Proposed Agency Information Collection Activities; Comment Request, 48932-48940 [2013-19354]

Download as PDF 48932 Federal Register / Vol. 78, No. 155 / Monday, August 12, 2013 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES exemption will be effective on September 11, 2013, unless stayed pending reconsideration. Petitions to stay that do not involve environmental issues,1 formal expressions of intent to file an OFA under 49 CFR 1152.27(c)(2),2 and trail use/rail banking requests under 49 CFR 1152.29 must be filed by August 22, 2013. Petitions to reopen or requests for public use conditions under 49 CFR 1152.28 must be filed by September 3, 2013, with the Surface Transportation Board, 395 E Street SW., Washington, DC 20423– 0001. A copy of any petition filed with the Board should be sent to NSR’s representative: Robert A. Wimbish, Baker & Miller PLLC, 2401 Pennsylvania Ave. NW., Suite 300, Washington, DC 20037. If the verified notice contains false or misleading information, the exemption is void ab initio. NSR has filed a combined environmental and historic report that addresses the effects, if any, of the abandonment on the environment and historic resources. OEA will issue an environmental assessment (EA) by August 16, 2013. Interested persons may obtain a copy of the EA by writing to OEA (Room 1100, Surface Transportation Board, Washington, DC 20423–0001) or by calling OEA at (202) 245–0305. Assistance for the hearing impaired is available through the Federal Information Relay Service at (800) 877–8339. Comments on environmental and historic preservation matters must be filed within 15 days after the EA becomes available to the public. Environmental, historic preservation, public use, or trail use/rail banking conditions will be imposed, where appropriate, in a subsequent decision. Pursuant to the provisions of 49 CFR 1152.29(e)(2), NSR shall file a notice of consummation with the Board to signify that it has exercised the authority granted and fully abandoned the Line. If consummation has not been effected by NSR’s filing of a notice of consummation by August 12, 2014, and there are no legal or regulatory barriers 1 The Board will grant a stay if an informed decision on environmental issues (whether raised by a party or by the Board’s Office of Environmental Analysis (OEA) in its independent investigation) cannot be made before the exemption’s effective date. See Exemption of Out-of-Serv. Rail Lines, 5 I.C.C. 2d 377 (1989). Any request for a stay should be filed as soon as possible so that the Board may take appropriate action before the exemption’s effective date. 2 Each OFA must be accompanied by the filing fee, which is currently set at $1,600. See 49 CFR 1002.2(f)(25). VerDate Mar<15>2010 14:51 Aug 09, 2013 Jkt 229001 to consummation, the authority to abandon will automatically expire. Board decisions and notices are available on our Web site at ‘‘WWW.STB.DOT.GOV.’’ Decided: August 7, 2013. By the Board, Rachel D. Campbell, Director, Office of Proceedings. Derrick A. Gardner, Clearance Clerk. [FR Doc. 2013–19433 Filed 8–9–13; 8:45 am] BILLING CODE 4915–01–P DEPARTMENT OF THE TREASURY Office of the Comptroller of the Currency FEDERAL RESERVE SYSTEM FEDERAL DEPOSIT INSURANCE CORPORATION Proposed Agency Information Collection Activities; Comment Request Office of the Comptroller of the Currency (OCC), Treasury; Board of Governors of the Federal Reserve System (Board); and Federal Deposit Insurance Corporation (FDIC). ACTION: Joint notice and request for comment. AGENCY: In accordance with the requirements of the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. chapter 35), the OCC, the Board, and the FDIC (the agencies) may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The agencies, under the auspices of the Federal Financial Institutions Examination Council (FFIEC), have approved the publication for public comment of proposed revisions to regulatory capital components and ratios portion of Schedule RC–R, Regulatory Capital, in the Consolidated Reports of Condition and Income (Call Report or FFIEC 031 and FFIEC 041) and to the Risk-Based Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework (FFIEC 101). The proposed revisions to the Call Report and the FFIEC 101 are consistent with the revised regulatory capital rules approved by the agencies during July 2013 (revised regulatory capital rules).1 SUMMARY: 1 See http://www.occ.treas.gov/news-issuances/ news-releases/2013/nr-occ-2013–110.html, July 9, 2013 (OCC); http://www.federalreserve.gov/ newsevents/press/bcreg/20130702a.htm, July 2, PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 Institutions subject to the advanced approaches risk-based capital rules (advanced approaches banking organizations) that are not savings and loan holding companies would begin reporting on the proposed revised FFIEC 101 and, if applicable, proposed revised Call Report Schedule RC–R effective March 31, 2014. Advanced approaches banking organizations that are savings and loan holding companies and that are subject to the revised regulatory capital rules would begin reporting on the proposed revised FFIEC 101 effective March 31, 2015. All other institutions that are required to file the Call Report would begin reporting on proposed revised Call Report Schedule RC–R effective March 31, 2015. At the end of the comment period, the comments and recommendations received will be analyzed to determine the extent to which the FFIEC and the agencies should modify the proposed reporting revisions prior to giving final approval. The agencies will then submit the proposed reporting revisions to OMB for review and approval. In connection with the revised regulatory capital rules, published elsewhere in today’s Federal Register, the Board proposes to make corresponding revisions to the Consolidated Financial Statements for Holding Companies (FR Y–9C) and to collect consolidated regulatory capital data from savings and loan holding companies with total consolidated assets of less than $500 million that are subject to the revised regulatory capital rules on the Parent Company Only Financial Statements for Holding Companies (FR Y–9SP). DATES: Comments must be submitted on or before October 11, 2013. ADDRESSES: Interested parties are invited to submit written comments to any or all of the agencies. All comments, which should refer to the OMB control number(s), will be shared among the agencies. OCC: Because paper mail in the Washington, DC, area and at the OCC is subject to delay, commenters are encouraged to submit comments by email if possible. Comments may be sent to: Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, Attention: 1557–0081 and 1557–0239, 400 7th Street SW., Suite 3E–218, Mail Stop 9W–11, Washington, DC 20219. In addition, comments may be sent by fax to (571) 465–4326 or by electronic mail to regs.comments@occ.treas.gov. You may personally inspect and photocopy 2013 (Board); and http://www.fdic.gov/news/news/ press/2013/pr13060.html, July 9, 2013 (FDIC). E:\FR\FM\12AUN1.SGM 12AUN1 mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 78, No. 155 / Monday, August 12, 2013 / Notices comments at the OCC, 400 7th Street SW., Washington, DC 20219. For security reasons, the OCC requires that visitors make an appointment to inspect comments. You may do so by calling (202) 649–6700. Upon arrival, visitors will be required to present valid government-issued photo identification and to submit to security screening in order to inspect and photocopy comments. All comments received, including attachments and other supporting materials, are part of the public record and subject to public disclosure. Do not enclose any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure. Board: You may submit comments, which should refer to ‘‘FFIEC 031, FFIEC 041, and FFIEC 101,’’ 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. • Email: regs.comments@federalreserve.gov. Include reporting form number in the subject line of the message. • Fax: (202) 452–3819 or (202) 452– 3102. • Mail: Robert DeV. Frierson, 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 www.federalreserve.gov/generalinfo/ foia/ProposedRegs.cfm as submitted, unless modified 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 9:00 a.m. and 5:00 p.m. on weekdays. FDIC: You may submit comments, which should refer to ‘‘FFIEC 031, FFIEC 041, and FFIEC 101,’’ by any of the following methods: • Agency Web site: http:// www.fdic.gov/regulations/laws/federal/ propose.html. Follow the instructions for submitting comments on the FDIC Web site. • Federal eRulemaking Portal: http:// www.regulations.gov. Follow the instructions for submitting comments. • Email: comments@FDIC.gov. Include ‘‘FFIEC 031, FFIEC 041, and VerDate Mar<15>2010 14:51 Aug 09, 2013 Jkt 229001 FFIEC 101’’ in the subject line of the message. • Mail: Gary A. Kuiper, Counsel, Attn: Comments, Room NYA–5046, 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: All comments received will be posted without change to http:// www.fdic.gov/regulations/laws/federal/ propose.html including any personal information provided. Comments may be inspected at the FDIC Public Information Center, Room E–1002, 3501 Fairfax Drive, Arlington, VA 22226, between 9 a.m. and 5 p.m. on business days. Additionally, commenters may send a copy of their comments to the OMB desk officer for the agencies by mail to the Office of Information and Regulatory Affairs, U.S. Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street NW., Washington, DC 20503; by fax to (202) 395–6974; or by email to oira_submission@omb.eop.gov. For further information about the proposed revisions to regulatory reporting requirements discussed in this notice, please contact any of the agency clearance officers whose names appear below. In addition, copies of the proposed revised Call Report Schedule RC–R and FFIEC 101 forms and instructions can be obtained at the FFIEC’s Web site (http://www.ffiec.gov/ ffiec_report_forms.htm). OCC: Mary H. Gottlieb and Johnny Vilela, OCC Clearance Officers, (202) 649–5490, Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, 400 7th Street SW., Washington, DC 20219. Board: Cynthia Ayouch, Federal Reserve Board Clearance Officer, (202) 452–3829, Office of the Chief Data Officer, Board of Governors of the Federal Reserve System, 20th and C Streets NW., Washington, DC 20551. Telecommunications Device for the Deaf (TDD) users may call (202) 263–4869. FDIC: Gary A. Kuiper, Counsel, (202) 898–3877, Legal Division, Federal Deposit Insurance Corporation, 550 17th Street NW., Washington, DC 20429. SUPPLEMENTARY INFORMATION: The agencies are proposing to revise, without extension, the Call Report and to revise, with extension, the FFIEC 101, which are currently approved FOR FURTHER INFORMATION CONTACT: PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 48933 collections of information for each agency. Report Title: Consolidated Reports of Condition and Income (Call Report). Form Number: Call Report: FFIEC 031 (for banks with domestic and foreign offices) and FFIEC 041 (for banks with domestic offices only). Frequency of Response: Quarterly. Affected Public: Business or other forprofit. OCC: OMB Number: 1557–0081. Estimated Number of Respondents: 1,787 national banks and federal savings associations. Estimated Time per Response: 55.39 burden hours per quarter to file. Estimated Total Annual Burden: 395,928 burden hours to file. Board: OMB Number: 7100–0036. Estimated Number of Respondents: 843 state member banks. Estimated Time per Response: 57.29 burden hours per quarter to file. Estimated Total Annual Burden: 193,182 burden hours to file. FDIC: OMB Number: 3064–0052. Estimated Number of Respondents: 4,369 insured state nonmember banks and state savings associations. Estimated Time per Response: 42.06 burden hours per quarter to file. Estimated Total Annual Burden: 735,041 burden hours to file. The estimated time per response for the quarterly filings of the Call Report is an average that varies by agency because of differences in the composition of the institutions under each agency’s supervision (e.g., size distribution of institutions, types of activities in which they are engaged, and existence of foreign offices). The average reporting burden for the filing of the Call Report as it is proposed to be revised is estimated to range from 18 to 750 hours per quarter, depending on an individual institution’s circumstances. Report Title: Risk-Based Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework. Form Number: FFIEC 101. Frequency of Response: Quarterly. Affected Public: Business or other forprofit. OCC: OMB Number: 1557–0239. Estimated Number of Respondents: 14 national banks and federal savings associations. Estimated Time per Response: 676 burden hours per quarter to file. Estimated Total Annual Burden: 37,856 burden hours to file. E:\FR\FM\12AUN1.SGM 12AUN1 48934 Federal Register / Vol. 78, No. 155 / Monday, August 12, 2013 / Notices Board: OMB Number: 7100–0319. Estimated Number of Respondents: 20 state member banks, bank holding companies, and savings and loan holding companies. Estimated Time per Response: 676 burden hours per quarter to file. Estimated Total Annual Burden: 54,080 burden hours to file. FDIC: OMB Number: 3064–0159. Estimated Number of Respondents: 8 insured state nonmember banks and state savings associations. Estimated Time per Response: 676 burden hours per quarter to file. Estimated Total Annual Burden: 21,632 burden hours to file. mstockstill on DSK4VPTVN1PROD with NOTICES General Description of Reports The Call Report information collections are mandatory for the following institutions: 12 U.S.C. 161 (national banks), 12 U.S.C. 324 (state member banks), 12 U.S.C. 1817 (insured state nonmember commercial and savings banks), and 12 U.S.C. 1464 (savings associations) (collectively, Call Report filers). At present, except for selected data items, Call Report information collections are not given confidential treatment. The FFIEC 101 information collections are mandatory for institutions using the advanced approaches risk-based capital rule (advanced approaches banking organizations): 12 U.S.C. 161 (national banks), 12 U.S.C. 324 and 12 U.S.C. 1844(c) (state member banks and bank holding companies, respectively), 12 U.S.C. 1467a(b) (savings and loan holding companies), 12 U.S.C. 1817 (insured state nonmember commercial and savings banks), and 12 U.S.C. 1464 (savings associations). Under the agencies’ current practice, the FFIEC 101 information collections are given confidential treatment (5 U.S.C. 552(b)(4)) for report dates until after the reporting institution conducts a satisfactory parallel run. For report dates thereafter, Schedules A and B, as well as line items 1 and 2 of Schedule S, of the institution’s FFIEC 101 are no longer given confidential treatment. The agencies propose to make public the information collected on the proposed FFIEC 101 Schedule A, except for a few advanced approaches-specific line items, for all advanced approaches banking organizations, regardless of their parallel run status, starting with the report for the March 31, 2014, report date, consistent with the implementation timeline established by the revised regulatory capital rules. VerDate Mar<15>2010 14:51 Aug 09, 2013 Jkt 229001 Abstract Call Report: Institutions submit Call Report data to the agencies each quarter for the agencies’ use in monitoring the condition, performance, and risk profile of individual institutions and the industry as a whole. Call Report data provide the most current statistical data available for evaluating institutions’ corporate applications, identifying areas of focus for on-site and off-site examinations, and monetary and other public policy purposes. The agencies use Call Report data in evaluating interstate merger and acquisition applications to determine, as required by law, whether the resulting institution would control more than ten percent of the total amount of deposits of insured depository institutions in the United States. Call Report data also are used to calculate institutions’ deposit insurance and Financing Corporation assessments and national banks’ and federal savings associations’ semiannual assessment fees. FFIEC 101: Each advanced approaches banking organization is required to file quarterly regulatory capital data. The