60 Day Federal Register Notice

57869

Federal Register / Vol. 84, No. 209 / Tuesday, October 29, 2019 / Notices
Interested parties are
invited to submit written comments to
the FDIC by any of the following
methods:
• https://www.FDIC.gov/regulations/
laws/federal.
• Email: comments@fdic.gov. Include
the name and number of the collection
in the subject line of the message.
• Mail: Manny Cabeza (202–898–
3767), Regulatory Counsel, MB–3128,
Federal Deposit Insurance Corporation,
550 17th Street NW, Washington, DC
20429.
• Hand Delivery: Comments may be
hand-delivered to the guard station at
the rear of the 17th Street building
(located on F Street), on business days
between 7:00 a.m. and 5:00 p.m.
All comments should refer to the
relevant OMB control number. A copy
of the comments may also be submitted
to the OMB desk officer for the FDIC:

ADDRESSES:

FEDERAL DEPOSIT INSURANCE
CORPORATION
Agency Information Collection
Activities: Proposed Collection
Renewal; Comment Request (OMB No.
3064–0029; –0030; –0070; –0104;
–0204)
Federal Deposit Insurance
Corporation (FDIC).
ACTION: Notice and request for comment.
AGENCY:

The FDIC, as part of its
obligations under the Paperwork
Reduction Act of 1995 (PRA), invites the
general public and other Federal
agencies to take this opportunity to
comment on the renewal of the existing
information collections described below
(OMB No. 3064–0029; –0030; –0070;
–0104; –0204).
DATES: Comments must be submitted on
or before December 30, 2019.
SUMMARY:

Office of Information and Regulatory
Affairs, Office of Management and
Budget, New Executive Office Building,
Washington, DC 20503.
FOR FURTHER INFORMATION CONTACT:
Manny Cabeza, Regulatory Counsel,
202–898–3767, mcabeza@fdic.gov, MB–
3128, Federal Deposit Insurance
Corporation, 550 17th Street NW,
Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
Proposal to renew the following
currently approved collections of
information:
1. Title: Notification of Performance of
Bank Services.
OMB Number: 3064–0029.
Form Number: 6120/06.
Affected Public: Insured state
nonmember banks and state savings
associations.
Burden Estimate:

SUMMARY OF ANNUAL BURDEN
Information collection description

Type of
burden

Obligation to
respond

Notification of Performance of Bank Services (FDIC Form 6120/06) .....

Reporting ......

Mandatory .....

Total Estimated Annual Burden: 318.
General Description of Collection:
Insured state nonmember banks are
required to notify the FDIC, under
section 7 of the Bank Service Company
Act (12 U.S.C. 1867), of the relationship
with a bank service company. The Form
FDIC 6120/06, Notification of
Performance of Bank Services, may be
used by banks to satisfy the notification

Estimated
number of
respondents

Estimated
frequency of
responses

634

On Occasion

requirement. There is no change in the
method or substance of the collection.
The estimated number of respondents is
estimated to increase based on the
response rate observed over the last
three years. The estimated time per
response and the frequency of response
is expected to remain the same.

Estimated
time per
response
(minutes)

Estimated
annual
burden
(hours)

30

318

2. Title: Securities of State
Nonmember Banks and State Savings
Associations.
OMB Number: 3064–0030.
Affected Public: Insured state
nonmember banks and state savings
associations.
Type of Burden: Reporting.
Obligation to Respond: Mandatory.
Burden Estimate:

SUMMARY OF BURDEN
Estimated
number of
responses
Form 3—Initial Statement of Beneficial Ownership ............
Form 4—Statement of Changes in Beneficial Ownership ..
Form 5—Annual Statement of Beneficial Ownership .........
Form 8–A .............................................................................
Form 8–C .............................................................................
Form 8–K .............................................................................
Form 10 ...............................................................................
Form 10–C ...........................................................................
Form10–K ............................................................................
Form 10–Q ..........................................................................
Form 12b–25 .......................................................................
Form 15 ...............................................................................
Form 25 ...............................................................................
Schedule 13D ......................................................................
Schedule 13E–3 ..................................................................
Schedule 13G ......................................................................
Schedule 14A ......................................................................
Schedule 14C ......................................................................
Schedule 14D–1 (Schedule TO) .........................................

