The director of the Division
of Supervision and Regulation (or the director’s delegatee)
is authorized:
(a) Procedure.
(1) Cease-and-desist orders. To refuse, with the prior concurrence
of the appropriate Reserve Bank and the general counsel, an application
to the Board to stay, modify, terminate, or set aside any effective
cease-and-desist order previously issued by the Board under section
8(b) of the Federal Deposit Insurance Act (12 U.S.C. 1818(b)), or
any written agreement between the Board or the Reserve Bank and a
bank holding company or any nonbanking subsidiary thereof, a savings
and loan holding company or any nondepository subsidiary thereof,
or a state member bank.
(2) Modification of commitments or conditions. To grant or deny requests for modifying, including extending the
time for, performing a commitment or condition relied on by the Board
or its delegatee in taking any action under the Bank Holding Company
Act, the Home Owners’ Loan Act, section 18(c) of the Federal
Deposit Insurance Act, the Change in Bank Control Act, the Federal
Reserve Act, the International Banking Act, or the Dodd-Frank Wall
Street Reform and Consumer Protection Act. In acting on such requests,
the director may take into account changed circumstances and good
faith efforts to fulfill the commitments or conditions, and shall
consult with the directors of other interested divisions where appropriate.
The director may not take any action that would be inconsistent with
or result in an evasion of the provisions of the Board’s original
action.
(3) Processing extensions. With the concurrence
of the general counsel, to extend the processing periods for the following
applications and notices:
(i) The 60-day processing period for
an acquisition of a bank or bank holding company filed under section
3 of the Bank Holding Company Act (12 U.S.C. 1842), pursuant to section
225.15(d)(2) of Regulation Y (12 CFR 225.15(d)(2));
(ii) The 60-day processing period for
a nonbanking proposal filed under section 4 of the Bank Holding Company
Act (12 U.S.C. 1843), pursuant to:
(A) Section 225.24(d)(2)
of Regulation Y (12 CFR 225.24(d)(2)); and
(B) Section 4(j)(1)(C) of the Bank Holding
Company Act (12 U.S.C. 1843(j)(1)(C)) and section 225.24(d)(3) of
Regulation Y (12 CFR 225.24(d)(3));
(iii) The 60-day processing period for
an acquisition of a savings association or savings and loan holding
company filed under section 10(e) of the Home Owners’ Loan Act
(12 U.S.C. 1467a(e)), pursuant to section 238.14(g)(2) of Regulation
LL (12 CFR 238.14(g)(2));
(iv) The 60-day processing period for a nonbanking proposal filed
under section 10(c) of the Home Owners’ Loan Act (12 U.S.C.
1467a(c)), pursuant to:
(A) Section 238.53(f)(2) of Regulation LL
(12 CFR 238.53(f)(2)); and
(B) Section 238.53(f)(3) of Regulation LL (12 CFR 238.53(f)(3));
and
(v) For an additional 180 days, the 180-day period within which final
Board action is required on an application pursuant to section 7(d)
of the International Banking Act (12 U.S.C. 3105(d)).
8-108.1
(4) Notice of insufficient capital. To issue, with the concurrence
of the general counsel, a notice that a state member bank, bank holding
company, or savings and loan holding company has insufficient capital
and which directs the bank or company to file with its regional Reserve
Bank a capital improvement plan under subpart E of the Board’s
Rules of Practice for Hearings (12 CFR part 263, subpart E).
(5) Obtaining possession or control of securities; extending time period. To approve, under section 403.5(g) of the Treasury Department regulations
(17 CFR 403.5) implementing the Government Securities Act of 1986,
as amended (Pub. L. 95-571), the application of a member bank, a state
branch or agency of a foreign bank, a foreign bank, or a commercial
lending company owned or controlled by a foreign bank, to extend for
one or more limited periods commensurate with the circumstances the
30-day time period specified in 17 CFR 403.5(c)(1)(iii), provided
that the director of the Division of Supervision and Regulation is
satisfied that the applicant is acting in good faith and that exceptional
circumstances warrant such action.
8-108.2
(b) Availability of information.
(1) Confidential
supervisory information. To make available information of the
Board of the nature and in the circumstances described in section
261.22 of the Board’s Rules Regarding Availability of Information
(12 CFR 261.22).
(2) Freedom of Information Act; availability of
information. To make available, under the Board’s Rules
Regarding Availability of Information (12 CFR part 261), reports and
other information of the Board acquired pursuant to the Board’s
Regulations G, T, U, and X (12 CFR parts 207, 220, 221, 224) of the
nature and in circumstances described in section 261.15(a)(4) and
(8) of these rules.
8-108.3
(c) Bank holding companies; savings and loan holding
companies; financial holding companies; change in bank control; mergers.
(1) Bank holding company and savings and loan holding company registration
forms and annual reports. To promulgate registration forms and
annual reports and other forms for use in connection with the Bank
Holding Company Act and the Home Owners’ Loan Act, after receiving
clearance from the Office of Management and Budget (where necessary),
under section 5 of the Bank Holding Company Act (12 U.S.C. 1844) or
section 10 of the Home Owners’ Loan Act (12 U.S.C. 1467a), and
in accordance with 5 U.S.C. 553.
(2) Emergency
action. To take actions the Reserve Bank could take under this
part at section 265.20(c)(2)(ii) if immediate or expeditious action
is required to avert failure of a bank or savings association or because
of an emergency pursuant to sections 3(a) and 4(c)(8) of the Bank
Holding Company Act (12 U.S.C. 1842(a), 1843(c)(8)), section 10(c)
of the Home Owners’ Loan Act (12 U.S.C. 1467a(c)), or the Change
in Bank Control Act (12 U.S.C. 1817(j)).
(3) Waiver of
notice. To waive, dispense with, modify or excuse the failure
to comply with the requirement for publication and solicitation of
public comment regarding a notice filed under the Change in Bank Control
Act (12 U.S.C. 1817(j)), with the concurrence of the general counsel,
provided a written finding is made that such disclosure would seriously
threaten the safety or soundness of a bank holding company, savings
and loan holding company, or a bank.
8-108.4
(4) Notices for
addition or change of directors or officers. Under section 914(a)
of the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989 (12 U.S.C. 1831i) and subpart H of Regulation Y (12 CFR part
225, subpart H) or subpart H of Regulation LL (12 CFR part 238, subpart
H), provided that no senior officer or director or proposed senior
officer or director of the notificant is also a director of the Reserve
Bank or a branch of the Reserve Bank:
(i) To determine the
informational sufficiency of notices filed pursuant to section 225.72
of Regulation Y (12 CFR 225.72) or section 238.73 of Regulation LL
(12 CFR 238.73); and
(ii) To waive the prior notice requirements of that section.
(5) ERISA violations. To provide the Department
of Labor written notification of possible significant violations of
the Employee Retirement Income Security Act (ERISA) (29 U.S.C. 1001 et seq.) by bank holding companies or savings and loan holding
companies, in accordance with section 3004(b) of ERISA (29 U.S.C.
1204(b)) and the Interagency Agreement adopted to implement its provisions.
(6) Appraisal not required. To determine pursuant
to 12 CFR 225.63(a)(13) that the services of an appraiser are not
necessary in order to protect federal financial and public policy
interests in real estate-related financial transactions or to protect
the safety and soundness of an institution.
(7) Financial
holding company corrective action agreements. With the concurrence
of the general counsel, to authorize a financial holding company,
or a foreign bank that has elected to be treated as a financial holding
company, that is subject to section 4(m) of the Bank Holding Company
Act (12 U.S.C. 1843(m)):
(i) To acquire shares of a company pursuant
to authority in section 4(k) of the Bank Holding Company Act (12 U.S.C.
1843(k)) in order to continue to engage in the following categories
of existing activities which require recurring transactions in the
ordinary course:
(A) Merchant banking,
(B) Underwriting dealing in, or making a market
in securities;
(C) Sponsoring,
organizing, and managing customer-driven investment funds; and
(D) Hedging risks incurred
in ongoing permissible activities;
(ii) To extend the time within which
a financial holding company must execute a corrective agreement under
section 4(m) of the Bank Holding Company Act (12 U.S.C. 1843(m));
(iii) To extend the
time limits in, or otherwise modify, corrective agreements under section
4(m) of the Bank Holding Company Act (12 U.S.C. 1843(m)); and
(iv) To determine not to
make public any corrective agreement under section 4(m) of the Bank
Holding Company Act (12 U.S.C. 1843(m));
(v) To acquire shares or assets pursuant
to section 4(k) of the Bank Holding Company Act (12 U.S.C. 1843(k))
without prior Board approval up to the following thresholds:
(A) $25 million
in consideration for a single transaction;
(B) $125 million in consideration over the
past 12 months; and
(C)
$400 million in consideration over the entire period the financial
holding company is subject to the agreement required by section 4(m)
of the Bank Holding Company Act (12 U.S.C. 1843(m)).