agencies use these data to assess and monitor the levels and components of each reporting entity’s risk-based capital requirements and the adequacy of the entity’s capital under the Advanced Capital Adequacy Framework; to evaluate the impact and competitive implications of the Advanced Capital Adequacy Framework on individual reporting entities and on an industry-wide basis; and to supplement on-site examination processes. The reporting schedules also assist advanced approaches banking organizations in understanding expectations around the system development necessary for implementation and validation of the Advanced Capital Adequacy Framework. Submitted data that are released publicly will also provide other interested parties with information about advanced approaches banking organizations’ regulatory capital. Current Actions I. Overview of the Proposed Changes A. Summary of Proposed Changes Call Report Call Report Schedule RC–R collects regulatory data on tier 1, tier 2, and total capital and regulatory capital ratios (regulatory capital components and ratios portion) and on risk-weighted assets (risk-weighted assets portion). The agencies are proposing at this time to revise the reporting requirements for the regulatory capital components and PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 ratios portion of Call Report Schedule RC–R, consistent with the revised regulatory capital rules. Compared to the current schedule, the proposed regulatory capital components and ratios portion of Schedule RC–R would provide a more detailed breakdown of the regulatory capital elements, including deductions and adjustments, consistent with the revised regulatory capital rules. For report dates in 2014, the regulatory capital components and ratios portion of Schedule RC–R would be designated Parts I.A and I.B. Call Report filers that are not advanced approaches institutions 2 would file Part I.A, which would include existing data items 1 through 33 of current Schedule RC–R. Call Report filers that are subject to advanced approaches and to the revised regulatory capital rule effective January 1, 2014, would file Part I.B, which would include the reporting revisions proposed herein consistent with the revised regulatory capital rules. In March 2015, Part I.A would be removed and Part I.B would be designated Part I; all Call Report filers would then submit Part I. The proposed changes to Call Report Schedule RC–R are discussed in more detail in section II below. The agencies expect to publish at a later date a request for comment on a separate proposal to revise the riskweighted assets portion of Call Report Schedule RC–R to incorporate the standardized approach for calculating risk-weighted assets under the revised regulatory capital rules. The revisions to the risk-weighted assets portion of Schedule RC–R would take effect March 31, 2015. The agencies are proposing changes to Schedule RC–R in two stages to allow interested parties to better understand the proposed revisions and focus their comments on areas of particular interest. Therefore, for report dates in 2014, all Call Report filers would continue to report risk-weighted assets in the portion of Schedule RC–R that contains existing data items 34 2 An advanced approaches institution as defined in the agencies’ revised regulatory capital rules (i) has consolidated total assets (excluding assets held by an insurance underwriting subsidiary) on its most recent year-end regulatory report equal to $250 billion or more; (ii) has consolidated total onbalance sheet foreign exposure on its most recent year-end regulatory report equal to $10 billion or more (excluding exposures held by an insurance underwriting subsidiary); (iii) is a subsidiary of a depository institution that uses the advanced approaches pursuant to subpart E of 12 CFR part 3 (OCC), 12 CFR part 217 (Board), or 12 CFR part 325 (FDIC) to calculate its total risk-weighted assets; (iv) is a subsidiary of a bank holding company or savings and loan holding company that uses the advanced approaches pursuant to 12 CFR part 217 to calculate its total risk-weighted assets; or (v) elects to use the advanced approaches to calculate its total risk-weighted assets. E:\FR\FM\12AUN1.SGM 12AUN1 Federal Register / Vol. 78, No. 155 / Monday, August 12, 2013 / Notices through 62 and Memorandum items 1 and 2 of current Schedule RC–R, but this portion of the schedule would be designated Part II and the data items would be renumbered beginning with item 1. mstockstill on DSK4VPTVN1PROD with NOTICES FFIEC 101 The proposed revised FFIEC 101 Schedule A for advanced approaches banking organizations incorporates the Basel III common disclosure template that was adopted by the Basel Committee on Banking Supervision in June 2012 (Basel III common disclosure template).3 The proposed revised Schedule A incorporates the Basel III capital disclosure template in its entirety, with some minor changes to the titles of the line items, consistent with the revised regulatory capital rules and accounting terminology of U.S. generally accepted accounting principles (GAAP). Line items that are not applicable to U.S. banking organizations are shaded out and marked as not applicable (for example, prudential valuation adjustments in line item 7 and additional tier 1 capital instruments classified as equity or liabilities under GAAP in line items 31 and 32). The agencies believe that incorporating the complete Basel III common disclosure template into Schedule A is essential to ensure transparency and comparability of reporting of regulatory capital elements among internationally active institutions. The proposed revised Schedule A also includes additional line items, such as the supplementary leverage ratio, to collect data on the new requirements established by the revised regulatory capital rules. To ensure transparency of reporting regulatory capital by internationally active institutions, the agencies propose to make public the information collected on the proposed revised Schedule A, except for a few specific line items, starting with the March 31, 2014, report date. The agencies propose to continue granting confidential treatment to certain items that are dependent on the implementation of the advanced approaches systems while an advanced approaches banking organization is in its parallel run period. The agencies believe that according confidential treatment to such line items is important to ensure that the organization conducts a satisfactory parallel run and reports this data publicly only after its primary federal 3 See Basel Committee on Banking Supervision, Composition of capital disclosure requirements; Annex 1; available at http://www.bis.org/publ/ bcbs221.pdf. VerDate Mar<15>2010 14:51 Aug 09, 2013 Jkt 229001 supervisor approves its internal systems to apply the revised advanced approaches rules. The agencies also propose to revise the risk-weighted assets schedules of the FFIEC 101 (Schedules B, C, D, H, I, J, P, Q, and R) consistent with the revised regulatory capital rules at this time to facilitate the timely implementation of the revised advanced approaches rules in 2014. B. Timing of Implementation of the Proposed Reporting Requirements Call Report Filers Call Report filers that are not subject to the advanced approaches rules would continue to report their regulatory capital data and regulatory capital ratios using the current template of Schedule RC–R, which would be designated Part I.A, during the reporting periods in 2014.4 These institutions would begin using proposed Schedule RC–R, Part I.B, to report their regulatory capital data and regulatory capital ratios effective March 31, 2015, at which time Part I.B would be relabeled Part I and Part I.A would be eliminated. Advanced Approaches Banking Organizations Reporting regulatory capital: An advanced approaches banking organization that is not a savings and loan holding company would use proposed revised FFIEC 101 Schedule A and proposed Call Report Schedule RC– R, Part I.B, if applicable, to report its regulatory capital consistent with the revised regulatory capital rules, effective March 31, 2014.5 An advanced approaches banking organization that is a savings and loan holding company (SLHC), except top-tier SLHCs that are substantially engaged in insurance and commercial activities, would file the FFIEC 101 effective March 31, 2015, 4 For report dates in 2014, the regulatory capital components and ratios portion of Schedule RC–R would be presented as two parts. Part 1.A would be identical to the current regulatory capital components and ratios portion of Schedule RC–R and it would be used by Call Report filers that are not subject to the advanced approaches rules. Part I.B would be the proposed revised regulatory capital components and ratios portion of Schedule RC–R and it would be used by Call Report filers that are subject to the advanced approaches rules. Starting on the March 31, 2015, report date, Part I.A would be eliminated and the proposed Part I.B of Schedule RC–R would be relabeled Part I, would be the only template for reporting regulatory capital data and regulatory capital ratios, and would be used by all Call Report filers. 5 Advanced approaches banking organizations that file the FR Y–9C would report their regulatory capital on proposed revised FR Y–9C Schedule HC– R, as described in the Federal Register notice published by the Board. PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 48935 consistent with the revised regulatory capital rules.6 Reporting risk-weighted assets and regulatory capital ratios: An advanced approaches banking organization that is in a parallel run period would apply the generally applicable risk-based capital rules for report dates in 2014 7 and the standardized approach for report dates beginning in 2015 to report its riskweighted assets and capital ratios on proposed revised FFIEC 101 Schedule A (line items 60 through 63) and on proposed Call Report Schedule RC–R, Part I.B (in 2014, which would be designated Part I in 2015), if applicable (line items 40 through 43, Column A). In addition, such an institution would apply the revised advanced approaches rules to report its risk-weighted assets and risk-based capital ratios on proposed revised FFIEC 101 Schedule A (line items 87 through 90). Beginning in 2014, an advanced approaches banking organization that conducts a satisfactory parallel run would report its advanced approaches risk-weighted assets and risk-based capital ratios on proposed revised FFIEC 101 Schedule A (line items 60 through 63) and on proposed revised Call Report Schedule RC–R, Part I.B, if applicable (line item 40.b and line items 41 through 43, Column B). Supplementary leverage ratio and capital buffer: All advanced approaches banking organizations, regardless of their parallel run status, would report their supplementary leverage ratio effective March 31, 2015, on proposed revised FFIEC 101 Schedule A (line item 98) and on proposed revised Call Report Schedule RC–R, Part I (as relabeled in 2015), if applicable (line item 44). All banking organizations would report the applicable capital buffer effective March 31, 2016, on proposed revised FFIEC 101 Schedule A (line items 64 through 68) and on proposed Call Report Schedule RC–R, Part I (as relabeled in 2015), if applicable (line items 45 through 47). Initial Reporting For the March 31, 2014, and March 31, 2015, report dates, as applicable, institutions may provide reasonable estimates for any new or revised Call Report and FFIEC 101 items initially required to be reported as of that date 6 The revised regulatory capital rules apply to top-tier SLHCs that are not substantially engaged in insurance or commercial activities (covered SLHCs) as defined in the rules. 7 The agencies’ general risk-based capital rules are at 12 CFR part 3, appendix A, and 12 CFR part 167 (OCC); 12 CFR parts 208 and 225, appendix A (Board); and 12 CFR part 325, appendix A, and 12 CFR part 390, subpart Z (FDIC). E:\FR\FM\12AUN1.SGM 12AUN1 48936 Federal Register / Vol. 78, No. 155 / Monday, August 12, 2013 / Notices for which the requested information is not readily available. The specific wording of the captions for the new or revised Call Report and FFIEC 101 data items discussed in this proposal and the numbering of these data items should be regarded as preliminary. II. Discussion of Proposed Call Report Schedule RC–R, Part I.B This section describes the proposed changes to Call Report Schedule RC–R to implement the reporting of regulatory capital information and ratios consistent with the revised regulatory capital rules. As previously discussed, effective March 31, 2014: (1) the existing regulatory capital ratios portion of Schedule RC–R would be designated Part I.A and would be completed by institutions that are not advanced approaches institutions during the 2014 reporting periods, and (2) a new Part I.B would be added to Schedule RC–R effective March 31, 2014, and would be completed by advanced approaches institutions during the 2014 reporting period. Then, effective March 31, 2015, Part I.A would be eliminated, Part I.B would be redesignated Part I of Schedule RC–R, and all institutions would complete Part I. Call Report filers should refer to the revised regulatory capital rules and the proposed reporting instructions for further information. The proposed reporting instructions also provide guidance on how to calculate and report items subject to the transition provisions under section 300 of the revised regulatory capital rules. Proposed Part I.B of Schedule RC–R would be divided into the following sections: (A) Common equity tier 1 capital; (B) common equity tier 1 capital: adjustments and deductions; (C) additional tier 1 capital; (D) tier 2 capital; (E) total assets for the leverage ratio; (F) capital ratios; and (G) capital buffer. A brief description of each of these sections and the corresponding line items is provided below. mstockstill on DSK4VPTVN1PROD with NOTICES A. Schedule RC–R, Part I.B, Items 1–5: Common Equity Tier 1 Capital Proposed line items 1 through 5 would collect information regarding the new regulatory capital component, common equity tier 1 capital. The proposed line items align with the elements of common equity tier 1 capital under the revised definition of capital, including (item 1) common stock plus related surplus (net of treasury stock and unearned employee stock ownership plan shares), (item 2) retained earnings, (item 3) accumulated other comprehensive income (AOCI), and (item 4) common equity tier 1 VerDate Mar<15>2010 14:51 Aug 09, 2013 Jkt 229001 minority interests.8 As explained in section 21 of the revised regulatory capital rules, an institution may include a limited amount of common equity tier 1 minority interest in a consolidated subsidiary that is a depository institution or a foreign bank in its common equity tier 1 capital. Line item 5 collects the sum of items 1 through 4 to determine common equity tier 1 capital before adjustments and deductions. For purposes of reporting line item 3, AOCI, an institution that is not subject to the advanced approaches rules may make a one-time election to opt out of the requirement to include most components of AOCI in common equity tier 1 capital (AOCI opt-out election). An institution that makes an AOCI optout election must report ‘‘Yes’’ in line item 3.a and report the amounts in line items 9.a, 9.b, 9.c, 9.d, and 9.e. An institution that is not an advanced approaches institution would make this election when it completes Schedule RC–R in its Call Report for March 31, 2015 (or, for an institution that becomes insured after March 31, 2015, in the first Call Report it files after becoming insured). If an institution makes an AOCI opt-out election, the transition provisions for AOCI under section 300 of the revised regulatory capital rules would not apply to the reporting of AOCI in line item 3. All advanced approaches banking organizations that file the Call Report and all other insured depository institutions that choose not to make the AOCI opt-out election must report ‘‘No’’ in line item 3.a and complete line item 9.f. In addition, such institutions must report AOCI in item 3 subject to the transition provisions, as described in section 300 of the revised regulatory capital rules and the corresponding