Resolution Plans Required

CourtFederal Deposit Insurance Corporation
Citation84 FR 21600
Record Number2019-08478
SectionProposed rules
Published date14 May 2019
Federal Register, Volume 84 Issue 93 (Tuesday, May 14, 2019)
[Federal Register Volume 84, Number 93 (Tuesday, May 14, 2019)]
                [Proposed Rules]
                [Pages 21600-21631]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2019-08478]
                [[Page 21599]]
                Vol. 84
                Tuesday,
                No. 93
                May 14, 2019
                Part III Federal Reserve System-----------------------------------------------------------------------12 CFR Part 243Federal Deposit Insurance Corporation-----------------------------------------------------------------------
                12 CFR Part 381 Resolution Plans Required; Proposed Rule
                Federal Register / Vol. 84 , No. 93 / Tuesday, May 14, 2019 /
                Proposed Rules
                [[Page 21600]]
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                FEDERAL RESERVE SYSTEM
                12 CFR Part 243
                [Regulation QQ; Docket No. R-1660]
                RIN 7100-AF47
                FEDERAL DEPOSIT INSURANCE CORPORATION
                12 CFR Part 381
                RIN 3064-AE93
                Resolution Plans Required
                AGENCY: Board of Governors of the Federal Reserve System (Board) and
                Federal Deposit Insurance Corporation (Corporation).
                ACTION: Notice of proposed rulemaking.
                -----------------------------------------------------------------------
                SUMMARY: The Board and the Corporation (together, the agencies) are
                inviting comment on a proposal to amend and restate the jointly issued
                regulation (the Rule) implementing the resolution planning requirements
                of section 165(d) of the Dodd-Frank Wall Street Reform and Consumer
                Protection Act (the Dodd-Frank Act). The proposal is intended to
                reflect improvements identified since the Rule was finalized in
                November 2011 and to address amendments to the Dodd-Frank Act made by
                the Economic Growth, Regulatory Relief, and Consumer Protection Act
                (EGRRCPA). The proposed amendments to the Rule include a proposal by
                the Board to establish risk-based categories for determining the
                application of the resolution planning requirement to certain U.S. and
                foreign banking organizations, consistent with section 401 of EGRRCPA,
                and a proposal by the agencies to extend the default resolution plan
                filing cycle, allow for more focused resolution plan submissions, and
                improve certain aspects of the Rule.
                DATES: Comments should be received by June 21, 2019.
                ADDRESSES:
                 Board: You may submit comments, identified by Docket No. R-1660 and
                RIN No. 7100-AF 47, by any of the following methods:
                 Agency Website: http://www.federalreserve.gov. Follow the
                instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
                 Email: [email protected]. Include the
                docket number in the subject line of the message.
                 Fax: (202) 452-3819 or (202) 452-3102.
                 Mail: Ann Misback, Secretary, Board of Governors of the
                Federal Reserve System, 20th Street and Constitution Avenue NW,
                Washington, DC 20551.
                 All public comments will be made available on the Board's
                website at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, unless modified for technical reasons or
                to remove personally identifiable information at the commenter's
                request. Accordingly, your comments will not be edited to remove any
                identifying or contact information. Public comments may also be viewed
                electronically or in paper in Room 146, 1709 New York Avenue NW,
                Washington, DC 20006, between 9:00 a.m. and 5:00 p.m. on weekdays.
                 Corporation: You may submit comments, identified by RIN 3064-AE93,
                by any of the following methods:
                 Agency website: https://www.fdic.gov/regulations/laws/federal. Follow the instructions for submitting comments on the Agency
                website.
                 Email: [email protected]. Include RIN 3064-AE93 on the
                subject line of the message.
                 Mail: Robert E. Feldman, Executive Secretary, Attention:
                Comments/RIN 3064-AE93, Federal Deposit Insurance Corporation, 550 17th
                Street NW, Washington, DC 20429.
                 Hand Delivery/Courier: Comments may be hand delivered to
                the guard station at the rear of the 550 17th Street Building (located
                on F Street) on business days between 7 a.m. and 5 p.m. All comments
                received must include the agency name (FDIC) and RIN 3064-AE93.
                 Public Inspection: All comments received, including any
                personal information provided, will be posted generally without change
                to https://www.fdic.gov/regulations/laws/federal.
                FOR FURTHER INFORMATION CONTACT:
                 Board: Michael Hsu, Associate Director, (202) 452-4330, Catherine
                Tilford, Assistant Director, (202) 452-5240, and Kathryn Ballintine,
                Lead Financial Institution Policy Analyst, (202) 452-2555, Division of
                Supervision and Regulation; or Laurie Schaffer, Associate General
                Counsel, (202) 452-2272, Jay Schwarz, Special Counsel, (202) 452-2970,
                or Steve Bowne, Counsel, (202) 452-3900, Legal Division, Board of
                Governors of the Federal Reserve System, 20th and C Streets NW,
                Washington, DC 20551. For users of Telecommunications Device for the
                Deaf (TDD), (202) 263-4869.
                 Corporation: Lori J. Quigley, Deputy Director, Institutions
                Monitoring Group, [email protected]; Robert C. Connors, Associate
                Director, Large Bank Supervision Branch, [email protected], Division of
                Risk Management Supervision; Alexandra Steinberg Barrage, Associate
                Director, Resolution Strategy and Policy, Office of Complex Financial
                Institutions, [email protected]; David N. Wall, Assistant General
                Counsel, [email protected]; Pauline E. Calande, Senior Counsel,
                [email protected]; Celia Van Gorder, Supervisory Counsel,
                [email protected], or Dena S. Kessler, Counsel, [email protected],
                Legal Division, Federal Deposit Insurance Corporation, 550 17th Street
                NW, Washington, DC 20429.
                SUPPLEMENTARY INFORMATION:
                Table of Contents
                I. Introduction
                II. Overview of the Resolution Planning Process to Date
                III. Overview of the Resolution Plan Proposal
                 A. Identification of Firms Subject to the Resolution Planning
                Requirement and Filing Groups
                 B. Resolution Plan Content
                 C. Critical Operations Methodology and Reconsideration Process
                 D. Clarifications to the Rule
                 E. Alternative Scoping and Tailoring Criteria
                IV. Transition Period
                V. Impact Analysis
                VI. Regulatory Analysis
                 A. Paperwork Reduction Act
                 B. Regulatory Flexibility Act
                 C. Riegle Community Development and Regulatory Improvement Act
                of 1994
                 D. Solicitation of Comments on the Use of Plain Language
                I. Introduction
                 Section 165(d) of the Dodd-Frank Act and the jointly-issued Rule
                require certain financial companies (covered companies) to report
                periodically to the agencies their plans for rapid and orderly
                resolution under the U.S. Bankruptcy Code in the event of material
                financial distress or failure. The goal of the Dodd-Frank Act
                resolution planning process is to help ensure that a covered company's
                failure would not have serious adverse effects on financial stability
                in the United States. The Dodd-Frank Act and the Rule require a covered
                company to submit a resolution plan for review by the agencies. The
                resolution planning process requires covered companies to demonstrate
                that they have adequately assessed the challenges that their structures
                and business activities pose to a rapid and orderly resolution in the
                event of material financial distress or failure and that they have
                taken action to address those issues, including through the development
                of appropriate capabilities by those firms more likely to pose a risk
                to U.S. financial stability.
                [[Page 21601]]
                 Among other requirements, the Rule requires each covered company to
                submit an annual resolution plan that includes a strategic analysis of
                the plan's components, a description of the range of specific actions
                the covered company proposes to take in resolution, and descriptions of
                the covered company's organizational structure, material entities, and
                interconnections and interdependencies. The Rule also requires that
                resolution plans include a confidential section that contains
                confidential supervisory and proprietary information submitted to the
                agencies, and a separate section that the agencies make available to
                the public.
                II. Overview of the Resolution Planning Process to Date
                 The implementation of the Rule has been an iterative process aimed
                at strengthening the resolvability and resolution planning capabilities
                of covered companies. Since the finalization of the Rule in 2011, the
                agencies have reviewed multiple resolution plan submissions and have
                provided feedback and guidance to assist the covered companies in their
                development of subsequent resolution plan submissions. As part of the
                iterative process, the agencies have increasingly tailored feedback and
                guidance to take into account characteristics of covered companies
                including their size, business models, and risk profiles, and, for a
                foreign-based organization, the scope of operations in the United
                States. Based on these factors, the agencies have allowed certain
                covered companies to file resolution plans containing a subset of a
                full resolution plan's informational content.
                 The resolution plans' informational content and strategic analysis
                and the covered companies' capabilities to execute their resolution
                strategies have developed over time. As both the covered companies'
                submissions and the agencies' feedback have matured over several
                resolution plan cycles, the Rule's annual filing requirement has been a
                challenging constraint for both the agencies and covered companies and
                has become less necessary. The agencies have noted that the annual
                filing cycle does not always permit sufficient time for the review of
                resolution plan submissions and the development of meaningful feedback
                and guidance. The agencies also recognize that covered companies
                require time to understand and address the feedback and to incorporate
                any changes into their next resolution plan filings. In recognition of
                the challenges associated with an annual resolution plan filing, the
                agencies have extended plan filing deadlines over the last few
                submission cycles to provide at least two years between resolution plan
                filings.
                 The resolution planning process and other resolution-related
                regulatory changes have focused the covered companies on developing
                both resolution plan informational content, including strategic
                analysis, and the capabilities to improve their resolvability. Given
                the complexity of their operations, the U.S. global systemically
                important banks (U.S. GSIBs), in particular, have taken significant and
                material actions to address their resolvability. Over the past several
                years, these covered companies have enhanced their resolution
                strategies and addressed key resolution vulnerabilities by modelling
                resolution liquidity and capital needs, rationalizing legal structures,
                developing governance mechanisms to increase the likelihood of timely
                entry into resolution, and more clearly identifying and mitigating
                organizational dependencies, among other changes. Consistent with the
                agencies' feedback, firms have continued to build upon their respective
                capabilities to support their resolvability amidst ongoing changes in
                their businesses and in markets. If the agencies jointly determine that
                a resolution plan is not credible or would not facilitate an orderly
                resolution, the covered company must remedy the deficiencies in the
                resolution plan jointly identified by the agencies. If the covered
                company fails to adequately remedy the deficiencies within the time
                period specified by the agencies, the agencies may jointly impose more
                stringent prudential requirements on the company until the deficiencies
                are remedied.\1\
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                 \1\ 12 U.S.C. 5365(d)(4), (5); 12 CFR 243.5(b), .6(a); 12 CFR
                381.5(b), .6(a).
                ---------------------------------------------------------------------------
                 EGRRCPA revised the resolution planning requirement as part of the
                changes the law made to application of the enhanced prudential
                standards in section 165 of the Dodd-Frank Act. Specifically, EGRRCPA
                raised the $50 billion minimum asset threshold for general application
                of the resolution planning requirement to $250 billion in total
                consolidated assets, and provides the Board with discretion to apply
                the resolution planning requirement to firms with total consolidated
                assets of $100 billion or more, but less than $250 billion in total
                consolidated assets.\2\ The threshold increase occurs in two stages.
                Immediately on the date of enactment, firms with total consolidated
                assets of less than $100 billion (for foreign banking organizations,
                $100 billion in total global assets) were no longer subject to the
                resolution planning requirement.
                ---------------------------------------------------------------------------
                 \2\ EGRRCPA also provides that any bank holding company,
                regardless of asset size, that has been identified as a U.S. GSIB
                under the Board's U.S. GSIB surcharge rule shall be considered a
                bank holding company with $250 billion or more in total consolidated
                assets for purposes of the application of the resolution planning
                requirement. EGRRCPA section 401(f).
                ---------------------------------------------------------------------------
                 Eighteen months after the date of EGRRCPA's enactment, the
                threshold is raised to $250 billion in total consolidated assets.
                However, EGRRCPA provides the Board with the authority to apply
                resolution planning requirements to firms with $100 billion or more and
                less than $250 billion in total consolidated assets. Specifically,
                under section 165(a)(2)(C) of the Dodd-Frank Act, as revised by
                EGRRCPA, the Board may, by order or rule, apply the resolution planning
                requirement to any firm or firms with total consolidated assets of $100
                billion (for foreign banking organizations, $100 billion in total
                global assets) or more.\3\
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                 \3\ 12 U.S.C. 5365(a); EGRRCPA section 401(a)(1)(B)(iii) (to be
                codified at 12 U.S.C. 5365(a)(2)(C)). See also EGRRCPA section
                401(g).
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                 Consistent with section 401 of EGRRCPA, the Board has issued two
                separate proposals to revise the framework for determining the
                prudential standards that should apply to large U.S. banking
                organizations (domestic tailoring proposal) \4\ and to large foreign
                banking organizations (FBO tailoring proposal \5\ and together with the
                domestic tailoring proposal, the tailoring proposals). Among other
                provisions, the tailoring proposals identify distinct standards
                applicable to firms for the purpose of calibrating requirements. The
                tailoring categories established in the tailoring proposals \6\ are as
                follows:
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                 \4\ Prudential Standards for Large Bank Holding Companies and
                Savings and Loan Holding Companies (Proposed Rule), 83 FR 61408
                (November 29, 2018).
                 \5\ Prudential Standards for Large Foreign Banking
                Organizations; Revisions to Proposed Prudential Standards for Large
                Domestic Bank Holding Companies and Savings and Loan Holding
                Companies (April 8, 2019), https://www.federalreserve.gov/newsevents/pressreleases/files/foreign-bank-fr-notice-1-20190408.pdf.
                 \6\ In the case of capital standards for foreign banking
                organizations, categories would apply based on the characteristics
                of the firm's U.S. intermediate holding company. That methodology is
                not relevant to this proposal.
                ---------------------------------------------------------------------------
                 Category I standards would apply to:
                 [cir] U.S. GSIBs,
                 Category II standards would apply to:
                [[Page 21602]]
                 [cir] U.S. firms that are not subject to Category I standards with
                (a) $700 billion or more in total consolidated assets, or (b) $100
                billion or more in total consolidated assets that have $75 billion or
                more in the following risk-based indicator: Cross-jurisdictional
                activity, and
                 [cir] Foreign banking organizations with (a) $700 billion or more
                in combined U.S. assets,\7\ or (b) $100 billion or more in combined
                U.S. assets that have $75 billion or more in the following risk-based
                indicator measured based on the combined U.S. operations: \8\ Cross-
                jurisdictional activity,\9\
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                 \7\ Combined U.S. assets means the sum of the consolidated
                assets of each top-tier U.S. subsidiary of the foreign banking
                organization (excluding any section 2(h)(2) company as defined in
                section 2(h)(2) of the Bank Holding Company Act (12 U.S.C.
                1841(h)(2)), if applicable) and the total assets of each U.S. branch
                and U.S. agency of the foreign banking organization, as reported by
                the foreign banking organization on the FR Y-7Q.
                 \8\ The combined U.S. operations of a foreign banking
                organization include any U.S. subsidiaries (including any U.S.
                intermediate holding company, which would reflect on a consolidated
                basis any U.S. depository institution subsidiaries thereof), U.S.
                branches, and U.S. agencies. In addition, for a foreign banking
                organization that is not required to form a U.S. intermediate
                holding company, combined U.S. operations refer to its U.S. branch
                and agency network and the U.S. subsidiaries of the foreign banking
                organization (excluding any section 2(h)(2) company as defined in
                section 2(h)(2) of the Bank Holding Company Act (12 U.S.C.
                1841(h)(2), if applicable) and any subsidiaries of such U.S.
                subsidiaries.
                 \9\ Cross-jurisdictional activity would be measured excluding
                transactions with non-U.S. affiliates.
                ---------------------------------------------------------------------------
                 Category III standards would apply to:
                 [cir] U.S. firms that are not subject to Category I or Category II
                standards with (a) $250 billion or more in total consolidated assets,
                or (b) $100 billion or more in total consolidated assets that have $75
                billion or more in any of the following risk-based indicators: Nonbank
                assets, weighted short-term wholesale funding, or off-balance sheet
                exposure, and
                 [cir] Foreign banking organizations that are not subject to
                Category II standards with (a) $250 billion or more in combined U.S.
                assets, or (b) $100 billion or more in combined U.S. assets that have
                $75 billion or more in any of the following risk-based indicators
                measured based on the combined U.S. operations: Nonbank assets,
                weighted short-term wholesale funding, or off-balance sheet exposure,
                and
                 Category IV standards would apply to:
                 [cir] U.S. firms with $100 billion or more in total consolidated
                assets that do not meet any of the thresholds specified for Categories
                I through III, and
                 [cir] Foreign banking organizations with $100 billion or more in
                combined U.S. assets that do not meet any of the thresholds specified
                for Categories II or III.
                These categories form the basis for this proposal's framework for
                imposing resolution planning requirements, with adjustments where
                appropriate. The categories would also be used to tailor the content of
                the resolution planning requirements, taking into account covered
                companies' particular geographical footprints, operations, and
                activities.
                III. Overview of the Resolution Plan Proposal
                 The agencies are proposing modifications to the Rule, which are
                intended to streamline, clarify, and improve the resolution plan
                submission and review processes and timelines. The agencies are seeking
                to achieve three key goals with the proposal: First, the proposal is
                intended to improve efficiency and balance burden by allowing more
                focused full resolution plan submissions, as well as periodic targeted
                resolution plan submissions for some filers, and reduced resolution
                plans for the remaining filers. Second, the proposal would establish by
                rule a biennial filing cycle for the U.S. GSIBs and balance burden by
                extending the filing cycle to every three years for all other filers.