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Estimated time
to respond
(hours)

58
297
69
2
2
21
2
1
21
21
6
2
2
2
2
2
21
2
2

Fmt 4703

Sfmt 4703

1
0.5
1
3
2
2
215
1
140
100
3
1
1
3
3
3
40
40
5

Frequency of
response
On Occasion ..
On Occasion ..
Annual ............
On Occasion ..
On Occasion ..
On Occasion ..
On Occasion ..
On Occasion ..
Annual ............
Quarterly ........
On Occasion ..
On Occasion ..
On Occasion ..
On Occasion ..
On Occasion ..
On Occasion ..
Annual ............
On Occasion ..
On Occasion ..

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Estimated
number of
responses
per year

Estimated
annual burden
(hours)
1
4
1
2
1
4
1
1
1
3
1
1
1
1
1
1
1
1
1

58
594
69
12
4
168
430
1
2,940
6,300
18
2
2
6
6
6
840
80
10

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Federal Register / Vol. 84, No. 209 / Tuesday, October 29, 2019 / Notices
SUMMARY OF BURDEN—Continued

Total Estimated Annual Burden ...................................

General Description of Collection:
Section 12(i) of the Exchange Act grants
authority to the Federal banking
agencies 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, 303, 304, 306, 401(b),
404, 406, and 407 of the Sarbanes-Oxley
Act of 2002. Pursuant to section 12(i),
the FDIC has the authority, including
rulemaking authority, to administer and
enforce these enumerated provisions as
may be necessary with respect to state
nonmember banks and state savings
associations over which it has been
designated the appropriate Federal
banking agency. Section 12(i) generally
requires the FDIC to issue regulations
substantially similar to those issued by
the Securities and Exchange
Commission (SEC) regulations to carry
out these responsibilities. Thus, part
335 of the FDIC regulations incorporates
by cross-reference the SEC rules and
regulations regarding the disclosure and
filing requirements of registered
securities of state nonmember banks and
state savings associations.
This information collection includes
the following:
Beneficial Ownership Forms: FDIC
Forms 3, 4, and 5 (FDIC Form Numbers
6800/03, 6800/04, and 6800/05).
Pursuant to section 16 of the Exchange
Act, every director, officer, and owner of
more than ten percent of a class of
equity securities registered with the
FDIC under section 12 of the Exchange
Act must file with the FDIC a statement
of ownership regarding such securities.
The initial filing is on Form 3 and
changes are reported on Form 4. The
Annual Statement of beneficial
ownership of securities is on Form 5.
The forms contain information on the
reporting person’s relationship to the
company and on purchases and sales of
such equity securities. 12 CFR 335.601
through 336.613 of the FDIC’s
regulations, which cross-reference 17
CFR 240.16a of the SEC’s regulations,
provide the FDIC form requirements for
FDIC Forms 3, 4, and 5 in lieu of SEC
Forms 3, 4, and 5, which are described
at 17 CFR 249.103 (Form 3), 249.104
(Form 4), and 249.105 (Form 5).
Forms 8–A and 8–C for Registration of
Certain Classes of Securities. Form 8–A
is used for registration pursuant to

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Estimated
number of
responses

Estimated time
to respond
(hours)

Frequency of
response

Estimated
number of
responses
per year

........................

........................

........................

........................

section 12(b) or (g) of the Exchange Act
of any class of securities of any issuer
which is required to file reports
pursuant to section 13 or 15(d) of that
Act or pursuant to an order exempting
the exchange on which the issuer has
securities listed from registration as a
national securities exchange. Form 8–C
has been replaced by Form 8–A. Form
8–A is described at 17 CFR 249.208a.
There is no actual ‘‘Form 8–A’’ as filers
must produce a customized narrative
document in compliance with the
requirements in accordance with the
filer’s particular circumstances.
Form 8–K: Current Report. This is the
current report that is used to report the
occurrence of any material events or
corporate changes that are of importance
to investors or security holders and have
not been reported previously by the
registrant. It provides more current
information on certain specified events
than would Forms 10–Q and 10–K. The
form description is at 17 CFR 249.308.
There is no actual ‘‘Form 8–K’’ as filers
must produce a customized narrative
document in compliance with the
requirements in accordance with the
filer’s particular circumstances.
Forms 10 and 10–C: Forms for
Registration of Securities. Form 10 is the
general reporting form for registration of
securities pursuant to section 12(b) or
(g) of the Exchange Act of classes of
securities of issuers for which no other
reporting form is prescribed. It requires
certain business and financial
information about the issuer. Form 10–
C has been replaced by Form 10. Form
10 is described at 17 CFR 249.210.
There is no actual ‘‘Form 10’’ as filers
must produce a customized narrative
document in compliance with the
requirements in accordance with the
filer’s particular circumstances.
Form 10–K: Annual Report. This
annual report is used by issuers
registered under the Exchange Act to
provide information described in
Regulation S–K, 17 CFR 229. The form
is described at 17 CFR 249.310. There is
no actual ‘‘Form 10–K’’ as filers must
produce a customized narrative
document in compliance with the
requirements in accordance with the
filer’s particular circumstances.
Form 10–Q: Quarterly Reports. The
Form 10–Q is a report filed quarterly by

