Federal Deposit Insurance Corporation.
Notice of proposed rulemaking.
The Federal Deposit Insurance Corporation (“FDIC”) proposes to rescind and remove its
Comments must be received on or before June 20, 2014.
You may submit comments, identified by RIN 3064–AE07, by any of the following methods:
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Dennis Chapman, Senior Staff Accountant, Division of Risk Management Supervision, 202–898–8922 or
The Federal Deposit Insurance Corporation (“FDIC”) proposes to rescind and remove from the Code of Federal Regulations 12 CFR part 390 subpart U, entitled
The Dodd-Frank Act, signed into law on July 21, 2010, provided for a substantial reorganization of the regulation of State and Federal savings associations and their holding companies.
Section 316(c) of the Dodd-Frank Act
Although section 312(b)(2)(B)(i)(II) of the Dodd-Frank Act
As noted, on June 14, 2011, operating pursuant to this authority, the FDIC's Board of Directors reissued and redesignated certain regulations transferred from the former OTS. These transferred OTS regulations were published as new FDIC regulations in the
One of the regulations transferred to the FDIC, 12 CFR part 390 subpart U, covers the former OTS requirements for the disclosure and reporting by State savings associations with securities registered pursuant to section 12(i) of the Exchange Act.
The Exchange Act governs the sales of securities offered by an issuer on the secondary market and establishes a mandatory periodic disclosure process that is designed to require registered companies to make public the information that investors would find pertinent in making investment decisions.
Prior to the Dodd-Frank Act, section 12(i) of the Exchange Act provided the FDIC with the powers, functions, and duties vested in the Securities and Exchange Commission (“SEC”) to administer and enforce sections 10A(m), 12, 13, 14(a), 14(c), 14(d), 14(f), and 16 of the Exchange Act and sections 302–304, 306, 401(b), 404, 406, and 407 of the SOX Act with respect to State nonmember banks. Also pursuant to section 12(i), the OTS had the same vested authority with respect to Federal and State savings associations. As part of the transfer of OTS authority to the OCC for Federal savings associations and FDIC for State savings associations, section 376(2) of the Dodd-Frank Act amended section 12(i) of the Exchange Act to provide the FDIC with authority over both State nonmember banks and State savings associations to administer the enumerated provisions of the Exchange Act and the SOX Act as well as the authority to make such rules and regulations as may be necessary for the execution of the functions vested in the FDIC under section 12(i).
As noted above, the regulations governing OTS implementation of the securities registration and reporting requirements of the Exchange Act, formerly found at 12 CFR part 563d, were transferred in their entirety to the FDIC as they relate to State savings associations, with only non-substantive changes and are now found in the FDIC's rules at part 390 subpart U. Part 390 subpart U incorporates the SEC rules regarding the filing and processing of forms
The FDIC's corresponding rules for State nonmember banks are found in part 335. While both part 390 subpart U and part 335 implement identical provisions of the Exchange Act and SEC rules, part 335 does so with greater specificity by incorporating the SEC rules regarding: the certification, suspension of, and removal from listing by exchanges
After careful review and comparison of part 390 subpart U and part 335, the FDIC proposes to rescind part 390 subpart U and remove all such references from the Code of Federal Regulations. This subpart is substantively similar to part 335 as both State nonmember banks and State savings associations are subject to the same provisions of the Exchange Act and the SOX Act. Part 335, with minor revisions, will appropriately and sufficiently implement the requirements of section 12(i) of the Exchange Act for both State nonmember banks and State savings associations now under FDIC supervision. As discussed above, part 335 provides more detailed guidance than part 390 subpart U by incorporating the SEC rules with greater specificity. Furthermore, State savings associations would benefit from greater clarity and guidance under part 335 with regard to FDIC-specific procedures for the submission of securities filings and forms as well as other FDIC-specific administrative practices that are not provided for in part 390 subpart U.