                Third, the proposal would improve certain aspects of the Rule, such as
                the process for identifying critical operations, based on the agencies'
                experience in applying the Rule over time. These changes are expected
                to permit covered companies to build on previous work more effectively.
                 Specifically, the agencies' proposal:
                 Divides the firms that have resolution planning
                requirements, including those identified by the Board pursuant to
                EGRRCPA, into groups of filers for plan content tailoring purposes,
                 Enhances transparency and provides greater predictability
                by formalizing the current reduced resolution plan category,
                 Establishes multi-year submission cycles for each group of
                filers,
                 Introduces a new category of plans distinguished by
                informational content,
                 Supersedes the existing tailored plan category, and
                 Updates certain procedural elements of the Rule.
                A. Identification of Firms Subject to the Resolution Planning
                Requirement and Filing Groups
                1. Firms Subject to the Resolution Planning Requirement
                 Following EGRRCPA, three types of firms are statutorily subject to
                the resolution planning requirement:
                 U.S. and foreign banking organizations with $250 billion
                or more in total consolidated assets,
                 U.S. banking organizations identified as U.S. GSIBs, and
                 Any designated nonbank financial companies that the
                Financial Stability Oversight Council (Council) has determined under
                section 113 of the Dodd-Frank Act should be supervised by the Board.
                 In addition and as discussed above, following EGRRCPA, the Board
                has the authority to apply the resolution planning requirement to firms
                with $100 billion or more and less than $250 billion in total
                consolidated assets.\10\ The risk-based indicators established in the
                tailoring proposals to define firms subject to Category II and III
                standards are important indicia of a firm's complexity and serve to
                gauge the likely impact of a firm's failure on U.S. financial
                stability. Therefore, the Board proposes to use these risk-based
                indicators to identify those U.S. firms with total consolidated assets
                equal to $100 billion or more and less than $250 billion to be subject
                to a resolution planning requirement. Consistent with the domestic
                tailoring proposal, the Board is proposing to apply resolution planning
                requirements to U.S. bank holding companies with (a) total consolidated
                assets equal to $100 billion or more and less than $250 billion and (b)
                $75 billion or more in any of the following risk-based indicators:
                Cross-jurisdictional activity, nonbank assets, weighted short-term
                wholesale funding, or off-balance-sheet exposure. Consistent with the
                FBO tailoring proposal, the Board is proposing to apply resolution
                planning requirements to foreign banking organizations \11\ with (a)
                total global assets equal to $100 billion or more and less than $250
                billion, (b) combined U.S. assets equal to $100 billion or more, and
                (c) $75
                [[Page 21603]]
                billion or more in any of the risk-based indicators measured based on
                combined U.S. operations.
                ---------------------------------------------------------------------------
                 \10\ 12 U.S.C. 5365(a); EGRRCPA section 401(a)(1)(B)(iii) (to be
                codified at 12 U.S.C. 5365(a)(2)(C)). See also EGRRCPA section
                401(g).
                 \11\ For purposes of the Rule and the proposal, a foreign
                banking organization is a foreign bank that has a banking presence
                in the United States by virtue of operating a branch, agency, or
                commercial lending subsidiary in the United States or controlling a
                bank in the United States; or any company of which the foreign bank
                is a subsidiary. See 12 CFR 243.2(i); 12 CFR 381.2(i); Sec.
                ____.2(n) of the proposal.
                ---------------------------------------------------------------------------
                 In addition, the agencies propose to use the risk-based indicators
                to divide U.S. and foreign firms into groups for the purposes of
                determining the frequency and informational content of resolution plan
                filings. For a summary of the proposal's resolution plan filing
                categories, please see the Resolution Plan Filing Groups visual below.
                ---------------------------------------------------------------------------
                 \12\ Please see the accompanying visual ``Proposed Resolution
                Plan Submission Dates'' for a visualization of proposed future
                submissions.
                 \13\ Firms subject to Category I standards would be the U.S.
                GSIBs. Any future Council-designated nonbank would file full and
                targeted plans on a two-year cycle, unless the agencies jointly
                determine the firm should file full and targeted plans on a three-
                year cycle.
                 \14\ Firms subject to Category II standards would be: (1) U.S.
                firms with (a) >=$700b total consolidated assets; or (b) >=$100b
                total consolidated assets with >=$75b in cross-jurisdictional
                activity and (2) foreign banking organizations (FBOs) with (a)
                >=$700b combined U.S. assets; or (b) >=$100b combined U.S. assets
                with >=$75b in cross-jurisdictional activity.
                 \15\ Firms subject to Category III standards would be: (1) U.S.
                firms with (a) >=$250b and =$100b total consolidated assets with >=$75b in nonbank assets,
                weighted short-term wholesale funding (wSTWF), or off-balance sheet
                exposure and (2) FBOs with (a) >=$250b and =$100b combined U.S. assets with >=$75b in nonbank
                assets, wSTWF, or off-balance sheet exposure.
                 \16\ Other FBOs subject to resolution planning pursuant to
                statute are FBOs with >=$250b global consolidated assets that are
                not subject to Category II or Category III standards.
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                BILLING CODE 6210-01-P
                [GRAPHIC] [TIFF OMITTED] TP14MY19.129
                BILLING CODE 6210-01-C
                U.S. Covered Companies With $100 Billion or More and Less Than $250
                Billion in Total Consolidated Assets
                 While the failure of some U.S. firms with $100 billion or more and
                less than $250 billion in total consolidated assets may not pose a
                significant threat to U.S. financial stability, the nature of an
                individual firm's particular activities and organizational footprint
                may present significant challenges to an orderly resolution. The
                thresholds and risk-based indicators identified in the categories above
                are designed to take these challenges and complexities into account.
                The Board is proposing to apply a uniform threshold of $75 billion for
                each of these risk-based indicators, based on the degree of
                concentration this amount would represent for each firm and the
                proportion of the risk factor among all U.S. firms with $100 billion or
                more in total consolidated assets that would be included by the
                threshold. In each case, a threshold of $75 billion would represent at
                least 30 percent and as much as 75 percent of total consolidated assets
                for U.S. firms with $100 billion or more and less than $250 billion in
                total consolidated assets. Setting the indicators at $75 billion would
                also ensure that firms that account for the vast majority--over 85
                percent--of the total amount of each risk factor among all U.S.
                depository institution holding companies with $100 billion or more in
                total consolidated assets would be subject to resolution planning
                requirements that address the associated challenges these factors may
                pose to orderly resolution. This would facilitate consistent treatment
                of these challenges across firms.
                [[Page 21604]]
                 For example, where a firm is heavily engaged in cross-
                jurisdictional activity, that activity increases operational
                complexity. It may be more difficult to resolve or unwind the firm's
                positions due to the multiple jurisdictions and regulatory authorities
                involved and potential legal or regulatory barriers to transferring
                financial resources across borders. The proposal would thus continue to
                apply resolution planning requirements to U.S. firms with $75 billion
                or more in cross-jurisdictional activity.
                 Similarly, bank holding companies with significant nonbank assets
                are more likely to be engaged in activities such as prime brokerage, or
                complex derivatives and capital markets activities. These activities
                can pose risks to the financial system and, if a firm has not engaged
                in planning to address these particular challenges, it is less likely
                the firm's resolution would proceed in an orderly manner without unduly
                impacting other firms. Moreover, certain of these activities may not be
                permitted in insured depository institutions because of their risk and
                tend to be conducted in legal entities that are resolved through
                bankruptcy, making the resolution planning requirement more relevant.
                The Board proposes to continue to apply resolution planning
                requirements to U.S. firms with this risk-based indicator. Continued
                resolution planning may increase the likelihood that any complex
                capital markets, securities, or derivatives activities could be
                resolved in an orderly manner.
                 In the 2008 financial crisis, it was apparent that liquidity
                stresses can lead to solvency challenges in short order if not
                addressed. Where a firm is particularly reliant on short-term funding
                sources, it may be more vulnerable to large-scale funding runs or
                ``fire sale'' effects on asset prices. The proposal would continue to
                apply resolution planning requirements to U.S. firms with higher levels
                of potential liquidity vulnerability, as measured by the firm's
                weighted short-term wholesale funding. Weighted short-term wholesale
                funding is a measure of liquidity vulnerability, as reliance on short-
                term, generally uninsured funding from highly sophisticated
                counterparties can create vulnerability to large-scale funding runs.
                Specifically, banking organizations that fund long-term assets with
                short-term liabilities from financial intermediaries like pension funds
                and money market mutual funds may need to rapidly sell less liquid
                assets to maintain their operations in a time of stress. This can lead
                to a sudden drop in asset prices that may, in turn, lead to rapid
                deterioration in the firm's financial condition and negatively impact
                broader financial stability. Through the resolution plan development
                process, the agencies expect that firms will develop and maintain
                robust liquidity measurement and risk management processes (including
                robust capabilities to measure and manage liquidity needs for those
                firms whose failure is more likely to pose a risk to U.S. financial
                stability), with the goal of leaving firms better positioned to manage
                liquidity stresses in the event of resolution, reducing negative
                effects on U.S. financial stability.
                 Where a firm's activities result in large off-balance sheet
                exposure, the firm may be more vulnerable to significant draws on
                capital and liquidity in times of stress. In the 2008 financial crisis,
                for example, vulnerabilities at individual firms were exacerbated by
                margin calls on derivative exposures, calls on commitments, and support
                provided to sponsored funds. Successful execution of a resolution
                strategy depends in part on there being sufficient capital and
                liquidity resources to execute the firm's strategy. The proposal would
                continue to apply resolution planning requirements to U.S. firms with
                this risk-based indicator. Through the resolution planning submission
                process, firms whose failure is more likely to pose risk to U.S.
                financial stability are expected to develop a more robust capacity to
                measure capital and liquidity needs for resolution and a strategy to
                deploy financial resources as needed, and to maintain the capabilities
                to measure capital and liquidity needs.
                 Question 1: What would be the advantages and disadvantages of
                having similar applicable resolution planning requirements for bank
                holding companies with total consolidated assets of $100 billion or
                more based on the proposed categories? What would be the advantages and
                disadvantages of having different standards?
                 Question 2: For purposes of the Board's discretion to apply the
                resolution planning requirement to U.S. firms with total consolidated
                assets of $100 billion or more, but less than $250 billion in total
                consolidated assets, what are the advantages and disadvantages of the
                proposed risk-based indicators? What different indicators should the
                Board use, and why?
                 Question 3: For purposes of the Board's discretion to apply the
                resolution planning requirement to U.S. firms with total consolidated
                assets of $100 billion or more, but less than $250 billion in total
                consolidated assets, at what level should the threshold for each
                indicator be set, and why? Commenters are encouraged to provide data
                supporting their recommendations.
                 Question 4: For purposes of the Board's discretion to apply the
                resolution planning requirements to U.S. firms with total consolidated
                assets of $100 billion or more, but less than $250 billion in total
                consolidated assets, the Board is considering whether Category II
                standards should apply based on a firm's weighted short-term wholesale
                funding, nonbank assets, and off-balance sheet exposure, using a higher
                threshold than the $75 billion that would apply for Category III
                standards, in addition to the thresholds discussed above based on asset
                size and cross-jurisdictional activity. For example, a firm could be
                subject to Category II standards if one or more of these indicators
                equaled or exceeded a level such as $100 billion or $200 billion. A
                threshold of $200 billion would represent at least 30 percent and as
                much as 80 percent of total consolidated assets for firms with between
                $250 billion and $700 billion in assets. If the Board were to adopt
                additional indicators for purposes of identifying firms that should be
                subject to Category II standards, at what level should the threshold
                for each indicator be set, and why? Commenters are encouraged to
                provide data supporting their recommendations.
                 When a firm does not have one of the risk-based indicators listed
                above and its total asset size is less than $250 billion, it is less
                likely that the firm's failure would present a risk of serious adverse
                effects on U.S. financial stability. In these instances, requiring a
                plan for rapid and orderly resolution in bankruptcy would impose burden
                without sufficient corresponding benefit. Accordingly, under the
                proposal, resolution planning requirements would no longer apply to
                U.S. firms with total consolidated assets of $100 billion or more and
                less than $250 billion that do not have any of the risk-based factors
                noted above. Based on their experience of reviewing resolution plans
                for firms in this category, the agencies have not identified
                deficiencies or shortcomings that required remediation.
                Foreign-Based Covered Companies With $100 Billion or More and Less Than
                $250 Billion in Total Global Assets
                 Under the proposal, the Board is proposing to apply resolution
                planning requirements to foreign banking organizations with (a) total
                global assets equal to $100 billion or more and less
                [[Page 21605]]
                than $250 billion, (b) combined U.S. assets equal to $100 billion or
                more, and (c) $75 billion or more in any of the following risk-based
                indicators measured based on combined U.S. operations: Cross-
                jurisdictional activity, nonbank assets, weighted short-term wholesale
                funding, or off-balance-sheet exposure. For the reasons described above
                with respect to domestic firms and as further discussed below in the
                triennial full filers section, the Board is proposing to use the risk-
                based indicators to determine whether a foreign banking organization
                with a significant U.S. footprint should be subject to resolution
                planning.
                 Under the proposal, the Board, however, would no longer require
                resolution plan submissions from foreign banking organizations with
                total global assets equal to $100 billion or more and less than $250
                billion where (a) the firm has combined U.S. assets below $100 billion
                or (b) the firm does not have $75 billion or more in any of the risk-
                based indicators measured based on combined U.S. operations. The
                majority of foreign banking organizations with total global assets less
                than $250 billion have limited U.S. activities and more limited
                interconnections with other U.S. market participants. Generally, such
                filers are likely to be foreign banking organizations with limited U.S.
                banking operations primarily conducted in a branch, which would not be
                resolved through bankruptcy. In the view of the Board, continuing to
                require even limited scope resolution plan submissions from this set of
                foreign banking organizations absent a significant amount of U.S.
                assets or any of the risk-based indicators does not seem warranted
                given the lower probability that the failure of these institutions
                would threaten U.S. financial stability.
                Exiting Covered Company Status
                 The proposal would update the methodology for ascertaining when a
                firm ceases to be a covered company. With respect to a decrease in
                assets, under the proposal, a U.S. firm would cease to be a covered
                company when its total consolidated assets are less than $250 billion
                based on total consolidated assets for each of the four most recent
                calendar quarters (and it is not otherwise subject to Category II or
                Category III standards based on the risk-based indicators identified
                above). A foreign banking organization that files quarterly reports on
                Form FR Y-7Q similarly would be assessed on the basis of its total
                global assets for each of the four most recent calendar quarters. A
                foreign banking organization that files the Y-7Q report annually rather
                than quarterly would be assessed based on its total global assets over
                two consecutive years. The agencies would retain the discretion to
                jointly determine that a firm is no longer a covered company at an
                earlier time than it would be pursuant to its quarterly or annual
                reports. Firms that cease to be, or to be treated as, bank holding
                companies or that are de-designated by the Council for supervision by
                the Board are no longer covered companies and do not have any further
                resolution planning requirements as of the effective date of the
                applicable action unless there is a subsequent change to their status.
                2. Filing Groups
                 The proposal divides covered companies required to file resolution
                plans into three groups of filers, commensurate with the potential
                impact of such companies' failure on U.S. financial stability. The
                proposal differentiates, for each group of filers, the resolution plan
                filing cycle length and information content requirements. The three
                groups of resolution plan filers are defined as: (a) Biennial filers;
                (b) triennial full filers; and (c) triennial reduced filers. Under the
                proposal, all covered companies would have a July 1 submission date, in
                place of the current division between July 1 and December 31. This
                change is intended to streamline the overall resolution planning
                framework.
                Biennial Filers
                 The biennial filers in the proposal comprise firms subject to
                Category I standards, or U.S. GSIBs, which are the largest, most
                systemically important U.S. bank holding companies, as well as any
                nonbank financial company supervised by the Board that has not been
                jointly designated as a triennial full filer by the agencies. Any such
                designation of a nonbank financial company would be made taking into
                account the relevant facts and circumstances, including the degree of
                systemic risk posed by the particular covered company's failure. The
                failure of a firm in this group would pose the most serious threat to
                U.S. financial stability, and accordingly the proposal provides that
                this group be subject to the most stringent resolution planning
                requirements in terms of both submission frequency and information
                content. Under the methodology in the U.S. GSIB surcharge rule,\17\
                eight U.S. bank holding companies are currently identified as U.S.
                GSIBs,\18\ and would therefore become subject to the proposed
                resolution planning requirements for this group.
                ---------------------------------------------------------------------------
                 \17\ 12 CFR part 217, subpart H.
                 \18\ Bank of America Corporation; The Bank of New York Mellon
                Corporation; Citigroup, Inc.; The Goldman Sachs Group, Inc.;
                JPMorgan Chase & Co.; Morgan Stanley; State Street Corporation; and
                Wells Fargo & Company.
                ---------------------------------------------------------------------------
                 For a biennial filer, the proposal would require submission of a
                resolution plan every two years, alternating between a full resolution
                plan, subject to the waiver option detailed below, and a targeted
                resolution plan, described below. Given that the U.S. GSIBs' resolution
                plans have matured over time and that these firms have taken meaningful
                steps to develop the foundational capabilities necessary for the
                implementation of their resolution strategies, the agencies have
                determined that a two-year filing cycle is appropriate.