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Estimated
annual burden
(hours)
11,546

most reporting companies. It includes
unaudited financial statements and
provides a continuing overview of major
changes in the company’s financial
position during the year, as compared to
the prior corresponding period. The
report must be filed for each of the first
three fiscal quarters of the company’s
fiscal year and is due within 40 or 45
days of the close of the quarter,
depending on the size of the reporting
company. The description of Form 10–
Q is at 17 CFR 249.308a. There is no
actual ‘‘Form 10–Q’’ as filers must
produce a customized narrative
document in compliance with the
requirements in accordance with the
filer’s particular circumstances.
Form 12b–25: Notification of Late
Filing. This notification extends the
reporting deadlines for filing quarterly
and annual reports for qualifying
companies. There is no FDIC Form 12b–
25. The form is described at 17 CFR
249.322.
Form 15: Certification and Notice of
Termination of Registration. This form
is filed by each issuer to certify that the
number of holders of record of a class
of security registered under section
12(g) of the Exchange Act is reduced to
a specified level in order to terminate
the registration of the class of security.
For a bank, the number of holders of
record of a class of registered security
must be reduced to less than 1,200
persons. For a savings association, the
number of record holders of a class of
registered security must be reduced to
(1) less than 300 persons or (2) less than
500 persons and the total assets of the
issuer have not exceeded $10 million on
the last day of each of the issuer’s most
recent three fiscal years. In general,
registration terminates 90 days after the
filing of the certification. There is no
FDIC Form 15. This form is described at
17 CFR 249.323.
Schedule 13D: Certain Beneficial
Ownership Changes. This Schedule
discloses beneficial ownership of
certain registered equity securities. Any
person or group of persons who acquire
a beneficial ownership of more than 5
percent of a class of registered equity
securities of certain issuers must file a
Schedule 13D reporting such
acquisition together with certain other
information within ten days after such

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Federal Register / Vol. 84, No. 209 / Tuesday, October 29, 2019 / Notices
acquisition. Moreover, any material
changes in the facts set forth in the
Schedule generally precipitates a duty
to promptly file an amendment on
Schedule 13D. The SEC’s rules define
the term beneficial owner to be any
person who directly or indirectly shares
voting power or investment power (the
power to sell the security). There is no
FDIC form for Schadule13D. This
schedule is described at 17 CFR
240.13d–101.
Schedule 13E–3: Going Private
Transactions by Certain Issuers or Their
Affiliates. This schedule must be filed if
an issuer engages in a solicitation
subject to Regulation 14A or a
distribution subject to Regulation 14C,
in connection with a going private
merger with its affiliate. An affiliate and
an issuer may be required to complete,
file, and disseminate a Schedule 13E–3,
which directs that each person filing the
schedule state whether it reasonably
believes that the Rule 13e–3 transaction
is fair or unfair to unaffiliated security
holders. There is no FDIC form for
Schedule13E–3. This schedule is
described at 17 CFR 240.13e–100.
Schedule 13G: Certain Acquisitions of
Stock. Certain acquisitions of stock that
are over than 5 percent of an issuer must
be reported to the public. Schedule 13G
is a much abbreviated version of
Schedule 13D that is only available for
use by a limited category of persons
(such as banks, broker/dealers, and
insurance companies) and even then
only when the securities were acquired
in the ordinary course of business and
not with the purpose or effect of
changing or influencing the control of