(8) Complementary physical commodity trading activities. With the concurrence of the general counsel, to approve requests
by financial holding companies to engage in complementary physical
commodity trading activities, pursuant to section 4(k)(1)(B) of the
Bank Holding Company Act (12 U.S.C. 1843(k)(1)(B)), as an activity
that is complementary to permissible commodity derivatives activities,
provided that the proposal meets the conditions imposed by the Board
approving previous requests and the proposal does not raise any significant
legal, policy, or supervisory issues.
(9) Extension
of merchant banking investment holding periods. With the concurrence
of the general counsel, to approve requests by financial holding companies
to hold merchant banking investments beyond the standard time periods
established in section 225.172(b)(4) of Regulation Y (12 CFR 225.172(b)(4)),
where no significant legal, policy, or supervisory issues are raised
by the specific request.
(10) Single-counterparty credit limits
rule exemptions. With the concurrence of the general counsel, to
act on exemption requests under section 165(e) of the Dodd-Frank Wall
Street Reform and Consumer Protection Act (12 U.S.C. 5365(e)) and
subparts H and Q of Regulation YY (12 CFR part 252, subparts H and
Q) where no significant legal, policy, or supervisory issues are raised.
(11) Stress tests.
(i) Jointly with the
director of the Division of Financial Stability, with the concurrence
of the Chair of the Board’s Committee on Supervision and Regulation:
(A) To develop and issue scenarios, including, but not limited to,
the baseline scenario and the severely adverse scenario, that the
Board would use to conduct analyses under section 238.132 of Regulation
LL (12 CFR 238.132) or section 252.44 of Regulation YY (12 CFR 252.44)
and that a company would use to conduct its stress tests under section
238.143 of Regulation LL (12 CFR 238.143) or section 252.14 or section
252.54 of Regulation YY (12 CFR 252.14 or 252.54), as appropriate,
provided that no significant policy issues are raised; and
(B) To develop and issue additional
scenarios or additional components for use in the severely adverse
scenario under sections 238.132(b) and 238.143(b)(2) and (3) of Regulation
LL (12 CFR 238.132(b) and 238.143(b)(2) and (b)(3)), and sections
252.14(b)(2) and (3), 252.44(b), and 252.54(b)(2) and (b)(3) of Regulation
YY (12 CFR 252.14(b)(2) and (3), 252.44(b), and 252.54(b)(2) and (3)),
that the Board would use to conduct analyses under section 238.132
of Regulation LL (12 CFR 238.132) or section 252.44 of Regulation
YY (12 CFR 252.44) and that a company would use to conduct its stress
tests under section 238.143 of Regulation LL (12 CFR 238.143) or section
252.14 or section 252.54 of Regulation YY (12 CFR 252.14 or 252.54),
as appropriate, provided that no significant policy issues are raised;
(ii)
With the concurrence of the Chair of the Committee on Supervision
and Regulation:
(A) After consultation with the Board, to
convey to a company the summary of the results of the Board’s
analyses of the company under section 238.134 of Regulation LL (12
CFR 238.134) or section 252.46 of Regulation YY (12 CFR 252.46);
(B) After consultation with
the Board and the director of the Division of Financial Stability,
to determine the content and timing of the public disclosure of the
results of the Board’s analyses of a company under section 238.134
of Regulation LL (12 CFR 238.134) or section 252.46 of Regulation
YY (12 CFR 252.46);
(C)
To determine any appropriate updates to a company’s resolution
plan based on the results of the Board’s analyses of the company
under section 252.47 of Regulation YY (12 CFR 252.47); and
(D) To require a company to include
one or more additional components in its severely adverse scenario
in its stress test based on the company’s financial condition,
size, complexity, risk profile, scope of operations, or activities,
or risks to the U.S. economy pursuant to section 238.143(b)(2) of
Regulation LL (12 CFR 238.143(b)(2)) and sections 252.14(b)(2) and
252.54(b)(2) of Regulation YY (12 CFR 252.14(b)(2) and 252.54(b)(2));
(iii)
After consultation with the Chair of the Committee on Supervision
and Regulation:
(A) To evaluate whether a company has the
capital necessary to absorb losses and continue its operation under
baseline and severely adverse scenarios, and any additional scenarios,
under section 238.134 of Regulation LL (12 CFR 238.134) or section
252.46 of Regulation YY (12 CFR 252.46);
(B) To conduct annual analyses of a company
under section 238.132 of Regulation LL (12 CFR 238.132) or section
252.44 of Regulation YY (12 CFR 252.44); and
(C) To require a company with significant
trading activity, as specified in the Capital Assessments and Stress
Testing report (FR Y-14), or a subsidiary of such company, to include
a trading and counterparty component in its severely adverse scenario
in its stress test pursuant to section 238.143(b)(2) of Regulation
LL (12 CFR 238.143(b)(2)) and sections 252.14(b)(2) and 252.54(b)(2)
of Regulation YY (12 CFR 252.14(b)(2) and 252.54(b)(2));
(iv) In consultation
with the general counsel, to respond to a company’s request
for reconsideration that the company is required to include one or
more additional components in its severely adverse scenario, including
a trading or counterparty component, or to use one or more additional
scenarios under section 238.143(b)(4) of Regulation LL (12 CFR 238.143(b)(4))
and sections 252.14(b)(4) and 252.54(b)(4) of Regulation YY (12 CFR
252.14(b)(4) and 252.54(b)(4)); and
(v) The director of the Division of
Supervision and Regulation is also authorized to:
(A) Notify a company
of the determination that the company is required to include one or
more additional components in its severely adverse scenario, including
a trading or counterparty component, or to use one or more additional
scenarios under section 238.143(b)(4) of Regulation LL (12 CFR 238.143(b)(4))
and sections 252.14(b)(4) and 252.54(b)(4) of Regulation YY (12 CFR
252.14(b)(4) and 252.54(b)(4));
(B) Coordinate with the appropriate primary
financial regulatory agencies in conducting the analyses under section
238.132 of Regulation LL (12 CFR 238.132) or section 252.44 of Regulation
YY (12 CFR 252.44);
(C)
Provide the as-of date of any scenarios, additional scenarios, additional
components, and the relevant data under section 238.143(b) of Regulation
LL (12 CFR 238.143(b)), or section 252.14(b) or section 252.54(b)
of Regulation YY (12 CFR 252.14(b) or 252.54(b)), as appropriate;
(D) Extend (and in the case
of nonbank financial companies supervised by the Board or savings
and loan holding companies, accelerate) the compliance date for companies
under section 238.131 or section 238.142 of Regulation LL (12 CFR
238.131 or 238.142), or section 252.13, section 252.43, or section
252.53 of Regulation YY (12 CFR 252.13, 252.43, or 252.53), as appropriate;
(E) Extend any or all of
the following time periods:
(1) The time period by which a company must conduct its stress
test or the as-of date of the data under section 238.143(a) of Regulation
LL (12 CFR 238.143(a)), or section 252.14(a) or section 252.54(a)
of Regulation YY (12 CFR 252.14(a) or 252.54(a)), as appropriate;
(2) The time period
by which a company must file a report to the Board under section 238.145(a)
of Regulation LL (12 CFR 238.145(a)), or section 252.16(a) or section
252.57(a) of Regulation YY (12 CFR 252.16(a) or 252.57(a)), as appropriate;
and
(3) The time
period by which a company must disclose a summary of results of its
stress tests under section 238.146 of Regulation LL (12 CFR 238.146),
or section 252.17 or section 252.58 of Regulation YY (12 CFR 252.17
or 252.58), as appropriate;
(F) Require a company to submit additional
information on a consolidated basis pursuant to section 238.133 of
Regulation LL (12 CFR 238.133) or section 252.45 of Regulation YY
(12 CFR
252.45) that the director determines necessary to ensure that the
Board has sufficient information to conduct its analysis under section
238.132 of Regulation LL (12 CFR 238.132) or section 252.44 of Regulation
YY (12 CFR 252.44) or as necessary to project a company’s pro
forma financial condition;
(G) Require a company to submit additional information under section
238.145 of Regulation LL (12 CFR 238.145), or section 252.16 or section
252.57 of Regulation YY (12 CFR 252.16 or 252.57), as appropriate;
and
(H) Determine that
disclosures made by a bank holding company do not adequately capture
the potential impact of scenarios on the capital of a state member
bank pursuant to section 252.17 of Regulation YY (12 CFR 252.17) and
require that the state member bank make the same disclosure as required
for state member banks that are not subsidiaries of bank holding companies.