Additionally, at the time of the transfer of the former OTS regulations to the FDIC, there were no registered State savings associations affected by the transfer. Currently, there is only
Therefore, based on the above, the FDIC proposes to rescind and remove from the Code of Federal Regulations the rules located at part 390 subpart U and expand the scope of part 335 to include State savings associations. If the proposed rule is adopted as a final rule, all State nonmember banks and State savings associations supervised by the FDIC and subject to the registration and reporting requirements of the Exchange Act will be subject to the same FDIC rules, as modified herein.
Regarding the functions of the former OTS that were transferred to the FDIC, section 316(b)(3) of the Dodd-Frank Act, 12 U.S.C. 5414(c), in pertinent part, provides that the former OTS's regulations will be enforceable by the FDIC until they are modified, terminated, set aside, or superseded in accordance with applicable law. After reviewing the rules currently found in part 390 subpart U, which concern the securities filing and disclosure requirements of State savings
The FDIC also proposes to revise the heading of part 335 by retitling it as
The FDIC invites comments on all aspects of this proposed rulemaking. In particular, the FDIC requests comments on the following questions:
1. Are the provisions of 12 CFR part 335 sufficient to provide consistent and effective filing and disclosure requirements for securities registered under the Exchange Act, regardless of whether they are securities of insured State nonmember banks or insured State savings associations? Please provide a detailed response.
2. Should part 390 subpart U pertaining to the securities of State savings associations be retained in whole or in part? Please substantiate your response.
3. What negative impacts, if any, can you foresee in the FDIC's proposal to rescind part 390 subpart U and remove it from the Code of Federal Regulations?
4. What negative impacts, if any, can you foresee in the FDIC's proposal to apply part 335 to State savings associations?
Written comments must be received by the FDIC no later than June 20, 2014.
In accordance with the requirements of the Paperwork Reduction Act (“PRA”) of 1995 (44 U.S.C. 3501–3521), the FDIC 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 information collection affected by this NPR is Securities of Insured Nonmember Banks, 3064–0030.
This rule also proposes to amend part 335 to incorporate State savings associations into the part. The revision of part 335 to include “State savings associations” would add additional burden to the FDIC's current information collection under OMB control number 3064–0030, Securities of Insured Nonmember Banks, as State savings associations would be required to submit the appropriate forms and financial statements to comply with the filing and disclosure requirements of part 335. Currently, there is only one State savings association that is registered pursuant to the Exchange Act requirements that would be affected by the proposed revision to part 335. The FDIC proposes to revise this information collection as follows:
Comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the FDIC's functions, including whether the information has practical utility; (b) the accuracy of the estimates of the burden of the information collection, including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the information collection on respondents, including through the use of automated collection techniques or other forms of information technology. All comments will become a matter of public record.
The Regulatory Flexibility Act (“RFA”), requires that, in connection with a notice of proposed rulemaking, an agency prepare and make available for public comment an initial regulatory flexibility analysis that describes the impact of the proposed rule on small entities (defined in regulations promulgated by the Small Business Administration to include banking organizations with total assets of less than or equal to $500 million).
As discussed in this notice of proposed rulemaking, part 390 subpart U was transferred from the OTS's part 563d, which governs the public disclosure and filing requirements of State savings associations that issue securities registered pursuant to the Exchange Act. The corresponding FDIC rule for State nonmember banks is 12 CFR part 335. After careful review of both rules, the FDIC proposes to remove part 390 subpart U in its entirety and revise part 335 to incorporate State savings associations into the scope of the part.
For the purposes of the RFA analysis, savings associations with total assets of $500 million or less are considered “small entities.” Additionally, the Exchange Act exempts an issuer of securities from the registration and reporting requirements of the Act if it does not meet the statutory registration threshold under section 12(g) of the Exchange Act unless the issuer lists its securities on a national exchange and is subject to registration under section 12(b) of the Exchange Act. Under section 12(g), a savings association that issues securities is subject to the Exchange Act requirements if, as of the last day of its last fiscal year, it has total assets of more than $10 million and a class of equity securities (other than an exempted security) held of record by either 2,000 persons or 500 persons who are not accredited investors.