the issuer. There is no FDIC form for
Schadule13G. This schedule is
described at 17 CFR 240.13d–102.
Schedule 14A: Proxy Statements.
State law governs the circumstances
under which shareholders are entitled
to vote. When a shareholder vote is
required and any person solicits proxies
with respect to securities registered
under section 12 of the Exchange Act,
that person generally is required to
furnish a proxy statement containing the
information specified by Schedule 14A.
The proxy statement is intended to
provide shareholders with the proxy
information necessary to enable them to
vote in an informed manner on matters
intended to be acted upon at
shareholders’ meetings, whether the
traditional annual meeting or a special
meeting. Typically, a shareholder is also
provided with a proxy card to authorize
designated persons to vote his or her
securities on the shareholder’s behalf in
the event the holder does not vote in
person at the meeting. Copies of
preliminary and definitive (final) proxy
statements and proxy cards are filed
with the FDIC. There is no FDIC form
for Schadule14A. The description of
this schedule is at 17 CFR 240.14a–101.
Schedule 14C: Information Required
in Information Statements. An
information statement prepared in
accordance with the requirements of the
SEC’s Regulation 14C is required
whenever matters are submitted for
shareholder action at an annual or
special meeting when there is no proxy
solicitation under the SEC’s Regulation
14A. There is no FDIC form for

Schadule14C. This schedule is
described at 17 CFR 240.14c–101.
Schedule 14D–1: Tender Offer. This
schedule is also known as Schedule TO.
Any person, other than the issuer itself,
making a tender offer for certain equity
securities registered pursuant to section
12 of the Exchange Act is required to
file this schedule if acceptance of the
offer would cause that person to own
over 5 percent of that class of the
securities. This schedule must be filed
and sent to various parties, such as the
issuer and any competing bidders. In
addition, the SEC’s Regulation 14D sets
forth certain requirements that must be
complied with in connection with a
tender offer. This schedule is described
at 17 CFR 240.14d–100. There is no
actual form for Schedule 14D–1 as filers
must produce a customized narrative
document in compliance with the
requirements in accordance with the
filer’s particular circumstances.
There is no change in the method or
substance of the collection. The
estimated number of respondents, as
well as the estimated time per response
and the frequency of response, is
expected to remain the same.
3. Title: Application for a Bank to
Establish a Branch or Move its Main
Office or a Branch.
OMB Number: 3064–0070.
Affected Public: Insured state
nonmember banks and state savings
associations.
Type of Burden: Reporting.
Obligation to Respond: Mandatory.
Burden Estimate:

SUMMARY OF ANNUAL BURDEN
Information collection description

Type of
burden

Obligation to
respond

Application to Establish a Branch, Move Main Office or Move Branch ..

Reporting ......

Mandatory .....

Total Estimated Annual Burden:
3,590.
General Description of Collection:
Section 18(d) of the Federal Deposit
Insurance Act (12 U.S.C. 1828(d)) (FDI
Act) provides that no FDIC insured state
nonmember bank or state savings
association shall establish and operate
any new domestic branch or move its
main office or any such branch from one
location to another without the prior
written consent of the FDIC. In granting
or withholding consent to the applicant,
FDIC considers: (a) The financial history
and condition of the depository
institution; (b) the adequacy of its

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Estimated
number of
respondents

Estimated
frequency of
response

718

On Occasion

capital structure; (c) its future earnings
prospects; (d) the general character and
fitness of its management; (e) the risk
presented by the depository institution
to the Deposit Insurance Fund; (f) the
convenience and needs of the
community to be served; and (g)
whether its corporate powers are
consistent with the purposes of the FDI
Act. FDIC regulations found at 12 CFR
303, subpart C, specify the steps that
respondents must take to comply with
the statutory mandate. There is no
change in the method or substance of
the collection. The estimated number of
respondents has been revised based on

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Estimated
time
per
response
(hours)

Estimated
annual
burden
(hours)
5

3,590

the number of responses recorded over
the last three years. The estimated time
per response and the frequency of
response, is expected to remain the
same.
4. Title: Activities and Investments of
Savings Associations.
OMB Number: 3064–0104.
Affected Public: Insured state savings
associations.
Type of Burden: Reporting.
Obligation to Respond: Mandatory.
Burden Estimate:

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Federal Register / Vol. 84, No. 209 / Tuesday, October 29, 2019 / Notices
SUMMARY OF ANNUAL BURDEN
Estimated
number of
respondents

Estimated
frequency of
response

Mandatory .....

18

On Occasion

.......................

....................

Information collection description

Type of
burden

Obligation to
respond

Application for Exemption—§ 28 and Subsidiary Notice—§ 18(m) .........

Reporting ......

Total Estimated Annual Burden .......................................................

.......................