(12) Volcker Rule conformance period extensions. With the concurrence of the general counsel, to approve (but not
deny) a request by a new banking entity for an extension of time to
conform its activities and investments to the requirements of section
13 of the Bank Holding Company Act and its implementing regulations,
pursuant to section 225.181(a)(3) of Regulation Y (12 CFR 225.181(a)(3)),
provided that the approval criteria thereunder are met and the request
raises no significant policy or supervisory issues.
8-108.5
(d) International banking.
(1) Foreign bank reports. To require submission of a report of condition
respecting any foreign bank in which a member bank holds stock acquired
under section 211.8(b) of Regulation K (12 CFR 211.8(b)), pursuant
to section 25 of the Federal Reserve Act (12 U.S.C. 602).
(2) Edge corporation reports. To require submission and publication
of reports by an Edge corporation under section 25A of the Federal
Reserve Act (12 U.S.C. 625).
(3) International
banking matters. With the concurrence of the general counsel,
to approve applications, notices, exemption requests, waivers and
suspensions, and other related matters under Regulation K (12 CFR
part 211), where such matters do not raise any significant legal,
supervisory, or policy issues.
8-108.6
(4) Allocated
transfer risk reserves. To determine the need for establishing
and the amount of any allocated transfer risk reserve against specific
international assets, and notify the banking institutions of the determination
and the amount of the reserve and whether the reserve may be reduced
under subpart D of Regulation K (12 CFR part 211, subpart D).
(5) Conduct and coordination of examinations. To authorize the conduct
of examinations of the U.S. offices and affiliates of foreign banks
as provided in sections 7(c) and 10(c) of the International Banking
Act (12 U.S.C. 3105(c) and 3107(c)), and, where appropriate, to coordinate
those examinations with examinations of the Office of the Comptroller
of the Currency, the Federal Deposit Insurance Corporation, and the
state entity that is authorized to supervise or regulate a state branch,
state agency, commercial lending company, or representative office.
(6) Election by a foreign bank to be treated as
financial holding company. With the concurrence of the general
counsel, to determine that an election by a foreign bank to become
or to be treated as a financial holding company is effective, provided
that:
(i) The foreign bank meets the criteria
for becoming or being treated as a financial holding company; and
(ii) The election raised
no significant policy or supervisory issues.
(7) Enhanced prudential standards rule for foreign banking organizations.
(i) With the concurrence of the Chair
of the
Committee on Supervision and Regulation and the general counsel, to
grant or deny a request to permit a foreign banking organization to
use an alternative organizational structure or not transfer its ownership
interest in a U.S. subsidiary to its intermediate holding company
under subpart O of Regulation YY (12 CFR part 252, subpart O), subject,
as appropriate, to any commitments or conditions, provided that the
request raises no significant policy or supervisory issues.
(ii) In consultation with
the general counsel, to:
(A) Commitments. Grant or deny requests for modifying, including extending the time
for, performing a commitment or condition relied on by the Board or
its delegatee in taking any action under subparts M through O of Regulation
YY (12 CFR part 252, subparts M-O). In acting on such requests, the
director may take into account changed circumstances and good faith
efforts to fulfill the commitments or conditions, and shall consult
with the directors of other interested divisions where appropriate.
The director may not take any action that would be inconsistent with
or result in an evasion of the provisions of the Board’s original
action;
(B) Stress testing.
(1) Determine that an asset should
not qualify as an eligible asset under sections 252.146 and 252.158
of Regulation YY (12 CFR 252.146 and 252.158);
(2) Determine that a foreign banking
organization or foreign savings and loan holding company must meet
the additional standards, respectively, under section 238.162(b) of
Regulation LL (12 CFR 238.162(b)) and sections 252.146 and 252.158
of Regulation YY (12 CFR 252.146 and 252.158);
(3) Approve an enterprise-wide stress
test and determine that it meets the stress test requirements under
section 238.162(b) of Regulation LL (12 CFR 238.162(b)) and sections
252.146 and 252.158 of Regulation YY (12 CFR 252.146 and 252.158);
(4) Require the
U.S. branches and agencies of a foreign banking organization and,
if the foreign banking organization has not established a U.S. intermediate
holding company, any subsidiary of the foreign banking organization,
to maintain a liquidity buffer or be subject to intragroup funding
restrictions under section 252.158(d)(3) of Regulation YY (12 CFR
252.158(d)(3));
(C) Capital. Determine that a foreign banking organization would meet or exceed
capital adequacy standards on a consolidated basis that are consistent
with the Basel Capital Framework were the foreign banking organization
subject to such standards under sections 252.143(a)(2) and 252.154(a)(2)
of Regulation YY (12 CFR 252.143(a)(2) and 252.154(a)(2));
(D) Risk management. Approve an alternative reporting structure
for a U.S. chief risk officer based on circumstances specific to the
foreign banking organization under sections 252.144(c)(3)(iii) and
252.155(b)(3)(iii) of Regulation YY (12 CFR 252.144(c)(3)(iii) and
252.155(b)(3)(iii));
(E) Liquidity.
(1) Require a foreign banking organization to calculate the
collateral positions for its combined U.S. operations more frequently
than required under section 252.156(g)(1)(i) of Regulation YY (12
CFR 252.156(g)(1)(i));
(2) Require a foreign banking organization to perform stress
testing more frequently than is required under section 252.157(a)(2)
of Regulation YY (12 CFR 252.157(a)(2)); and
(F) Additional information. Require a foreign banking organization
to provide additional information under sections 252.147(a)(3), 252.153(a)(3)
and 252.158(c)(2) of Regulation YY (12 CFR 252.147(a)(3), 252.153(a)(3)
and 252.158(c)(2)), as appropriate.
8-108.7
(e) Member banks.
(1) Membership
certification to FDIC. To certify, under section 4(b) of the
Federal Deposit Insurance Act (12 U.S.C. 1814(b)), to the Federal
Deposit Insurance Corporation that the factors specified in section
6 of the Federal Deposit Insurance Act (12 U.S.C. 1816) were considered
with respect to the admission of a state-chartered bank to Federal
Reserve membership.
(2) Dollar exchange. To permit any
member bank to accept drafts or bill of exchange drawn upon it for
the purpose of furnishing dollar exchange under section 13(12) of
the Federal Reserve Act (12 U.S.C. 373).
(3) ERISA violations. To provide to the Department of Labor written notification of possible
significant violations of the Employee Retirement Income Security
Act (ERISA) (29 U.S.C. 1001 et seq.) by member banks, in accordance
with section 3004(b) of ERISA (29 U.S.C. 1204(b)) and the Interagency
Agreement adopted to implement its provisions.
8-108.8
(4) Examiners. To select or approve the appointment of Federal Reserve examiners,
assistant examiners, and special examiners for the purpose of making
examinations for or by the direction of the Board under 12 U.S.C.
325, 338, 625, 1844(c), and 3105(c)(1).
(5) Capital stock
reduction; branch applications; declaration of dividends; investment
in bank premises. To exercise the functions described in sections
265.20(e)(5) and (11) (reductions in capital and early retirement
of subordinated debt) when the conditions specified in those sections
preclude a Reserve Bank from acting on a member bank’s request
for action or when the Reserve Bank concludes that it should not take
action, and to exercise the functions in section 265.20(e)(3), (4),
and (7) (approving branch applications, declaration of dividends,
and investment in bank premises) in cases in which the Reserve Bank
concludes that it should not take action.
(6) Security
devices. To exercise the functions described in section 265.20(e)(8)
in those cases in which the appropriate Reserve Bank concludes that
it should not take action for good cause.
(7) Public welfare
investments.
(i) To permit a state member bank to
make a public welfare investment in accordance with section 9(23)
of the Federal Reserve Act (12 U.S.C. 338a) in any case in which the
appropriate Reserve Bank does not have delegated authority to act,
unless the proposal does not satisfy section 208.22(b)(1) of Regulation
H (12 CFR 208.22(b)(1)). In acting on such requests, the director
shall consult with the directors of other interested divisions where
appropriate; and
(ii) To determine, in connection with acting on a proposal pursuant
to delegated authority as set forth in paragraph (e)(7)(i) of this
section, that the aggregate amount of a state member bank’s
public welfare investments will not pose a significant risk to the
deposit insurance fund in accordance with section 9(23) of the Federal
Reserve Act (12 U.S.C. 338a).
(8) Prior approval
for capital distributions. With the concurrence of the Vice Chair
for Supervision, to approve (but not deny) a request to make a distribution
pursuant to section 217.303(g) of the Board’s Regulation Q (12
CFR 217.303(g)).
(9) Bank-affiliate transactions. With the concurrence
of the general counsel, to approve, or to make the requisite findings
for approval of, requests for an exemption from the requirements of
section 23A of the Federal Reserve Act (12 U.S.C. 371c) and the Board’s
Regulation W (12 CFR part 223) for the purchase of assets by a state
bank or other insured depository institution from an affiliate, provided
that the purchase of assets is:
(i) Part of a one-time
corporate reorganization;
(ii) Does not involve the purchase of
low-quality assets;
(iii) Is accompanied by a commitment to repurchase any assets that
have become low quality within two years of the transfer; and
(iv) Has been approved
by the Federal Deposit Insurance Corporation and the institution’s
appropriate federal banking agency.