                Triennial Full Filers
                 The proposal would create a second filing group, triennial full
                filers, comprising firms subject to Category II or III standards, as
                well as any nonbank financial company supervised by the Board that has
                been designated as a triennial full filer by the agencies. As indicated
                above, the agencies' designation of a nonbank financial company's plan
                type would take into account the relevant facts and circumstances.
                Triennial full filers would include any of the following firms that do
                not meet the criteria to be biennial filers:
                 U.S. firms with $250 billion or more in total consolidated
                assets,
                 U.S. firms with total consolidated assets of $100 billion
                or more and less than $250 billion that have $75 billion or more in any
                of the following risk-based indicators: Cross-jurisdictional activity,
                nonbank assets, weighted short-term wholesale funding, or off-balance
                sheet exposure,
                 Foreign banking organizations with $250 billion or more in
                combined U.S. assets, and
                 Foreign banking organizations with $100 billion or more
                and less than $250 billion in combined U.S. assets that have $75
                billion or more in any of the following risk-based indicators measured
                based on combined U.S. operations: Cross-jurisdictional activity,
                nonbank assets, weighted short-term wholesale funding, or off-balance
                sheet exposure.
                 Consistent with the tailoring proposals, the agencies would also
                consider the level of cross-jurisdictional activity, nonbank assets,
                weighted short-term wholesale funding, and off-balance
                [[Page 21606]]
                sheet exposure levels of a foreign banking organization's U.S.
                operations to determine the applicable filing group. The agencies
                propose to apply a uniform threshold of $75 billion for each of these
                risk-based indicators. A threshold of $75 billion would represent at
                least 30 percent and as much as 75 percent of the size of the U.S.
                operations of a foreign banking organization with combined U.S. assets
                equal to $100 billion or more and less than $250 billion. The Board
                proposed a $75 billion threshold for these indicators in the tailoring
                proposals. Setting the thresholds for these risk-based indicators at
                $75 billion would ensure that domestic banking organizations and the
                U.S. operations of foreign banking organizations that account for the
                vast majority--over 70 percent--of the total amount of each risk-based
                indicator would be subject to resolution planning requirements that
                account for the risks associated with these indicators.
                 For example, foreign banking organizations with U.S. operations
                that engage in significant cross-jurisdictional activity \19\ may
                present increased operational complexities for resolution. Where
                multiple jurisdictions and regulatory authorities are involved, there
                could be further legal or regulatory barriers preventing transfer of
                financial resources across borders. The agencies propose that foreign
                banking organizations with $75 billion or more in cross-jurisdictional
                activity (i.e., foreign banking organizations subject to Category II
                standards) be triennial full filers in order to understand how these
                firms would address these challenges in resolution.
                ---------------------------------------------------------------------------
                 \19\ Consistent with the domestic tailoring proposal, cross-
                jurisdictional activity for U.S. firms would be defined as the sum
                of cross jurisdictional assets and liabilities, as each is reported
                on the Banking Organization Systemic Risk Report (FR Y-15).
                Consistent with the FBO tailoring proposal, a foreign banking
                organization would measure cross-jurisdictional activity as the sum
                of the cross-jurisdictional assets and liabilities of its combined
                U.S. operations excluding intercompany liabilities and
                collateralized intercompany claims. As discussed in more detail in
                the FBO tailoring proposal, cross-jurisdictional activity would be
                measured excluding cross-jurisdictional liabilities to non-U.S.
                affiliates and cross-jurisdictional claims on non-U.S. affiliates to
                the extent that these claims are secured by eligible financial
                collateral.
                ---------------------------------------------------------------------------
                 Similarly, foreign banking organizations with significant nonbank
                assets may have increased operational complexity that could present
                challenges to resolution. Specifically, banking organizations with
                significant investments in nonbank subsidiaries are more likely to have
                complex corporate structures, inter-affiliate transactions, and funding
                relationships. In a resolution scenario, it may be more challenging to
                resolve these activities in an orderly manner without unduly impacting
                other firms.
                 Additionally, nonbank activities may involve a broader range of
                risks than those associated with banking activities, and can increase
                interconnectedness with other financial market participants, presenting
                increased risks to the financial system. If a firm is not engaged in
                planning to address these challenges, the firm's resolution may be more
                difficult. The distress or failure of a nonbank subsidiary could also
                be destabilizing to the U.S. operations of a foreign banking
                organization and to the foreign banking organization itself, causing
                counterparties and creditors to lose confidence in its global
                operations. The agencies propose that firms with this risk-based
                indicator be triennial full filers as resolution planning may increase
                the likelihood that capital markets, securities, or derivatives
                activities could be resolved in an orderly manner.
                 In the 2008 financial crisis, liquidity stresses resulted in
                solvency challenges for firms. Where the U.S. operations of a foreign
                banking organization is particularly reliant on short-term, generally
                uninsured funding from sophisticated counterparties such as investment
                funds, these operations may be more vulnerable to large-scale funding
                runs. In particular, foreign banking organizations with U.S. operations
                that fund long-term assets with short-term liabilities from financial
                intermediaries such as investment funds may need to rapidly sell less
                liquid assets to meet withdrawals and maintain their operations in a
                time of stress, which they may be able to do only at ``fire sale''
                prices. Such asset fire sales can cause rapid deterioration in a
                foreign banking organization's financial condition and may adversely
                affect U.S. financial stability by driving down asset prices across the
                market. The agencies propose that firms with this risk-based indicator
                be triennial full filers since the development and maintenance of
                liquidity measurement and risk management may result in the firms being
                better positioned to manage liquidity stresses in the event of
                resolution.
                 Where a firm's activities result in large off-balance sheet
                exposure, the firm's customers or counterparties may be exposed to a
                risk of loss or suffer a disruption in the provision of services. The
                firm may also be more vulnerable to significant future draws on
                liquidity, particularly in times of stress. In the 2008 financial
                crisis, for example, vulnerabilities among the U.S. operations of
                foreign banking organizations were exacerbated by margin calls on
                derivative exposures and draws on commitments. Successful execution of
                a resolution strategy depends in part on there being sufficient capital
                and liquidity resources to execute the firm's strategy. The proposal
                would make firms with this risk-based indicator triennial full filers.
                Through the resolution planning submission process, firms may develop a
                more robust capacity to measure capital and liquidity needs for
                resolution and a strategy to deploy financial resources as needed.
                 Question 5: For purposes of defining resolution plan filing groups,
                what are the advantages and disadvantages of the proposed risk-based
                indicators? Should the agencies use different indicators, and if so,
                why?
                 Question 6: For purposes of defining resolution plan filing groups,
                at what level should the threshold for each indicator be set for
                foreign banking organization's U.S. operations, and why? Commenters are
                encouraged to provide data supporting their recommendations.
                 The failure of a triennial full filer could pose a threat to U.S.
                financial stability, though it is generally less likely than a firm in
                the biennial filers group. The proposal would therefore require these
                firms to submit resolution plans as triennial full filers; however,
                under the proposal, the filing cycle for triennial full filers would be
                one year longer than that of the biennial filers.
                 Specifically, the proposal would require triennial full filers to
                submit a resolution plan every three years, alternating between a full
                resolution plan, subject to the waiver option detailed below, and a
                targeted resolution plan, described below. The agencies have determined
                that this longer filing cycle is appropriate in light of the lesser
                degree of systemic risk posed by the failure of a firm in this group.
                 Notably, this filing group includes the foreign banking
                organizations that have received detailed guidance from the
                agencies.\20\ The agencies believe that it is appropriate that these
                firms be part of the triennial full filing group and submit plans on
                the three-year filing cycle because the preferred outcome for each of
                these foreign banking organizations is a successful home country
                resolution using a single point of entry resolution
                [[Page 21607]]
                strategy, not the resolution strategy described in its U.S. resolution
                plan.
                ---------------------------------------------------------------------------
                 \20\ See, e.g., Guidance for 2018 Sec. 165(d) Annual Resolution
                Plan Submissions By Foreign-based Covered Companies that Submitted
                Resolution Plans in July 2015, https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20170324a21.pdf.
                ---------------------------------------------------------------------------
                 The filing group would also include non-bank financial companies
                designated by the Council for supervision by the Board that the
                agencies jointly designate to be triennial full filers. Given that the
                Council must determine that material financial distress at a nonbank
                financial company supervised by the Board could pose a threat to U.S.
                financial stability,\21\ under the proposal, nonbank financial
                companies would automatically be deemed biennial filers. However, the
                agencies are retaining the discretion to obtain plans from these
                companies on a triennial basis based on the facts and circumstances of
                a particular company.
                ---------------------------------------------------------------------------
                 \21\ 12 U.S.C. 5323.
                ---------------------------------------------------------------------------
                Triennial Reduced Filers
                 The proposal identifies a third group, triennial reduced filers,
                which consists of any covered company that is not subject to Category
                I, II, or III standards or is not a nonbank financial company
                supervised by the Board; that is, any covered company that is not a
                biennial or triennial full filer. The firms in this population do not
                pose the same risks to U.S. financial stability because they do not
                have the same size or complexity as the firms subject to Category I,
                II, or III standards. Accordingly, the proposal would apply less
                stringent resolution planning requirements to these firms. Triennial
                reduced filers would include foreign banking organizations with $250
                billion or more in total global assets that are not subject to Category
                II or III standards.\22\
                ---------------------------------------------------------------------------
                 \22\ These foreign banking organizations would be required to
                submit resolution plans because they would have at least $250
                billion in total global assets. See EGRRCPA section 401(a).
                ---------------------------------------------------------------------------
                 The proposal would require a firm that becomes a covered company
                and that is a triennial reduced filer to submit as its initial
                submission a full resolution plan, subject to the waiver option
                detailed below, and thereafter, every three years, a reduced resolution
                plan, described below. The agencies have determined that extending the
                filing cycle and reducing the informational requirements is appropriate
                given these firms' limited U.S. operations and smaller U.S. footprints.
                Moving Filing Dates
                 As a covered company's resolution plan matures over time and as the
                risks presented by individual firms and the market change, a different
                filing cycle may be appropriate, commensurate with the risks posed by
                the failure of the firm to U.S. financial stability and the extent of
                current and relevant information available to support the agencies'
                advance planning efforts. Accordingly, the proposal would provide the
                agencies with flexibility to move filing dates when appropriate. The
                agencies would notify a covered company that has previously submitted a
                resolution plan at least 180 days prior to the new filing date. The
                agencies would notify a new covered company at least 12 months prior to
                the new filing date.
                 Question 7: Are the risk-based indicators and thresholds
                appropriate for identifying and distinguishing between groups of
                resolution plan filers (i.e., biennial, triennial full, and triennial
                reduced)?
                 Question 8: The agencies invite public comment on whether the
                proposed resolution plan submission cycle (i.e., U.S. GSIBs submitting
                resolution plans every two years, and other covered companies
                submitting resolution plans every three years) is appropriate. Would a
                longer or shorter interval between submissions be appropriate for any
                group of resolution plan filers?
                B. Resolution Plan Content
                1. Full Resolution Plan
                 The proposal would not generally modify the components or
                informational requirements of a full resolution plan.\23\ Through
                numerous resolution plan submissions, the agencies and firms have
                gained familiarity with the format and content of the information
                currently required to be submitted pursuant to the Rule. The agencies
                also recognize the utility of the existing information requirements for
                full resolution plans. Focus on these items has facilitated resolution
                plan and resolvability improvements, particularly by the largest and
                most complex firms. Applicable guidance previously issued to specific
                full resolution plan filers concerning the content of their upcoming
                submissions would continue to apply to those individual firms.\24\
                ---------------------------------------------------------------------------
                 \23\ The proposal would modify the requirements for a full
                resolution plan's executive summary by requiring a firm to include a
                description of material changes (as defined in the proposal) since
                the filing of the firm's previously submitted resolution plan and a
                description of the changes the firm has made to its resolution plan
                in response. The proposal would also require the executive summary
                to describe changes made to the firm's resolution plan, including
                its resolvability or resolution strategy or how the strategy is
                implemented, in response to feedback provided by the agencies,
                guidance issued by the agencies, or legal or regulatory changes. The
                requirements for targeted resolution plans would be consistent with
                these requirements.
                 \24\ E.g., Guidance for Sec. [thinsp]165(d) Resolution Plan
                Submissions by Domestic Covered Companies applicable to the Eight
                Largest, Complex U.S. Banking Organizations, 84 FR 1438, 1449
                (February 4, 2019).
                ---------------------------------------------------------------------------
                 Question 9: The agencies invite comment on whether there are
                specific elements in Sec. __.4 (Informational content of a resolution
                plan) of the current Rule that should be omitted or modified.
                2. Waiver
                 Through a covered company's repeated resolution plan submissions,
                certain aspects of its resolution plan may reach a steady state or
                become less material such that regular updates would not be useful to
                the agencies in their review of the plan. In acknowledgement of this,
                the proposal would continue to permit the agencies to waive certain
                informational content requirements for one or more firms on the
                agencies' joint initiative.\25\ Waivers could be granted for one or
                more filing cycles.
                ---------------------------------------------------------------------------
                 \25\ The current Rule permits the agencies to grant exemptions
                for one or more of the informational requirements of the Rule. 12
                CFR 243.4(k); 12 CFR 381.4(k). The proposal would supersede this
                provision with the new waiver provisions found in Sec. __.4(d)(6)
                of the proposal, which would provide similar authority.
                ---------------------------------------------------------------------------
                 The proposal also lays out a process for a covered company that has
                previously submitted a resolution plan to apply for a waiver of certain
                informational content requirements of a full resolution plan (waivers
                could not be applied for with respect to targeted or reduced resolution
                plans). Where the covered company would like to omit certain
                information from its next full resolution plan submission, the covered
                company would need to apply for the waiver at least 15 months in
                advance of the filing date.
                 In order to limit administrative burden and maximize transparency,
                covered companies would be limited to making one waiver request for
                each filing cycle, and the public section of the waiver request,
                containing the list of the requirements sought to be waived, would be
                made public. Waivers would be automatically granted on the date that is
                nine months prior to the plan it relates to is due if the agencies do
                not jointly deny the waiver prior to that date. The agencies may deny a
                waiver if, for example, they find that the information sought to be
                waived could be relevant to the agencies' review of the covered
                company's plan. The proposal provides that covered companies would not
                be able to request waivers for certain informational content
                requirements of the Rule. These include the core elements required in a
                targeted resolution plan, discussed below; information about changes
                the covered company has made to its resolution plan in response to a
                material change;
                [[Page 21608]]
                information required in the public section of a full resolution plan;
                information about a deficiency or shortcoming that has not been
                adequately remedied or satisfactorily addressed; and information that
                is specifically required to be included in a resolution plan pursuant
                to section 165(d) of the Dodd-Frank Act.\26\ The agencies note,
                however, that covered companies may be able to incorporate by reference
                to a previous plan submission certain information that would not be
                eligible for a waiver if the information meets the proposed
                requirements for incorporation by reference.
                ---------------------------------------------------------------------------
                 \26\ 12 U.S.C. 5365(d)(1)(A)-(C).
                ---------------------------------------------------------------------------
                 The agencies expect that waivers would be granted in appropriate
                circumstances. For example, waivers could be appropriate to reduce
                burden for informational content that may be of limited utility to the
                agencies, such as where the agencies have recently completed an in-
                depth review of a particular business line and are satisfied that they
                are in possession of current information relevant to a firm's ability
                to resolve that business line. More specifically, if the agencies have
                recently undertaken a comprehensive review of a firm's Payments,
                Clearing, and Settlement (PCS) activities, it may be appropriate to
                waive the requirement for that firm to submit information relevant to
                these activities in its next resolution plan submission. As another
                example, for a covered company that would currently be eligible to file
                a tailored resolution plan, the agencies could grant a waiver that
                would limit the firm's required plan content in a manner that is
                similar to the current tailored resolution plan provisions of the
                Rule.\27\
                ---------------------------------------------------------------------------
                 \27\ The current Rule's tailored resolution plan provisions
                allow covered companies with less than $100 billion in total nonbank
                assets that predominately operate through one or more insured
                depository institutions (i.e., the company's insured depository
                institution subsidiaries comprise at least 85 percent of its total
                consolidated assets or, in the case of a foreign-based covered
                company, the assets of the U.S. insured depository institution
                operations, branches, and agencies comprise 85 percent or more of
                the company's U.S. total consolidated assets), to seek approval from
                the Board and the Corporation to submit a tailored resolution plan
                that focuses on the nonbank operations of the covered company.
                ---------------------------------------------------------------------------
                 A firm would need to provide all information necessary to support
                its request, including an explanation of why approval of the request
                would be appropriate, why the information for which a waiver is sought
                would not be relevant to the agencies' review of the firm's resolution
                plan, and confirmation that the request meets the eligibility
                requirements for a waiver under the Rule (i.e., that it is not a core
                element, not related to an identified deficiency that has not been
                adequately remedied, etc.). In order to ensure that the agencies have
                the information necessary to evaluate a waiver request, the proposal
                provides that covered companies would be required to explain why the
                information sought to be waived would not be relevant to the agencies'
                review of the covered company's next full resolution plan and why a
                waiver of the requirement would be appropriate. Failure to provide
                appropriate explanation or any information requested by the agencies in
                a timely manner could lead the agencies to deny a waiver request on the
                basis that insufficient explanation or a lack of information makes it
                impossible to determine that the information sought to be waived would
                not be relevant to their review of the resolution plan.