General Description of Collection:
Section 28 of the Federal Deposit
Insurance Act limits the powers of state
savings associations to acquire or retain
equity investments of a type or amount
not permitted for a federal savings
association. Section 28 also prohibits
insured state savings associations and
their subsidiaries from engaging as
principal in any activity of a type or in
an amount that is not permitted for a
federal savings association or its
subsidiaries. Section 28 charges the
FDIC with the responsibility of
enforcing the restrictions and filing
requirements, and permits the FDIC to

grant exceptions under certain
circumstances.
12 CFR part 362 details the activities
that state savings associations and/or
their subsidiaries may engage in, under
certain criteria and conditions, and
identifies the information that banks
must furnish to the FDIC in order to
obtain the FDIC’s approval or nonobjection.
There is no change in the method or
substance of the collection. The
estimated number of respondents has
been revised upward based on the
number of responses recorded over the
last three years. The estimated time per

1,000
10
5

1

1

4

4

Recordkeeping
Reporting ..........
Recordkeeping

1
1
1

1
1
1

100
240
40

100
240
40

Reporting ..........
Recordkeeping
Reporting ..........
Recordkeeping

1
1
1
1

1
1
3
250

50
20
10
1

50
20
30
250

...........................

........................

........................

........................

1,749

Recordkeeping

Totals .........................................................................

These capital and margin requirements
apply to swaps that are not cleared by
a registered derivatives clearing
731 and 764 of the Dodd-Frank Act added a new
section 4s to the Commodity Exchange Act of 1936,
as amended, and a new section, section 15F, to the
Securities Exchange Act of 1934, as amended,
respectively, which require registration with the
Commodity Futures Trading Commission (CFTC) of
swap dealers and major swap participants and the
U.S. Securities and Exchange Commission (SEC) of
security-based swap dealers and major securitybased swap participants (each a swap entity and,
collectively, swap entities). Section 1a(39) of the
Commodity Exchange Act of 1936, as amended,
defines the term ‘‘prudential regulator’’ for
purposes of the margin requirements applicable to
swap dealers, major swap participants, securitybased swap dealers and major security-based swap
participants. See 7 U.S.C. 1a(39).

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1,000
10
5

1
1
1

Jkt 250001

....................

1
1
1

Reporting ..........
Disclosure .........
Recordkeeping

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216

Estimated
annual burden
hours

§ 349.1(d)(1), (d)(2) Meeting criteria for exemption ..........
§ 349.1(h) ..........................................................................
§ 349.2 Definition of ‘‘Eligible Master Netting Agreement,’’ paragraphs (4)(i) and (ii).
§ 349.8(g) Documentation.
§ 349.10 Documentation of Margin Matters.
40+50++20+20++10++250+§ 349.5(c)(2)(i)
Required
Margin.
§ 349.7(c) Custody Agreement .........................................
§ 349.8(c) and (d) Initial Margin Model .............................
§ 349.8(e) Periodic Review ...............................................
§ 349.8(f) Control, Oversight, and Validation Mechanisms.
§ 349.8(f)(3) Initial Margin Modeling Report .....................
§ 349.8(h) Escalation Procedures .....................................
§ 349.9(e) Requests for Determinations ...........................
§ 349.11(b)(1) Posting Initial Margin .................................

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12

Estimated
average hours
per response

Type of burden

1 Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111–203, 124 Stat. 1376
(2010). See 7 U.S.C. 6s; 15 U.S.C. 78o–10. Sections

Estimated
annual
burden
(hours)

response and the frequency of response,
is expected to remain the same.
5. Title: Margin and Capital
Requirements for Covered Swap
Entities.
OMB Number: 3064–0204.
Affected Public: Any FDIC-insured
state-chartered bank that is not a
member of the Federal Reserve System
or FDIC-insured state-chartered savings
association that is registered as a swap
dealer, major swap participant, securitybased swap dealer, or major securitybased swap participant.
Obligation to Respond: Mandatory.
Burden Estimate:
Estimated
annual
frequency

Number of
respondents

Regulation

General Description of Collection: The
Dodd-Frank Wall Street Reform and
Consumer Protection Act (Dodd-Frank
Act) required the Office of the
Comptroller of the Currency, the Board
of Governors of the Federal Reserve
System, the FDIC, the Farm Credit
Administration, and Federal Home
Finance Agency (each, an agency, and
collectively, the agencies) to jointly
adopt rules that establish capital and
margin requirements for swap entities
that are prudentially regulated by one of
the agencies (covered swap entities).1

.......................