instructions. B. Schedule RC–R, Part I.B, Items 6–19: Common Equity Tier 1 Capital: Adjustments and Deductions Proposed line items 6 through 18 reflect adjustments and deductions to common equity tier 1 capital, as described in section 22 of the revised regulatory capital rules. Institutions must refer to the revised regulatory capital rules to determine the conditions under which deferred tax liabilities (DTLs) may be netted against assets subject to deduction. An institution would calculate and report the following adjustments and deductions, as described below, which would be summed in line item 18 and deducted from common equity tier 1 capital in line item 19. Schedule RC–R, Part I.B, item 6: LESS: Goodwill net of associated DTLs: Goodwill is reported and deducted from common equity tier 1 capital. Schedule RC–R, Part I.B, item 7: LESS: Intangible assets (other than goodwill and mortgage servicing assets (MSAs)), net of associated DTLs: Intangible assets, other than goodwill and MSAs, net of associated DTLs, must be deducted from common equity tier 1 capital. Schedule RC–R, Part I.B, item 8: LESS: Deferred tax assets (DTAs) that arise from operating loss and tax credit carryforwards, net of any related valuation allowances and net of associated DTLs: An institution must deduct DTAs that arise from operating loss and tax credit carryforwards, net of any related valuation allowances and net of associated DTLs, from common equity tier 1 elements.9 Schedule RC–R, Part I.B, item 9: AOCI-related adjustments: An institution that makes an AOCI opt-out election in line item 3.a would adjust its common equity tier 1 capital by reporting the amount of specified AOCI components in line items 9.a, 9.b, 9.c, 9.d, and 9.e, that is, net unrealized gains (losses) on available-for-sale (AFS) securities; net unrealized loss on AFS preferred stock classified as an equity security under GAAP and AFS equity exposures; accumulated net gains (losses) on cash flow hedges; amounts recorded in AOCI attributed to defined benefit postretirement plans resulting from the initial and subsequent application of the relevant GAAP standards that pertain to such plans; and net unrealized gains (losses) on held-to-maturity securities that are included in AOCI. An advanced approaches banking organization that files the Call Report and any other insured depository institution that chooses not to make the AOCI opt-out election would report in line item 9.f any accumulated net gain (loss) on cash flow hedges included in AOCI, net of applicable tax effects, that relate to the hedging of items that are not recognized at fair value on the balance sheet. Schedule RC–R, Part I.B, item 10: LESS: Other deductions from (additions to) common equity tier 1 capital: Under the revised regulatory capital rules, 8 Under current GAAP, minority interests are referred to as noncontrolling interests. In this regard, on the Call Report balance sheet (Schedule RC), such interests are labeled ‘‘Noncontrolling (minority) interests in consolidated subsidiaries.’’ 9 DTAs arising from temporary differences that the banking organization could realize through net operating loss carrybacks are not subject to deduction and instead receive a 100 percent risk weight. PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 E:\FR\FM\12AUN1.SGM 12AUN1 mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 78, No. 155 / Monday, August 12, 2013 / Notices institutions must make the following deductions from or additions to common equity tier 1 capital. Schedule RC–R, Part I.B, item 10.a: Unrealized net gain (loss) related to changes in the fair value of liabilities that are due to changes in own credit risk: An institution would report the amount of unrealized net gain (loss) related to changes in the fair value of liabilities measured at fair value on the balance sheet that are due to changes in its own credit risk. Advanced approaches banking organizations would include the credit spread premium over the risk-free rate for derivatives that are liabilities. Schedule RC–R, Part I.B, item 10.b: LESS: All other deductions from (additions to) common equity tier 1 capital before threshold-based deductions: An institution would report in line item 10.b the total of the following deductions and additions: (1) Gain-on-sale associated with a securitization exposure: An institution must deduct from common equity tier 1 capital any after-tax gain-on-sale associated with a securitization exposure. Gain-on-sale means an increase in the equity capital of the institution resulting from the consummation or issuance of a securitization (other than an increase in equity capital resulting from the institution’s receipt of cash in connection with the securitization). (2) Defined benefit pension fund net assets net of associated DTLs: Defined benefit pension fund assets, net of any associated DTLs, must be deducted from common equity tier 1 capital. (This deduction does not pertain to defined benefit pension fund net assets owned by depository institutions.) (3) Investments in own regulatory capital instruments: To avoid doublecounting of regulatory capital, an institution must deduct any investments in its own common equity tier 1, own additional tier 1, and own tier 2 capital instruments from its common equity tier 1, additional tier 1, and tier 2 capital elements, respectively. Any common equity tier 1, additional tier 1, or tier 2 capital instrument issued by the institution which the institution could be contractually obligated to purchase must be deducted from its common equity tier 1, additional tier 1, or tier 2 capital elements, respectively. If an institution already deducts its investment in its own shares (for example, treasury stock) from its common equity tier 1 capital elements, it does not need to make such deduction twice. (4) Reciprocal cross holdings in the capital instruments of financial VerDate Mar<15>2010 14:51 Aug 09, 2013 Jkt 229001 institutions: A reciprocal cross holding results from a formal or informal arrangement between two financial institutions to swap, exchange, or otherwise intend to hold each other’s capital instruments. Institutions must deduct reciprocal holdings of capital instruments of other financial institutions in certain circumstances. The deduction is made by using the corresponding deduction approach as described in section 22(c) of the revised regulatory capital rules. The corresponding deduction approach requires the institution to make the deduction from the tier of capital for which the instrument would qualify. However, if the institution does not have a sufficient amount of the tier of capital to effect the required deduction, the shortfall must be deducted from the next higher (that is, more subordinated) component of regulatory capital. For example, if an institution is required to deduct a certain amount of regulatory capital from additional tier 1 capital and it does not have sufficient additional tier 1 capital to effectuate the deduction, then the amount of the deduction in excess of the available additional tier 1 capital must be made from common equity tier 1 capital. (5) Equity investments in financial subsidiaries: An institution must deduct the aggregate amount of its outstanding equity investments, including retained earnings, in its financial subsidiaries 10 from common equity tier 1 capital and may not consolidate the assets and liabilities of a financial subsidiary with those of the parent institution. No other deduction is required for these investments in the capital instruments of financial subsidiaries. (6) Advanced approaches banking organizations that file Call Report: After such an institution conducts a satisfactory parallel run, it would include expected credit losses that exceed its eligible credit reserves in this line item. Schedule RC–R, Part I.B, item 11: LESS: Non-significant investments in the capital of unconsolidated financial institutions in the form of common stock that exceed the 10 percent threshold for non-significant investments: Non-significant investments in the capital of unconsolidated financial institutions are investments where an institution owns 10 percent or less of the issued and outstanding common shares of an unconsolidated financial institution. An institution must deduct the amount of 10 The agencies’ definitions of financial subsidiary are at 12 CFR 5.39 (OCC); 12 CFR 208.77 (Board); and 12 CFR 362.17 (FDIC). PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 48937 its non-significant investments that exceeds the 10 percent threshold for non-significant investments (calculated as described in section 22(c)(4) of the revised regulatory capital rules and in the reporting instructions for this line item), applying the corresponding deduction approach. Schedule RC–R, Part I.B, item 12: Subtotal: An institution would report the amount in item 5 less the amounts in items 6 through 11. The amount reported in this item is used to calculate the common equity tier 1 capital deduction thresholds that are used for reporting items 13, 14, 15, and 16. Schedule RC–R, Part I.B, items 13 through 16: LESS: Items subject to the 10 and 15 percent common equity tier 1 capital threshold deductions: An institution must report the amount of each of the following items that individually exceeds the 10 percent common equity tier 1 capital deduction threshold (that is, 10 percent of the amount reported in line item 12). These items are referred to as items subject to the threshold deductions in section 22(d) of the revised regulatory capital rules and include: (1) DTAs arising from temporary differences that could not be realized through net operating loss carrybacks, net of any related valuation allowances and net of DTLs; (2) MSAs net of associated DTLs; and (3) significant investments in the capital of financial institutions in the form of common stock. The aggregate amount of the items subject to the threshold deductions (that are not deducted in line items 13, 14, and 15) are not permitted to exceed 15 percent of an institution’s common equity tier 1 capital. The aggregate amount in excess of the 15 percent threshold, if any, calculated in accordance with section 22(d)(2) of the revised regulatory capital rules and the corresponding line item instructions, must be deducted in line item 16. Schedule RC–R, Part I.B, item 17: LESS: Deductions applied to common equity tier 1 capital due to insufficient amount of additional tier 1 capital and tier 2 capital to cover deductions: If an institution does not have a sufficient amount of additional tier 1 capital and tier 2 capital to cover deductions, then the shortfall must be reported in this line item. Schedule RC–R, Part I.B, items 18 and 19: An institution would summarize total adjustments and deductions in line item 18 and deduct that amount from its common equity tier 1 capital before adjustments and deductions to determine its common equity tier 1 capital, which would be reported in line item 19. E:\FR\FM\12AUN1.SGM 12AUN1 48938 Federal Register / Vol. 78, No. 155 / Monday, August 12, 2013 / Notices C. Schedule RC–R, Part I.B, Items 20 through 25: Additional Tier 1 Capital, and Item 26: Tier 1 Capital Proposed line items 20 through 25 pertain to the reporting of additional tier 1 capital elements. Additional tier 1 capital is the sum of: (item 20) additional tier 1 capital instruments that satisfy the eligibility criteria described in section 20 of the revised regulatory capital rules plus related surplus; (item 21) non-qualifying capital instruments subject to phase-out from additional tier 1 capital; and (item 22) tier 1 minority interest that is not included in an institution’s common equity tier 1 capital; less (item 24) applicable deductions. Line item 26 collects information on the institution’s tier 1 capital, calculated as the sum of (item 19) common equity tier 1 capital and (item 25) additional tier 1 capital. D. Schedule RC–R, Part I.B, Items 27 Through 34: Tier 2 Capital, and Item 35: Total Capital mstockstill on DSK4VPTVN1PROD with NOTICES Proposed line items 27 through 34 would require reporting of tier 2 capital elements. Tier 2 capital is the sum of: (item 27) tier 2 capital instruments that satisfy the eligibility criteria described in section 20 of the revised regulatory capital rules, plus related surplus; (item 28) non-qualifying capital instruments subject to phase-out from tier 2 capital; (item 29) total capital minority interest not included in an institution’s tier 1 capital; (item 30.a) allowance for loan and lease losses (ALLL) includable in tier 2 capital; and (item 31) unrealized gains on AFS preferred stock classified as an equity security under GAAP and AFS equity exposures; less (item 33) tier 2 capital deductions. Advanced approaches banking organizations would report line items 30.b (eligible credit reserves includable in tier 2 capital), 32.b (tier 2 capital before deductions), 34.b (tier 2 capital), and 35.b (total capital) only after these institutions conduct a satisfactory parallel run. Line item 35.a would collect information on an institution’s total capital, which is the sum of (item 26) tier 1 capital and (item 34) tier 2 capital. E. Schedule RC–R, Part I.B, Items 36 Through 39: Total Assets for the Leverage Ratio Institutions would report total assets for the leverage ratio denominator in line item 39, calculated as: (item 36) average total consolidated assets; less (item 37) deductions from common equity tier 1 capital and additional tier 1 capital; and less (item 38) other VerDate Mar<15>2010 14:51 Aug 09, 2013 Jkt 229001 deductions from (additions to) assets for leverage ratio purposes, as described under sections 22(a), (c), and (d) of the revised regulatory capital rules. F. Schedule RC–R, Part I.B, Items 40 Through 45: Total Risk-Weighted Assets and Capital Ratios Line item 40 would collect information on an institution’s riskweighted assets. Line items 41 through 45 would collect information on the following regulatory capital ratios: (item 41) common equity tier 1 capital ratio; (item 42) tier 1 capital ratio; (item 43) total capital ratio; (item 44) tier 1 leverage ratio; and, for advanced approaches institutions, (item 45) supplementary leverage ratio, all calculated as described in section 10 of the revised regulatory capital rules. During the reporting periods in 2014, Call Report filers would continue applying the general risk-based capital rules to report their total risk-weighted assets in line item 40.a of Part I of Schedule RC–R (as currently reported in item 62 of the risk-weighted assets portion of Schedule RC–R). The amount in line item 40 would serve as the denominator of the risk-based capital ratios reported in line items 41 through 44 (Column A). Effective March 31, 2015, Call Report filers would apply the standardized approach, described in subpart D of the revised regulatory capital rules, to report their riskweighted assets in line item 40.a and the risk-based capital ratios in line items 41 through 44 (Column A) of the regulatory capital ratios portion of Schedule RC–R. Advanced approaches institutions would report line items 40 through 45 on the proposed Schedule RC–R, Part I.B, as follows. • During the reporting periods in 2014, these institutions would continue applying the general risk-based capital rules to report their total risk-weighted assets in line item 40.a, which would serve as the denominator of the ratios reported in line items 41 through 44 (Column A). • Starting on March 31, 2015, these institutions would apply the standardized approach, described in subpart D of the revised regulatory capital rules, to report their riskweighted assets in item 40.a and the regulatory capital ratios in items 41 through 44. After they conduct a satisfactory parallel run, these institutions would report their total riskweighted assets (item 40.b) and regulatory capital ratios (items 41 through 44, Column B) using the advanced approaches rule. • In addition, starting on March 31, 2015, these institutions would report a PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 supplementary leverage ratio in item 45, as described in section 10 of the revised regulatory capital rules. G. Schedule RC–R, Part I.B, Items 46 Through 48: Capital Buffer Under section 11 of the revised regulatory capital rules, institutions must hold