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Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB

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Information about this document as published in the Federal Register.

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Notice is hereby given of the final approval of a proposed information collection by the Board of Governors of the Federal Reserve System (Board) under OMB delegated authority, as per 5 CFR 1320.16 (OMB Regulations on Controlling Paperwork Burdens on the Public). Board-approved collections of information are incorporated into the official OMB inventory of currently approved collections of information. Copies of the OMB 83-Is and supporting statements and approved collection of information instrument(s) are placed into OMB's public docket files. The Federal Reserve may not conduct or sponsor, and the respondent is not required to respond to, an information collection that has been extended, revised, or implemented on or after October 1, 1995, unless it displays a currently valid OMB control number.

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Federal Reserve Board Clearance Officer—Mary M. West—Division of Research and Statistics, Board of Governors of the Federal Reserve System, Washington, DC 20551 (202-452-3829); OMB Desk Officer—Alexander T. Hunt—Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 3208, Washington, DC 20503 (202-395-7860).

Final Approval Under OMB Delegated Authority of the Implementation of the Following Reports

Report title: the Consolidated Bank Holding Company Report of Equity Investments in Nonfinancial Companies.

Agency form number: FR Y-12.

OMB control number: 7100-0300.

Frequency: Quarterly and semi-annually.

Reporters: bank holding companies.

Annual reporting hours: 14,112 hours.

Estimated average hours per response: 16 hours.

Number of respondents: 232.

Small businesses are affected.

General description of report: This information collection is mandatory (12 U.S.C. 1844(c)) and data may be exempt from disclosure pursuant to Sections (b)(4) and (b)(8) of the Freedom of Information Act (5 U.S.C. 552(b)(4) and (8)).

Abstract: The Federal Reserve will implement the mandatory FR Y-12, effective September 30, 2001. The FR Y-12 will collect information from certain domestic bank holding companies on their investments in nonfinancial companies on three schedules: Type of Investments, Type of Security, and Type of Entity within the Banking Organization. Large bank holding companies will report on a quarterly basis, and small bank holding companies will report semi-annually.

Current actions: On May 10, 2001, the Federal Reserve issued a Federal Register notice (66 FR 23929) requesting public comment on a proposal to implement the FR Y-12. The comment period ended on July 9, 2001, and the Federal Reserve received public comments from two domestic banking organizations. Both commenters stated that the manner and level of detail in which the Federal Reserve proposed to collect this information is unnecessary for monitoring the growth in nonfinancial equity investment portfolios. The first commenter suggested alternative monitoring through expanded disclosure on the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) in conjunction with analysis of information available in the Securities and Exchange Commission 10-Q and 10-K filings. However, institutions that will be required to file the FR Y-12 are a small subset of the institutions required to file the FR Y-9C. By expanding disclosures on the FR Y-9C, institutions not active in this business line may be confused and misleading information may be gathered as a result.

The second commenter suggested monitoring of this information through the examination process. For institutions active in this business line, annual reviews generally are conducted through the supervisory examination process. However, the FR Y-12 will Start Printed Page 44347allow the Federal Reserve to monitor an institution's activity between review dates and help in the examination planning process. It also will serve as an “early warning” mechanism to identify institutions where equity investment activities are growing rapidly and that, therefore, may warrant special supervisory attention.

One commenter felt that the detailed information on Schedule A on the number of companies in which the bank holding company had invested was unnecessary. As originally proposed, the FR Y-12 required the reporting bank holding company to provide information separately on the number of direct investments in public entities, direct investments in nonpublic entities, and all indirect investments (lines 1 through 3 on Schedule A). In light of the comment and after further discussions, the Federal Reserve has decided that obtaining information on the total number of investments in the portfolio will be sufficient.

This same commenter also strongly disagreed that the FR Y-12 should be made publicly available, stating that disclosure of this information would likely be harmful to the competitive position of BHCs. The Board has determined that a reporting BHC may request confidential treatment for certain information on the FR Y-12 under the Freedom of Information Act if the BHC is of the opinion that the disclosure of specific commercial or financial information in the report would likely result in substantial harm to its competitive position, or that disclosure of the submitted information would result in an unwarranted invasion of personal privacy.

The initial Federal Register notice requested comment on the addition of a new item related to consolidated recognized gains or losses on equity investments in nonfinancial companies. No public comments were received on this item. Therefore, the Federal Reserve will add this item to Schedule A as memorandum item 3. Finally, the commenters suggested a number of clarifications to the reporting form and instructions. All of the clarifications mentioned in the comment letters have been addressed in the final form and instructions.

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Board of Governors of the Federal Reserve System, August 20, 2001.

Jennifer J. Johnson,

Secretary of the Board.

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[FR Doc. 01-21333 Filed 8-22-01; 8:45 am]