Estimated
time
per
response
(hours)

Frm 00029

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organization or a registered clearing
agency (non-cleared swaps).2 The
agencies published regulations that
require swap dealers and security-based
swap dealers under the agencies’
respective jurisdictions to exchange
margin with their counterparties for
swaps that are not centrally cleared
(Swap Margin Rule or Rule). First issued
in 2015, the Swap Margin Rule includes
2 A ‘‘swap’’ is defined in section 721 of the DoddFrank Act to include, among other things, an
interest rate swap, commodity swap, equity swap,
and credit default swap, and a security-based swap
is defined in section 761 of the Dodd-Frank Act to
include a swap based on a single security or loan
or on a narrow-based security index. See 7 U.S.C.
1a(47); 15 U.S.C. 78c(a)(68).

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Federal Register / Vol. 84, No. 209 / Tuesday, October 29, 2019 / Notices
a phased compliance schedule from
2016 to 2020 and generally applies only
to a non-cleared swap entered into on or
after the applicable compliance date. A
non-cleared swap entered into prior to
an entity’s applicable compliance date
is ‘‘grandfathered’’ by this regulatory
provision and is generally not subject to
the margin requirements in the Swap
Margin Rule (legacy swap) unless it is
amended or novated on or after the
applicable compliance date. The FDIC’s
Swap Margin Rule can be found at 12
CFR part 349.
The reporting requirements found in
12 CFR 349.1(d) refer to statutory
provisions that set forth conditions for
an exemption from clearing. Section
349.1(d)(1) provides an exemption for
non-cleared swaps if one of the
counterparties to the swap is not a
financial entity, is using swaps to hedge
or mitigate commercial risk, and notifies
the Commodity Futures Trading
Commission of how it generally meets
its financial obligations associated with
entering into non-cleared swaps.
Section 349.1(d)(2) provides an
exemption for security-based swaps if
the counterparty notifies the Securities
and Exchange Commission (SEC) of how
it generally meets its financial
obligations associated with entering into
non-cleared security-based swaps.
Section 349.2 defines terms used in part
349, including the definition of ‘‘eligible
master netting agreement,’’ which
provides that a covered swap entity that
relies on the agreement for purpose of
calculating the required margin must:
(1) Conduct sufficient legal review of
the agreement to conclude with a wellfounded basis that the agreement meets
specified criteria; and (2) establish and
maintain written procedures for
monitoring relevant changes in law and
to ensure that the agreement continues
to satisfy the requirements of this
section. The term ‘‘eligible master
netting agreement’’ is used elsewhere in
part 349 to specify instances in which
a covered swap entity may: (1) Calculate
variation margin on an aggregate basis
across multiple non-cleared swaps and
security-based swaps and (2) calculate
initial margin requirements under an
initial margin model for one or more
swaps and security-based swaps.
Section 349.5(c)(2)(i) specifies that a
covered swap entity shall not be
deemed to have violated its obligation to
collect or post margin from or to a
counterparty if the covered swap entity
has made the necessary efforts to collect
or post the required margin, including
the timely initiation and continued
pursuit of formal dispute resolution
mechanisms, or has otherwise

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demonstrated upon request to the
satisfaction of the agency that it has
made appropriate efforts to collect or
post the required margin. Section 349.7
generally requires a covered swap entity
to ensure that any initial margin
collateral that it collects or posts is held
at a third-party custodian. Section
349.7(c) requires the custodian to act
pursuant to a custody agreement that:
(1) Prohibits the custodian from
rehypothecating, repledging, reusing, or
otherwise transferring (through
securities lending, securities borrowing,
repurchase agreement, reverse
repurchase agreement or other means)
the collateral held by the custodian,
except that cash collateral may be held
in a general deposit account with the
custodian if the funds in the account are
used to purchase an asset held in
compliance with § 349.7, and such
purchase takes place within a time
period reasonably necessary to
consummate such purchase after the
cash collateral is posted as initial
margin and (2) is a legal, valid, binding,
and enforceable agreement under the
laws of all relevant jurisdictions,
including in the event of bankruptcy,
insolvency, or a similar proceeding. A
custody agreement may permit the
posting party to substitute or direct any
reinvestment of posted collateral held
by the custodian under certain
conditions. With respect to collateral
collected by a covered swap entity
pursuant to § 349.3(a) or posted by a
covered swap entity pursuant to
§ 349.3(b), the agreement must require
the posting party to substitute only
funds or other property that would
qualify as eligible collateral under
§ 349.6 and for which the amount net of
applicable discounts described in
Appendix B would be sufficient to meet
the requirements of § 349.3 and direct
reinvestment of funds only in assets that
would qualify as eligible collateral
under § 349.6. Section 349.8 establishes
standards for the use of initial margin
models. These standards include: (1) A
requirement that the covered swap
entity receive prior approval from the
relevant Agency based on
demonstration that the initial margin
model meets specific requirements
(§§ 349.8(c)(1) and 349.8(c)(2)); (2) a
requirement that a covered swap entity
notify the relevant Agency in writing 60
days before extending use of the model
to additional product types, making
certain changes to the initial margin
model, or making material changes to
modeling assumptions (§ 349.8(c)(3));
and (3) a variety of quantitative
requirements, including requirements
that the covered swap entity validate