sufficient common equity tier 1 capital to avoid limitations on distributions and discretionary bonus payments. An institution’s capital conservation buffer, which would be reported in item 46.a, is the lowest of the following measures: (1) The institution’s common equity tier 1 capital ratio minus the applicable minimum (4 percent in 2014, 4.5 percent in 2015 and thereafter); (2) the institution’s tier 1 capital ratio minus the applicable minimum (5.5 percent in 2014, 6 percent in 2015 and thereafter); and (3) the institution’s total capital ratio minus 8 percent. Advanced approaches banking organizations must make additional calculations to account for all the applicable buffers and report the resulting amount in item 46.b, as described in section 11 of the revised regulatory capital rules. If an institution’s capital buffer is less than or equal to the applicable minimum capital conservation buffer (or, in the case of an advanced approaches institution, the applicable minimum capital conservation buffer plus any other applicable capital buffers), then it must report eligible retained income in item 47 and distributions and discretionary bonus payments to executive officers in item 48, as described in section 11 of the revised regulatory capital rules. III. Discussion of the Proposed FFIEC 101 Changes A. Schedule A: Advanced Risk-Based Capital As described in section I.A of this notice, the proposed revised FFIEC 101 Schedule A incorporates the Basel III common disclosure template to ensure consistency and comparability of reporting of regulatory capital elements by internationally active institutions. Although the changes proposed to be made to Schedule A of the FFIEC 101 are consistent with the regulatory capital reporting approach followed in proposed Call Report Schedule RC–R, Part I.B, as described in section II of this notice, advanced approaches banking organizations would provide a more granular breakdown of regulatory capital elements, deductions and adjustments, and regulatory capital instruments subject to phase-out in Schedule A, consistent with the Basel III common disclosure template. Advanced E:\FR\FM\12AUN1.SGM 12AUN1 mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 78, No. 155 / Monday, August 12, 2013 / Notices approaches banking organizations would be able to continue to import the majority of the line items from proposed Call Report Schedule RC–R, Part I.B, into proposed revised FFIEC 101 Schedule A.11 Reporting confidential line items during the parallel run period: As noted in section I.B of this notice, the agencies propose to make public the information collected on proposed revised Schedule A, except for a few specific line items, for all advanced approaches banking organizations, starting with the March 31, 2014, report date. Since the majority of the line items on the proposed Schedule A would also be publicly reported on the proposed Call Report Schedule RC–R, the additional disclosure of regulatory capital elements on proposed revised Schedule A while the institution is conducting its parallel run would be minimal. The agencies propose to grant confidential treatment to items that are dependent on the implementation of the advanced approaches systems to ensure compliance with the revised advanced approaches rules. Specifically, while an institution is conducting its parallel run, the following line items on proposed revised Schedule A would be reported on a confidential basis using the revised advanced approaches rules: item 78 (total eligible credit reserves calculated under the advanced approaches rules); item 79 (amount of eligible credit reserves includable in tier 2 capital); item 86 (expected credit loss that exceeds eligible credit reserves); item 87 (advanced approaches risk-weighted assets); item 88 (common equity tier 1 capital ratio calculated using the advanced approaches); item 89 (tier 1 capital ratio calculated using the advanced approaches); and item 90 (total capital ratio using the advanced approaches). In addition, an institution that is conducting its parallel run would report ‘‘zero’’ in line item 12 (expected credit loss that exceeds eligible credit reserves) and would report line item 50 (eligible credit reserves) and line item 60 (total risk-weighted assets) by applying the general risk-based capital rules in 2014 and the standardized approach in 2015. After an institution conducts a satisfactory parallel run, the entire Schedule A would be made public. In addition, such an institution would then begin to report line item 12 (expected credit loss that exceeds eligible credit 11 Advanced approaches banking organizations that file the FR Y–9C rather than the Call Report would be able to import the majority of the line items from proposed revised Schedule HC–R published by the Federal Reserve Board into proposed revised FFIEC 101 Schedule A. VerDate Mar<15>2010 14:51 Aug 09, 2013 Jkt 229001 reserves), line item 50 (eligible credit reserves), and line item 60 (total riskweighted assets) using the revised advanced approaches rules. Supplementary leverage ratio: Proposed line items 91 through 98 in the Schedule A would collect data on a new supplementary leverage ratio requirement for advanced approaches banking organizations, effective March 31, 2015. Consistent with the revised regulatory capital rules, an advanced approaches banking organization would report the supplementary leverage ratio calculated as the simple arithmetic mean of the three monthly leverage ratios over the reporting quarter. B. Schedules B, C, D, H, I, J, P, Q, and R: Risk-Weighted Assets This section describes the proposed revisions to Schedules B, C, D, H, I, J, P, Q, and R of the FFIEC 101, which are intended to be consistent with the revised advanced approaches rules to calculate the risk-weighted assets. The proposed revisions reflect changes to the methodologies for calculating regulatory capital for counterparty credit risk, securitization exposures, and exposures to central counterparties (CCPs). In addition, the proposed changes incorporate capital requirements for credit valuation adjustments (CVA), wrong-way risk, margin risk, exposures subject to a wholesale correlation factor multiplier of 1.25, cleared derivative and repostyle transactions, and default fund contributions to CCPs. As is currently the case, FFIEC 101 Schedules B through S will be given confidential treatment while an institution is conducting its parallel run. Also, as is currently the case, after an institution conducts a satisfactory parallel run, Schedule B and line items 1 and 2 of Schedule S will no longer be given confidential treatment. Schedules H and J: Credit valuation adjustments (CVAs): The proposed insertion of memorandum items in Schedule H (Wholesale Exposure: Eligible Margin Loans, Repo-Style Transactions, and OTC Derivatives with Cross-Product Netting) and Schedule J (Wholesale Exposure: OTC Derivatives No Cross-Product Netting) reflects the CVA requirements for over-the-counter (OTC) derivative activities. Under the revised regulatory capital rules, CVA is the fair value adjustment to reflect counterparty credit risk in the valuation of an OTC derivative contract. Advanced approaches banking organizations must hold capital to reflect the CVA due to changes in counterparties’ credit spreads, assuming fixed expected exposure (EE) profiles. PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 48939 The advanced approaches rules provide two approaches for calculating the CVA capital requirement: the simple and advanced CVA approaches. The conditions for each approach, as well as the methods for calculation, are described in section 132 of the revised regulatory capital rules. Schedule P: Securitization exposures: The agencies propose to combine the current Schedule P (Securitization Exposures Subject to Ratings-based or Internal Assessment Approaches) and Schedule Q (Securitization Detail Schedule) into a new Schedule P (Securitization Exposures). This proposed revision reflects a number of changes to the securitization framework, including the replacement of the ratings-based and internal assessment approaches from the advanced approaches rules with the simplified supervisory formula approach, and the introduction of a specific treatment for resecuritization exposures. The revised advanced approaches rules introduce enhanced due diligence requirements and require banking organizations to assign higher risk weights to resecuritization exposures than other securitization exposures with similar credit characteristics. The revised advanced approaches rules introduce new operational criteria for recognizing risk transfer as well as revisions to the hierarchy of approaches in the securitization framework. The operational criteria as well as the revised hierarchy of approaches are described in sections 141 through 145 of the revised regulatory capital rules. Schedule Q: Cleared transactions: The proposed new Schedule Q (Cleared Transactions) reflects the treatment for cleared transactions and is intended to capture exposures to CCPs. The revised advanced approaches rules introduce a capital requirement for transactions with CCPs and a more risk-sensitive approach for determining the capital requirement for a banking organization’s contributions to the default funds of these CCPs. The calculation of the trade exposure amount for a cleared transaction is described in section 133 of the revised regulatory capital rules. Schedules C, D, H, I, and J: Exposures subject to a 1.25 asset correlation factor: The proposed insertion of memorandum items in Schedule C (Wholesale Exposure: Corporate), Schedule D (Wholesale Exposure: Bank), Schedule H (Wholesale Exposure: Eligible Margin Loans, Repo-Style Transactions, and OTC Derivatives with Cross-Product Netting); Schedule I (Wholesale Exposure: Eligible Margin Loans and Repo-Style Transactions No CrossProduct Netting), and Schedule J E:\FR\FM\12AUN1.SGM 12AUN1 48940 Federal Register / Vol. 78, No. 155 / Monday, August 12, 2013 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES (Wholesale Exposure: OTC Derivatives No Cross-Product Netting) reflects the new 1.25 asset correlation factor for certain unregulated financial institutions as well as regulated financial institutions with assets of at least $100 billion. The advanced approaches rules introduce the 1.25 multiplier to capture the correlation of financial institutions’ common risk factors. The formula for these wholesale exposures is described in section 131 of the revised regulatory capital rules. Schedules H, I, and J: Internal models methodology (IMM) margin period of risk and specific wrong-way risk: The proposed insertion of memorandum items in Schedule H (Wholesale Exposure: Eligible Margin Loans, RepoStyle Transactions, and OTC Derivatives with Cross-Product Netting), Schedule I (Wholesale Exposure: Eligible Margin Loans and Repo-Style Transactions No Cross-Product Netting) and Schedule J (Wholesale Exposure: OTC Derivatives No Cross-Product Netting) reflects the new capital requirements for the margin period of risk and wrong-way risk in the advanced approaches. The revised advanced approaches rules introduce an increased margin period of risk of 20 days. In addition, for OTC derivative transactions, repo-style transactions, and margin loans that exhibit wrongway risk, the advanced approaches rules require a banking organization to apply an increased capital requirement rather than the IMM to these exposures. The calculations and requirements associated with margin period of risk and wrong-way risk are described in section 132 of the revised regulatory capital rules. Schedules B and R: Summary table and equity exposures: The proposed revisions to Schedule B (Summary Riskweighted Assets Information for Banks) reflect the proposed changes to the schedules described above in this section III.B. In addition, the revised advanced approaches rules remove the prior money market fund approach for equity exposures. Accordingly, in proposed revised Schedule R (Equity Exposures), the agencies propose to remove this approach. agencies expect all reporting entities to meet the existing reporting standards for accuracy and other requirements as currently mandated by their primary federal supervisor. See section I.B of this notice for a detailed discussion of the timing for the implementation of the proposed reporting changes. Federal Deposit Insurance Corporation. Valerie J. Best, Assistant Executive Secretary. V. Request for Comment [OMB Control No. 2900–0020] Public comment is requested on all aspects of this joint notice. In particular, do advanced approaches institutions expect that making any specific line items on proposed revised FFIEC 101 Schedule A public would cause them competitive or other harm? If so, identify the specific line items and describe in detail the nature of the harm. Additionally, comments are invited on (a) Whether the collections of information that are the subject of this notice are necessary for the proper performance of the agencies’ functions, including whether the information has practical utility; (b) The accuracy of the agencies’ estimates of the burden of the information collections as they are proposed to be revised, including the validity of the methodology and assumptions used; (c) Ways to enhance the quality, utility, and clarity of the information to be collected; (d) Ways to minimize the burden of information collections on respondents, including through the use of automated collection techniques or other forms of information technology; and (e) Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information. Comments submitted in response to this joint notice will be shared among the agencies and will be summarized or included in the agencies’ requests for OMB approval. All comments will become a matter of public record. Agency Information Collection (Designation of Beneficiary) Activities Under OMB Review IV. Scope and Frequency of Reporting The proposed regulatory reporting changes to Call Report Schedule RC–R ultimately would apply to all Call Report filers. The proposed revisions to the FFIEC 101 would apply only to advanced approaches banking organizations. Each reporting entity would continue to submit the applicable quarterly reports on the same due dates as are currently in effect for the reporting entity. In addition, the Dated: August 5, 2013. Stuart Feldstein, Director, Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency. VerDate Mar<15>2010 14:51 Aug 09, 2013 Jkt 229001 Board of Governors of the Federal Reserve System, August 5, 2013. Robert deV. Frierson, Secretary of the Board. Dated at Washington, DC, this 2nd day of August, 2013. PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 [FR Doc. 2013–19354 Filed 8–9–13; 8:45 am] BILLING CODE 4810–33–P; 6210–01–P; 6714–01–P DEPARTMENT OF VETERANS AFFAIRS Veterans Benefits Administration, Department of Veterans Affairs. ACTION: Notice. AGENCY: In compliance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501–3521), this notice announces that the Veterans Benefits Administration, Department of Veterans Affairs, has submitted the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and includes the actual data collection instrument. DATES: Comments must be submitted on or before September 11, 2013. ADDRESSES: Submit written comments on the collection of information through www.Regulations.gov or to VA’s OMB Desk Officer, OMB Human Resources and Housing Branch, New Executive Office Building, Room 10235, Washington, DC 20503 (202) 395–7316. Please refer to ‘‘OMB Control No. 2900– 0020’’ in any correspondence. FOR FURTHER INFORMATION CONTACT: Crystal Rennie, Enterprise Records Service (005R1B), Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 20420, (202) 632– 7492 or email crystal.rennie@va.gov. Please refer to ‘‘OMB Control No. 2900– 0020.’’ SUPPLEMENTARY INFORMATION: Title: Designation of Beneficiary, Government Life Insurance, VA Form 29–336. OMB Control Number: 2900–0020. Type of Review: Extension of a currently approved collection. Abstract: VA Form 29–336 is completed by the insured to designate a beneficiary and select an optional settlement to be used when the Government Life Insurance matures by death. An agency may not conduct or sponsor, and a person is not required to SUMMARY: E:\FR\FM\12AUN1.SGM 12AUN1