Consequently, insured State savings associations that have total assets of $500 million or less and meet the registration threshold under section 12(g) would be affected by this proposed rule. Based on both of the section 12(g) criteria, as of the current date, there is one insured State savings associations that would be affected by the proposed rule out of a total universe of 58 insured State savings associations. The proposed rule also would apply to insured State savings associations with securities listed on a national exchange; however, as of the current date, no insured State savings association has listed securities. Therefore, a substantial number of small entities would not be affected.
Additionally, as discussed in the proposed rule, part 390 subpart U and part 335 are substantively similar as both State nonmember banks and State savings associations are subject to the same provisions of the Exchange Act and the SOX Act. Both parts incorporate by reference the same SEC rules such that registered State nonmember banks and State savings associations currently must comply with substantially similar forms and reporting obligations. Therefore, there would be no additional compliance burden imposed on registered State savings associations that would result in a significant economic impact on small State savings associations.
For these reasons, the FDIC certifies that the Proposed Rule, if adopted in final form, would not have a significant economic impact on a substantial number of small entities, within the meaning of those terms as used in the RFA. Accordingly, a regulatory flexibility analysis is not required.
Section 722 of the Gramm-Leach-Bliley Act, Public Law 106–102, 113 Stat. 1338, 1471, 12 U.S.C. 4809, requires each Federal banking agency to use plain language in all of its proposed and final rules published after January 1, 2000. As a Federal banking agency subject to the provisions of this section, the FDIC has sought to present the proposed rule to rescind part 390 subpart U and revise part 335 in a simple and straightforward manner. The FDIC invites comments on whether the proposal is clearly stated and effectively organized, and how the FDIC might make the proposal easier to understand.
Under section 2222 of the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (“EGRPRA”), the FDIC is required to review all of its regulations, at least once every 10 years, in order to identify any outdated or otherwise unnecessary regulations imposed on insured institutions.
Banks, banking, Savings Associations, Securities.
Savings Associations, Securities.
For the reasons stated in the preamble, the Board of Directors of the Federal Deposit Insurance Corporation proposes to amend parts 335 and 390 of title 12 of the Code of Federal Regulations as follows:
12 U.S.C. 1819; 15 U.S.C. 78l(i), 78m, 78n, 78p, 78w, 5412, 7241, 7242, 7243, 7244, 7261, 7262, 7264, and 7265.
(a) This part is issued by the Federal Deposit Insurance Corporation (the FDIC) under section 12(i) of the Securities Exchange Act of 1934, 15 U.S.C. 78
(b) The requirements for Financial Statements can generally be found in Regulation S–X (17 CFR part 210). Banks and State savings associations may also refer to the instructions for Federal Financial Institutions Examination Council (FFIEC) Consolidated Reports of Condition and Income when preparing unaudited interim statements. The requirements for Management's Discussion and Analysis of Financial Condition and Results of Operations can be found at 17 CFR part 229. Additional requirements are provided at Industry Guide 3, Statistical Disclosure by Bank Holding Companies, which is found at 17 CFR part 229.
(b) The requirements for Financial Statements can generally be found in Regulation S–X (17 CFR part 210). Banks and State savings associations may also refer to the instructions for FFIEC Consolidated Reports of Condition and Income when preparing unaudited interim reports. The requirements for Management's Discussion and Analysis of Financial Condition and Results of Operations can be found at 17 CFR part 229. Additional requirements are included in Industry Guide 3, Statistical Disclosure by Bank Holding Companies, which is found at 17 CFR part 229.
(a)
(b)
(b) * * *
(6) * * *
(i) A filer may apply in writing for a continuing hardship exemption if all or part of a filing or group of filings otherwise to be filed in electronic format cannot be so filed without undue burden or expense. Such written application shall be made at least ten business days prior to the required due date of the filing(s) or the proposed filing date, as appropriate, or within such shorter period as may be permitted. The written application shall be sent to the Accounting and Securities Disclosure Section, Division of Risk Management Supervision, Federal Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC 20429, and shall contain the information set forth in paragraph (b)(6)(ii) of this subsection.
(7) * * *
(iii) Where the FDIC's rules require a filer to furnish a national securities exchange, a national securities association, a bank, or State savings association, paper copies of a document filed with the FDIC in electronic format, signatures to such paper copies may be in typed form.