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and demonstrate the reasonableness of
its process for modeling and measuring
hedging benefits, demonstrate to the
satisfaction of the relevant Agency that
the omission of any risk factor from the
calculation of its initial margin is
appropriate, demonstrate to the
satisfaction of the relevant Agency that
incorporation of any proxy or
approximation used to capture the risks
of the covered swap entity’s non-cleared
swaps or noncleared security-based
swaps is appropriate, periodically
review and, as necessary, revise the data
used to calibrate the initial margin
model to ensure that the data
incorporate an appropriate period of
significant financial stress
(§§ 349.8(d)(5), 349.8(d)(10),
349.8(d)(11), 349.8(d)(12), and
349.8(d)(13)). Also, if the validation
process reveals any material problems
with the initial margin model, the
covered swap entity must promptly
notify the Agency of the problems,
describe to the Agency any remedial
actions being taken, and adjust the
initial margin model to ensure an
appropriately conservative amount of
required initial margin is being
calculated (§ 349.8(f)(3)). Section 349.8
also establishes requirements for the
ongoing review and documentation of
initial margin models. These standards
include: (1) A requirement that a
covered swap entity review its initial
margin model annually (§ 349.8(e)); (2)
a requirement that the covered swap
entity validate its initial margin model
at the outset and on an ongoing basis,
describe to the relevant Agency any
remedial actions being taken, and report
internal audit findings regarding the
effectiveness of the initial margin model
to the covered swap entity’s board of
directors or a committee thereof
(§§ 349.8(f)(2), 349.8(f)(3), and
349.8(f)(4)); (3) a requirement that the
covered swap entity adequately
document all material aspects of its
initial margin model (§ 349.8(g)); and (4)
that the covered swap entity must
adequately document internal
authorization procedures, including
escalation procedures, that require
review and approval of any change to
the initial margin calculation under the
initial margin model, demonstrable
analysis that any basis for any such
change is consistent with the
requirements of this section, and
independent review of such
demonstrable analysis and approval
(§ 349.8(h)). Section 349.9 addresses the
treatment of cross-border transactions
and, in certain limited situations, will
permit a covered swap entity to comply
with a foreign regulatory framework for

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Federal Register / Vol. 84, No. 209 / Tuesday, October 29, 2019 / Notices

noncleared swaps (as a substitute for
compliance with the prudential
regulators’ rule) if the prudential
regulators jointly determine that the
foreign regulatory framework is
comparable to the requirements in the
prudential regulators’ rule. Section
349.9(e) allows a covered swap entity to
request that the prudential regulators
make a substituted compliance
determination and must provide the
reasons therefore and other required
supporting documentation. A request
for a substituted compliance
determination must include: (1) A
description of the scope and objectives
of the foreign regulatory framework for
non-cleared swaps and non-cleared
security-based swaps; (2) the specific
provisions of the foreign regulatory
framework for non-cleared swaps and
security-based swaps (scope of
transactions covered; determination of
the amount of initial and variation
margin required; timing of margin
requirements; documentation
requirements; forms of eligible
collateral; segregation and
rehypothecation requirements; and
approval process and standards for
models); (3) the supervisory compliance
program and enforcement authority
exercised by a foreign financial
regulatory authority or authorities in
such system to support its oversight of
the application of the non-cleared swap
and security-based swap regulatory
framework; and (4) any other
descriptions and documentation that the
prudential regulators determine are
appropriate. A covered swap entity may
make a request under this section only
if directly supervised by the authorities
administering the foreign regulatory
framework for non-cleared swaps and
non-cleared security-based swaps.
Section 349.10 requires a covered swap
entity to execute trading documentation
with each counterparty that is either a
swap entity or financial end user
regarding credit support arrangements
that: (1) Provides the contractual right to
collect and post initial margin and
variation margin in such amounts, in
such form, and under such
circumstances as are required and (2)
specifies the methods, procedures,
rules, and inputs for determining the
value of each non-cleared swap or
noncleared security-based swap for
purposes of calculating variation margin
requirements and the procedures for
resolving any disputes concerning
valuation. Section 349.11(b)(1) provides
that the requirement for a covered swap