8-108.9
(f) Securities.
(1) Registration
statements by member banks. Under section 12(g) of the Securities
Exchange Act of 1934 (15 U.S.C. 78l(g)):
(i) To accelerate the
effective date of a registration statement filed by a member bank
with respect to its securities;
(ii) To accelerate termination of the
registration of a security that is no longer held of record by 300 persons;
and
(iii) To extend
the time for filing a registration statement by a member bank.
(2) Exemption from registration. To issue notices
with respect to application by a state member bank for exemption from
registration under section 12(h) of the Securities Exchange Act of
1934 (15 U.S.C. 78l(h)).
(3) Accelerating registration of security
on national securities exchange. To accelerate the effective
date of an application by a state member bank for registration of
a security on a national securities exchange under section 12(d) of
the Securities Exchange Act of 1934 (15 U.S.C. 78l(d)).
(4) Unlisted trading in security of a state member bank. To issue
notices with respect to an application by a national securities exchange
for unlisted trading privileges in a security of a state member bank
under section 12(f) of the Securities Exchange Act of 1934 (15 U.S.C.
78l(f)).
8-108.91
(5) Transfer agent registration; acceleration; withdrawal
or cancellation.
(i) To accelerate, under section 17A(c)(2)
of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78q-1(c)(2)),
the effective date of a registration statement for transfer agent
activities filed by a member bank or a subsidiary thereof, a bank
holding company or a subsidiary thereof that is a bank as defined
in section 3(a)(6) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)(6)) other than a bank specified in clause (i) or (iii) of section
3(a)(34)(B) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(34)(B)).
(ii) To withdraw or
cancel, under section 17A(c)(3)(C) of the Securities Exchange Act
of 1934, as amended (15 U.S.C. 78q-1(c)(4)(B)), the transfer agent
registration of a member bank or a subsidiary thereof, a bank holding
company, or a subsidiary thereof that is a bank as defined in section
3(a)(6) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(6))
other than a bank specified in clause (i) or (iii) of section 3(a)(34)(B)
of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(34)(B)),
that has filed a written notice of withdrawal with the Board or upon
a finding that such transfer agent is no longer in existence or has
ceased to do business as a transfer agent.
(6) Proxy solicitation; financial statements.
(i) To
permit the mailing of proxy and other soliciting materials by a state
member bank before the expiration of the time prescribed therein under
section 208.36 of Regulation H (12 CFR 208.36).
(ii) To permit the omission of financial
statements from reports by a state member bank, or to require other
financial statements in addition to, or in substitution for, the statements
required therein under section 208.36 of Regulation H (12 CFR 208.36).
(7) Municipal securities dealers. Under section
23 of the Securities Exchange Act of 1934 (15 U.S.C. 78w).
(i) To grant
or deny requests for waiver of examination and waiting period requirements
for municipal securities principals and representatives under Municipal
Securities Rulemaking Board Rule G-3;
(ii) To grant or deny requests for a
determination that a natural person or municipal securities dealer
subject to a statutory disqualification is qualified to act as a municipal
securities representative or dealer under Municipal Securities Rulemaking
Board Rule G-4;
(iii) To approve or disapprove clearing arrangements under Municipal
Securities Rulemaking Board Rule G-8, in connection with the administration
of these rules for municipal securities dealers for which the Board
is the appropriate regulatory agency under section 3(a)(34) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(34)).
8-108.92
(8) Making reports available to SEC. To make available, upon request,
to the Securities and Exchange Commission reports of examination of transfer
agents, clearing agencies, and municipal securities dealers for which
the Board is the appropriate regulatory agency for use by the Commission
in exercising its supervisory responsibilities under the Act under
section 17(c)(3) of the Securities Exchange Act of 1934 (15 U.S.C.
78q(c)(3)).
(9) Issuing examination manuals, forms, and other
materials. To issue examination or inspection manuals, registration,
report, agreement, and examination forms, guidelines, instructions,
and other similar materials for use in administering sections 7, 8,
15B, and 17A(c) of the Securities Exchange Act of 1934 (15 U.S.C.
78g, 78h, 78o-4, and 78q-1(c)).
(10) Lists of
OTC and foreign margin stocks. To approve issuance of the lists
of OTC margin stocks and foreign margin stocks and add, omit, or remove
any stock in circumstances indicating that such change is necessary
or appropriate in the public interest under section 207.6(d) of Regulation
G (12 CFR 207.6(d)), section 220.17(f) of Regulation T (12 CFR 220.17(f)),
or section 221.7(d) of Regulation U (12 CFR 221.7(d)).
(g) Golden parachute payments. With the concurrence of the general counsel, to approve an application
to make a golden parachute payment or enter into an agreement to make
a golden parachute payment under 12 CFR part 359.
(h) Prompt corrective action. With
the approval of the general counsel, to take the following actions
pursuant to prompt corrective action under the rules implementing
section 38 of the Federal Deposit Insurance Act (12 U.S.C. 1831o)
in connection with any institution or person, except a critically
undercapitalized institution:
(1) Capital categories, capital restoration
plans, and discretionary supervisory actions pursuant to sections
208.42 through 208.44 of Regulation H (12 CFR 208.42 through 208.44);
(2) Notices and directives
pursuant to section 263.202 of the Board’s Rules of Practice
for Hearings (12 CFR 263.202);
(3) Reclassification of a capital category
based on criteria other than capital pursuant to section 263.203 of
the Board’s Rules of Practice for Hearings (12 CFR 263.203);
and
(4) Dismissal of
directors or senior officers pursuant to section 263.204 of the Board’s
Rules of Practice for Hearings (12 CFR 263.204).
(i) Assessments for bank holding
companies, savings and loan holding companies, and nonbank financial
companies supervised by the Board. In consultation with the general
counsel, to take actions pursuant to Regulation TT (12 CFR part 246)
to determine the elements of the assessment formula for each assessment
period including the assessment rate, the amount of the assessment
basis, and each company’s total assessable assets; to determine
the amount of assessment for each assessed company, including allowing
for pro-rata adjustments, payment of a lesser amount than would otherwise
be required pursuant to the reservation of authority, and responding
to an appeal by revising the assessment amount; to notify the assessed
companies of the assessment; and to publish information regarding
calculation of the assessments for each assessment period (including
a description of how the assessment basis was determined) on the Board’s
public website.
(j) Capital
plans.
(1) To take the following
actions (or to provide concurrence to the appropriate Reserve Bank,
where appropriate):
(i) To allow a bank holding company
or savings and loan holding company to submit its capital plan after
the 5th of January of a given year;
(ii) To object, in whole or in part,
to the capital plan or provide the bank holding company or savings
and loan holding company with a notice of nonobjection to the capital
plan;
(iii) To direct
a bank holding company or savings and loan holding company to revise
and resubmit its capital plan if:
(A) The capital plan is incomplete;
(B) There has been or will
be a material change in the bank holding company’s or savings
and loan holding company’s risk profile, financial condition,
or corporate structure;
(C) The stressed scenarios developed by the bank holding company
or savings and loan holding company are not sufficiently stressed;
or
(D) The capital plan
or bank holding company or savings and loan holding company raise
any issues that would cause the Board or the Reserve Bank to object
to the capital plan;
(iv) To waive the requirement that a
bank holding company or savings and loan holding company resubmit
its entire capital plan with respect to those portions of the plan
that are unchanged;
(v) To extend or shorten the 30-day period for resubmission of a
capital plan;
(vi)
To determine that a bank holding company or savings and loan holding
company is required to obtain prior approval for a capital distribution
that would result in a material adverse change to the organization’s
capital or liquidity structure or because earnings were materially
underperforming projections;
(vii) To notify a bank holding company
or savings and loan holding company in writing that it may not take
advantage of the prior approval exception for well-capitalized bank
holding companies or savings and loan holding companies; or
(viii) To approve or disapprove,
within 30 days of receipt of a complete request, a proposed capital
distribution; and
(ix) To affirm or withdraw objection to a capital plan based on a
bank holding company’s or savings and loan holding company’s
written request to reconsider an objection to a capital plan.
(2) With the concurrence
of the Chair of the Committee on Supervision and Regulation, and after
consultation with the Board and the director of the Division of Financial
Stability, to determine the content and timing of the public disclosure
of the Board’s decision to object or not object to a bank holding
company’s or savings and loan holding company’s capital
plan and the summary of the Board’s analyses of that company,
under section 225.8 of Regulation Y (12 CFR 225.8).