Agencies

[Federal Register Volume 78, Number 155 (Monday, August 12, 2013)]
[Notices]
[Pages 48932-48940]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-19354]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

FEDERAL RESERVE SYSTEM

FEDERAL DEPOSIT INSURANCE CORPORATION


Proposed Agency Information Collection Activities; Comment 
Request

AGENCY: Office of the Comptroller of the Currency (OCC), Treasury; 
Board of Governors of the Federal Reserve System (Board); and Federal 
Deposit Insurance Corporation (FDIC).

ACTION: Joint notice and request for comment.

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SUMMARY: In accordance with the requirements of the Paperwork Reduction 
Act (PRA) of 1995 (44 U.S.C. chapter 35), the OCC, the Board, and the 
FDIC (the agencies) may not conduct or sponsor, and the respondent is 
not required to respond to, an information collection unless it 
displays a currently valid Office of Management and Budget (OMB) 
control number. The agencies, under the auspices of the Federal 
Financial Institutions Examination Council (FFIEC), have approved the 
publication for public comment of proposed revisions to regulatory 
capital components and ratios portion of Schedule RC-R, Regulatory 
Capital, in the Consolidated Reports of Condition and Income (Call 
Report or FFIEC 031 and FFIEC 041) and to the Risk-Based Capital 
Reporting for Institutions Subject to the Advanced Capital Adequacy 
Framework (FFIEC 101). The proposed revisions to the Call Report and 
the FFIEC 101 are consistent with the revised regulatory capital rules 
approved by the agencies during July 2013 (revised regulatory capital 
rules).\1\
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    \1\ See http://www.occ.treas.gov/news-issuances/news-releases/2013/nr-occ-2013-110.html, July 9, 2013 (OCC); http://www.federalreserve.gov/newsevents/press/bcreg/20130702a.htm, July 2, 
2013 (Board); and http://www.fdic.gov/news/news/press/2013/pr13060.html, July 9, 2013 (FDIC).
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    Institutions subject to the advanced approaches risk-based capital 
rules (advanced approaches banking organizations) that are not savings 
and loan holding companies would begin reporting on the proposed 
revised FFIEC 101 and, if applicable, proposed revised Call Report 
Schedule RC-R effective March 31, 2014. Advanced approaches banking 
organizations that are savings and loan holding companies and that are 
subject to the revised regulatory capital rules would begin reporting 
on the proposed revised FFIEC 101 effective March 31, 2015. All other 
institutions that are required to file the Call Report would begin 
reporting on proposed revised Call Report Schedule RC-R effective March 
31, 2015.
    At the end of the comment period, the comments and recommendations 
received will be analyzed to determine the extent to which the FFIEC 
and the agencies should modify the proposed reporting revisions prior 
to giving final approval. The agencies will then submit the proposed 
reporting revisions to OMB for review and approval.
    In connection with the revised regulatory capital rules, published 
elsewhere in today's Federal Register, the Board proposes to make 
corresponding revisions to the Consolidated Financial Statements for 
Holding Companies (FR Y-9C) and to collect consolidated regulatory 
capital data from savings and loan holding companies with total 
consolidated assets of less than $500 million that are subject to the 
revised regulatory capital rules on the Parent Company Only Financial 
Statements for Holding Companies (FR Y-9SP).

DATES: Comments must be submitted on or before October 11, 2013.

ADDRESSES: Interested parties are invited to submit written comments to 
any or all of the agencies. All comments, which should refer to the OMB 
control number(s), will be shared among the agencies.
    OCC: Because paper mail in the Washington, DC, area and at the OCC 
is subject to delay, commenters are encouraged to submit comments by 
email if possible. Comments may be sent to: Legislative and Regulatory 
Activities Division, Office of the Comptroller of the Currency, 
Attention: 1557-0081 and 1557-0239, 400 7th Street SW., Suite 3E-218, 
Mail Stop 9W-11, Washington, DC 20219. In addition, comments may be 
sent by fax to (571) 465-4326 or by electronic mail to 
regs.comments@occ.treas.gov. You may personally inspect and photocopy

[[Page 48933]]

comments at the OCC, 400 7th Street SW., Washington, DC 20219. For 
security reasons, the OCC requires that visitors make an appointment to 
inspect comments. You may do so by calling (202) 649-6700. Upon 
arrival, visitors will be required to present valid government-issued 
photo identification and to submit to security screening in order to 
inspect and photocopy comments.
    All comments received, including attachments and other supporting 
materials, are part of the public record and subject to public 
disclosure. Do not enclose any information in your comment or 
supporting materials that you consider confidential or inappropriate 
for public disclosure.
    Board: You may submit comments, which should refer to ``FFIEC 031, 
FFIEC 041, and FFIEC 101,'' 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.
     Email: regs.comments@federalreserve.gov. Include reporting 
form number in the subject line of the message.
     Fax: (202) 452-3819 or (202) 452-3102.
     Mail: Robert DeV. Frierson, 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 
www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, 
unless modified 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 9:00 
a.m. and 5:00 p.m. on weekdays.
    FDIC: You may submit comments, which should refer to ``FFIEC 031, 
FFIEC 041, and FFIEC 101,'' by any of the following methods:
     Agency Web site: http://www.fdic.gov/regulations/laws/federal/propose.html. Follow the instructions for submitting comments 
on the FDIC Web site.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: comments@FDIC.gov. Include ``FFIEC 031, FFIEC 041, 
and FFIEC 101'' in the subject line of the message.
     Mail: Gary A. Kuiper, Counsel, Attn: Comments, Room NYA-
5046, 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: 
All comments received will be posted without change to http://www.fdic.gov/regulations/laws/federal/propose.html including any 
personal information provided. Comments may be inspected at the FDIC 
Public Information Center, Room E-1002, 3501 Fairfax Drive, Arlington, 
VA 22226, between 9 a.m. and 5 p.m. on business days.
    Additionally, commenters may send a copy of their comments to the 
OMB desk officer for the agencies by mail to the Office of Information 
and Regulatory Affairs, U.S. Office of Management and Budget, New 
Executive Office Building, Room 10235, 725 17th Street NW., Washington, 
DC 20503; by fax to (202) 395-6974; or by email to oira_submission@omb.eop.gov.

FOR FURTHER INFORMATION CONTACT: For further information about the 
proposed revisions to regulatory reporting requirements discussed in 
this notice, please contact any of the agency clearance officers whose 
names appear below. In addition, copies of the proposed revised Call 
Report Schedule RC-R and FFIEC 101 forms and instructions can be 
obtained at the FFIEC's Web site (http://www.ffiec.gov/ffiec_report_forms.htm).
    OCC: Mary H. Gottlieb and Johnny Vilela, OCC Clearance Officers, 
(202) 649-5490, Legislative and Regulatory Activities Division, Office 
of the Comptroller of the Currency, 400 7th Street SW., Washington, DC 
20219.
    Board: Cynthia Ayouch, Federal Reserve Board Clearance Officer, 
(202) 452-3829, Office of the Chief Data Officer, Board of Governors of 
the Federal Reserve System, 20th and C Streets NW., Washington, DC 
20551. Telecommunications Device for the Deaf (TDD) users may call 
(202) 263-4869.
    FDIC: Gary A. Kuiper, Counsel, (202) 898-3877, Legal Division, 
Federal Deposit Insurance Corporation, 550 17th Street NW., Washington, 
DC 20429.

SUPPLEMENTARY INFORMATION: The agencies are proposing to revise, 
without extension, the Call Report and to revise, with extension, the 
FFIEC 101, which are currently approved collections of information for 
each agency.
    Report Title: Consolidated Reports of Condition and Income (Call 
Report).
    Form Number: Call Report: FFIEC 031 (for banks with domestic and 
foreign offices) and FFIEC 041 (for banks with domestic offices only).
    Frequency of Response: Quarterly.
    Affected Public: Business or other for-profit.

OCC:

    OMB Number: 1557-0081.
    Estimated Number of Respondents: 1,787 national banks and federal 
savings associations.
    Estimated Time per Response: 55.39 burden hours per quarter to 
file.

    Estimated Total Annual Burden: 395,928 burden hours to file.

Board:

    OMB Number: 7100-0036.
    Estimated Number of Respondents: 843 state member banks.
    Estimated Time per Response: 57.29 burden hours per quarter to 
file.
    Estimated Total Annual Burden: 193,182 burden hours to file.

FDIC:

    OMB Number: 3064-0052.
    Estimated Number of Respondents: 4,369 insured state nonmember 
banks and state savings associations.
    Estimated Time per Response: 42.06 burden hours per quarter to 
file.
    Estimated Total Annual Burden: 735,041 burden hours to file.
    The estimated time per response for the quarterly filings of the 
Call Report is an average that varies by agency because of differences 
in the composition of the institutions under each agency's supervision 
(e.g., size distribution of institutions, types of activities in which 
they are engaged, and existence of foreign offices). The average 
reporting burden for the filing of the Call Report as it is proposed to 
be revised is estimated to range from 18 to 750 hours per quarter, 
depending on an individual institution's circumstances.
    Report Title: Risk-Based Capital Reporting for Institutions Subject 
to the Advanced Capital Adequacy Framework.
    Form Number: FFIEC 101.
    Frequency of Response: Quarterly.
    Affected Public: Business or other for-profit.

OCC:

    OMB Number: 1557-0239.
    Estimated Number of Respondents: 14 national banks and federal 
savings associations.
    Estimated Time per Response: 676 burden hours per quarter to file.
    Estimated Total Annual Burden: 37,856 burden hours to file.


[[Page 48934]]


Board:

    OMB Number: 7100-0319.
    Estimated Number of Respondents: 20 state member banks, bank 
holding companies, and savings and loan holding companies.
    Estimated Time per Response: 676 burden hours per quarter to file.
    Estimated Total Annual Burden: 54,080 burden hours to file.

FDIC:

    OMB Number: 3064-0159.
    Estimated Number of Respondents: 8 insured state nonmember banks 
and state savings associations.
    Estimated Time per Response: 676 burden hours per quarter to file.
    Estimated Total Annual Burden: 21,632 burden hours to file.

General Description of Reports

    The Call Report information collections are mandatory for the 
following institutions: 12 U.S.C. 161 (national banks), 12 U.S.C. 324 
(state member banks), 12 U.S.C. 1817 (insured state nonmember 
commercial and savings banks), and 12 U.S.C. 1464 (savings 
associations) (collectively, Call Report filers). At present, except 
for selected data items, Call Report information collections are not 
given confidential treatment.
    The FFIEC 101 information collections are mandatory for 
institutions using the advanced approaches risk-based capital rule 
(advanced approaches banking organizations): 12 U.S.C. 161 (national 
banks), 12 U.S.C. 324 and 12 U.S.C. 1844(c) (state member banks and 
bank holding companies, respectively), 12 U.S.C. 1467a(b) (savings and 
loan holding companies), 12 U.S.C. 1817 (insured state nonmember 
commercial and savings banks), and 12 U.S.C. 1464 (savings 
associations). Under the agencies' current practice, the FFIEC 101 
information collections are given confidential treatment (5 U.S.C. 
552(b)(4)) for report dates until after the reporting institution 
conducts a satisfactory parallel run. For report dates thereafter, 
Schedules A and B, as well as line items 1 and 2 of Schedule S, of the 
institution's FFIEC 101 are no longer given confidential treatment. The 
agencies propose to make public the information collected on the 
proposed FFIEC 101 Schedule A, except for a few advanced approaches-
specific line items, for all advanced approaches banking organizations, 
regardless of their parallel run status, starting with the report for 
the March 31, 2014, report date, consistent with the implementation 
timeline established by the revised regulatory capital rules.

Abstract

    Call Report: Institutions submit Call Report data to the agencies 
each quarter for the agencies' use in monitoring the condition, 
performance, and risk profile of individual institutions and the 
industry as a whole. Call Report data provide the most current 
statistical data available for evaluating institutions' corporate 
applications, identifying areas of focus for on-site and off-site 
examinations, and monetary and other public policy purposes. The 
agencies use Call Report data in evaluating interstate merger and 
acquisition applications to determine, as required by law, whether the 
resulting institution would control more than ten percent of the total 
amount of deposits of insured depository institutions in the United 
States. Call Report data also are used to calculate institutions' 
deposit insurance and Financing Corporation assessments and national 
banks' and federal savings associations' semiannual assessment fees.
    FFIEC 101: Each advanced approaches banking organization is 
required to file quarterly regulatory capital data. The agencies use 
these data to assess and monitor the levels and components of each 
reporting entity's risk-based capital requirements and the adequacy of 
the entity's capital under the Advanced Capital Adequacy Framework; to 
evaluate the impact and competitive implications of the Advanced 
Capital Adequacy Framework on individual reporting entities and on an 
industry-wide basis; and to supplement on-site examination processes. 
The reporting schedules also assist advanced approaches banking 
organizations in understanding expectations around the system 
development necessary for implementation and validation of the Advanced 
Capital Adequacy Framework. Submitted data that are released publicly 
will also provide other interested parties with information about 
advanced approaches banking organizations' regulatory capital.