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entity to post initial margin under
§ 349.3(b) does not apply with respect to
any noncleared swap or non-cleared
security based swap with a counterparty
that is an affiliate. A covered swap
entity shall calculate the amount of
initial margin that would be required to
be posted to an affiliate that is a
financial end user with material swaps
exposure pursuant to § 349.3(b) and
provide documentation of such amount
to each affiliate on a daily basis.
There is no change in the method or
substance of the collection. The FDIC
currently does not supervise any
institutions that are subject to this
information collection but is reporting
one respondent as a placeholder to
preserve the burden estimates. For
clarity, the burden presentation has
been changed to correspond to the
burden presentation made by the other
agencies in their respective information
collections. There is no change in the
total estimated annual burden.
Request for Comment
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 collection of information
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.
Federal Deposit Insurance Corporation.
Dated at Washington, DC, on October 23,
2019.
Annmarie H. Boyd,
Assistant Executive Secretary.
[FR Doc. 2019–23527 Filed 10–28–19; 8:45 am]
BILLING CODE 6714–01–P

FEDERAL RESERVE SYSTEM
Change in Bank Control Notices;
Acquisitions of Shares of a Bank or
Bank Holding Company
The notificants listed below have
applied under the Change in Bank
Control Act (Act) (12 U.S.C. 1817(j)) and
§ 225.41 of the Board’s Regulation Y (12

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CFR 225.41) to acquire shares of a bank
or bank holding company. The factors
that are considered in acting on the
notices are set forth in paragraph 7 of
the Act (12 U.S.C. 1817(j)(7)).
The applications listed below, as well
as other related filings required by the
Board, if any, are available for
immediate inspection at the Federal
Reserve Bank indicated. The
applications will also be available for
inspection at the offices of the Board of
Governors. Interested persons may
express their views in writing on the
standards enumerated in paragraph 7 of
the Act.
Comments regarding each of these
applications must be received at the
Federal Reserve Bank indicated or the
offices of the Board of Governors, Ann
E. Misback, Secretary of the Board, 20th
and Constitution Avenue NW,
Washington, DC 20551–0001, not later
than November 7, 2019.
A. Federal Reserve Bank of Dallas
(Robert L. Triplett III, Senior Vice
President) 2200 North Pearl Street,
Dallas, Texas 75201–2272:
1. Ferne S. Frosch, Huntsville, Texas;
to retain voting shares of First National
Bancshares of Huntsville, Inc. and
thereby indirectly retain voting shares of
First National Bank of Huntsville, both
of Huntsville, Texas. In addition, The
Wilbourne T. Robinson Family Trust
No. 1, Huntsville, Texas, Ferne S.
Frosch, Huntsville, Texas, Frances R.
Snipes, Houston, Texas, and Florine R.
Klussmann, Katy, Texas, as co-trustees;
The Wilbourne T. Robinson Family
Trust No. 2, Ferne S. Frosch, Frances R.
Snipes, and Florine R. Klussmann, as
co-trustees; The J. Philip Gibbs Trust
No. 2, Huntsville, Texas, Ferne S.
Frosch, trustee; Wayne B. Frosch;
Walter M. Woodward, Jr.; and Clyde
Michael Williams, all of Huntsville,
Texas; Janet Smyth and Mary K.
Basquin, both of New York, New York;
Virginia S. Low, London, N1; Elizabeth
H. Hawley, Dallas, Texas; and a minor
child; to be approved as members acting
in concert with the Smyth Gibbs Aker
Group to retain voting shares of First
National Bancshares of Huntsville, Inc.
and thereby retain voting shares of First
National Bank of Huntsville.
Board of Governors of the Federal Reserve
System, October 23, 2019.
Yao-Chin Chao,
Assistant Secretary of the Board.
[FR Doc. 2019–23531 Filed 10–28–19; 8:45 am]
BILLING CODE 6210–01–P

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