applicability and future effect'' relating to 
the Banks, to consider the differences between the Banks and the 
Enterprises as they may relate to the Banks' cooperative ownership 
structure, mission of providing liquidity to members, affordable 
housing and community development mission, capital structure, and joint 
and several liability. HERA section 1201, 122 Stat. 2782 (amending 12 
U.S.C. 4513). This final rule does not impose any new obligations on 
the Banks, but instead simply removes an existing Finance Board 
regulation that, as a result of the passage of HERA and changed 
circumstances, is obsolete, unnecessary and no longer of any regulatory 
purpose. The repeal of part 998 of title 12 of the Code of Federal 
Regulations therefore would not have any ``future effect'' on the 
Banks. For these reasons, a section 1201 analysis is not required for 
this final rule.

II. Notice and Public Participation

    FHFA finds that good cause exists under 5 U.S.C. 553(b)(B) of the 
Administrative Procedure Act for adopting these rule changes as a final 
rule without public notice and comment because the subject regulations 
currently have no regulatory purpose or value and thus their removal 
would be insignificant in nature and impact and of no consequence to 
the industry and the public. The provisions of part 1730 were expressly 
intended to facilitate the Enterprises' securities registration and 
associated financial disclosures, which had already been agreed to by 
the Enterprises. These requirements have subsequently been 
independently mandated under HERA. Similarly, the provisions of part 
998 relate solely to the Finance Board's requirement that the Banks 
register their equity securities under the 1934 Act and make attendant 
financial disclosures. These requirements too were subsequently 
mandated by the provisions of HERA. Neither of these regulations 
includes provisions that are appropriate for FHFA to carry over and 
incorporate into its own regulations, and thus they should be repealed 
and removed from the Code of Federal Regulations. For these reasons, 
FHFA believes that public comments are unnecessary and would serve no 
purpose.

III. Paperwork Reduction Act

    The final rule does not contain any collections of information 
pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.). Therefore, FHFA has not submitted any information to the Office 
of Management and Budget for review.

IV. Regulatory Flexibility Act

    The final rule applies only to the Banks and Enterprises, which do 
not come within the meaning of small entities as defined in the 
Regulatory Flexibility Act (RFA). See 5 U.S.C. 601(6). Therefore in 
accordance with section 605(b) of the RFA, FHFA certifies that this 
final rule will not have a significant economic impact on a substantial 
number of small entities.

List of Subjects

12 CFR Part 998

    Credit, Federal home loan banks, Financial disclosure, Government-
sponsored enterprises, Records, Reporting and recordkeeping, Securities 
disclosure.

12 CFR Part 1730

    Financial disclosure, Government-sponsored enterprises, Records, 
Reporting and recordkeeping.

    Accordingly, for reasons stated in the Supplementary Information 
and under the authority of 12 U.S.C. 4511, 4512, 4513, and 4526, FHFA 
amends subchapter M of chapter IX and subchapter C of chapter XVII of 
title 12 of the Code of Federal Regulations as follows:

CHAPTER IX--FEDERAL HOUSING FINANCE BOARD

SUBCHAPTER M--FEDERAL HOME LOAN BANK DISCLOSURES

PART 998--[REMOVED]

0
1. Remove part 998.

CHAPTER XVII--OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT, 
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

SUBCHAPTER C--SAFETY AND SOUNDNESS

PART 1730--[REMOVED]

0
2. Remove part 1730.

    Dated: March 5, 2013.
Edward J. DeMarco,
Acting Director, Federal Housing Finance Agency.
[FR Doc. 2013-05765 Filed 3-12-13; 8:45 am]
BILLING CODE 8070-01-P