(3) Jointly with the director of the Division
of Financial Stability, with the concurrence of the Vice Chair for
Supervision:
(i) To provide a firm subject to the
Board’s capital plan rules with notice of its stress capital
buffer requirement and an explanation of the results of the supervisory
stress test pursuant to sections 225.8(h)(1) of Regulation Y (12 CFR
225.8(h)(1)) and 238.170(h)(1) of Regulation LL (12 CFR 238.170(h)(1));
and
(ii) To provide
a firm subject to the Board’s capital plan rules with its final
stress capital buffer requirement and confirmation of its final planned
capital distributions pursuant to sections 225.8(h)(4)(i) of Regulation
Y (12 CFR 225.8(h)(4)(i)) and 238.170(h)(4)(i) of Regulation LL (12
CFR 238.170(h)(4)(i)).
(k) Capital adequacy.
(1) Delegations
regarding the general provisions of subpart A of Regulation Q (12
CFR part 217, subpart A).
(i) With the concurrence
of the Chair of the Committee on Supervision and Regulation, and after
consultation with the general counsel:
(A) To determine under section
217.1(d)(2)(ii) of Regulation Q (12 CFR 217.1(d)(2)(ii)) whether a
capital element may be included in a company’s common equity
tier 1 capital, additional tier 1 capital, or tier 2 capital consistent
with the loss absorption capacity of the element and in accordance
with section 217.20(e) of Regulation Q (12 CFR 217.20(e)); and
(B) To determine under the
definition of “financial institution” in section 217.2
of Regulation Q (12 CFR 217.2) whether a company is a financial institution
based on its activities.
(ii) After consultation with the general
counsel:
(A) To require under section 217.1(d)(1)
of Regulation Q (12 CFR 217.1(d)(1)) a company to hold an amount of
regulatory capital greater than otherwise required under Regulation
Q because the company’s capital requirements under Regulation
Q are not commensurate with the company’s credit, market, operational
or other risks;
(B) To
determine under section 217.1(d)(2)(i) of Regulation Q (12 CFR 217.1(d)(2)(i))
whether an element of capital must be excluded in whole or in part
from capital because the capital element has characteristics or terms
that diminish its ability to absorb losses, or otherwise presents
safety and soundness concerns;
(C) To require under section 217.1(d)(3) of
Regulation Q (12 CFR 217.1(d)(3)) that a company assign a different
risk-weighted asset amount to an exposure or deduct the amount of
the exposure from its regulatory capital because the risk-weighted
asset amount calculated under Regulation Q for the exposure is not
commensurate with the risks associated with the exposure;
(D) To determine under section
217.1(d)(4) of Regulation Q (12 CFR 217.1(d)(4)) whether the leverage
exposure amount, or the amount reflected in a company’s reported
average total consolidated assets, for an on- or off-balance sheet
exposure (under section 217.10 of Regulation Q (12 CFR 217.10)) is
inappropriate for the exposure(s) or the circumstances of the company,
and, based on this determination, require the company to adjust this
amount in the numerator and the denominator for purposes of the company’s
leverage ratio calculations;
(E) To determine under section 217.1(d)(5) of Regulation Q (12 CFR
217.1(d)(5)) whether the risk-based capital treatment for an exposure,
or the treatment provided to an entity that is not consolidated on
a company’s balance sheet, is commensurate with the risk of
the exposure and the relationship of the company to the entity, and,
based on this determination, require the company to treat the exposure
or entity as if it were consolidated on the company’s balance
sheet;
(F) With respect
to any deduction or limitation required under Regulation Q, to require
under section 217.1(d)(6) of Regulation Q (12 CFR 217.1(d)(6)) a different
deduction or limitation provided that such alternative deduction or
limitation is commensurate with the company’s risk and consistent
with safety and soundness;
(G) To approve a request by a Board-regulated institution to make
or change an election, or a choice of treatment, under section 217.1(g)(2)(ii)
of Regulation Q (12 CFR 217.1(g)(2)(ii)); and
(H) To review and adjust estimated total consolidated
assets under the definition of “insurance bank holding company”
or “insurance savings and loan holding company” in section
217.2 of Regulation Q (12 CFR 217.2) or under section 217.601(b)(2)
of Regulation Q (12 CFR 217.601(b)(2)).
(iii)(A) To determine under paragraph
(5) of the definition of “distribution” in section 217.2
of Regulation Q (12 CFR 217.2) whether a transaction is in substance
a distribution of capital;
(B) To act on a request from a company under the definition of “eligible
credit derivative” in section 217.2 of Regulation Q (12 CFR
217.2) to find that a credit derivative (other than a credit default
swap, nth-to-default swap, or total return swap) should be considered
an eligible credit derivative;
(C) To determine under the definition of “main
index” in section 217.2 of Regulation Q (12 CFR 217.2) whether
an index is a main index because the equities represented by the index
have comparable liquidity, depth of market, and size of bid-ask spreads
as equities in the Standard & Poor’s 500 Index and FTSE
All-World Index;
(D) To
determine under the definition of “multilateral development
bank” in section 217.2 of Regulation Q (12 CFR 217.2) whether
a multilateral lending institution or regional development bank poses
a comparable credit risk to other multilateral development banks;
(E) To determine under the
definition of “qualifying central counterparty” in section
217.2 of Regulation Q (12 CFR 217.2) whether a central counterparty
meets the requirements for qualification as a qualifying central counterparty;
(F) To determine under paragraph
(8) of the definition of “traditional securitization”
in section 217.2 of Regulation Q (12 CFR 217.2) whether a transaction
is not a traditional securitization based on the transaction’s
leverage, risk profile, or economic substance; and
(G) To determine under paragraph (9) of the
definition of “traditional securitization” in section
217.2 of Regulation Q (12 CFR 217.2) whether a transaction is a traditional
securitization based on the transaction’s leverage, risk profile,
or economic substance.
(2) Delegation
regarding the capital ratio requirements and buffers in subpart B
of Regulation Q (12 CFR part 217, subpart B). To act on a request
under section 217.11(a)(4)(iv) of Regulation Q (12 CFR 217.11(a)(4)(iv))
to permit a company to make a capital distribution or discretionary
bonus payment that would otherwise not be permissible.
(3) Delegations regarding the definition of capital in subpart C of Regulation
Q (12 CFR part 217, subpart C).
(i) With the concurrence
of the Chair of the Committee on Supervision and Regulation, and after
consultation with the general counsel, to act on a request from a
company under section 217.20(e)(1) of Regulation Q (12 CFR 217.20(e)(1))
to include a capital element in its common equity tier 1 capital,
additional tier 1 capital, or tier 2 capital.
(ii)(A)
To determine under section 217.20(c)(1)(v)(C) and (d)(1)(v)(C) of
Regulation Q (12 CFR 217.20(c)(1)(v)(C) and (d)(1)(v)(C)) whether
a company would continue to hold capital commensurate to its risk
following the exercise of a call option;
(B) To consult with the other banking agencies
under section 217.20(e)(2) of Regulation Q (12 CFR 217.20(e)(2)) when
considering whether a company may include a regulatory capital element
in its common equity tier 1 capital, additional tier 1 capital, or
tier 2 capital;
(C) To
make publicly available under section 217.20(e)(3) of Regulation Q
(12 CFR 217.20(e)(3)) a decision that a regulatory capital element
may be included in a company’s common equity tier 1 capital,
additional tier 1 capital, or tier 2 capital;
(D) To determine under section 217.22(a)(5)(i)
of Regulation Q (12 CFR 217.22(a)(5)(i)) whether the deduction of
a defined benefit pension fund net asset is not required to the extent
that the company has unrestricted and unfettered access to the assets
in the fund;
(E) To act
on a request from a company under section 217.22(b)(2)(iv) of Regulation
Q (12 CFR 217.22(b)(2)(iv)) to change to its AOCI opt-out election
following a merger, acquisition, or purchase transaction;
(F) To act on a request from
a company under section 217.22(c)(4), (5), or (6) or (d)(2)(i)(C)
of Regulation Q (12 CFR 217.22(c)(4), (5), or (6) or (d)(2)(i)(C))
not to deduct investments in the capital of an unconsolidated financial
institution either:
(1) To the extent the investment is related to a failed underwriting,
or
(2) If the
financial institution is in distress and the investment is made for
the purpose of providing financial support to the financial institution;
(G) To act
on a request from a company under section 217.22(d)(1)(iv) or (d)(2)(iii)
of Regulation Q (12 CFR 217.22(d)(1)(iv) or (d)(2)(iii)) to change
its election whether to exclude DTAs and DTLs relating to adjustments
made to common equity tier 1 capital;
(H) To act on a request from a company under
section 217.22(e)(5) of Regulation Q (12 CFR 217.22(e)(5)) to change
its preference regarding the manner in which it nets DTLs against
specific assets subject to deduction;
(I) To act on a request from a company under
section 217.22(h)(2)(iii)(A) of Regulation Q (12 CFR 217.22(h)(2)(iii)(A))
to use a conservative estimate of the amount of its investment in
its own capital instruments or the capital of an unconsolidated financial
institution held through a position in an index; and
(J) To determine under section 217.22(h)(3)(iii)(C)
of Regulation Q (12 CFR 217.22(h)(3)(iii)(C)) whether a company’s
internal control process is adequate.