Current Actions

I. Overview of the Proposed Changes

A. Summary of Proposed Changes

Call Report
    Call Report Schedule RC-R collects regulatory data on tier 1, tier 
2, and total capital and regulatory capital ratios (regulatory capital 
components and ratios portion) and on risk-weighted assets (risk-
weighted assets portion). The agencies are proposing at this time to 
revise the reporting requirements for the regulatory capital components 
and ratios portion of Call Report Schedule RC-R, consistent with the 
revised regulatory capital rules. Compared to the current schedule, the 
proposed regulatory capital components and ratios portion of Schedule 
RC-R would provide a more detailed breakdown of the regulatory capital 
elements, including deductions and adjustments, consistent with the 
revised regulatory capital rules. For report dates in 2014, the 
regulatory capital components and ratios portion of Schedule RC-R would 
be designated Parts I.A and I.B. Call Report filers that are not 
advanced approaches institutions \2\ would file Part I.A, which would 
include existing data items 1 through 33 of current Schedule RC-R. Call 
Report filers that are subject to advanced approaches and to the 
revised regulatory capital rule effective January 1, 2014, would file 
Part I.B, which would include the reporting revisions proposed herein 
consistent with the revised regulatory capital rules. In March 2015, 
Part I.A would be removed and Part I.B would be designated Part I; all 
Call Report filers would then submit Part I. The proposed changes to 
Call Report Schedule RC-R are discussed in more detail in section II 
below.
---------------------------------------------------------------------------

    \2\ An advanced approaches institution as defined in the 
agencies' revised regulatory capital rules (i) has consolidated 
total assets (excluding assets held by an insurance underwriting 
subsidiary) on its most recent year-end regulatory report equal to 
$250 billion or more; (ii) has consolidated total on-balance sheet 
foreign exposure on its most recent year-end regulatory report equal 
to $10 billion or more (excluding exposures held by an insurance 
underwriting subsidiary); (iii) is a subsidiary of a depository 
institution that uses the advanced approaches pursuant to subpart E 
of 12 CFR part 3 (OCC), 12 CFR part 217 (Board), or 12 CFR part 325 
(FDIC) to calculate its total risk-weighted assets; (iv) is a 
subsidiary of a bank holding company or savings and loan holding 
company that uses the advanced approaches pursuant to 12 CFR part 
217 to calculate its total risk-weighted assets; or (v) elects to 
use the advanced approaches to calculate its total risk-weighted 
assets.
---------------------------------------------------------------------------

    The agencies expect to publish at a later date a request for 
comment on a separate proposal to revise the risk-weighted assets 
portion of Call Report Schedule RC-R to incorporate the standardized 
approach for calculating risk-weighted assets under the revised 
regulatory capital rules. The revisions to the risk-weighted assets 
portion of Schedule RC-R would take effect March 31, 2015. The agencies 
are proposing changes to Schedule RC-R in two stages to allow 
interested parties to better understand the proposed revisions and 
focus their comments on areas of particular interest. Therefore, for 
report dates in 2014, all Call Report filers would continue to report 
risk-weighted assets in the portion of Schedule RC-R that contains 
existing data items 34

[[Page 48935]]

through 62 and Memorandum items 1 and 2 of current Schedule RC-R, but 
this portion of the schedule would be designated Part II and the data 
items would be renumbered beginning with item 1.
FFIEC 101
    The proposed revised FFIEC 101 Schedule A for advanced approaches 
banking organizations incorporates the Basel III common disclosure 
template that was adopted by the Basel Committee on Banking Supervision 
in June 2012 (Basel III common disclosure template).\3\ The proposed 
revised Schedule A incorporates the Basel III capital disclosure 
template in its entirety, with some minor changes to the titles of the 
line items, consistent with the revised regulatory capital rules and 
accounting terminology of U.S. generally accepted accounting principles 
(GAAP). Line items that are not applicable to U.S. banking 
organizations are shaded out and marked as not applicable (for example, 
prudential valuation adjustments in line item 7 and additional tier 1 
capital instruments classified as equity or liabilities under GAAP in 
line items 31 and 32). The agencies believe that incorporating the 
complete Basel III common disclosure template into Schedule A is 
essential to ensure transparency and comparability of reporting of 
regulatory capital elements among internationally active institutions. 
The proposed revised Schedule A also includes additional line items, 
such as the supplementary leverage ratio, to collect data on the new 
requirements established by the revised regulatory capital rules.
---------------------------------------------------------------------------

    \3\ See Basel Committee on Banking Supervision, Composition of 
capital disclosure requirements; Annex 1; available at http://www.bis.org/publ/bcbs221.pdf.
---------------------------------------------------------------------------

    To ensure transparency of reporting regulatory capital by 
internationally active institutions, the agencies propose to make 
public the information collected on the proposed revised Schedule A, 
except for a few specific line items, starting with the March 31, 2014, 
report date. The agencies propose to continue granting confidential 
treatment to certain items that are dependent on the implementation of 
the advanced approaches systems while an advanced approaches banking 
organization is in its parallel run period. The agencies believe that 
according confidential treatment to such line items is important to 
ensure that the organization conducts a satisfactory parallel run and 
reports this data publicly only after its primary federal supervisor 
approves its internal systems to apply the revised advanced approaches 
rules.
    The agencies also propose to revise the risk-weighted assets 
schedules of the FFIEC 101 (Schedules B, C, D, H, I, J, P, Q, and R) 
consistent with the revised regulatory capital rules at this time to 
facilitate the timely implementation of the revised advanced approaches 
rules in 2014.

B. Timing of Implementation of the Proposed Reporting Requirements

Call Report Filers
    Call Report filers that are not subject to the advanced approaches 
rules would continue to report their regulatory capital data and 
regulatory capital ratios using the current template of Schedule RC-R, 
which would be designated Part I.A, during the reporting periods in 
2014.\4\ These institutions would begin using proposed Schedule RC-R, 
Part I.B, to report their regulatory capital data and regulatory 
capital ratios effective March 31, 2015, at which time Part I.B would 
be relabeled Part I and Part I.A would be eliminated.
---------------------------------------------------------------------------

    \4\ For report dates in 2014, the regulatory capital components 
and ratios portion of Schedule RC-R would be presented as two parts. 
Part 1.A would be identical to the current regulatory capital 
components and ratios portion of Schedule RC-R and it would be used 
by Call Report filers that are not subject to the advanced 
approaches rules. Part I.B would be the proposed revised regulatory 
capital components and ratios portion of Schedule RC-R and it would 
be used by Call Report filers that are subject to the advanced 
approaches rules. Starting on the March 31, 2015, report date, Part 
I.A would be eliminated and the proposed Part I.B of Schedule RC-R 
would be relabeled Part I, would be the only template for reporting 
regulatory capital data and regulatory capital ratios, and would be 
used by all Call Report filers.
---------------------------------------------------------------------------

Advanced Approaches Banking Organizations
    Reporting regulatory capital: An advanced approaches banking 
organization that is not a savings and loan holding company would use 
proposed revised FFIEC 101 Schedule A and proposed Call Report Schedule 
RC-R, Part I.B, if applicable, to report its regulatory capital 
consistent with the revised regulatory capital rules, effective March 
31, 2014.\5\ An advanced approaches banking organization that is a 
savings and loan holding company (SLHC), except top-tier SLHCs that are 
substantially engaged in insurance and commercial activities, would 
file the FFIEC 101 effective March 31, 2015, consistent with the 
revised regulatory capital rules.\6\
---------------------------------------------------------------------------

    \5\ Advanced approaches banking organizations that file the FR 
Y-9C would report their regulatory capital on proposed revised FR Y-
9C Schedule HC-R, as described in the Federal Register notice 
published by the Board.
    \6\ The revised regulatory capital rules apply to top-tier SLHCs 
that are not substantially engaged in insurance or commercial 
activities (covered SLHCs) as defined in the rules.
---------------------------------------------------------------------------

    Reporting risk-weighted assets and regulatory capital ratios: An 
advanced approaches banking organization that is in a parallel run 
period would apply the generally applicable risk-based capital rules 
for report dates in 2014 \7\ and the standardized approach for report 
dates beginning in 2015 to report its risk-weighted assets and capital 
ratios on proposed revised FFIEC 101 Schedule A (line items 60 through 
63) and on proposed Call Report Schedule RC-R, Part I.B (in 2014, which 
would be designated Part I in 2015), if applicable (line items 40 
through 43, Column A). In addition, such an institution would apply the 
revised advanced approaches rules to report its risk-weighted assets 
and risk-based capital ratios on proposed revised FFIEC 101 Schedule A 
(line items 87 through 90).
---------------------------------------------------------------------------

    \7\ The agencies' general risk-based capital rules are at 12 CFR 
part 3, appendix A, and 12 CFR part 167 (OCC); 12 CFR parts 208 and 
225, appendix A (Board); and 12 CFR part 325, appendix A, and 12 CFR 
part 390, subpart Z (FDIC).
---------------------------------------------------------------------------

    Beginning in 2014, an advanced approaches banking organization that 
conducts a satisfactory parallel run would report its advanced 
approaches risk-weighted assets and risk-based capital ratios on 
proposed revised FFIEC 101 Schedule A (line items 60 through 63) and on 
proposed revised Call Report Schedule RC-R, Part I.B, if applicable 
(line item 40.b and line items 41 through 43, Column B).
    Supplementary leverage ratio and capital buffer: All advanced 
approaches banking organizations, regardless of their parallel run 
status, would report their supplementary leverage ratio effective March 
31, 2015, on proposed revised FFIEC 101 Schedule A (line item 98) and 
on proposed revised Call Report Schedule RC-R, Part I (as relabeled in 
2015), if applicable (line item 44). All banking organizations would 
report the applicable capital buffer effective March 31, 2016, on 
proposed revised FFIEC 101 Schedule A (line items 64 through 68) and on 
proposed Call Report Schedule RC-R, Part I (as relabeled in 2015), if 
applicable (line items 45 through 47).
Initial Reporting
    For the March 31, 2014, and March 31, 2015, report dates, as 
applicable, institutions may provide reasonable estimates for any new 
or revised Call Report and FFIEC 101 items initially required to be 
reported as of that date

[[Page 48936]]

for which the requested information is not readily available. The 
specific wording of the captions for the new or revised Call Report and 
FFIEC 101 data items discussed in this proposal and the numbering of 
these data items should be regarded as preliminary.

II. Discussion of Proposed Call Report Schedule RC-R, Part I.B

    This section describes the proposed changes to Call Report Schedule 
RC-R to implement the reporting of regulatory capital information and 
ratios consistent with the revised regulatory capital rules. As 
previously discussed, effective March 31, 2014: (1) the existing 
regulatory capital ratios portion of Schedule RC-R would be designated 
Part I.A and would be completed by institutions that are not advanced 
approaches institutions during the 2014 reporting periods, and (2) a 
new Part I.B would be added to Schedule RC-R effective March 31, 2014, 
and would be completed by advanced approaches institutions during the 
2014 reporting period. Then, effective March 31, 2015, Part I.A would 
be eliminated, Part I.B would be redesignated Part I of Schedule RC-R, 
and all institutions would complete Part I. Call Report filers should 
refer to the revised regulatory capital rules and the proposed 
reporting instructions for further information. The proposed reporting 
instructions also provide guidance on how to calculate and report items 
subject to the transition provisions under section 300 of the revised 
regulatory capital rules.
    Proposed Part I.B of Schedule RC-R would be divided into the 
following sections: (A) Common equity tier 1 capital; (B) common equity 
tier 1 capital: adjustments and deductions; (C) additional tier 1 
capital; (D) tier 2 capital; (E) total assets for the leverage ratio; 
(F) capital ratios; and (G) capital buffer. A brief description of each 
of these sections and the corresponding line items is provided below.

A. Schedule RC-R, Part I.B, Items 1-5: Common Equity Tier 1 Capital

    Proposed line items 1 through 5 would collect information regarding 
the new regulatory capital component, common equity tier 1 capital. The 
proposed line items align with the elements of common equity tier 1 
capital under the revised definition of capital, including (item 1) 
common stock plus related surplus (net of treasury stock and unearned 
employee stock ownership plan shares), (item 2) retained earnings, 
(item 3) accumulated other comprehensive income (AOCI), and (item 4) 
common equity tier 1 minority interests.\8\ As explained in section 21 
of the revised regulatory capital rules, an institution may include a 
limited amount of common equity tier 1 minority interest in a 
consolidated subsidiary that is a depository institution or a foreign 
bank in its common equity tier 1 capital. Line item 5 collects the sum 
of items 1 through 4 to determine common equity tier 1 capital before 
adjustments and deductions.
---------------------------------------------------------------------------

    \8\ Under current GAAP, minority interests are referred to as 
noncontrolling interests. In this regard, on the Call Report balance 
sheet (Schedule RC), such interests are labeled ``Noncontrolling 
(minority) interests in consolidated subsidiaries.''
---------------------------------------------------------------------------

    For purposes of reporting line item 3, AOCI, an institution that is 
not subject to the advanced approaches rules may make a one-time 
election to opt out of the requirement to include most components of 
AOCI in common equity tier 1 capital (AOCI opt-out election). An 
institution that makes an AOCI opt-out election must report ``Yes'' in 
line item 3.a and report the amounts in line items 9.a, 9.b, 9.c, 9.d, 
and 9.e. An institution that is not an advanced approaches institution 
would make this election when it completes Schedule RC-R in its Call 
Report for March 31, 2015 (or, for an institution that becomes insured 
after March 31, 2015, in the first Call Report it files after becoming 
insured). If an institution makes an AOCI opt-out election, the 
transition provisions for AOCI under section 300 of the revised 
regulatory capital rules would not apply to the reporting of AOCI in 
line item 3.
    All advanced approaches banking organizations that file the Call 
Report and all other insured depository institutions that choose not to 
make the AOCI opt-out election must report ``No'' in line item 3.a and 
complete line item 9.f. In addition, such institutions must report AOCI 
in item 3 subject to the transition provisions, as described in section 
300 of the revised regulatory capital rules and the corresponding 
instructions.