                 A full resolution plan should specify content omitted due to a
                waiver request that was granted.
                 Question 10: The agencies invite comment on the process identified
                for covered companies to request waivers. Does the proposed timeline
                provide sufficient time for covered companies to request waivers and
                for the agencies to review those requests? Should waivers be presumed
                to be granted unless the agencies jointly deny them or presumed to be
                denied unless the agencies jointly grant them? The agencies invite
                comment on the list of requirements with respect to which a waiver is
                not available. For example, are there any additional requirements under
                the proposal with respect to which a waiver should not be available?
                Should the public section of waiver requests be required to contain any
                additional information?
                 Question 11: The agencies invite comment on areas where the
                agencies should consider granting a waiver on the agencies' joint
                initiative in the next plan submissions of the covered companies. The
                agencies note they do not anticipate soliciting such feedback regularly
                or periodically in advance of future resolution plan submissions, but
                rather are inviting general comments on this topic to help inform the
                initial application of this proposed waiver mechanism.
                3. Targeted Resolution Plan
                 The proposal would also amend the Rule to include a new type of
                resolution plan submission: A targeted resolution plan. As resolution
                plans develop and solidify over time, it is appropriate that certain
                information be refreshed or updated rather than resubmitted in full.
                The agencies are proposing the creation of the targeted resolution plan
                submission to strike the appropriate balance between providing a means
                to continue receiving updated information on structural or other
                changes that may affect a firm's resolution strategy while not
                requiring submission of information that remains largely unchanged
                since the previous submission. A targeted resolution plan would be a
                subset of a full resolution plan.
                 The targeted resolution plan elements are proposed to be as
                follows:
                 Certain Resolution Plan Core Elements: Each targeted resolution
                plan would include an update of the information required to be included
                in a full resolution plan regarding capital, liquidity, and the covered
                company's plan for executing any recapitalization contemplated in its
                resolution plan, including updated quantitative financial information
                and analyses important to the execution of the covered company's
                resolution strategy. For firms that have received detailed guidance
                from the agencies applicable to their upcoming submissions regarding
                capital, liquidity, and governance mechanisms, the targeted resolution
                plans should address these elements consistent with the applicable
                guidance.\28\ A firm that has not received detailed guidance would be
                required to describe the capital and liquidity needed to execute the
                firm's resolution strategy consistent with Sec. __.5(c), (d)(1)(i),
                (iii), and (iv), (e)(1)(ii), (e)(2), (3), and (5), (f)(1)(v), and (g)
                of the proposal and, to the extent its resolution plan contemplates
                recapitalization, the covered company's plan for executing the
                recapitalization consistent with Sec. __.5(c)(5) of the proposal.
                ---------------------------------------------------------------------------
                 \28\ For example, a targeted resolution plan could discuss
                changes to a firm's methodology for modeling liquidity needs for its
                material entities during periods of financial stress, as well as
                changes to the firm's means for providing capital and liquidity to
                such entities as would be needed to successfully execute the firm's
                resolution strategy. These updates could, for example, involve
                changes to triggers upon which the firm relies to execute a
                recapitalization, including triggers based on capital or liquidity
                modeling. See, e.g., Guidance for section[thinsp]165(d) Resolution
                Plan Submissions by Domestic Covered Companies applicable to the
                Eight Largest, Complex U.S. Banking Organizations, 84 FR 1438, 1449
                (February 4, 2019); Guidance for 2018 Sec. 165(d) Annual Resolution
                Plan Submissions By Foreign-based Covered Companies that Submitted
                Resolution Plans in July 2015, https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20170324a21.pdf. The firms that
                received this guidance would be expected to address Resolution
                Capital Adequacy and Positioning (RCAP), Resolution Liquidity
                Execution Need (RLEN), and governance mechanisms as part of their
                updates concerning capital, liquidity and any plans for executing a
                recapitalization, respectively.
                ---------------------------------------------------------------------------
                 Material Changes: Each targeted resolution plan would include a
                description of material changes since
                [[Page 21609]]
                the filing of the covered company's previously submitted resolution
                plan and a description of the changes the covered company has made to
                its resolution plan in response.\29\ A material change is defined to be
                any event, occurrence, change in conditions or circumstances, or other
                change that results in, or could reasonably be foreseen to have a
                material effect on the resolvability of the covered company, the
                covered company's resolution strategy, or how the covered company's
                resolution strategy is implemented. Such changes include the
                identification of a new critical operation or core business line; the
                identification of a new material entity or the de-identification of a
                material entity; significant increases or decreases in the business,
                operations, or funding of a material entity; or changes in the primary
                regulatory authorities of a material entity or the covered company on a
                consolidated basis.
                ---------------------------------------------------------------------------
                 \29\ Section 165(d)(1) of the Dodd-Frank Act requires that
                certain information be periodically reported to the agencies in
                covered companies' resolution plans (required information). 12
                U.S.C. 5365(d)(1). If a covered company does not include in its
                targeted resolution plan a description of changes to the required
                information from its previously submitted plan, the required
                information that it included in its previously submitted plan would
                be incorporated by reference into its targeted resolution plan.
                ---------------------------------------------------------------------------
                 Other such changes include material changes in operational and
                financial interconnectivity, both those that are intra-firm and
                external. Examples of such operational interconnectivity include
                reliance on affiliates for access to key financial market utilities or
                critical services, or significant reliance on the covered company by
                other firms for certain PCS services, including agent bank clearing or
                nostro account clearing, or government securities settlement services.
                Examples of such financial interconnectivity include a material entity
                becoming reliant on an affiliate as a source for funding or collateral,
                or the covered company becoming a major over-the-counter derivatives
                dealer.
                 Changes in Response to Regulatory Requirements, Guidance, or
                Feedback: Each targeted resolution plan would discuss changes made to
                the covered company's resolution plan, including its resolvability or
                resolution strategy or how the strategy is implemented, in response to
                feedback provided by the agencies, guidance issued by the agencies, or
                legal or regulatory changes.
                 Public Section: Each targeted resolution plan would contain a
                public section with the same content required of a full resolution
                plan's public section.
                 Targeted Areas of Interest: Each targeted resolution plan would
                discuss targeted areas of interest identified by the agencies that
                either an individual covered company or a group of similarly situated
                covered companies in a particular filing group \30\ should address to
                enhance their resolution plan submissions. The agencies would notify
                covered companies of such targeted areas of interest at least 12 months
                prior to the applicable resolution plan submission date. Examples of a
                targeted area of interest could include the potential effects of Brexit
                on a covered company's resolvability because of material changes to
                booking practices or to the firm's organizational structure as a result
                of regulatory and market developments.
                ---------------------------------------------------------------------------
                 \30\ E.g., U.S. GSIBs, or foreign banking organizations that are
                triennial full filers.
                ---------------------------------------------------------------------------
                 Question 12: The agencies invite comment on the proposed content of
                targeted resolution plans. Is it sufficiently clear what information is
                required to be included in a targeted resolution plan, including with
                respect to the proposed definition of the core elements? If not, how
                should the agencies clarify these requirements? Are there any
                information requirements that should be added to or removed from the
                proposed content of targeted resolution plans? Do the paragraphs of
                Sec. __.5 identified in the proposal's core elements definition
                identify the appropriate sections of the full resolution plan where
                core elements can be found?
                4. Reduced Resolution Plan
                 The proposal would also codify the reduced resolution plan type.
                For foreign banking organizations with limited U.S. operations, the
                agencies have generally agreed, on a case-by-case basis, to limit the
                informational requirements of these firms' recent submissions to
                material changes and improvements to the firms' resolution strategies.
                The proposal would formalize the information requirements for this type
                of resolution plan and lay out the criteria (as discussed above) for
                firms to be permitted to file reduced resolution plans.
                 The proposal lays out the reduced resolution plan components as
                follows: A description of material changes experienced by the covered
                company since the filing of the covered company's previously submitted
                resolution plan and changes made to the strategic analysis that was
                presented in the firm's previously submitted resolution plan in
                response to these changes and changes made in response to feedback
                provided by the agencies, guidance issued by the agencies, or legal or
                regulatory changes.\31\ Receiving updates of this information would
                permit the agencies to continue to monitor significant changes in
                structure or activities while appropriately focusing on the
                informational components of these firms' resolution plans.
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                 \31\ As described above, section 165(d)(1) of the Dodd-Frank Act
                mandates that required information be included in covered companies'
                resolution plans. 12 U.S.C. 5365(d)(1). If a triennial reduced filer
                does not include in its reduced resolution plan a description of
                changes to the required information from its previously submitted
                plan, the required information that it included in its previously
                submitted plan would be incorporated by reference into its reduced
                resolution plan.
                ---------------------------------------------------------------------------
                 For the public section of a reduced resolution plan, the proposal
                would modify the content currently required in the public section of
                all plans. The reduced resolution plan public section would be limited
                to the following elements: Names of material entities, a description of
                core business lines, the identities of principal officers, and a high-
                level description of the firm's resolution strategy, referencing the
                applicable resolution regimes for its material entities.
                 Question 13: The agencies invite comment on the proposed content of
                reduced resolution plans. Are there any information requirements that
                should be added to or removed from the proposed content of reduced
                resolution plans?
                5. Tailored Plans
                 The Rule currently provides for a tailored plan, a means for
                certain bank-centric firms to request that their resolution plan
                submissions focus on nonbank activities that may pose challenges to
                executing the firm's resolution strategy. Pursuant to the Rule, firms
                must apply to the agencies to file a tailored plan rather than a full
                resolution plan every year that a submission is required.
                 The agencies propose to eliminate the tailored plan category. The
                introduction of the waiver process and the targeted resolution plan
                would provide effective substitutes for this type of focused submission
                in appropriate circumstances. Additionally, many of the covered
                companies currently eligible for a tailored plan either have ceased,
                post-EGRRCPA, to be subject to the resolution plan submission
                requirement or would become triennial reduced filers, which would focus
                their future plan submissions on material changes.
                 Question 14: The agencies invite comment on whether the tailored
                plan category should be retained.
                [[Page 21610]]
                C. Critical Operations Methodology and Reconsideration Process
                 The current Rule provides for critical operations to be identified
                by the firms or at the agencies' joint direction. In 2012, the agencies
                established a process and methodology for jointly identifying critical
                operations for both U.S. and foreign-based covered companies. The
                agencies assessed the significance of activities and markets with
                respect to U.S. financial stability in the following four areas:
                Capital markets; funding and liquidity; retail and commercial banking;
                and payments, clearing, and settlement. The agencies then considered
                the significance of individual covered companies as a provider or
                participant in those activities and markets using criteria such as
                market share data, level of market concentration, size of market
                activity, and ease of substitutability.\32\
                ---------------------------------------------------------------------------
                 \32\ For example, a critical operation of a covered company
                would include an operation, such as a clearing, payment, or
                settlement system, that plays a role in the financial markets for
                which other firms lack the expertise or capacity to provide a ready
                substitute.
                ---------------------------------------------------------------------------
                 The agencies' original critical operations identifications from
                2012 have remained largely unchanged. As covered companies have made
                changes to their operating structures, realigned business entities, and
                adapted to changing market conditions, some have submitted ad hoc
                requests to the agencies seeking reconsideration of certain critical
                operations identifications. The agencies have reviewed these requests
                and communicated their decisions to firms on a rolling basis.
                 Given that both firms and markets continually evolve and change,
                the agencies have determined that a periodic, comprehensive review of
                critical operations identifications would help to ensure that
                resolution planning remains appropriately focused on key areas.
                 The proposal would establish processes for firms and the agencies
                to identify particular operations of covered companies as critical
                operations and to rescind prior critical operations identifications
                made by the agencies. In addition, the proposal would specify a process
                for a covered company to request reconsideration of operations
                previously identified by the agencies as critical, and require that
                covered companies notify the agencies if the covered company ceases to
                identify an operation as a critical operation. The intended result
                would be a process that yields a relatively stable population of
                identified critical operations while allowing for recognition of new,
                or changes to existing, markets or activities as well as changes to
                individual firms' participation in those markets or activities, among
                other factors. The agencies expect that the proposed processes would
                cause covered companies' resolution plans to be more clearly focused on
                the actions a covered company would need to take to facilitate a rapid
                and orderly resolution.\33\
                ---------------------------------------------------------------------------
                 \33\ See 12 CFR 243.4(c)(1)(ii); 12 CFR 381.4(c)(1)(ii); Sec.
                __.5(c)(1)(ii) of the proposal.
                ---------------------------------------------------------------------------
                1. Changes to Definitions
                 The agencies are proposing to modify the definition of ``critical
                operations'' to reflect the proposed requirements and processes in new
                Sec. __.3. Under the proposal, ``critical operations'' means those
                operations, including associated services, functions, and support, the
                failure or discontinuance of which would pose a threat to the financial
                stability of the United States. In addition, the proposal would include
                a new definition, ``identified critical operations,'' to clarify that
                critical operations can be identified by either the covered company or
                jointly identified by the agencies and that until such an operation has
                been identified by either method, the operation does not need to be
                addressed as a critical operation in a resolution plan.
                2. Identification of Critical Operations by Covered Companies
                 In general, covered companies have developed processes within their
                broader resolution planning framework to identify critical operations.
                The proposal would require a subset of covered companies, specifically
                biennial filers and triennial full filers (i.e., generally those with
                currently identified critical operations) to maintain a process for the
                identification of critical operations on a scale that reflects the
                nature, size, complexity, and scope of their operations.
                 The proposal would require that the firm's process include a
                methodology for identifying critical operations. Specifically, the
                methodology must first identify and assess economic functions engaged
                in by the firm. These economic functions may include the core banking
                functions of deposit taking; lending; payments, clearing and
                settlement; custody; wholesale funding; and capital markets and
                investment activities. In general, an economic function is most likely
                to present a critical operation of the firm where both (a) a market or
                activity engaged in by the firm is significant to U.S. financial
                stability and (b) the firm is a significant provider or participant in
                such a market or activity. Factors relevant for determining whether a
                market or activity is significant to U.S. financial stability, or
                whether a firm is a significant provider or participant in such a
                market or activity, may include substitutability, market concentration,
                interconnectedness, and the impact of cessation. The firm's analysis
                should focus on the significance of the activity to U.S. financial
                stability, not whether a particular activity is significant for a
                foreign parent or other foreign affiliates of the firm.\34\ The process
                undertaken by a firm in completing such an analysis should be
                commensurate with the nature, size, complexity, and scope of its
                operations.\35\
                ---------------------------------------------------------------------------
                 \34\ Where a firm's operation, such as U.S. dollar deposit
                taking, is significant to the firm, but the failure or
                discontinuance of that activity would not pose a threat to the
                financial stability of the United States, that operation would not
                be an identified critical operation under the proposal.
                 \35\ For a foreign firm, the critical operations identification
                process and methodology should be commensurate with the nature,
                size, complexity, and scope of its U. S. operations.
                ---------------------------------------------------------------------------
                 The agencies propose that the covered company's critical operations
                review process occur at least as frequently as its resolution plan
                submission cycle and that the review process be documented in the
                covered company's corporate governance policies and procedures.\36\
                ---------------------------------------------------------------------------
                 \36\ See 12 CFR 243.4(d)(1)(i); 12 CFR 381.4(d)(1)(i); Sec.
                __.5(d)(1)(i) of the proposal.
                ---------------------------------------------------------------------------
                 The proposal lays out a process for a covered company that has
                previously submitted a resolution plan but does not currently have an
                identified critical operation under the Rule to apply for a waiver of
                the requirement to have a process and methodology to identify critical
                operations. Where the covered company would like a waiver of the
                requirement with respect to its next plan submission, the covered
                company would need to apply for the waiver at least 15 months in
                advance of the filing date for that resolution plan.
                 In its waiver request, the covered company must explain why a
                waiver of the requirement would be appropriate, including an
                explanation of why the process and methodology are not likely to
                identify any critical operation given its business model, operations,
                and organizational structure. For example, for a covered company that
                has not experienced any significant changes in its business,
                operations, or organizational structure since its most recent
                resolution plan, a waiver request that so states, with reasonable
                supporting detail, could provide sufficient information for the
                agencies to evaluate the request. Alternatively, if
                [[Page 21611]]
                one of a covered company's operations gained significant market share
                since it submitted its most recent resolution plan submission, the
                waiver request should include this information, a description of the
                operation, and a discussion of why this change would not warrant the
                development of a methodology for identifying critical operations.
                 Failure to provide appropriate information jointly requested by the
                agencies in a timely manner could lead the agencies to deny a waiver
                request on the basis that a lack of information makes it impossible to
                determine that the information sought to be waived would not be
                relevant to their review of the resolution plan.
                 The public section of the waiver request, describing that a waiver
                of the requirement is being sought, would be made public. Waivers would
                be automatically granted on the date that is nine months prior to the
                date that the resolution plan it relates to is due if the agencies do
                not jointly deny the waiver prior to that date.
                 Question 15: If granted, how long should the waiver from the
                critical operations methodology be valid? For example, should the
                waiver be valid for each submission cycle (e.g., three years) or for a
                full resolution plan submission and the following targeted plan
                submission (e.g., six years)? In addition, should the waiver become
                invalid upon the occurrence of certain events (e.g., the occurrence of
                a material change (as defined in the proposal))?
                 Question 16: The agencies propose that any critical operations
                identification process undertaken by a firm be commensurate with the
                nature, size, complexity, and scope of its operations, and that a firm
                that does not currently have an identified critical operation be
                permitted to seek a waiver from the requirement to have such a process.