(iii)(A)
To act on a company’s request under section 217.20(b)(1)(iii),
(c)(1)(vi), or (d)(1)(x) of Regulation Q (12 CFR 217.20(b)(1)(iii),
(c)(1)(vi), (d)(1)(x)) to redeem a security; and
(B) To act on a company’s request under
section 217.20(c)(1)(v)(A) or (d)(1)(v)(A) of Regulation Q (12 CFR
217.20(c)(1)(v)(A), (d)(1)(v)(A)) to exercise a call option.
(4) Delegations regarding the standardized approach
in subpart D of Regulation Q (12 CFR part 217, subpart D).
(i) After consultation with the general counsel, to determine under
section 217.35(d)(3)(i)(E) of Regulation Q (12 CFR 217.35(d)(3)(i)(E))
that a risk weight higher than 20 percent for variable RW in formula
KCCP is more appropriate based on the specific characteristics of
the QCCP and its clearing members.
(ii)(A) To determine
under section 217.35(d)(1) of Regulation Q (12 CFR 217.35(d)(1)) whether
there has been a material change in the financial condition of a CCP;
(B) To act on a request
under section 217.35(d)(2) of Regulation Q (12 CFR 217.35(d)(2)) for
a company to use a risk-weighted asset amount for default fund contributions
to a CCP that is not QCCP other than a 1,250 percent risk weight;
and
(C) In the case of
a system-wide failure of a settlement or clearing system, or a CCP,
to waive under section 217.38(c) of Regulation Q (12 CFR 217.38(c))
risk-based capital requirements for unsettled and failed transactions.
(iii)(A) To act on a request from
a company under section 217.37(c) of Regulation Q (12 CFR 217.37(c))
to use its own estimates of haircuts, including:
(1) Acting on a request by a company
under section 217.37(c)(4)(i)(E) of Regulation Q (12 CFR 217.37(c)(4)(i)(E))
to make changes to the company’s policies and procedures; and
(2) Requiring a
company under section 217.37(c)(4)(i)(F) of Regulation Q (12 CFR 217.37(c)(4)(i)(F))
to use a different period of significant financial stress in the calculation
of own estimates of haircuts; and
(B) To determine under section 217.41(c) of
Regulation Q (12 CFR 217.41(c)) whether or not a company has demonstrated
a comprehensive understanding of the features of a securitization
exposure.
(5) Delegations
regarding the advanced approaches risk-based capital rules in subpart
E of Regulation Q (12 CFR part 217, subpart E).
(i) With
the concurrence of the Chair of the Committee on Supervision and Regulation,
and after consultation with the general counsel, to act on a request
by a company under section 217.121(c) and (d) of Regulation Q (12
CFR 217.121(c) and (d)) to use the advanced approaches to calculate
its risk-based capital requirements and notify the company of the
date that it must begin to do so if the action would not raise significant
policy issues.
(ii)
After consultation with the general counsel:
(A) To require
a company (that no longer meets the qualification requirements in
subpart E of Regulation Q (12 CFR part 217, subpart E)) under section
217.123(b)(3) of Regulation Q (12 CFR 217.123(b)(3)) to calculate
its advanced approaches total risk weighted assets with modifications
determined by the director if the director determines that the advanced
approaches total risk-weighted assets are not commensurate with the
company’s credit, market, operational, or other risk; and
(B) To determine under section
217.133(d)(3)(i) of Regulation Q (12 CFR 217.133(d)(3)(i)) that a
risk weight higher than 20 percent for variable RW in formula Kccp is more appropriate based on the specific characteristics
of the QCCP and its clearing members.
(iii)(A)
To determine under section 217.100(c)(1) of Regulation Q (12 CFR 217.100(c)(1))
that not applying a provision of Regulation Q would, in all circumstances,
unambiguously generate a risk-based capital requirement for each such
exposure greater than that which would otherwise be required;
(B) To determine that a non-U.S.
subsidiary of a U.S. company may use the retail definition of default
defined in a non-U.S. jurisdiction under the definition of “default”
in section 217.101 of Regulation Q (12 CFR 217.101);
(C) To determine for purposes of the definition
of eligible double default guarantor in section 217.101 of Regulation
Q (12 CFR 217.101) whether the guarantor is subject to consolidated
supervision and regulation comparable to that imposed on U.S. depository
institutions or securities broker-dealers;
(D) To extend any of the following periods:
(1) A company’s parallel run
start date under section 217.121 of Regulation Q (12 CFR 217.121);
(2) For up to an
additional 12 months, the time in which a company may use subpart
D of Regulation Q (12 CFR part 217, subpart D) to determine the risk-weighted
asset amounts for a merged or acquired company’s exposures under
section 217.124(a) of Regulation Q (12 CFR 217.124(a)); and
(3) For up to an additional
12 months, the time in which a company may use an acquired company’s
advanced systems to determine total risk-weighted assets for the merged
or acquired company’s exposures under section 217.124(b)(1)
of Regulation Q (12 CFR 217.124(b)(1));
(E) To assess compliance with
any supervisory guidance on qualification requirements for purposes
of section 217.121(b)(1) of Regulation Q (12 CFR 217.121(b)(1));
(F) To waive the requirement
under section 217.121(b)(2) of Regulation Q (12 CFR 217.121(b)(2))
that a company submit a parallel run implementation plan to the Board
at least 60 days before it proposes to begin its parallel run;
(G) To act on a request
by a company under section 217.122(g)(2)(ii)(A)(1) of Regulation
Q (12 CFR 217.122(g)(2)(ii)(A)(1)) to use a historical observation
period of less than five years for internal operational loss event
data to address transitional situations, such as integrating a new
business line;
(H) To act
on a request by a company under section 217.122(g)(2)(ii)(A)(3) of Regulation Q (12 CFR 217.122(g)(2)(ii)(A)(3)) to refrain
from collecting internal operational loss event data for individual
operational losses below established dollar threshold amounts;
(I) To act on a request by
a company under section 217.122(g)(3)(i)(D) of Regulation Q (12 CFR
217.122(g)(3)(i)(D)) to use internal estimates of dependence among
operational losses across and within units of measure;
(J) To act on a request by a state
member bank under section 217.122(g)(3)(ii) of Regulation Q (12 CFR
217.122(g)(3)(ii)) to generate an estimate of the company’s
operational risk exposure using an alternative approach to that specified
in section 217.122(g)(3)(i) of Regulation Q (12 CFR 217.122(g)(3)(i));
(K) To determine under section
217.123(b) of Regulation Q (12 CFR 217.123(b)) that a company that
has conducted a satisfactory parallel run fails to comply with the
qualification requirements in section 217.122 of Regulation Q (12
CFR 217.122) and notify the company in writing of the determination;
(L) To determine under section
217.123(b) of Regulation Q (12 CFR 217.123(b)) whether a company’s
plan to return to compliance with the qualification requirements in
section 217.122 of Regulation Q (12 CFR 217.122) is satisfactory;
(M) To establish requirements
under section 217.131(e)(1)(i) of Regulation Q (12 CFR 217.131(e)(1)(i))
for the estimation of a margin loan’s probability of default
(“PD”) and loss given default (“LGD”);
(N) In the case of a system-wide
failure of a settlement or clearing system, or a central counterparty,
to waive under section 217.136(c) of Regulation Q (12 CFR 217.136(c))
risk-based capital requirements for unsettled and failed transactions;
and
(O) To act on a request
by a company under section 217.161(b)(2) of Regulation Q (12 CFR 217.161(b)(2))
to use operational risk mitigants other than insurance.