(d)
(1) If aggregate extensions of credit to all specified persons as a group exceeded 20 percent of the equity capital accounts of the bank or State savings association at any time since the beginning of the last fiscal year, the aggregate amount of such extensions of credit shall also be disclosed.
(e) * * *
(1) Three preliminary copies of each information statement, proxy statement, form of proxy, and other item of soliciting material to be furnished to security holders concurrently therewith, shall be filed with the FDIC by the bank, State savings association, or any other person making a solicitation subject to 12 CFR 335.401 at least ten calendar days (or 15 calendar days in the case of other than routine meetings, as defined in paragraph (e)(2) of this section) prior to the date such item is first sent or given to any security holders, or such shorter date as may be authorized.
(2) * * *
(i) A meeting with respect to which no one is soliciting proxies subject to 12 CFR 335.401 other than on behalf of the bank or State savings association and at which the bank or State savings
(A) The election of directors;
(B) The election, approval or ratification of accountants;
(C) A Security holder proposal included pursuant to SEC Rule 14(a)–8 (17 CFR 240.14a–8); and
(D) The approval or ratification of a plan as defined in paragraph (a)(7)(ii) of Item 402 of SEC Regulation S–K (17 CFR 229.402(a)(7)(ii)) or amendments to such a plan; and
(ii) The bank or State savings association does not comment upon or refer to a solicitation in opposition (as defined in 17 CFR 240.14a–6) in connection with the meeting in its proxy material.
(f) * * *
(2) The FDIC may, upon the written request of the bank or State savings association, and where consistent with the protection of investors, permit the omission of one or more of the statements or disclosures herein required, or the filing in substitution therefor of appropriate statements or disclosures of comparable character.
12 U.S.C. 1819.
Subpart A also issued under 12 U.S.C. 1820.
Subpart B also issued under 12 U.S.C. 1818.
Subpart C also issued under 5 U.S.C. 504; 554–557; 12 U.S.C. 1464; 1467; 1468; 1817; 1818; 1820; 1829; 3349, 4717; 15 U.S.C. 78
Subpart D also issued under 12 U.S.C. 1817; 1818; 1820; 15 U.S.C. 78
Subpart E also issued under 12 U.S.C. 1813; 1831m; 15 U.S.C. 78.
Subpart F also issued under 5 U.S.C. 552; 559; 12 U.S.C. 2901
Subpart G also issued under 12 U.S.C. 2810
Subpart I also issued under 12 U.S.C. 1831x.
Subpart J also issued under 12 U.S.C. 1831p–1.
Subpart K also issued under 12 U.S.C. 1817; 1818; 15 U.S.C. 78c; 78
Subpart L also issued under 12 U.S.C. 1831p–1.
Subpart M also issued under 12 U.S.C. 1818.
Subpart N also issued under 12 U.S.C. 1821.
Subpart O also issued under 12 U.S.C. 1828.
Subpart P also issued under 12 U.S.C. 1470; 1831e; 1831n; 1831p–1; 3339.
Subpart Q also issued under 12 U.S.C. 1462; 1462a; 1463; 1464.
Subpart R also issued under 12 U.S.C. 1463; 1464; 1831m; 1831n; 1831p–1.
Subpart S also issued under 12 U.S.C. 1462; 1462a; 1463; 1464; 1468a; 1817; 1820; 1828; 1831e; 1831o; 1831p–1; 1881–1884; 3207; 3339; 15 U.S.C. 78b; 78
Subpart T also issued under 12 U.S.C. 1462a; 1463; 1464; 15 U.S.C. 78c; 78
Subpart V also issued under 12 U.S.C. 3201–3208.
Subpart W also issued under 12 U.S.C. 1462a; 1463; 1464; 15 U.S.C. 78c; 78
Subpart X also issued under 12 U.S.C. 1462; 1462a; 1463; 1464; 1828; 3331
Subpart Y also issued under 12 U.S.C. 1831o.
Subpart Z also issued under 12 U.S.C. 1462; 1462a; 1463; 1464; 1828 (note).
(b) * * *
(2)
By order of the Board of Directors.