                Are there benefits from having firms that do not have currently
                identified critical operations develop and maintain a process for
                identifying critical operations, or should these firms be able to
                request a waiver from the proposed critical operations identification
                process requirement? Should a firm that moves to a more stringent
                category (e.g., from being a triennial reduced filer to being a firm
                that is subject to Category II standards and, accordingly, a triennial
                full filer) and does not have a currently identified critical operation
                be permitted to seek a waiver from the critical operations
                identification process requirement?
                3. Identification and Rescission of Critical Operations by the
                Agencies; Periodic Agency Review
                 Under the proposal, the agencies would be able to identify a
                critical operation or rescind a prior identification at any time. In
                addition, the proposal would provide for the agencies to review all
                identified critical operations and the operations of covered companies
                for consideration as critical operations at least every six years. In
                connection with these reviews, the agencies would jointly identify any
                additional critical operation or rescind any prior identification if
                they jointly find that the operation is not a critical operation.
                4. Requests for Reconsideration
                 Under the proposal, a covered company would be able to request that
                the agencies reconsider a critical operation identification made
                jointly by the agencies by submitting a written request that presents
                the company's arguments, all relevant information that the company
                expects the agencies to consider, and, if applicable, a description of
                the material differences between the current request and the most
                recent prior reconsideration request for the same critical operation. A
                covered company would be required to submit a request for
                reconsideration sufficiently before its next resolution plan to provide
                the agencies with a reasonable period to reconsider the identification.
                The agencies would generally complete their reconsideration no later
                than 90 days after receipt of all requested information from the
                covered company.
                5. De-Identification by Covered Companies of Self-Identified Critical
                Operations
                 Under the proposal, a covered company would be required to notify
                the agencies if the covered company ceases to identify an operation as
                a critical operation. The notice would be required to explain why the
                firm previously identified the operation as a critical operation and
                why the firm no longer identifies the operation as a critical
                operation. The notice is meant to provide the agencies with sufficient
                time to consider whether to jointly identify the operation as a
                critical operation, if they have not already done so. Accordingly, a
                covered company would generally be required to continue to treat an
                operation as a self-identified critical operation in any resolution
                plan the covered company is required to submit within 12 months of the
                notification.
                 Question 17: How often should the agencies conduct a new
                identification process and review existing critical operations
                identifications for each covered company? Should, for example, the
                frequency of the agencies' critical operations identification review
                processes occur on the same cycle with the agencies' review of covered
                companies' full resolution plan submission?
                 Question 18: What particular information should the agencies
                consider in addressing a covered company's rescission request under the
                Rule?
                 Question 19: The agencies invite comment on all aspects of the
                proposal for firms to establish and implement a process designed to
                identify their critical operations. Are the elements of the critical
                operations identification methodology sufficiently clear? For example,
                is it sufficiently clear how a covered company should analyze the
                significance to U.S. financial stability of the markets and activities
                through which it engages in economic functions? Should this requirement
                apply to a broader or narrower set of firms? For example, should the
                requirement apply only to global systemically important bank holding
                companies? Should firms' reviews of their critical operations
                designations be required to occur on a more or less frequent basis? In
                what ways, if any, do the proposed requirements differ from covered
                companies' current processes for identifying their critical operations?
                D. Clarifications to the Rule
                1. Resolution Strategy for Foreign-Based Covered Companies
                 The Rule does not specify the assumptions a foreign banking
                organization should make with respect to how resolution actions it
                takes outside of the United States should be addressed in its
                resolution plan. This issue is particularly acute for a foreign banking
                organization that expects to undertake a single point of entry
                resolution strategy in its home country. If such a strategy were to be
                successfully undertaken, a firm's U.S. operations would not need to
                enter resolution, which conflicts with the statutory requirement that a
                covered company present a plan for its orderly resolution under the
                U.S. Bankruptcy Code. Therefore, the proposal would clarify that
                covered companies that are foreign banking organizations should not
                assume that the covered company takes resolution actions outside of the
                United States that would eliminate the need for any U.S. subsidiaries
                to enter into
                [[Page 21612]]
                resolution proceedings. This is consistent with guidance that the
                agencies have previously provided.\37\
                ---------------------------------------------------------------------------
                 \37\ See https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20170324a21.pdf, p. 4, https://www.fdic.gov/resauthority/2018subguidance.pdf, p. 4 and https://www.federalreserve.gov/newsevents/pressreleases/bcreg20180129a.htm,
                https://www.fdic.gov/news/news/press/2018/pr18006.html.
                ---------------------------------------------------------------------------
                2. Covered Company in Multi-Tier Foreign Banking Organization Holding
                Companies
                 The definition of covered company in the Rule includes the top tier
                entity in a multi-tier holding company structure of any foreign bank or
                company that is a bank holding company or is treated as a bank holding
                company under section 8(a) of the International Banking Act of
                1978.\38\ The top tier holding company of certain foreign banks is a
                government, sovereign entity, or family trust. There is no benefit to
                the agencies in obtaining resolution plan information concerning such
                types of entities. To date, the agencies have addressed these issues on
                a case-by-case basis and have identified alternate filers in the
                corporate structure, such as the entity in the structure that is
                directly supervised by the Board. In the interest of clarity, the
                proposal includes a formal process by which the agencies would identify
                a subsidiary in a multi-tiered FBO holding company structure to serve
                as the covered company that would be required to file the resolution
                plan.
                ---------------------------------------------------------------------------
                 \38\ 12 CFR 243.2(f)(1)(iii); 12 CFR 381.2(f)(1)(iii).
                ---------------------------------------------------------------------------
                3. Removal of the Incompleteness Concept and Related Review
                 The Rule includes a requirement that the agencies review a
                resolution plan within 60 days of submission and jointly inform the
                covered company if the plan is informationally incomplete or additional
                information is required to facilitate review of the plan.\39\ This
                process led to a limited number of resubmissions in 2012 when the first
                resolution plans were submitted, but has not been used since. As
                resolution plans have developed over time, the agencies have not found
                that this requirement facilitates their review of the resolution plans
                and are therefore proposing to remove it.
                ---------------------------------------------------------------------------
                 \39\ 12 CFR 243.5(a); 12 CFR 381.5(a).
                ---------------------------------------------------------------------------
                 Question 20: The agencies invite comment on whether the
                incompleteness concept and related review should be retained.
                4. Assessment of New Covered Companies
                 The Rule provides that covered company status for a foreign banking
                organizations may be based on annual or quarterly reports based on
                availability of such reports but does not clarify whether firms that
                file quarterly reports would be assessed for covered company status on
                a quarterly basis or annually at the same time firms that report
                annually are assessed. The proposal would clarify that a foreign
                banking organization's status as a covered company would be assessed
                quarterly for foreign banking organizations that file the Federal
                Reserve's Form FR Y-7Q (FR Y-7Q) on a quarterly basis and annually for
                foreign banking organizations that file the Y-7Q on an annual basis
                only. In each case, the assessment would be based on total consolidated
                assets as averaged over the preceding four calendar quarters as
                reported on the FR Y-7Q.
                 In addition, the proposal would also address the process for
                assessing a firm whose assets have grown due to a merger, acquisition,
                combination, or similar transaction for covered company status. Under
                these circumstances, the agencies would have the discretion to
                alternatively consider, to the extent and in the manner the agencies
                jointly consider appropriate, the relevant assets reflected on the one
                or more of the four most recent reports of the pre-combination entities
                (the FR Y-9C in the case of a U.S. firm and the FR Y-7Q in the case of
                a foreign banking organization). For example, if Firm A, which
                previously reported total consolidated assets of $175 billion over the
                preceding four calendar quarters, acquired Firm B, which previously
                reported total consolidated assets of $80 billion over the same
                preceding four calendar quarters, the agencies could determine that
                immediately following the closing of the transaction, Firm A is a
                covered company. Similarly, if Firm A acquired assets from Firm B,
                which assets had been reported over the preceding four calendar
                quarters to have a value of $80 billion, the agencies could determine
                that Firm A became a covered company as of the closing of the
                acquisition.
                5. Timing of New Filings, Firms That Change Filing Categories, and
                Notices of Extraordinary Events
                 To address the new filing cycles for biennial, triennial full, and
                triennial reduced filers, the proposal includes related modifications
                to the timing of the initial submission for new filers. When a firm
                becomes a covered company, the proposal provides that its first
                submission would be a full resolution plan and that the initial plan
                would be due the next time its filing group (biennial, triennial full,
                or triennial reduced) submits resolution plans as long as the
                submission deadline is at least 12 months after the time the firm
                becomes a covered company. For example, if a firm becomes a triennial
                full filer, its first resolution plan would be due when the triennial
                full filing group next submits resolution plans, so long as such date
                is at least 12 months after the firm becomes a triennial full filer. If
                the triennial full filers' next plan submission is a targeted
                resolution plan, the new filer would still need to submit a full
                resolution plan as its initial plan. After its initial plan, subsequent
                plans would be of the same type (full or targeted) as other triennial
                full filers. The proposal would also include a reservation of
                authority, however, permitting the agencies to require the initial plan
                earlier than the date of the filing group's next filing, so long as the
                submission deadline would be at least 12 months from the date on which
                the agencies jointly determined to require the covered company to
                submit its resolution plan.
                 Similarly, if a covered company changes groups (e.g., a triennial
                reduced filer becomes a triennial full filer or a triennial full filer
                becomes a triennial reduced filer), the proposal specifies the timing
                and type of resolution plan it would be required to next submit:
                 If the resolution plan submission deadline for the covered
                company's new group were the same as the prior group, the covered
                company would be required to submit a resolution plan by the deadline.
                If the deadline were within 12 months, the covered company would be
                required to submit the type of resolution plan based on its prior group
                status or its new group status (e.g., if a triennial full filer became
                a triennial reduced filer, it could submit either the full or targeted
                resolution plan it would have submitted as a triennial full filer, or
                it could submit a reduced resolution plan as permitted by its status as
                a triennial reduced filer). If the deadline were 12 months or later,
                the covered company would be required to submit the type of resolution
                plan based on its new group status.
                 If the resolution plan submission deadline for the new
                group were different than the prior group and:
                 [cir] The new deadline were at least 12 months in the future, the
                covered company would be required to submit a resolution plan of the
                type required by its new group status by the new deadline.
                 [cir] the new deadline were within 12 months, the covered company
                would not be required to submit a resolution plan on the new deadline.
                Instead, the
                [[Page 21613]]
                covered company would be required to submit a resolution plan of the
                type required by its new group status by the following submission
                deadline for the new group.
                 A former triennial reduced filer that has become a
                triennial full filer would in all cases be required to submit a full
                resolution plan no later than its next deadline that occurs at least 12
                months in the future. A triennial reduced filer would become a
                triennial full filer where its combined U.S. assets grow over $250
                billion or it has $75 billion or more of one or more of the risk-based
                indicators (cross-jurisdictional activity, nonbank assets, weighted
                short-term wholesale funding, or off-balance-sheet exposure) within its
                U.S. operations. Because these events would represent significant
                changes to the firm's U.S. operations, submission of a full resolution
                plan would be useful to allow the agencies to evaluate whether there
                could be any related challenges to the firm's resolvability. After the
                covered company submits a full resolution plan, it would submit on
                future submission dates the same type of resolution plan as the other
                members of the new group.
                 The proposal retains the agencies' authority to require a covered
                company to submit a resolution plan earlier than the deadline for the
                new group's submission, so long as the agencies notify the covered
                company of the revised submission deadline at least 180 days in
                advance.
                 The proposal would also permit the agencies to require a full
                resolution plan to be submitted within such time period as specified by
                the agencies.\40\ In this instance, a firm may be required to submit a
                resolution plan at a different time or of a different plan type
                relative to its filing group. For example, a triennial reduced filer
                may become a triennial full filer due to a merger or acquisition of
                assets, but may not be required to submit a full resolution plan for a
                number of years due to the timing of the transaction. If the new,
                larger covered company has assets or operations that are of particular
                importance to U.S. financial stability, the agencies may jointly
                require it to submit a full resolution plan earlier than the rest of
                its new filing group.
                ---------------------------------------------------------------------------
                 \40\ When requiring a covered company to file a full resolution
                plan within a time period different from that of other covered
                companies in the same filing group, the agencies believe that 12
                months is presumptively a reasonable period of time. However, a
                shorter time period may be reasonable in light of the relevant facts
                and circumstances.
                ---------------------------------------------------------------------------
                 The notice of material events requirement has been revised and
                clarified to reflect the creation of a material changes definition. The
                agencies determined that the material changes definition was too broad
                to merit a notice requirement and instead propose the concept of
                extraordinary events that would require a notice. An extraordinary
                event is a material merger, acquisition of assets or other similar
                transaction, or a fundamental change to a covered company's resolution
                strategy (such as a change from single point of entry to multiple point
                of entry).
                 Question 21: The agencies invite comment on whether the listed
                events that are proposed to constitute extraordinary events are
                appropriate, or if there are additional events should be identified.
                6. Clarification of the Mapping Expectations for Foreign Banking
                Organizations
                 The proposal would amend the language governing the expectations
                regarding the mapping of intragroup interconnections and
                interdependencies by foreign banking organizations.\41\ The proposal
                would clarify that foreign banking organizations would be expected to
                map (a) the interconnections and interdependencies among their U.S.
                subsidiaries, branches, and agencies, (b) the interconnections and
                interdependencies between these U.S. entities and any critical
                operations and core business lines, and (c) the interconnections and
                interdependencies between these U.S. entities and any foreign-based
                affiliates.
                ---------------------------------------------------------------------------
                 \41\ 12 CFR 243.4(a)(2)(i); 12 CFR 381.4(a)(2)(i); Sec.
                __.5(a)(2)(i) of the proposal.
                ---------------------------------------------------------------------------
                7. Standard of Review
                 In reviewing resolution plans, the agencies have identified
                ``deficiencies'' and ``shortcomings'' in plans and have issued letters
                to covered companies describing the rationale for the findings and
                suggesting potential alternatives for how the identified deficiencies
                and shortcomings could be addressed. While the agencies have defined
                these terms in a public statement, they are not defined in the
                Rule.\42\ To provide an opportunity for public comment on these terms
                and a clearer articulation of the standards the agencies apply in
                identifying deficiencies and shortcomings, the proposal would define a
                deficiency and a shortcoming.
                ---------------------------------------------------------------------------
                 \42\ Resolution Plan Assessment Framework and Firm
                Determinations (2016), April 13, 2016, https://www.fdic.gov/news/news/press/2016/pr16031a.pdf.
                ---------------------------------------------------------------------------
                 The proposed definition of deficiency is as follows: An aspect of a
                firm's resolution plan that the agencies jointly determine presents a
                weakness that individually or in conjunction with other aspects could
                undermine the feasibility of the firm's plan. Where a deficiency has
                been identified, the covered company must correct the identified
                weakness and resubmit a revised resolution plan to avoid being subject
                to more stringent regulatory requirements or restrictions, as described
                in section 165(d)(5) of the Dodd-Frank Act and Sec. Sec. __.5 and __.6
                of the Rule.
                 The proposal also includes a definition of a shortcoming. A
                shortcoming would be defined as a weakness or gap that raises questions
                about the feasibility of a firm's plan, but does not rise to the level
                of a deficiency for both agencies. In some instances, a weakness that
                only one agency considers a deficiency may constitute a shortcoming for
                purposes of resolution plan feedback or guidance. A shortcoming may
                require additional analysis from the covered company or additional work
                by the covered company, or both. Although a shortcoming would not
                require a firm to resubmit a revised resolution plan prior to its next
                plan submission date, the agencies may require a firm to provide an
                interim update regarding progress made to address the shortcoming prior
                to the firm's next resolution plan submission date pursuant to Sec.
                __.4(d)(3) of the proposal. If the issue is not satisfactorily
                explained or addressed in the covered company's next resolution plan,
                it may be found to be a deficiency in the covered company's next
                resolution plan. It is not necessary for the agencies to identify an
                issue as a shortcoming before identifying it as a deficiency.\43\ In
                addition, the agencies may identify issues and weaknesses in a covered
                company's resolution plan in feedback provided to the firm without
                jointly classifying them as deficiencies or shortcomings.
                ---------------------------------------------------------------------------
                 \43\ As noted above, as part of codifying definitions for the
                terms ``deficiency'' and ``shortcoming,'' the proposal would clarify
                that the agencies may jointly identify an issue as a deficiency
                without first identifying it as a shortcoming.
                ---------------------------------------------------------------------------
                 Both deficiencies and shortcomings reflect weaknesses that the
                agencies consider important and should be addressed in the firm's next
                resolution plan submission. The agencies' correspondence to a firm
                identifying one or more deficiencies or shortcomings will normally
                suggest a manner in which the covered company may address the
                deficiencies or shortcomings. These suggestions do not preclude the
                covered company from pursuing a different means of addressing the
                deficiency or shortcoming.
                 Question 22: The agencies invite comment on all aspects of the
                proposed
                [[Page 21614]]
                definitions of ``deficiency'' and ``shortcoming.''
                8. Deletion of ``deficiencies'' Relating to Management Information
                Systems
                 The Rule requires a resolution plan to include information about a
                covered company's management information systems, including a
                description and analysis of the system's ``deficiencies, gaps or
                weaknesses'' in the system's capabilities. The proposal deletes the
                term ``deficiencies'' from this informational content requirement
                solely to avoid confusion with the proposal's new definition of
                ``deficiencies'' in Sec. __.8(b) of the proposal, and not to change
                the informational requirement relating to a covered company's
                management information systems.