(iv)(A) To act on a request for
approval of any model or optional approach available under subpart
E of Regulation Q (12 CFR part 217, subpart E), including without
limitation:
(1) Any counterparty
credit risk model or methodology (own estimates of haircuts, simple
VaR methodology, internal models methodology, or advanced credit valuation
adjustment (“CVA”) approach) under sections 217.122(d)
and 217.132 of Regulation Q (12 CFR 217.122(d) and 217.132), including:
(i) Acting on a request by a company
under section 217.132(b)(2)(iii)(A)(5) of Regulation Q (12
CFR 217.132(b)(2)(iii)(A)(5)) to make changes to the company’s
policies and procedures;
(ii) Requiring a company under section 217.132(b)(2)(iii)(A)(6) of Regulation Q (12 CFR 217.132(b)(2)(iii)(A)(6)) to
use a different period of significant financial stress in the calculation
of own internal estimates for haircuts;
(iii) Acting on a request by a company
under section 217.132(d)(1) introductory text and (d)(1)(iv) of Regulation
Q (12 CFR 217.132(d)(1) introductory text and (d)(1)(iv)) to use the
internal models methodology, cease using the internal models methodology
for a transaction type, or make a material change to its internal
model;
(iv) Acting
on a request by a company under section 217.132(d)(2)(iv) and (d)(10)
of Regulation Q (12 CFR 217.132(d)(2)(iv) and (d)(10)) to use a more
conservative estimate of exposure at default (“EAD”);
(v) Determining that
a company must set a higher “alpha” under section 217.132(d)(2)(iv)(C)
of Regulation Q (12 CFR 217.132(d)(2)(iv)(C)) based on the company’s
specific characteristics of and counterparty credit risk or model
performance;
(vi) Acting on a request by a company under section 217.132(d)(3) of
Regulation Q (12 CFR 217.132(d)(3)) to calculate the distributions
of exposures upon which the EAD calculation is based;
(vii) Requiring a company under section
217.132(d)(3)(viii) of Regulation Q (12 CFR 217.132(d)(3)(viii)) to
modify its stress calibration to better reflect actual historic losses
of the portfolio;
(viii) Acting on a request by a company under section 217.132(d)(5)(i)
of Regulation Q (12 CFR 217.132(d)(5)(i)) to include the effect of
a collateral agreement within an internal model used to calculate
EAD;
(ix) Requiring
a company under section 217.132(d)(5)(iii)(C) of Regulation Q (12
CFR 217.132(d)(5)(iii)(C)) to set a longer holding period (for margin
period of risk for a netting set that is subject to a collateral agreement)
if the director determines that a longer period is appropriate due
to the nature, structure, or characteristics of the transaction or
is commensurate with the risks associated with the transaction;
(x) Acting on a request
by a company under section 217.132(d)(6) of Regulation Q (12 CFR 217.132(d)(6))
to calculate alpha as the ratio of economic capital from a full simulation
of counterparty exposure across counterparties that incorporates a
joint simulation of market and credit risk factors (numerator) and
economic capital based on expected positive exposure (“EPE”)
(denominator), subject to a floor of 1.2;
(xi) Acting on a request by a company
under section 217.132(e) of Regulation Q (12 CFR 217.132(e)) to calculate
its CVA risk-weighted asset amounts for a class of counterparties
using the advanced CVA approach;
(xii) Acting on a request by a company
under section 217.132(e)(6)(ii)(D) of Regulation Q (12 CFR 217.132(e)(6)(ii)(D))
to use a conservative estimate when determining LGDMKT;
and
(xiii) Requiring
a company under section 217.132(e)(6)(v)(B) of Regulation Q (12 CFR
217.132(e)(6)(v)(B)) to use a different period of significant financial
stress in the calculation of the CVAStressed measure;
(2)
Any model or approach relating to cleared transactions under sections
217.122(d) and 217.133 of Regulation Q (12 CFR 217.122(d) and 217.133),
including:
(i) Requiring under
section 217.133(d)(1) of Regulation Q (12 CFR 217.133(d)(1)) a company
that is a clearing member to determine the risk-weighted asset amount
for a default fund contribution to a CCP more frequently than quarterly
if in the opinion of the director of the Division of Supervision and
Regulation, there is a material change in the financial condition
of the CCP; and
(ii) Acting on a request under section 217.133(d)(2) of Regulation Q
(12 CFR 217.133(d)(2)) for a company to use a risk-weighted asset
amount for default fund contributions to a CCP that is not QCCP other
than a 1,250 percent risk weight;
(3) Any model or approach relating
to the double default treatment under sections 217.122(e) and 217.135
of Regulation Q (12 CFR 217.122(e) and 217.135), including acting
on a request by a company under section 217.135(a)(6) of Regulation
Q (12 CFR 217.135(a)(6)) to implement a process to detect excessive
correlation between the creditworthiness of the obligor of a hedged
exposure and a protection provider;
(4) A company’s own internal
estimates of market price volatility and foreign exchange volatility
under section 217.145(b)(4) of Regulation Q (12 CFR 217.145(b)(4)); and
(5) The internal models
approach for equity exposures under sections 217.122(f) and 217.153(b)
of Regulation Q (12 CFR 217.122(f) and 217.153(b));
(B) To determine under section
217.131(e)(4) of Regulation Q (12 CFR 217.131(e)(4)) whether a portfolio
of exposures is or is not material; and
(C) To assess for purposes of section 217.141(c)(1)
of Regulation Q (12 CFR 217.141(c)(1)) whether a company has a comprehensive
understanding of the features of a securitization exposure that would
materially affect the performance of the exposure.
(6) Delegations regarding the market risk rule in
subpart F of Regulation Q (12 CFR part 217, subpart F).
(i) With
the concurrence of the Chair of the Committee on Supervision and Regulation,
and after consultation with the general counsel, to act on a request
by a company to be excluded from the market risk rule under section
217.201(b)(3) of Regulation Q (12 CFR 217.201(b)(3)) if the action
would not raise significant policy issues.
(ii) After consultation with the general
counsel, to require a company:
(A) Under section 217.201(c)(1)
of Regulation Q (12 CFR 217.201(c)(1)) to hold an amount of capital
greater than otherwise required under subpart F of Regulation Q (12
CFR part 217, subpart F) upon a determination that the company’s
capital requirement for market risk as calculated under Regulation
Q is not commensurate with the market risk of the company’s
covered positions;
(B)
Under section 217.201(c)(2) of Regulation Q (12 CFR 217.201(c)(2))
to assign a different risk-based capital requirement to one or more
covered positions or portfolios that more accurately reflects the
risk of the positions or portfolios; and
(C) Under section 217.201(c)(3) of Regulation
Q (12 CFR 217.201(c)(3)) to calculate risk-based capital requirements
for specific positions or portfolios under subpart F of Regulation
Q (12 CFR part 217, subpart F), or under subparts D or E of Regulation
Q (12 CFR part 217, subparts D or E), as appropriate, to more accurately
reflect the risks of the positions.
(iii) To act regarding any model approval,
disapproval, rescission, or supervision under subpart F of Regulation
Q (12 CFR part 217, subpart F), including the authority to:
(A) Exclude from
trading assets or liabilities structural foreign currency positions
of a company or any hedge of a covered position that is outside the
scope of the company’s hedging strategy under section 217.202
of Regulation Q (12 CFR 217.202);
(B) Act on a request from a company under
section 217.203(c)(1) of Regulation Q (12 CFR 217.203(c)(1)) to approve
its internal model(s) to calculate its risk-based capital requirement;
(C) Rescind approval under
section 217.203(c)(3) of Regulation Q (12 CFR 217.203(c)(3)) of a
company’s internal model(s) to calculate its risk-based capital
requirement;
(D) Act on
a request from a company under section 217.204(a)(2)(vi)(B) of Regulation
Q (12 CFR 217.204(a)(2)(vi)(B)) to use alternative techniques to measure
the risk of de minimis exposures;
(E) Act on a request from a company under
section 217.204(b)(2) of Regulation Q (12 CFR 217.204(b)(2)) to use
a different adjustment of its VaR-based measure;
(F) Review and determine the appropriateness
of a company’s omission of risk factors under section 217.205(a)(4)
of Regulation Q (12 CFR 217.205(a)(4)) and the use of proxies under
section 217.205(a)(5) of Regulation Q (12 CFR 217.205(a)(5));
(G) Review and determine under
section 217.205(b)(1) of Regulation Q (12 CFR 217.205(b)(1)) the appropriateness
of any conversions of VaR to other holding periods by a company;
(H) Review and determine
under section 217.205(b)(2)(ii) of Regulation Q (12 CFR 217.205(b)(2)(ii))
the appropriateness of a company’s alternative weighting schemes;
(I) Approve or disapprove
under section 217.205(c) of Regulation Q (12 CFR 217.205(c)) any requirements
relating to a company’s division of subportfolios;
(J) Approve or disapprove under
section 217.206(b)(3) of Regulation Q (12 CFR 217.206(b)(3)) any changes
to a company’s policies and procedures that describe how the
company determines the period of significant financial stress used
to calculate its stressed VaR-based measure;
(K) Require a company under section 217.206(b)(4)
of Regulation Q (12 CFR 217.206(b)(4)) to use a different period of
significant financial stress in the calculation of the stressed VaR-based
measure;
(L) Act on a request
by a company under section 217.208(a) of Regulation Q (12 CFR 217.208(a))
to include certain portfolios of equity positions in its incremental
risk model;
(M) Act on
a request by a company under section 217.209(a)(1) of Regulation Q
(12 CFR 217.209(a)(1)) to use the comprehensive risk approach for
one or more portfolios of correlation trading positions and the related
approval under section 217.209(a)(2)(ii) of Regulation Q (12 CFR 217.209(a)(2)(ii))
regarding a company’s comprehensive risk capital requirement;
(N) Determine under section
217.210(e)(3) of Regulation Q (12 CFR 217.210(e)(3)) whether an index
is a main index because the equities represented by the index have
comparable liquidity, depth of market, and size of bid-ask spreads
as equities in the Standard & Poor’s 500 Index and FTSE
All-World Index; and
(O)
Determine under section 217.210(f)(1) of Regulation Q (12 CFR 217.210(f)(1))
whether or not a company has demonstrated a comprehensive understanding
of the features of a securitization exposure.