B. Schedule RC-R, Part I.B, Items 6-19: Common Equity Tier 1 Capital: 
Adjustments and Deductions

    Proposed line items 6 through 18 reflect adjustments and deductions 
to common equity tier 1 capital, as described in section 22 of the 
revised regulatory capital rules. Institutions must refer to the 
revised regulatory capital rules to determine the conditions under 
which deferred tax liabilities (DTLs) may be netted against assets 
subject to deduction. An institution would calculate and report the 
following adjustments and deductions, as described below, which would 
be summed in line item 18 and deducted from common equity tier 1 
capital in line item 19.
    Schedule RC-R, Part I.B, item 6: LESS: Goodwill net of associated 
DTLs: Goodwill is reported and deducted from common equity tier 1 
capital.
    Schedule RC-R, Part I.B, item 7: LESS: Intangible assets (other 
than goodwill and mortgage servicing assets (MSAs)), net of associated 
DTLs: Intangible assets, other than goodwill and MSAs, net of 
associated DTLs, must be deducted from common equity tier 1 capital.
    Schedule RC-R, Part I.B, item 8: LESS: Deferred tax assets (DTAs) 
that arise from operating loss and tax credit carryforwards, net of any 
related valuation allowances and net of associated DTLs: An institution 
must deduct DTAs that arise from operating loss and tax credit 
carryforwards, net of any related valuation allowances and net of 
associated DTLs, from common equity tier 1 elements.\9\
---------------------------------------------------------------------------

    \9\ DTAs arising from temporary differences that the banking 
organization could realize through net operating loss carrybacks are 
not subject to deduction and instead receive a 100 percent risk 
weight.
---------------------------------------------------------------------------

    Schedule RC-R, Part I.B, item 9: AOCI-related adjustments: An 
institution that makes an AOCI opt-out election in line item 3.a would 
adjust its common equity tier 1 capital by reporting the amount of 
specified AOCI components in line items 9.a, 9.b, 9.c, 9.d, and 9.e, 
that is, net unrealized gains (losses) on available-for-sale (AFS) 
securities; net unrealized loss on AFS preferred stock classified as an 
equity security under GAAP and AFS equity exposures; accumulated net 
gains (losses) on cash flow hedges; amounts recorded in AOCI attributed 
to defined benefit postretirement plans resulting from the initial and 
subsequent application of the relevant GAAP standards that pertain to 
such plans; and net unrealized gains (losses) on held-to-maturity 
securities that are included in AOCI.
    An advanced approaches banking organization that files the Call 
Report and any other insured depository institution that chooses not to 
make the AOCI opt-out election would report in line item 9.f any 
accumulated net gain (loss) on cash flow hedges included in AOCI, net 
of applicable tax effects, that relate to the hedging of items that are 
not recognized at fair value on the balance sheet.
    Schedule RC-R, Part I.B, item 10: LESS: Other deductions from 
(additions to) common equity tier 1 capital: Under the revised 
regulatory capital rules,

[[Page 48937]]

institutions must make the following deductions from or additions to 
common equity tier 1 capital.
    Schedule RC-R, Part I.B, item 10.a: Unrealized net gain (loss) 
related to changes in the fair value of liabilities that are due to 
changes in own credit risk: An institution would report the amount of 
unrealized net gain (loss) related to changes in the fair value of 
liabilities measured at fair value on the balance sheet that are due to 
changes in its own credit risk. Advanced approaches banking 
organizations would include the credit spread premium over the risk-
free rate for derivatives that are liabilities.
    Schedule RC-R, Part I.B, item 10.b: LESS: All other deductions from 
(additions to) common equity tier 1 capital before threshold-based 
deductions: An institution would report in line item 10.b the total of 
the following deductions and additions:
    (1) Gain-on-sale associated with a securitization exposure: An 
institution must deduct from common equity tier 1 capital any after-tax 
gain-on-sale associated with a securitization exposure. Gain-on-sale 
means an increase in the equity capital of the institution resulting 
from the consummation or issuance of a securitization (other than an 
increase in equity capital resulting from the institution's receipt of 
cash in connection with the securitization).
    (2) Defined benefit pension fund net assets net of associated DTLs: 
Defined benefit pension fund assets, net of any associated DTLs, must 
be deducted from common equity tier 1 capital. (This deduction does not 
pertain to defined benefit pension fund net assets owned by depository 
institutions.)
    (3) Investments in own regulatory capital instruments: To avoid 
double-counting of regulatory capital, an institution must deduct any 
investments in its own common equity tier 1, own additional tier 1, and 
own tier 2 capital instruments from its common equity tier 1, 
additional tier 1, and tier 2 capital elements, respectively. Any 
common equity tier 1, additional tier 1, or tier 2 capital instrument 
issued by the institution which the institution could be contractually 
obligated to purchase must be deducted from its common equity tier 1, 
additional tier 1, or tier 2 capital elements, respectively. If an 
institution already deducts its investment in its own shares (for 
example, treasury stock) from its common equity tier 1 capital 
elements, it does not need to make such deduction twice.
    (4) Reciprocal cross holdings in the capital instruments of 
financial institutions: A reciprocal cross holding results from a 
formal or informal arrangement between two financial institutions to 
swap, exchange, or otherwise intend to hold each other's capital 
instruments. Institutions must deduct reciprocal holdings of capital 
instruments of other financial institutions in certain circumstances. 
The deduction is made by using the corresponding deduction approach as 
described in section 22(c) of the revised regulatory capital rules. The 
corresponding deduction approach requires the institution to make the 
deduction from the tier of capital for which the instrument would 
qualify. However, if the institution does not have a sufficient amount 
of the tier of capital to effect the required deduction, the shortfall 
must be deducted from the next higher (that is, more subordinated) 
component of regulatory capital. For example, if an institution is 
required to deduct a certain amount of regulatory capital from 
additional tier 1 capital and it does not have sufficient additional 
tier 1 capital to effectuate the deduction, then the amount of the 
deduction in excess of the available additional tier 1 capital must be 
made from common equity tier 1 capital.
    (5) Equity investments in financial subsidiaries: An institution 
must deduct the aggregate amount of its outstanding equity investments, 
including retained earnings, in its financial subsidiaries \10\ from 
common equity tier 1 capital and may not consolidate the assets and 
liabilities of a financial subsidiary with those of the parent 
institution. No other deduction is required for these investments in 
the capital instruments of financial subsidiaries.
---------------------------------------------------------------------------

    \10\ The agencies' definitions of financial subsidiary are at 12 
CFR 5.39 (OCC); 12 CFR 208.77 (Board); and 12 CFR 362.17 (FDIC).
---------------------------------------------------------------------------

    (6) Advanced approaches banking organizations that file Call 
Report: After such an institution conducts a satisfactory parallel run, 
it would include expected credit losses that exceed its eligible credit 
reserves in this line item.
    Schedule RC-R, Part I.B, item 11: LESS: Non-significant investments 
in the capital of unconsolidated financial institutions in the form of 
common stock that exceed the 10 percent threshold for non-significant 
investments: Non-significant investments in the capital of 
unconsolidated financial institutions are investments where an 
institution owns 10 percent or less of the issued and outstanding 
common shares of an unconsolidated financial institution. An 
institution must deduct the amount of its non-significant investments 
that exceeds the 10 percent threshold for non-significant investments 
(calculated as described in section 22(c)(4) of the revised regulatory 
capital rules and in the reporting instructions for this line item), 
applying the corresponding deduction approach.
    Schedule RC-R, Part I.B, item 12: Subtotal: An institution would 
report the amount in item 5 less the amounts in items 6 through 11. The 
amount reported in this item is used to calculate the common equity 
tier 1 capital deduction thresholds that are used for reporting items 
13, 14, 15, and 16.
    Schedule RC-R, Part I.B, items 13 through 16: LESS: Items subject 
to the 10 and 15 percent common equity tier 1 capital threshold 
deductions: An institution must report the amount of each of the 
following items that individually exceeds the 10 percent common equity 
tier 1 capital deduction threshold (that is, 10 percent of the amount 
reported in line item 12). These items are referred to as items subject 
to the threshold deductions in section 22(d) of the revised regulatory 
capital rules and include: (1) DTAs arising from temporary differences 
that could not be realized through net operating loss carrybacks, net 
of any related valuation allowances and net of DTLs; (2) MSAs net of 
associated DTLs; and (3) significant investments in the capital of 
financial institutions in the form of common stock.
    The aggregate amount of the items subject to the threshold 
deductions (that are not deducted in line items 13, 14, and 15) are not 
permitted to exceed 15 percent of an institution's common equity tier 1 
capital. The aggregate amount in excess of the 15 percent threshold, if 
any, calculated in accordance with section 22(d)(2) of the revised 
regulatory capital rules and the corresponding line item instructions, 
must be deducted in line item 16.
    Schedule RC-R, Part I.B, item 17: LESS: Deductions applied to 
common equity tier 1 capital due to insufficient amount of additional 
tier 1 capital and tier 2 capital to cover deductions: If an 
institution does not have a sufficient amount of additional tier 1 
capital and tier 2 capital to cover deductions, then the shortfall must 
be reported in this line item.
    Schedule RC-R, Part I.B, items 18 and 19: An institution would 
summarize total adjustments and deductions in line item 18 and deduct 
that amount from its common equity tier 1 capital before adjustments 
and deductions to determine its common equity tier 1 capital, which 
would be reported in line item 19.

[[Page 48938]]

C. Schedule RC-R, Part I.B, Items 20 through 25: Additional Tier 1 
Capital, and Item 26: Tier 1 Capital

    Proposed line items 20 through 25 pertain to the reporting of 
additional tier 1 capital elements. Additional tier 1 capital is the 
sum of: (item 20) additional tier 1 capital instruments that satisfy 
the eligibility criteria described in section 20 of the revised 
regulatory capital rules plus related surplus; (item 21) non-qualifying 
capital instruments subject to phase-out from additional tier 1 
capital; and (item 22) tier 1 minority interest that is not included in 
an institution's common equity tier 1 capital; less (item 24) 
applicable deductions.
    Line item 26 collects information on the institution's tier 1 
capital, calculated as the sum of (item 19) common equity tier 1 
capital and (item 25) additional tier 1 capital.

D. Schedule RC-R, Part I.B, Items 27 Through 34: Tier 2 Capital, and 
Item 35: Total Capital

    Proposed line items 27 through 34 would require reporting of tier 2 
capital elements. Tier 2 capital is the sum of: (item 27) tier 2 
capital instruments that satisfy the eligibility criteria described in 
section 20 of the revised regulatory capital rules, plus related 
surplus; (item 28) non-qualifying capital instruments subject to phase-
out from tier 2 capital; (item 29) total capital minority interest not 
included in an institution's tier 1 capital; (item 30.a) allowance for 
loan and lease losses (ALLL) includable in tier 2 capital; and (item 
31) unrealized gains on AFS preferred stock classified as an equity 
security under GAAP and AFS equity exposures; less (item 33) tier 2 
capital deductions.
    Advanced approaches banking organizations would report line items 
30.b (eligible credit reserves includable in tier 2 capital), 32.b 
(tier 2 capital before deductions), 34.b (tier 2 capital), and 35.b 
(total capital) only after these institutions conduct a satisfactory 
parallel run.
    Line item 35.a would collect information on an institution's total 
capital, which is the sum of (item 26) tier 1 capital and (item 34) 
tier 2 capital.

E. Schedule RC-R, Part I.B, Items 36 Through 39: Total Assets for the 
Leverage Ratio

    Institutions would report total assets for the leverage ratio 
denominator in line item 39, calculated as: (item 36) average total 
consolidated assets; less (item 37) deductions from common equity tier 
1 capital and additional tier 1 capital; and less (item 38) other 
deductions from (additions to) assets for leverage ratio purposes, as 
described under sections 22(a), (c), and (d) of the revised regulatory 
capital rules.

F. Schedule RC-R, Part I.B, Items 40 Through 45: Total Risk-Weighted 
Assets and Capital Ratios

    Line item 40 would collect information on an institution's risk-
weighted assets. Line items 41 through 45 would collect information on 
the following regulatory capital ratios: (item 41) common equity tier 1 
capital ratio; (item 42) tier 1 capital ratio; (item 43) total capital 
ratio; (item 44) tier 1 leverage ratio; and, for advanced approaches 
institutions, (item 45) supplementary leverage ratio, all calculated as 
described in section 10 of the revised regulatory capital rules.
    During the reporting periods in 2014, Call Report filers would 
continue applying the general risk-based capital rules to report their 
total risk-weighted assets in line item 40.a of Part I of Schedule RC-R 
(as currently reported in item 62 of the risk-weighted assets portion 
of Schedule RC-R). The amount in line item 40 would serve as the 
denominator of the risk-based capital ratios reported in line items 41 
through 44 (Column A). Effective March 31, 2015, Call Report filers 
would apply the standardized approach, described in subpart D of the 
revised regulatory capital rules, to report their risk-weighted assets 
in line item 40.a and the risk-based capital ratios in line items 41 
through 44 (Column A) of the regulatory capital ratios portion of 
Schedule RC-R.
    Advanced approaches institutions would report line items 40 through 
45 on the proposed Schedule RC-R, Part I.B, as follows.
     During the reporting periods in 2014, these institutions 
would continue applying the general risk-based capital rules to report 
their total risk-weighted assets in line item 40.a, which would serve 
as the denominator of the ratios reported in line items 41 through 44 
(Column A).
     Starting on March 31, 2015, these institutions would apply 
the standardized approach, described in subpart D of the revised 
regulatory capital rules, to report their risk-weighted assets in item 
40.a and the regulatory capital ratios in items 41 through 44. After 
they conduct a satisfactory parallel run, these institutions would 
report their total risk-weighted assets (item 40.b) and regulatory 
capital ratios (items 41 through 44, Column B) using the advanced 
approaches rule.
     In addition, starting on March 31, 2015, these 
institutions would report a supplementary leverage ratio in item 45, as 
described in section 10 of the revised regulatory capital rules.