                9. Incorporation by Reference
                 Similar to the current Rule, the proposal would continue to allow a
                covered company to incorporate by reference information from its
                previously submitted resolution plans, subject to restrictions that the
                covered company clearly identifies the information it is incorporating
                and the specific location of the information in the previously
                submitted plan by, for example, indicating the relevant page range or
                subsection of the resolution plan. The proposal would require the
                referenced information to remain accurate in all respects that are
                material to the covered company's resolution plan. The agencies intend
                that this clarification regarding the material accuracy of referenced
                information provide covered companies greater flexibility in their
                ability to incorporate by reference information, thereby reducing
                duplication and further streamlining the resolution planning process.
                The proposal's incorporation of the waiver concept should not be
                interpreted to conflict with the ability to incorporate items by
                reference. In particular, if the agencies were to deny a waiver
                request, the covered company would not be precluded from incorporating
                by reference elements that it sought to have waived, so long as the
                information remains accurate in all respects that are material to the
                covered company's resolution plan. The agencies note that any
                information incorporated by reference would remain subject to the
                contemporaneous certification requirement specified in the Rule.
                E. Alternative Scoping and Tailoring Criteria
                 In its tailoring proposals, the Board presented an alternative
                approach for assessing the risk profile and systemic footprint of a
                U.S. banking organization and of a foreign banking organization's
                combined U.S. operations or U.S. intermediate holding company using a
                single, comprehensive score. The Board uses an identification
                methodology (scoring methodology) to identify a U.S. bank holding
                company as a U.S. GSIB and apply risk-based capital surcharges to these
                firms. The Board could use this same scoring methodology to determine
                whether to apply the resolution planning requirements to firms with
                $100 billion or more but less than $250 billion in total consolidated
                assets. The agencies could likewise use this same scoring methodology
                to divide U.S. and foreign firms into groups for the purposes of
                determining the frequency and informational content of resolution plan
                filings.
                1. Alternative Scoping Criteria for U.S. Firms
                 The scoring methodology in the Board's regulations is used to
                calculate a U.S. GSIB's capital surcharge under two methods.\44\ The
                first method is based on the sum of a firm's systemic indicator scores
                reflecting its size, interconnectedness, cross-jurisdictional activity,
                substitutability, and complexity (method 1). The second method is based
                on the sum of these same measures of risk, except that the
                substitutability measures are replaced with a measure of the firm's
                reliance on short-term wholesale funding (method 2).
                ---------------------------------------------------------------------------
                 \44\ 12 CFR part 217, subpart H.
                ---------------------------------------------------------------------------
                 The Board designed the scoring methodology to provide a single,
                comprehensive, integrated assessment of a large bank holding company's
                systemic footprint. Accordingly, the indicators in the scoring
                methodology measure the extent to which the failure or distress of a
                bank holding company could pose a threat to U.S. financial stability or
                inflict material damage on the broader economy. The Board could also
                use the indicators in the scoring methodology to help identify banking
                organizations that have heightened risk profiles and would closely
                align with the risk-based factors specified in section 165 of the Dodd-
                Frank Act for applying enhanced prudential standards, including the
                resolution planning requirement. Importantly, large bank holding
                companies already submit to the Board periodic public reports on their
                indicator scores in the scoring methodology. Accordingly, use of the
                scoring methodology more broadly for tailoring of resolution planning
                requirements may promote transparency and could economize on compliance
                costs for large bank holding companies.
                 Under the alternative scoring methodology, a banking organization's
                size and either its method 1 or method 2 score from the scoring
                methodology would be used to determine which category of standards
                would apply to the firm. In light of the changes made by EGRRCPA, the
                Board in its domestic tailoring proposal conducted an analysis of the
                distribution of method 1 and method 2 scores of bank holding companies
                and covered savings and loan holding companies with at least $100
                billion in total consolidated assets.
                 Category I. As under the domestic tailoring proposal and under the
                Board's existing enhanced prudential standards framework, Category I
                standards would continue to apply to U.S. GSIBs, which would continue
                to be defined as U.S. banking organizations with a method 1 score of
                130 or more.
                 Category II. Category II banking organizations were defined in the
                domestic tailoring proposal as those whose failure or distress could
                impose costs on the U.S. financial system and economy that are higher
                than the costs imposed by the failure or distress of an average banking
                organization with total consolidated assets of $250 billion or more.
                 In selecting the ranges of method 1 or method 2 scores that could
                define the application of Category II standards in the domestic
                tailoring proposal, the Board considered the potential of a firm's
                material distress or failure to disrupt the U.S. financial system or
                economy. As noted in section III.A and III.C of the domestic tailoring
                proposal, during the 2008 financial crisis, significant losses at
                Wachovia Corporation, which had $780 billion in total consolidated
                assets at the time of being acquired in distress, had a destabilizing
                effect on the financial system. In the domestic tailoring proposal, the
                Board estimated method 1 and method 2 scores for Wachovia Corporation,
                based on available data, and also calculated the scores of banking
                organizations with more than $250 billion in total consolidated assets
                that are not U.S. GSIBs assuming that each had $700 billion in total
                consolidated assets (the asset size threshold used to define Category
                II in the Board's domestic tailoring proposal). In the domestic
                tailoring proposal, the Board also considered the outlier method 1 and
                method 2 scores for banking organizations with more than $250 billion
                in total consolidated assets that are not U.S. GSIBs.
                 Based on this analysis, under the alternative methodology, the
                Board
                [[Page 21615]]
                would apply Category II standards to any non-U.S. GSIB banking
                organization with $100 billion or more in total consolidated assets and
                with a method 1 score between 60 and 80 or a method 2 score between 100
                and 150. If the Board were to establish a scoring methodology for these
                purposes in the final rule, the Board would set a single score within
                the listed ranges for application of Category II standards. The Board
                invites comment on what score within these ranges would be appropriate.
                 Category III. As noted, section 165 of the Dodd-Frank Act, as
                amended by EGRRCPA, requires the Board to apply enhanced prudential
                standards (including the resolution planning requirement) to any bank
                holding company with total consolidated assets of $250 billion or more
                and authorizes the Board to apply these standards to bank holding
                companies with $100 billion or more and less than $250 billion in total
                consolidated assets. In order to determine a scoring methodology
                threshold for application of Category III standards to banking
                organizations with $100 billion or more and less than $250 billion in
                total consolidated assets, the Board in the domestic tailoring proposal
                considered the scores of these banking organizations as compared to the
                scores of banking organizations with $250 billion or more in total
                consolidated assets that are not U.S. GSIBs. Based on the analysis in
                the domestic tailoring proposal, the Board, under a scoring methodology
                approach, would apply Category III standards to banking organizations
                with total consolidated assets of $100 billion or more and less than
                $250 billion that have a method 1 score between 25 and 45. Banking
                organizations with a score in this range would have a score similar to
                that of the average firm with $250 billion or more in total
                consolidated assets. Using method 2 scores, the Board would apply
                Category III standards to any banking organization with total
                consolidated assets $100 billion or more and less than $250 billion
                that have a method 2 score between 50 and 85. Again, if the Board were
                to establish a scoring methodology for these purposes in the final
                rule, the Board would pick a single score within the listed ranges. The
                Board invites comment on what score within these ranges would be
                appropriate.
                 Category IV. Under a score-based approach and similar to the
                domestic tailoring proposal, the Board would apply Category IV
                standards to banking organizations with $100 billion or more in total
                consolidated assets that do not meet any of the thresholds specified
                for Categories I through III (that is, a method 1 score of less than 25
                to 45 or a method 2 score of less than 50 to 85). If the score-based
                approach is adopted, the Board may or may not exercise its discretion
                to apply resolution planning requirements to these firms.
                 Question 23: What are the advantages and disadvantages to using the
                alternative scoring methodology and category thresholds described above
                relative to the proposed thresholds for U.S. firms?
                 Question 24: If the Board were to use the alternative scoring
                methodology for purposes of determining whether to apply the resolution
                planning requirements to U.S. firms with $100 billion or more and less
                than $250 billion in total consolidated assets, should the Board use
                method 1 scores, method 2 scores, or both?
                 Question 25: If the Board adopts the alternative scoring
                methodology, what would be the advantages or disadvantages of the Board
                requiring banking organizations to calculate their scores at a
                frequency greater than annually, including, for example, requiring a
                banking organization to calculate its score on a quarterly basis?
                 Question 26: With respect to each category of standards described
                above, at what level should the method 1 or method 2 score thresholds
                be set for U.S. firms and why, and discuss how those levels could be
                impacted by considering additional data, or by considering possible
                changes in the banking system. Commenters are encouraged to provide
                data supporting their recommendations.
                 Question 27: What other approaches should the Board consider in
                setting thresholds for determining whether to apply the resolution
                planning requirements to U.S. firms with $100 billion or more and less
                than $250 billion in total consolidated assets?
                2. Alternative Scoping Criteria for Foreign Banking Organizations
                 Similar to the alternative approach for U.S. firms outlined above,
                an alternative approach for tailoring the application of resolution
                planning requirements to a foreign banking organization would be to use
                a single, comprehensive score to assess the risk profile and systemic
                footprint of a foreign banking organization's combined U.S. operations.
                As mentioned above, the Board uses a scoring methodology to identify
                U.S. GSIBs and apply risk-based capital surcharges to these firms. As
                an alternative in both tailoring proposals, the Board proposed a
                scoring methodology that also could be used to tailor resolution
                planning requirements for foreign banking organizations.
                 As mentioned above, the scoring methodology in the Board's
                regulations is used to calculate a U.S. GSIB's capital surcharge under
                two methods.\45\ Consistent with the tailoring proposals and as an
                alternative to the threshold approach under this proposal, the Board is
                seeking comment on use of the scoring methodology to apply the
                resolution planning requirement to foreign banking organizations with
                $100 billion or more and less than $250 billion in total consolidated
                assets.
                ---------------------------------------------------------------------------
                 \45\ See 12 CFR part 217, subpart H.
                ---------------------------------------------------------------------------
                 As discussed in further detail in the tailoring proposals, the
                scoring methodology was designed to identify and assess the systemic
                risk of a large banking organization, and can be similarly used to
                measure the risks posed by the U.S. operations of foreign banking
                organizations. Like the thresholds-based approach in this proposal and
                the tailoring proposals, the indicators used in the scoring methodology
                closely align with the risk-based factors specified in section 165 of
                the Dodd-Frank Act. Because this information would be reported
                publicly, use of the scoring methodology may promote transparency in
                the application of such standards to foreign banking organizations.
                 Under the alternative scoring methodology, the size of a foreign
                banking organization's combined U.S. assets, together with the method 1
                or method 2 score of its U.S. operations under the scoring methodology,
                would be used to determine which category of standards would apply.
                Consistent with the FBO tailoring proposal, tailoring of the resolution
                planning requirement would be based on the method 1 or method 2 score
                applicable to a foreign banking organization's combined U.S.
                operations. U.S. intermediate holding companies already report
                information required to calculate method 1 and method 2 scores, and in
                connection with the FBO tailoring proposal, the reporting requirements
                would be extended to include a foreign banking organization's combined
                U.S. operations.\46\
                ---------------------------------------------------------------------------
                 \46\ As discussed in detail in the FBO tailoring proposal, the
                FR Y-15 would be amended to collect risk-indicator data for the
                combined U.S. operations of foreign banking organizations.
                ---------------------------------------------------------------------------
                 To determine which category of standards would apply under the
                alternative scoring methodology, the Board in its FBO tailoring
                proposal considered the distribution of method 1 and method 2 scores of
                the U.S. operations of foreign banking
                [[Page 21616]]
                organizations, U.S. intermediate holding companies, U.S. bank holding
                companies, and certain savings and loan holding companies with $100
                billion or more in total consolidated assets.\47\
                ---------------------------------------------------------------------------
                 \47\ In conducting its analysis, the Board considered method 1
                and method 2 scores as of September 30, 2018.
                ---------------------------------------------------------------------------
                 Category II. In the FBO tailoring proposal, the Board considered
                the potential of a firm's material distress or failure to disrupt the
                U.S. financial system or economy in selecting the ranges of method 1 or
                method 2 scores that could define the application of Category II
                standards.
                 Based on the Board's analysis in the FBO tailoring proposal and to
                maintain comparability to the domestic tailoring proposal, under the
                alternative scoring methodology the Board would apply Category II
                standards to any foreign banking organization with at least $100
                billion in combined U.S. assets whose combined U.S. operations have (a)
                a method 1 score that meets or exceeds a minimum score between 60 and
                80 or (b) a method 2 score that meets or exceeds a minimum score
                between 100 to 150.
                 If the Board were to establish a scoring methodology for these
                purposes in the final rule, the Board would set a single score within
                the listed ranges for the application of Category II standards. The
                Board invites comment on what score within these ranges would be
                appropriate.
                 Category III. Under the FBO tailoring proposal, the Board would
                apply category III standards to a foreign banking organization with
                combined U.S. assets of $250 billion or more, reflecting, among other
                things, the crisis experience of U.S. banking organizations with total
                consolidated assets of $250 billion or more, which presented materially
                different risks to U.S. financial stability relative to firms with less
                than $250 billion in assets. Similarly, under the domestic tailoring
                proposal, the Board would at a minimum apply Category III standards to
                a firm with assets of $250 billion or more, reflecting the threshold
                above which the Board must apply enhanced prudential standards under
                section 165 of the Dodd-Frank Act.
                 In the domestic tailoring proposal, the Board sought comment on an
                alternative scoring methodology under which a firm with total
                consolidated assets of $100 billion or more and less than $250 billion
                that had a method 1 or method 2 score within a specified range would be
                subject to Category III standards. Specifically, the Board proposed
                selecting a minimum score for application of Category III standards
                between 25 and 45 under method 1, or between 50 and 85 under method 2.
                The maximum score for application of the Category III standards would
                be one point lower than the minimum score selected for application of
                Category II standards. In selecting these ranges, the Board compared
                the scores of U.S. firms with total consolidated assets of $100 billion
                or more and less than $250 billion with those of firms with total
                consolidated assets of $250 billion or more. In the FBO tailoring
                proposal, the Board is proposing the same thresholds for application of
                Category III standards to foreign banking organizations under the
                alternative scoring methodology.
                 In this proposal, the Board proposes to use the same range for
                foreign banking organizations, such that Category III standards would
                apply to a foreign banking organization with combined U.S. assets of
                $100 billion or more and less than $250 billion with a method 1 score
                that meets or exceeds a minimum score between 25 and 45 or a method 2
                score that meets or exceeds a minimum score between 50 and 85, and in
                either case is below the score threshold for Category II standards. The
                Board invites comment on what score within these ranges would be
                appropriate.
                 Category IV. The Board proposes that under the alternative scoring
                methodology, Category IV standards would apply to a foreign banking
                organization with $100 billion or more in combined U.S. assets whose
                method 1 or method 2 score for its combined U.S. operations is below
                the minimum score threshold for Category III. If the score-based
                approach is adopted, the Board may or may not exercise its discretion
                to apply resolution planning requirements to these firms.
                 Question 28: What are the advantages and disadvantages to the use
                of the alternative scoring methodology and category thresholds
                described above instead of the proposed thresholds for foreign banking
                organizations?
                 Question 29: If the Board were to use the alternative scoring
                methodology for purposes of determining whether to apply the resolution
                planning requirements to foreign banking organizations with $100
                billion or more and less than $250 billion in total consolidated
                assets, should the Board use method 1 scores, method 2 scores, or both?
                What are the challenges of applying the scoring methodologies to the
                combined U.S. operations of a foreign banking organization? What
                modifications to the scoring methodology, if any, should the Board
                consider (e.g., should intercompany transactions be reflected in the
                calculation of indicators)?
                 Question 30: If the Board adopts the alternative scoring
                methodology, what would be the advantages or disadvantages of the Board
                requiring scores to be calculated for the U.S. operations of a foreign
                banking organization at a frequency greater than annually, including,
                for example, requiring scores to be calculated on a quarterly basis?
                 Question 31: With respect to each category of standards described
                above, at what level should the method 1 or method 2 score thresholds
                be set and why? Commenters are encouraged to provide data supporting
                their recommendations.
                 Question 32: What other approaches should the Board consider in
                setting thresholds for determining whether to apply the resolution
                planning requirements to foreign banking organizations with $100
                billion or more and less than $250 billion in total consolidated assets
                and why? How would any such approach affect the comparability of
                requirements across U.S. banking organizations and foreign banking
                organizations?
                3. Alternative Tailoring Criteria
                 If the Board were to use the alternative scoring methodology for
                purposes of determining whether to apply the resolution planning
                requirements to firms with $100 billion or more and less than $250
                billion in total consolidated assets, the agencies may also use the
                scoring methodology to differentiate among U.S. and foreign firms to
                which the resolution planning requirements would apply. For example,
                the agencies could divide covered companies required to file resolution
                plans into the three groups of filers as follows:
                 The biennial filers group could comprise firms subject to
                Category I standards under the alternative scoring methodology, which
                would continue to be U.S. GSIBs, as well as any nonbank financial
                company supervised by the Board that has not been jointly designated as
                a triennial full filer by the agencies.
                 The triennial full filers group could comprise firms
                subject to Category II and III standards under the alternative scoring
                methodology, as well as any nonbank financial company supervised by the
                Board that has been designated as a triennial full filer by the
                agencies.