(7) Delegations of authority under Basel I-based
capital guidelines (appendix A to Regulation Y, 12 CFR part 225).
(i) To approve under section II.A.1.c.ii.(2)
of appendix A to Regulation Y, 12 CFR part 225, a bank or bank holding
company’s redemption of perpetual preferred stock; and
(ii) To approve under section
II.A.2. of appendix A to Regulation Y, 12 CFR part 225, a bank or
bank holding company’s redemption of subordinated debt or mandatorily
convertible securities prior to the stated maturity.
(8) Delegations regarding the building block approach
in subpart J of Regulation Q (12 CFR part 217, subpart J).
(i) [Reserved]
(ii) After consultation with the general counsel:
(A) To require
a supervised insurance organization to exclude all or a portion of
a particular company capital element from building block available
capital, to approve the inclusion on a permanent or temporary basis
of a capital resource in building block available capital, to adjust
the building block capital requirement and building block available
capital of a supervised insurance organization, or to require a supervised
insurance organization to take certain actions to better reflect the
risk profile of an inventory company or the supervised insurance organization,
under section 217.601(d) of Regulation Q (12 CFR 217.601(d));
(B) To require a supervised insurance
organization to apply an alternative treatment to a treatment otherwise
required by subpart J of Regulation Q (12 CFR part 217, subpart J)
under section 217.601(d)(4) of Regulation Q (12 CFR 217.601(d)(4));
(C) To approve a request
to exercise a call option on an instrument under section 217.608(a)(1)(v)(A)
or section 217.608(a)(2)(iv)(A) of Regulation Q (12 CFR 217.608(a)(1)(v)(A)
or 217.608(a)(2)(iv)(A));
(D) To approve a request to redeem or repurchase an instrument under
section 217.608(a)(1)(vi) or section 217.608(a)(2)(v) of Regulation
Q (12 CFR 217.608(a)(1)(vi) or 217.608(a)(2)(v)); and
(E) To approve a request to include in building
block available capital an instrument issued by a company in a supervised
insurance organization under section 217.608(g) of Regulation Q (12
CFR 217.608(g)).
(l) Concentration limit
actions (Regulation XX (12 CFR part 251)).
(1) To approve requests from financial
companies seeking to use an accounting standard or method of estimation
other than GAAP to calculate and report liabilities pursuant to section
14 of the Bank Holding Company Act (12 U.S.C. 1852) and Regulation
XX (12 CFR part 251);
(2) To calculate and publish total financial sector liabilities for
the preceding calendar year and the average of financial sector liabilities
for the preceding two calendar years, for use in calculating whether
a firm exceeds 10 percent of the liabilities of all financial firms
in the United States pursuant to section 14 of the Bank Holding Company
Act (12 U.S.C. 1852); and
(3) To provide prior written consent for purposes of section 14 of
the Bank Holding Company Act (12 U.S.C. 1852) to a financial company
to consummate an acquisition of a de minimis transaction, to the extent
that the transaction otherwise meets all other criteria for delegated
action related to financial, managerial, convenience and needs, and
other review factors.
(m) Savings and loan holding companies.
(1) With concurrence of the
general counsel:
(i) To extend the time limits in, or
otherwise modify, an agreement entered into by a savings and loan
holding company pursuant to section 238.66 of Regulation LL (12 CFR
238.66).
(ii) To
determine that publication of an agreement entered into by a savings
and loan holding company pursuant to section 238.66 of Regulation
LL (12 CFR 238.66) would be contrary to the public interest under
the publication requirements of the Federal Deposit Insurance Act
(12 U.S.C. 1811 et seq.).
(iii) To act on requests for exemptions
or otherwise make determinations under section 11 of the Home Owners’
Loan Act (12 U.S.C. 1468), as implemented in Regulation W (12 CFR
part 223), to the same extent authorized with respect to insured depository
institutions and their affiliates and bank holding companies.
(2) With the director of
the Division of Consumer and Community Affairs, to designate the responsible
Reserve Bank of a savings and loan holding company when the standard
delegation would not result in an efficient allocation of supervisory
resources or would not otherwise be appropriate.
(n) Swaps margin and swaps pushout. To approve internal margin models for entities for which the Board
is the prudential regulator, in accordance with section 237.8 of Regulation
KK (12 CFR 237.8).
(o) Certain determinations under Regulations LL, YY, and QQ. In
consultation with the general counsel, to:
(1) Determine that an asset meets the criteria
to be a highly liquid asset under the Board’s prudential standards
in Regulation LL (12 CFR 238.124(b)(3)(i)) and Regulation YY (12 CFR
252.35(b)) to the extent that such determination is consistent with
the criteria specified in such regulations and does not raise any
significant legal, policy, or supervisory concerns;
(2) Determine that a foreign banking organization
may comply with the requirements in Regulation YY (12 CFR 252.3(c))
through a subsidiary to the extent that such determination is consistent
with the criteria specified in Regulation YY and does not raise any
significant legal, policy or supervisory concerns; and
(3) Identify which holding
company in a multi-tiered holding company will be a covered company
under Regulation QQ (12 CFR part 243) to the extent such identification
is consistent with the criteria specified in Regulation QQ (12 CFR
243.2) and does not raise any significant legal, policy, or supervisory
concerns.
(p) Approving certain requests under the capital rule (Regulation Q,
12 CFR part 217) related to the exposure amount of derivative contracts. To the extent that the determination or request does not raise any
significant legal, policy, or supervisory issue:
(1) To act on a request under section 217.34(f)
of Regulation Q (12 CFR 217.34(f)) as to whether a holding period
greater than 5 days is appropriate for variable H due to the nature,
structure, or characteristics of the transaction or that is commensurate
with the risks associated with the transaction;
(2) To act on a request under section 217.132(c)(1)
of Regulation Q (12 CFR 217.132(c)(1)) from a banking organization
to change its election between the use of the standardized approach
to counterparty credit risk under section 217.132(c)(5) of Regulation
Q (12 CFR 217.132(c)(5)) and the internal models methodology under
section 217.132(d) of Regulation Q (12 CFR 217.132(d)) for its derivative
transactions;
(3) To
require under section 217.132(c)(2)(iii)(H) of Regulation Q (12 CFR
217.132(c)(2)(iii)(H)) that a banking organization include a derivative
contract in multiple hedging sets if the risk of the derivative contract
materially depends on more than one of interest rate, exchange rate,
credit, equity, or commodity risk factors;
(4) To act on a request under section 217.132(d)(10)
of Regulation Q (12 CFR 217.132(d)(10)) from a banking organization
to use a more conservative estimate of EAD for purposes of the internal
models methodology;
(5) To require under section 217.133(d)(1) of Regulation Q (12 CFR
217.133(d)(1)) that a banking organization determine the risk-weighted
asset amount for its default fund contribution to a central counterparty
(CCP) on the basis that there has been a material change in the financial
condition of the CCP;
(6) To act on a request under section 217.133(d)(2) of Regulation
Q (12 CFR 217.133(d)(2)) from a banking organization to use a risk-weighted
asset amount for a default fund contribution to a CCP that is not
a qualifying central counterparty (QCCP) other than 1,250 percent
risk weight; and
(7)
To act on a request under section 217.133(d)(6)(vi) of Regulation
Q (12 CFR 217.133(d)(6)(vi)) from a banking organization to determine
the risk-weighted asset amount for a default fund contribution to
a QCCP according to section 217.35(d)(3)(ii) (12 CFR 217.35(d)(3)(ii))
rather than section 217.133(d) (12 CFR 217.133(d)).
(q) Insurance Policy Advisory
Committee. To organize and administer the Insurance Policy Advisory
Committee (“IPAC”), including by publishing future requests
for IPAC applications in the Federal Register.
(r) Submission of reports.
(1) With the concurrence of the general
counsel, to prepare and submit to Congress reports under section 165(b)(5)
of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12
U.S.C. 5365(b)(5)).
(2) With the concurrence of the general counsel, to prepare and submit
to Congress reports under section 37(c) of the Federal Deposit Insurance
Act (12 U.S.C. 1831n(c)), and to submit such reports to the Federal
Register for publication.