G. Schedule RC-R, Part I.B, Items 46 Through 48: Capital Buffer

    Under section 11 of the revised regulatory capital rules, 
institutions must hold sufficient common equity tier 1 capital to avoid 
limitations on distributions and discretionary bonus payments. An 
institution's capital conservation buffer, which would be reported in 
item 46.a, is the lowest of the following measures: (1) The 
institution's common equity tier 1 capital ratio minus the applicable 
minimum (4 percent in 2014, 4.5 percent in 2015 and thereafter); (2) 
the institution's tier 1 capital ratio minus the applicable minimum 
(5.5 percent in 2014, 6 percent in 2015 and thereafter); and (3) the 
institution's total capital ratio minus 8 percent. Advanced approaches 
banking organizations must make additional calculations to account for 
all the applicable buffers and report the resulting amount in item 
46.b, as described in section 11 of the revised regulatory capital 
rules. If an institution's capital buffer is less than or equal to the 
applicable minimum capital conservation buffer (or, in the case of an 
advanced approaches institution, the applicable minimum capital 
conservation buffer plus any other applicable capital buffers), then it 
must report eligible retained income in item 47 and distributions and 
discretionary bonus payments to executive officers in item 48, as 
described in section 11 of the revised regulatory capital rules.

III. Discussion of the Proposed FFIEC 101 Changes

A. Schedule A: Advanced Risk-Based Capital

    As described in section I.A of this notice, the proposed revised 
FFIEC 101 Schedule A incorporates the Basel III common disclosure 
template to ensure consistency and comparability of reporting of 
regulatory capital elements by internationally active institutions. 
Although the changes proposed to be made to Schedule A of the FFIEC 101 
are consistent with the regulatory capital reporting approach followed 
in proposed Call Report Schedule RC-R, Part I.B, as described in 
section II of this notice, advanced approaches banking organizations 
would provide a more granular breakdown of regulatory capital elements, 
deductions and adjustments, and regulatory capital instruments subject 
to phase-out in Schedule A, consistent with the Basel III common 
disclosure template. Advanced

[[Page 48939]]

approaches banking organizations would be able to continue to import 
the majority of the line items from proposed Call Report Schedule RC-R, 
Part I.B, into proposed revised FFIEC 101 Schedule A.\11\
---------------------------------------------------------------------------

    \11\ Advanced approaches banking organizations that file the FR 
Y-9C rather than the Call Report would be able to import the 
majority of the line items from proposed revised Schedule HC-R 
published by the Federal Reserve Board into proposed revised FFIEC 
101 Schedule A.
---------------------------------------------------------------------------

    Reporting confidential line items during the parallel run period: 
As noted in section I.B of this notice, the agencies propose to make 
public the information collected on proposed revised Schedule A, except 
for a few specific line items, for all advanced approaches banking 
organizations, starting with the March 31, 2014, report date. Since the 
majority of the line items on the proposed Schedule A would also be 
publicly reported on the proposed Call Report Schedule RC-R, the 
additional disclosure of regulatory capital elements on proposed 
revised Schedule A while the institution is conducting its parallel run 
would be minimal.
    The agencies propose to grant confidential treatment to items that 
are dependent on the implementation of the advanced approaches systems 
to ensure compliance with the revised advanced approaches rules. 
Specifically, while an institution is conducting its parallel run, the 
following line items on proposed revised Schedule A would be reported 
on a confidential basis using the revised advanced approaches rules: 
item 78 (total eligible credit reserves calculated under the advanced 
approaches rules); item 79 (amount of eligible credit reserves 
includable in tier 2 capital); item 86 (expected credit loss that 
exceeds eligible credit reserves); item 87 (advanced approaches risk-
weighted assets); item 88 (common equity tier 1 capital ratio 
calculated using the advanced approaches); item 89 (tier 1 capital 
ratio calculated using the advanced approaches); and item 90 (total 
capital ratio using the advanced approaches). In addition, an 
institution that is conducting its parallel run would report ``zero'' 
in line item 12 (expected credit loss that exceeds eligible credit 
reserves) and would report line item 50 (eligible credit reserves) and 
line item 60 (total risk-weighted assets) by applying the general risk-
based capital rules in 2014 and the standardized approach in 2015.
    After an institution conducts a satisfactory parallel run, the 
entire Schedule A would be made public. In addition, such an 
institution would then begin to report line item 12 (expected credit 
loss that exceeds eligible credit reserves), line item 50 (eligible 
credit reserves), and line item 60 (total risk-weighted assets) using 
the revised advanced approaches rules.
    Supplementary leverage ratio: Proposed line items 91 through 98 in 
the Schedule A would collect data on a new supplementary leverage ratio 
requirement for advanced approaches banking organizations, effective 
March 31, 2015. Consistent with the revised regulatory capital rules, 
an advanced approaches banking organization would report the 
supplementary leverage ratio calculated as the simple arithmetic mean 
of the three monthly leverage ratios over the reporting quarter.

B. Schedules B, C, D, H, I, J, P, Q, and R: Risk-Weighted Assets

    This section describes the proposed revisions to Schedules B, C, D, 
H, I, J, P, Q, and R of the FFIEC 101, which are intended to be 
consistent with the revised advanced approaches rules to calculate the 
risk-weighted assets. The proposed revisions reflect changes to the 
methodologies for calculating regulatory capital for counterparty 
credit risk, securitization exposures, and exposures to central 
counterparties (CCPs). In addition, the proposed changes incorporate 
capital requirements for credit valuation adjustments (CVA), wrong-way 
risk, margin risk, exposures subject to a wholesale correlation factor 
multiplier of 1.25, cleared derivative and repo-style transactions, and 
default fund contributions to CCPs.
    As is currently the case, FFIEC 101 Schedules B through S will be 
given confidential treatment while an institution is conducting its 
parallel run. Also, as is currently the case, after an institution 
conducts a satisfactory parallel run, Schedule B and line items 1 and 2 
of Schedule S will no longer be given confidential treatment.
    Schedules H and J: Credit valuation adjustments (CVAs): The 
proposed insertion of memorandum items in Schedule H (Wholesale 
Exposure: Eligible Margin Loans, Repo-Style Transactions, and OTC 
Derivatives with Cross-Product Netting) and Schedule J (Wholesale 
Exposure: OTC Derivatives No Cross-Product Netting) reflects the CVA 
requirements for over-the-counter (OTC) derivative activities. Under 
the revised regulatory capital rules, CVA is the fair value adjustment 
to reflect counterparty credit risk in the valuation of an OTC 
derivative contract. Advanced approaches banking organizations must 
hold capital to reflect the CVA due to changes in counterparties' 
credit spreads, assuming fixed expected exposure (EE) profiles. The 
advanced approaches rules provide two approaches for calculating the 
CVA capital requirement: the simple and advanced CVA approaches. The 
conditions for each approach, as well as the methods for calculation, 
are described in section 132 of the revised regulatory capital rules.
    Schedule P: Securitization exposures: The agencies propose to 
combine the current Schedule P (Securitization Exposures Subject to 
Ratings-based or Internal Assessment Approaches) and Schedule Q 
(Securitization Detail Schedule) into a new Schedule P (Securitization 
Exposures). This proposed revision reflects a number of changes to the 
securitization framework, including the replacement of the ratings-
based and internal assessment approaches from the advanced approaches 
rules with the simplified supervisory formula approach, and the 
introduction of a specific treatment for resecuritization exposures. 
The revised advanced approaches rules introduce enhanced due diligence 
requirements and require banking organizations to assign higher risk 
weights to resecuritization exposures than other securitization 
exposures with similar credit characteristics. The revised advanced 
approaches rules introduce new operational criteria for recognizing 
risk transfer as well as revisions to the hierarchy of approaches in 
the securitization framework. The operational criteria as well as the 
revised hierarchy of approaches are described in sections 141 through 
145 of the revised regulatory capital rules.
    Schedule Q: Cleared transactions: The proposed new Schedule Q 
(Cleared Transactions) reflects the treatment for cleared transactions 
and is intended to capture exposures to CCPs. The revised advanced 
approaches rules introduce a capital requirement for transactions with 
CCPs and a more risk-sensitive approach for determining the capital 
requirement for a banking organization's contributions to the default 
funds of these CCPs. The calculation of the trade exposure amount for a 
cleared transaction is described in section 133 of the revised 
regulatory capital rules.
    Schedules C, D, H, I, and J: Exposures subject to a 1.25 asset 
correlation factor: The proposed insertion of memorandum items in 
Schedule C (Wholesale Exposure: Corporate), Schedule D (Wholesale 
Exposure: Bank), Schedule H (Wholesale Exposure: Eligible Margin Loans, 
Repo-Style Transactions, and OTC Derivatives with Cross-Product 
Netting); Schedule I (Wholesale Exposure: Eligible Margin Loans and 
Repo-Style Transactions No Cross-Product Netting), and Schedule J

[[Page 48940]]

(Wholesale Exposure: OTC Derivatives No Cross-Product Netting) reflects 
the new 1.25 asset correlation factor for certain unregulated financial 
institutions as well as regulated financial institutions with assets of 
at least $100 billion. The advanced approaches rules introduce the 1.25 
multiplier to capture the correlation of financial institutions' common 
risk factors. The formula for these wholesale exposures is described in 
section 131 of the revised regulatory capital rules.
    Schedules H, I, and J: Internal models methodology (IMM) margin 
period of risk and specific wrong-way risk: The proposed insertion of 
memorandum items in Schedule H (Wholesale Exposure: Eligible Margin 
Loans, Repo-Style Transactions, and OTC Derivatives with Cross-Product 
Netting), Schedule I (Wholesale Exposure: Eligible Margin Loans and 
Repo-Style Transactions No Cross-Product Netting) and Schedule J 
(Wholesale Exposure: OTC Derivatives No Cross-Product Netting) reflects 
the new capital requirements for the margin period of risk and wrong-
way risk in the advanced approaches. The revised advanced approaches 
rules introduce an increased margin period of risk of 20 days. In 
addition, for OTC derivative transactions, repo-style transactions, and 
margin loans that exhibit wrong-way risk, the advanced approaches rules 
require a banking organization to apply an increased capital 
requirement rather than the IMM to these exposures. The calculations 
and requirements associated with margin period of risk and wrong-way 
risk are described in section 132 of the revised regulatory capital 
rules.
    Schedules B and R: Summary table and equity exposures: The proposed 
revisions to Schedule B (Summary Risk-weighted Assets Information for 
Banks) reflect the proposed changes to the schedules described above in 
this section III.B. In addition, the revised advanced approaches rules 
remove the prior money market fund approach for equity exposures. 
Accordingly, in proposed revised Schedule R (Equity Exposures), the 
agencies propose to remove this approach.

IV. Scope and Frequency of Reporting

    The proposed regulatory reporting changes to Call Report Schedule 
RC-R ultimately would apply to all Call Report filers. The proposed 
revisions to the FFIEC 101 would apply only to advanced approaches 
banking organizations. Each reporting entity would continue to submit 
the applicable quarterly reports on the same due dates as are currently 
in effect for the reporting entity. In addition, the agencies expect 
all reporting entities to meet the existing reporting standards for 
accuracy and other requirements as currently mandated by their primary 
federal supervisor.
    See section I.B of this notice for a detailed discussion of the 
timing for the implementation of the proposed reporting changes.

V. Request for Comment

    Public comment is requested on all aspects of this joint notice. In 
particular, do advanced approaches institutions expect that making any 
specific line items on proposed revised FFIEC 101 Schedule A public 
would cause them competitive or other harm? If so, identify the 
specific line items and describe in detail the nature of the harm.
    Additionally, comments are invited on
    (a) Whether the collections of information that are the subject of 
this notice are necessary for the proper performance of the agencies' 
functions, including whether the information has practical utility;
    (b) The accuracy of the agencies' estimates of the burden of the 
information collections as they are proposed to be revised, including 
the validity of the methodology and assumptions used;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    (d) Ways to minimize the burden of information collections on 
respondents, including through the use of automated collection 
techniques or other forms of information technology; and
    (e) Estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of services to provide information.
    Comments submitted in response to this joint notice will be shared 
among the agencies and will be summarized or included in the agencies' 
requests for OMB approval. All comments will become a matter of public 
record.

    Dated: August 5, 2013.
Stuart Feldstein,
Director, Legislative and Regulatory Activities Division, Office of the 
Comptroller of the Currency.

Board of Governors of the Federal Reserve System, August 5, 2013.
Robert deV. Frierson,
Secretary of the Board.

    Dated at Washington, DC, this 2nd day of August, 2013.

Federal Deposit Insurance Corporation.
Valerie J. Best,
Assistant Executive Secretary.
[FR Doc. 2013-19354 Filed 8-9-13; 8:45 am]
BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P