                 The triennial reduced filers group could comprise covered
                companies that are neither subject to Category I, II, or III standards
                under the alternative scoring methodology, nor nonbank
                [[Page 21617]]
                financial companies supervised by the Board. This would include foreign
                banking organizations with $250 billion or more in total global assets
                that are not subject to Category II or Category III standards under the
                alternative scoring methodology.
                 The agencies are seeking comment on use of the alternative scoring
                methodology to tailor the application of the resolution planning
                requirement to covered companies.
                 Question 33: If the Board were to use the alternative scoring
                methodology for purposes of determining whether to apply the resolution
                planning requirements to firms with $100 billion or more and less than
                $250 billion in total consolidated assets, should the agencies use the
                same scoring methodology for purposes of tailoring resolution planning
                requirements? What are the advantages and disadvantages in using the
                alternative scoring methodology to categorize U.S. firms with systemic
                footprints smaller than the U.S. GSIBs for purposes of tailoring the
                resolution planning requirements?
                 Question 34: What other approaches should the agencies consider in
                setting thresholds for tailoring resolution planning requirements?
                IV. Transition Period
                 Under the proposal, the rule would take effect no earlier than (a)
                the first day of the first calendar quarter after the issuance of the
                final rule and (b) November 24, 2019. Financial institutions that are
                covered companies when the final rule is issued would be required to
                comply with the proposed requirements beginning on the effective date.
                 The following summary describes the proposed submission dates for
                each new group of filers in the coming years. There currently are no
                nonbank financial companies designated for Board supervision by the
                Council so the summary does not address this type of firm.
                 Biennial filers (all firms subject to Category I standards): All
                U.S. firms identified as U.S. GSIBs and subject to Category I standards
                would be biennial filers. Firms in this group of filers would submit
                resolution plans on a biennial basis. The biennial filers are currently
                required to submit resolution plans under the Rule by July 1, 2019. If
                the proposal is adopted, their subsequent submission would be due by
                July 1, 2021. This submission would be a targeted resolution plan.
                Thereafter, the biennial filers would alternate between filing full and
                targeted resolution plans on a biennial basis going forward.
                 Triennial full filers (all firms subject to Category II or Category
                III standards): Firms in this filing group would submit resolution
                plans on a triennial basis and alternate between filing full resolution
                plans and targeted resolution plans. If the proposal is adopted, each
                triennial full filer would submit its first full resolution plan by
                July 1, 2021 and alternate between filing full and targeted resolution
                plans on a triennial basis going forward. For firms in this filing
                group with outstanding shortcomings or deficiencies, it is expected
                that remediation and related timelines established by the agencies
                would continue to apply. For example, the four foreign banking
                organizations that received feedback letters on December 20, 2018
                (Barclays plc, Credit Suisse Group AG, Deutsche Bank AG, and UBS Group
                AG) would be expected to address their shortcomings and complete their
                respective project plans by July 1, 2020, as provided in the feedback
                letters. Consistent with previous communications to the firm, Northern
                Trust Corporation would be expected to provide an update in response to
                the agencies' joint feedback letter regarding its December 2017
                resolution plan.
                 Triennial reduced filers (all other filers): Firms in this filing
                group would submit reduced resolution plans on a triennial basis. If
                the proposal is adopted, each triennial reduced filer would be required
                to submit its first reduced resolution plan by July 1, 2022, and then
                every three years going forward.
                 Question 35: The agencies invite comment on the proposed transition
                period. Are there other alternatives to consider as the agencies
                finalize the rule?
                V. Impact Analysis
                 The proposal would modify the expected costs imposed by the Rule
                while seeking to preserve the benefits to U.S. financial stability
                provided by the Rule.
                 Consistent with EGRRCPA, the proposal would change the asset
                thresholds at which all firms are required to file resolution plans
                from $50 billion to $250 billion in total consolidated assets. The
                proposal also would require the submission of resolution plans by
                certain firms with $100 billion or more and less than $250 billion in
                total consolidated assets, including those that have certain risk-based
                indicators. As of June 30, 2018, firms with total consolidated assets
                between $50 and $100 billion accounted for less than 2.5 percent of
                total U.S. industry assets, and firms with $100 billion or more and
                less than $250 billion in total consolidated assets accounted for 17
                percent of total U.S. industry assets.\48\ The net impact of these
                threshold changes would reduce the number of U.S. filers from 27 to 12
                and the number of foreign banking organization filers from 108 to 62.
                This reduction in resolution plan filers would decrease costs as fewer
                firms would be required to prepare plans.
                ---------------------------------------------------------------------------
                 \48\ Assets as reported on form FR Y-9C for the quarter ending
                June 30, 2018.
                ---------------------------------------------------------------------------
                 The proposal would also seek to minimize the impact of this change
                on benefits to U.S. financial stability provided from resolution plan
                filings by maintaining filing requirements for certain firms with $100
                billion or more and less than $250 billion in total consolidated
                assets, including those that have certain risk-based indictors.
                 The proposal would also reduce the frequency of required resolution
                plan submissions for the remaining resolution plan filers, including
                the largest and most complex resolution plan filers, by extending the
                default filing cycle between resolution plan submissions. The proposal
                would modify the filing cycle in the Rule to every two years for U.S.
                GSIBs and certain systemically important nonbank financial companies
                and to every three years for all other resolution plan filers. This
                change formalizes a practice that has developed over time to extend
                firms' resolution plan submission dates to allow at least two years
                between plan submissions and should reduce costs.
                 In the August 2018 proposal to extend mandatory Reporting
                Requirements Associated with Regulation QQ, the estimate of total
                annual burden for resolution plan filings was estimated to be 1,137,797
                hours.\49\ The revised annual burden, incorporating proposed
                modifications to the resolution plan rule is 425,523 hours. At an
                estimated mean wage of $56.05 per hour,\50\ this reduction in the
                number of resolution plan filers has an estimated wage savings of
                approximately $39,922,958 per year. Impacts on resolution preparedness
                that could arise from the reduced frequency of filing would be
                mitigated by the proposal authorizing the agencies to require a firm to
                file a resolution plan with appropriate notice. This authority would
                address circumstances where the agencies
                [[Page 21618]]
                determine that waiting for a firm to submit on its regular submission
                cycle could present excess risk.
                ---------------------------------------------------------------------------
                 \49\ Agency Information Collection Activities: Announcement of
                Board Approval Under Delegated Authority and Submission to OMB, 83
                FR 42296 (August 21, 2018).
                 \50\ Mean hourly wages retrieved from the Bureau of Labor and
                Statistics (BLS), Occupational Employment and Wages May 2017,
                published March 30, 2018, www.bls.gov/news.release/ocwage.t01.htm.
                ---------------------------------------------------------------------------
                 Finally, the proposal is also expected to improve efficiency by
                streamlining the information requirements for the resolution plan
                submissions: The proposal includes a mechanism for firms to request a
                waiver from certain informational requirements in full resolution plan
                submissions; a new, more focused plan submission (i.e., targeted
                resolution plan); and formalizes the conditions and content for reduced
                resolution plans. These resolution plan modifications are appropriate
                because the firms' resolution plans have matured and become more stable
                through multiple submissions. Further, the resolution plan
                modifications should reduce the costs of preparing and reviewing the
                plans without having a material impact on the benefits provided by the
                plans.
                 In short, as detailed in this section, the proposal would provide
                estimated wage savings, to the institutions affected by it, totaling
                $39,922,958 due to the reduction of 712,274 burden hours needed to
                comply with the Rule. Moreover, firms could reallocate the 712,274
                hours used to comply with the Rule to other activities considered to be
                more beneficial. Thus, the total economic benefits of the proposal
                could be greater than the dollar amount estimated.
                 Question 36: The agencies invite comment on all aspects of this
                evaluation of costs and benefits.
                VI. Regulatory Analysis
                A. Paperwork Reduction Act
                 Certain provisions of the proposal contain ``collection of
                information'' requirements within the meaning of the Paperwork
                Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA). In accordance with
                the requirements of the PRA, the agencies may not conduct or sponsor,
                and a respondent is not required to respond to, an information
                collection unless it displays a currently valid Office of Management
                and Budget (OMB) control number. The agencies reviewed the proposal and
                determined that the proposal would revise the reporting requirements
                that have been previously cleared by the OMB under the Board's control
                number (7100-0346). When the Rule was adopted in 2011, the Board took
                the entire burden associated with the Rule even though the Board and
                the Corporation are both legally authorized to receive and review
                resolution plans. The agencies have decided to now share equally in the
                burden associated with the proposal. As a result, the Corporation will
                request approval from the OMB for one half of the Board's PRA burden,
                as revised by the proposal, and the OMB will assign an OMB control
                number. The Board has reviewed the proposal under the authority
                delegated to the Board by the OMB and at the final rule stage, will
                revise and extend its information collection for three years.
                 Comments are invited on:
                 Whether the collections of information are necessary for
                the proper performance of the Board's functions, including whether the
                information has practical utility;
                 The accuracy of the estimate of the burden of the
                information collections, including the validity of the methodology and
                assumptions used;
                 Ways to enhance the quality, utility, and clarity of the
                information to be collected;
                 Ways to minimize the burden of information collections on
                respondents, including through the use of automated collection
                techniques or other forms of information technology;
                 Estimates of capital or start-up costs and costs of
                operation, maintenance, and purchase of services to provide
                information; and
                 Burden estimates for preparation of waiver requests and
                the calculation of any associated reduction in burden.
                 All comments will become a matter of public record. Comments on the
                collection of information should be sent to the addresses listed in the
                ADDRESSES section of this document. A copy of the comments may also be
                submitted to the OMB desk officer: By mail to U.S. Office of Management
                and Budget, 725 17th Street NW, #10235, Washington, DC 20503, or by
                facsimile to 202-395-6974; or email to [email protected],
                Attention, Federal Banking Agency Desk Officer.
                Proposed Information Collection
                 Title of Information Collection: Reporting Requirements Associated
                with Resolution Planning.
                 Agency Form Number: FR QQ.
                 OMB Control Number: 7100-0346.
                 Frequency of Response: Biennially, Triennially.
                 Respondents: Bank holding companies \51\ with total consolidated
                assets of $250 billion or more, bank holding companies with $100
                billion or more in total consolidated assets with certain
                characteristics specified in the proposal, and nonbank financial firms
                designated by the Council for supervision by the Board.
                ---------------------------------------------------------------------------
                 \51\ This includes any foreign bank or company that is, or is
                treated as, a bank holding company under section 8(a) of the
                International Banking Act of 1978, and meets the relevant total
                consolidated assets threshold.
                ----------------------------------------------------------------------------------------------------------------
                 Number of Estimated Estimated
                 FR QQ respondents Annual average hours annual burden
                 \52\ frequency per response hours
                ----------------------------------------------------------------------------------------------------------------
                 Current
                ----------------------------------------------------------------------------------------------------------------
                Reduced Reporters............................... 72 1 60 4,320
                December Filers:
                 Tailored Reporters:
                 Domestic................................ 11 1 9,000 99,000
                 Foreign................................. 6 1 1,130 6,780
                 Full Reporters:
                 Domestic................................ 3 1 26,000 78,000
                 Foreign................................. 6 1 2,000 12,000
                Complex Filers:
                 Domestic.................................... 9 1 \53\ 79,522 715,697
                 Foreign..................................... 4 1 55,500 222,000
                 ---------------------------------------------------------------
                 Current Total........................... .............. .............. .............. 1,137,797
                ----------------------------------------------------------------------------------------------------------------
                [[Page 21619]]
                
                 Proposed
                ----------------------------------------------------------------------------------------------------------------
                Triennial Reduced............................... 53 1 20 1,060
                Triennial Full:
                 Complex Foreign............................. 4 1 13,135 52,540
                 Foreign and Domestic........................ 9 1 5,667 51,003
                Biennial Filers:
                 Domestic.................................... 8 1 40,115 320,920
                Waivers \54\.................................... 1 1 1 1
                 ---------------------------------------------------------------
                 Current Total............................... .............. .............. .............. 425,523
                 ---------------------------------------------------------------
                 Change.................................. .............. .............. .............. 712,274
                ----------------------------------------------------------------------------------------------------------------
                B. Regulatory Flexibility Act
                 The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq.,
                generally requires an agency, in connection with a proposed rule, to
                prepare and make available for public comment an initial regulatory
                flexibility analysis that describes the impact of a proposed rule on
                small entities.\55\ However, a regulatory flexibility analysis is not
                required if the agency certifies that the rule will not have a
                significant economic impact on a substantial number of small entities.
                The Small Business Administration (SBA) has defined ``small entities''
                to include banking organizations with total assets of less than or
                equal to $550 million.\56\
                ---------------------------------------------------------------------------
                 \52\ Of these respondents, none are small entities as defined by
                the Small Business Administration (i.e., entities with less than
                $550 million in total assets) https://www.sba.gov/document/support-table-size-standards.
                 \53\ This estimate captures the annual time that complex
                domestic filers will spend complying with this collection, given
                that eight of these filers will only submit two resolution plans
                over the three-year period covered by this document. The estimate
                therefore represents two-thirds of the time these firms are
                estimated to spend on each resolution plan submission.
                 \54\ The agencies cannot reasonably estimate how many of the 21
                firms expected to file full resolution plans may submit waiver
                requests, nor how long it would take to prepare a waiver request.
                Accordingly, the agencies are including this line as a placeholder.
                 \55\ 5 U.S.C. 601 et seq.
                 \56\ The SBA defines a small banking organization as having $550
                million or less in assets, where ``a financial institution's assets
                are determined by averaging the assets reported on its four
                quarterly financial statements for the preceding year.'' See 13 CFR
                121.201 (as amended, effective December 2, 2014). ``SBA counts the
                receipts, employees, or other measure of size of the concern whose
                size is at issue and all of its domestic and foreign affiliates.''
                See 13 CFR 121.103. Following these regulations, the agencies use a
                covered entity's affiliated and acquired assets, averaged over the
                preceding four quarters, to determine whether the covered entity is
                ``small'' for the purposes of RFA.
                ---------------------------------------------------------------------------
                 The agencies have considered the potential impact of the proposal
                on small entities in accordance with the RFA. As discussed below, the
                Board believes and the Corporation certifies that the proposal is not
                expected to have a significant impact on a substantial number of small
                entities, including small banking organizations.
                 As discussed in detail above, section 165(d) of the Dodd-Frank Act
                requires certain financial companies to report periodically to the
                agencies their plans for rapid and orderly resolution under the U.S.
                Bankruptcy Code in the event of material financial distress or failure.
                This provision of the Dodd-Frank Act has recently been amended by
                EGRRCPA.
                 In accordance with section 165(d) of the Dodd-Frank Act as amended
                by EGRRCPA, the Board is proposing to amend Regulation QQ (12 CFR part
                243) and the Corporation is proposing to amend part 381 (12 CFR part
                381) to amend the requirements that a covered company periodically
                submit a resolution plan to the agencies.\57\ The proposal would also
                modify the procedures for joint review of a resolution plan by the
                agencies. The reasons and justification for the proposal are described
                in the Supplementary Information.
                ---------------------------------------------------------------------------
                 \57\ See 12 U.S.C. 5365(d).
                ---------------------------------------------------------------------------
                 Under regulations issued by the SBA, a ``small entity'' includes
                those firms within the ``Finance and Insurance'' sector with total
                consolidated assets totaling less than $550 million.\58\ The agencies
                believe that the Finance and Insurance sector constitutes a reasonable
                universe of firms for these purposes because such firms generally
                engage in activities that are financial in nature. Consequently, banks,
                bank holding companies or nonbank financial companies with total
                consolidated assets of $550 million or less are small entities for
                purposes of the RFA. As of June 30, 2018, there were 4,106 insured
                depository institutions and six bank holding companies considered
                ``small'' by the SBA under the RFA.\59\
                ---------------------------------------------------------------------------
                 \58\ 13 CFR 121.201.
                 \59\ FFIEC Call reports, June 30, 2018.
                ---------------------------------------------------------------------------
                 As discussed in the SUPPLEMENTARY INFORMATION, the proposal would
                apply to covered companies, which includes only bank holding companies
                and foreign banks that are or are treated as a bank holding company
                (foreign banking organization) with at least $100 billion in total
                consolidated assets, and nonbank financial companies that the Council
                has determined under section 113 of the Dodd-Frank Act must be
                supervised by the Board and for which such determination is in effect.
                The assets of a covered company substantially exceed the $550 million
                asset threshold at which a banking organization is considered a ``small
                entity'' under SBA regulations.\60\ The proposal would apply to a
                nonbank financial company designated by the Council under section 113
                of the Dodd-Frank Act regardless of such a company's asset size.
                Although the asset size of nonbank financial companies may not be the
                determinative factor of whether such companies may pose systemic risks
                and would be designated by the Council for supervision by the Board, it
                is an important consideration.\61\ It is therefore unlikely that a
                financial firm that is at or below the $550 million asset threshold
                would be designated by the Council under section 113 of the Dodd-Frank
                Act because material financial distress at such firms, or the nature,
                scope, size, scale, concentration, interconnectedness, or mix of it
                activities, are not likely to pose a threat to the financial stability
                of the United States.
                ---------------------------------------------------------------------------
                 \60\ The Dodd-Frank Act provides that the Board may, on the
                recommendation of the Council, increase the asset threshold for the
                application of the resolution planning requirements. See 12 U.S.C.
                5365(a)(2)(B). However, neither the Board nor the Council has the
                authority to lower such threshold.
                 \61\ See 12 CFR 1310.11.
                ---------------------------------------------------------------------------
                [[Page 21620]]
                 Because the proposal is not likely to apply to any company with
                assets of $550 million or less, if adopted in final form, it is not
                expected to apply to any small entity for purposes of the RFA.
                Moreover, as discussed in the Supplementary Information, the Dodd-Frank
                Act requires the agencies jointly to adopt rules implementing the
                provisions of section 165(d) of the Dodd-Frank Act. The agencies do not
                believe that the proposal duplicates, overlaps, or conflicts with any
                other Federal rules.
                 In light of the foregoing, the Board believes and the Corporation
                certifies that the proposal, if adopted in final form, will not have a
                significant economic impact on a substantial number of small entities
                supervised. Nonetheless, the agencies invite comment on whether the
                proposal would have significant effects on small organizations, and
                whether the potential burdens or consequences of such effects could be
                minimized in a manner consistent with section 165(d) of the Dodd-Frank
                Act.
                 Question 37: The agencies invite written comments regarding this
                analysis, and request that commenters describe the nature of any impact
                on small entities and provide empirical data to illustrate and support
                the extent of the impact. A final regulatory flexibility analysis will
                be conducted after consideration of comment received during the public
                comment period.
                C. Riegle Community Development and Regulatory Improvement Act of 1994
                 The Riegle Community Development and Regulatory Improvement Act of
                1994 (RCDRIA) requires that each Federal banking agency, in determining
                the effective date and administrative compliance requirements for new
                regulations that impose additional reporting, disclosure, or other
                requirements on insured depository institutions, consider, consistent
                with principles of safety and soundness and the public interest, any
                administrative burdens that such regulations would place on depository
                institutions, including small depository institutions, and customers of
                depository institutions, as well as the benefits of such regulations.
                In addition, new regulations that impose additional reporting,
                disclosures, or other new requirements on insured depository
                institutions generally must take effect on the first day of a calendar
                quarter that begins on or after the date on which the regulations are
                published in final form.
                 Because the proposal would not impose additional reporting,
                disclosure, or other requirements on insured depository institutions,
                section 302 of the RCDRIA therefore does not apply. Nevertheless, the
                requirements of RCDRIA will be considered as part of the overall
                rulemaking process. In addition, the agencies invite any other comments
                that further will inform the agencies' consideration of RCDRIA.
                 Question 38: The agencies invites comment on this section,
                including any additional comments that will inform the agencies'
                consideration of the requirements of RCDRIA.
                D. Solicitation of Comments on the Use of Plain Language
                 Section 722 of the Gramm-Leach-Bliley Act requires the Federal
                banking agencies to use plain language in all proposed and final rules
                published after January 1, 2000.\62\ The agencies have sought to
                present the proposal in a simple and straightforward manner, and invite
                comment on the use of plain language. For example:
                ---------------------------------------------------------------------------
                 \62\ 12 U.S.C. 4809(a).
                ---------------------------------------------------------------------------
                 Question 39: Have the agencies organized the material to suit your
                needs? If not, how could they present the rule more clearly?
                 Question 40: Are the requirements of the proposal clearly stated?
                If not, how could they be stated more clearly?
                 Question 41: Does the proposal contain unclear technical language
                or jargon? If so, which language requires clarification?
                 Question 42: Would a different format (such as a different grouping
                and ordering of sections, a different use of section headings, or a
                different organization of paragraphs) make the regulation easier to
                understand? If so, what changes would make the proposal clearer?
                 Question 43: What else could the agencies do to make the proposal
                clearer and easier to understand?
                Appendix A: Foreign Banking Organizations That Would Be Triennial
                Reduced Filers
                Agricultural Bank of China
                Australia and New Zealand Banking Group
                Banco Bradesco
                Banco De Sabadell
                Banco Do Brasil
                Banco Santander
                Bank of China
                Bank of Communications
                Bank of Montreal
                Bank of Nova Scotia
                Bayerische Landesbank
                BBVA Compass
                BNP Paribas
                BPCE Group
                Caisse Federale de Credit Mutuel
                Canadian Imperial Bank of Commerce
                China Construction Bank Corporation
                China Merchants Bank
                CITIC Group Corporation
                Commerzbank
                Commonwealth Bank of Australia
                Cooperative Rabobank
                Credit Agricole Corporate and Investment Bank
                DNB Bank
                DZ Bank
                Erste Group Bank AG
                Hana Financial Group
                Industrial and Commercial Bank of China
                Industrial Bank of Korea
                Intesa Sanpaolo
                Itau Unibanco
                KB Financial Group
                KBC Bank
                Landesbank Baden-Weurttemberg
                Lloyds Banking Group
                National Agricultural Cooperative Federation
                National Australia Bank
                Nordea Group
                Norinchukin Bank
                Oversea-Chinese Banking Corporation
                Shinhan Bank
                Skandinaviska Enskilda Banken
                Societe Generale
                Standard Chartered Bank
                State Bank of India
                Sumitomo Mitsui Financial Group
                Sumitomo Mitsui Trust Holdings
                Svenska Handelsbanken
                Swedbank
                UniCredit Bank
                United Overseas Bank
                Westpac Banking Corporation
                Woori Bank
                Text of the Common Rules
                (All Agencies)
                 The text of the common rules appears below:
                PART [ ]--RESOLUTION PLANS
                Sec.
                __.1 Authority and scope.
                __.2 Definitions.
                __.3 Critical operations.
                __.4 Resolution plan required.
                __.5 Informational content of a full resolution plan.
                __.6 Informational content of a targeted resolution plan.
                __.7 Informational content of a reduced resolution plan.
                __.8 Review of resolution plans; resubmission of deficient
                resolution plans.
                __.9 Failure to cure deficiencies on resubmission of a resolution
                plan.
                __.10 Consultation.
                __.11 No limiting effect or private right of action; confidentiality
                of resolution plans.
                __.12 Enforcement.
                [[Page 21621]]
                Sec. __.1 Authority and scope.
                 (a) Authority. This part is issued pursuant to section 165(d)(8) of
                the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L.
                111-203, 124 Stat. 1376, 1426-1427), as amended by the Economic Growth,
                Regulatory Relief, and Consumer Protection Act (Pub. L. 115-174, 132
                Stat. 1296) (the Dodd-Frank Act), 12 U.S.C. 5365(d)(8), which requires
                the Board of Governors of the Federal Reserve System (Board) and the
                Federal Deposit Insurance Corporation (Corporation) to jointly issue
                rules implementing the provisions of section 165(d) of the Dodd-Frank
                Act.
                 (b) Scope. This part applies to each covered company and
                establishes rules and requirements regarding the submission and content
                of a resolution plan, as well as procedures for review by the Board and
                Corporation of a resolution plan.
                Sec. __.2 Definitions.
                 For purposes of this part:
                 Bankruptcy Code means Title 11 of the United States Code.
                 Biennial filer is defined in Sec. __.4(a)(1).
                 Category II banking organization means a covered company that is a
                category II banking organization pursuant to Sec. 252.5 of this title.
                 Category III banking organization means a covered company that is a
                category III banking organization pursuant to Sec. 252.5 of this
                title.
                 Company means a corporation, partnership, limited liability
                company, depository institution, business trust, special purpose
                entity, association, or similar organization, but does not include any
                organization, the majority of the voting securities of which are owned
                by the United States.
                 Control. A company controls another company when the first company,
                directly or indirectly, owns, or holds with power to vote, 25 percent
                or more of any class of the second company's outstanding voting
                securities.
                 Core business lines means those business lines of the covered
                company, including associated operations, services, functions and
                support, that, in the view of the covered company, upon failure would
                result in a material loss of revenue, profit, or franchise value.
                 Core elements mean the information required to be included in a
                full resolution plan pursuant to Sec. __.5(c), (d)(1)(i), (iii), and
                (iv), (e)(1)(ii), (e)(2), (3), and (5), (f)(1)(v), and (g) regarding
                capital, liquidity, and the covered company's plan for executing any
                recapitalization contemplated in its resolution plan, including updated
                quantitative financial information and analyses important to the
                execution of the covered company's resolution strategy.
                 Council means the Financial Stability Oversight Council established
                by section 111 of the Dodd-Frank Act (12 U.S.C. 5321).
                 Covered company--(1) In general. A covered company means:
                 (i) Any nonbank financial company supervised by the Board;
                 (ii) Any global systemically important BHC;
                 (iii) Any bank holding company, as that term is defined in section
                2 of the Bank Holding Company Act, as amended (12 U.S.C. 1841), and
                part 225 of this title (the Board's Regulation Y), that has $250
                billion or more in total consolidated assets, as determined based on
                the average of the company's four most recent Consolidated Financial
                Statements for Holding Companies as reported on the Federal Reserve's
                Form FR Y-9C; provided that in the case of a company whose total
                consolidated assets have increased as the result of a merger,
                acquisition, combination, or similar transaction, the Board and the
                Corporation may alternatively consider, in their discretion, to the
                extent and in the manner the Board and the Corporation jointly consider
                to be appropriate, one or more of the four most recent Consolidated
                Financial Statements for Holding Companies as reported on the Federal
                Reserve's Form FR Y-9C or Capital and Asset Reports for Foreign Banking
                Organizations as reported on the Federal Reserve's Form FR Y-7Q of the
                companies that were party to the merger, acquisition, combination or
                similar transaction;
                 (iv) Any foreign bank or company that is a bank holding company or
                is treated as a bank holding company under section 8(a) of the
                International Banking Act of 1978 (12 U.S.C. 3106(a)), and that has
                $250 billion or more in total consolidated assets, as determined
                annually based on the foreign bank's or company's most recent annual
                or, as applicable, quarterly based on the average of the foreign bank's
                or company's four most recent quarterly Capital and Asset Reports for
                Foreign Banking Organizations as reported on the Federal Reserve's Form
                FR Y-7Q; provided that in the case of a company whose total
                consolidated assets have increased as the result of a merger,
                acquisition, combination, or similar transaction, the Board and the
                Corporation may alternatively consider, in their discretion, to the
                extent and in the manner the Board and the Corporation jointly consider
                to be appropriate, one or more of the four most recent Consolidated
                Financial Statements for Holding Companies as reported on the Federal
                Reserve's Form FR Y-9C or Capital and Asset Reports for Foreign Banking
                Organizations as reported on the Federal Reserve's Form FR Y-7Q of the
                companies that were party to the merger, acquisition, combination or
                similar transaction; and
                 (v) Any additional covered company as determined pursuant to Sec.
                243.13.
                 (2) Cessation of covered company status for nonbank financial
                companies supervised by the Board and global systemically important
                BHCs. Once a covered company meets the requirements described in
                paragraph (j)(1)(i) or (ii) of this section, the company shall remain a
                covered company until it no longer meets any of the requirements
                described in paragraph (j)(1) of this section.
                 (3) Cessation of covered company status for other covered
                companies. Once a company meets the requirements described in paragraph
                (j)(1)(iii) or (iv) of this section, the company shall remain a covered
                company until--
                 (i) In the case of a covered company described in paragraph
                (j)(1)(iii) of this section or a covered company described in paragraph
                (j)(1)(iv) of this section that files quarterly Capital and Asset
                Reports for Foreign Banking Organizations on the Federal Reserve's Form
                FR Y-7Q, the company has reported total consolidated assets that are
                below $250 billion for each of four consecutive quarters, as determined
                based on its average total consolidated assets as reported on its four
                most recent Consolidated Financial Statements for Holding Companies on
                the Federal Reserve's Form FR Y-9C or Capital and Asset Reports for
                Foreign Banking Organizations on the Federal Reserve's Form FR Y-7Q, as
                applicable; or
                 (ii) In the case of a covered company described in paragraph
                (j)(1)(iv) of this section that does not file quarterly Capital and
                Asset Reports for Foreign Banking Organizations on the Federal
                Reserve's Form FR Y-7Q, the company has reported total consolidated
                assets that are below $250 billion for each of two consecutive years,
                as determined based on its average total consolidated assets as
                reported on its two most recent annual Capital and Asset Reports for
                Foreign Banking Organizations on the Federal Reserve's Form FR Y-7Q, or
                such earlier time as jointly determined by the Board and the
                Corporation.
                 (4) Multi-tiered holding company. In a multi-tiered holding company
                structure, covered company means the top-tier of the multi-tiered
                holding company unless the Board and the Corporation
                [[Page 21622]]
                jointly identify a different holding company to satisfy the
                requirements that apply to the covered company. In making this
                determination, the Board and the Corporation shall consider:
                 (i) The ownership structure of the foreign banking organization,
                including whether the foreign banking organization is owned or
                controlled by a foreign government;
                 (ii) Whether the action would be consistent with the purposes of
                this part; and
                 (iii) Any other factors that the Board and the Corporation
                determine are relevant.
                 (5) Asset threshold for bank holding companies and foreign banking
                organizations. The Board may, pursuant to a recommendation of the
                Council, raise any asset threshold specified in paragraph (j)(1)(iii)
                or (iv) of this section.
                 (6) Exclusion. A bridge financial company chartered pursuant to 12
                U.S.C. 5390(h) shall not be deemed to be a covered company hereunder.
                 Critical operations means those operations of the covered company,
                including associated services, functions and support, the failure or
                discontinuance of which would pose a threat to the financial stability
                of the United States.
                 Deficiency is defined in Sec. __.8(b).
                 Depository institution has the same meaning as in section 3(c)(1)
                of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)(1)) and
                includes a state-licensed uninsured branch, agency, or commercial
                lending subsidiary of a foreign bank.
                 Foreign banking organization means--
                 (1) A foreign bank, as defined in section 1(b)(7) of the
                International Banking Act of 1978 (12 U.S.C. 3101(7)), that:
                 (i) Operates a branch, agency, or commercial lending company
                subsidiary in the United States;
                 (ii) Controls a bank in the United States; or
                 (iii) Controls an Edge corporation acquired after March 5, 1987;
                and
                 (2) Any company of which the foreign bank is a subsidiary.
                 Foreign-based company means any covered company that is not
                incorporated or organized under the laws of the United States.
                 Full resolution plan means a full resolution plan described in
                Sec. __.5.
                 Functionally regulated subsidiary has the same meaning as in
                section 5(c)(5) of the Bank Holding Company Act, as amended (12 U.S.C.
                1844(c)(5)).
                 Global systemically important BHC means a covered company that is a
                global systemically important BHC pursuant to Sec. 252.5 of this
                title.
                 Identified critical operations means the critical operations of the
                covered company identified by the covered company or jointly identified
                by the Board and the Corporation under Sec. __.3(b)(2).
                 Material change means an event, occurrence, change in conditions or
                circumstances, or other change that results in, or could reasonably be
                foreseen to have, a material effect on:
                 (1) The resolvability of the covered company;
                 (2) The covered company's resolution strategy; or
                 (3) How the covered company's resolution strategy is implemented.
                Such changes include, but are not limited to:
                 (i) The identification of a new critical operation or core business
                line;
                 (ii) The identification of a new material entity or the de-
                identification of a material entity;
                 (iii) Significant increases or decreases in the business,
                operations, or funding or interconnections of a material entity; or
                 (iv) Changes in the primary regulatory authorities of a material
                entity or the covered company on a consolidated basis.
                 Material entity means a subsidiary or foreign office of the covered
                company that is significant to the activities of an identified critical
                operation or core business line, or is financially or operationally
                significant to the resolution of the covered company.
                 Material financial distress with regard to a covered company means
                that:
                 (1) The covered company has incurred, or is likely to incur, losses
                that will deplete all or substantially all of its capital, and there is
                no reasonable prospect for the company to avoid such depletion;
                 (2) The assets of the covered company are, or are likely to be,
                less than its obligations to creditors and others; or
                 (3) The covered company is, or is likely to be, unable to pay its
                obligations (other than those subject to a bona fide dispute) in the
                normal course of business.
                 Nonbank financial company supervised by the Board means a nonbank
                financial company or other company that the Council has determined
                under section 113 of the Dodd-Frank Act (12 U.S.C. 5323) shall be
                supervised by the Board and for which such determination is still in
                effect.
                 Rapid and orderly resolution means a reorganization or liquidation
                of the covered company (or, in the case of a covered company that is
                incorporated or organized in a jurisdiction other than the United
                States, the subsidiaries and operations of such foreign company that
                are domiciled in the United States) under the Bankruptcy Code that can
                be accomplished within a reasonable period of time and in a manner that
                substantially mitigates the risk that the failure of the covered
                company would have serious adverse effects on financial stability in
                the United States.
                 Reduced resolution plan means a reduced resolution plan described
                in Sec. __.7.
                 Shortcoming is defined in Sec. __.8(e).
                 Subsidiary means a company that is controlled by another company,
                and an indirect subsidiary is a company that is controlled by a
                subsidiary of a company.
                 Targeted resolution plan means a targeted resolution plan described
                in Sec. __.6.
                 Triennial full filer is defined in Sec. __.4(b)(1).
                 Triennial reduced filer is defined in Sec. __.4(c)(1).
                 United States means the United States and includes any state of the
                United States, the District of Columbia, any territory of the United
                States, Puerto Rico, Guam, American Samoa, and the Virgin Islands.
                Sec. __.3 Critical operations.
                 (a) Identification of critical operations by covered companies--(1)
                Process and methodology required. (i) Each biennial filer and triennial
                full filer shall establish and implement a process designed to identify
                each of its critical operations. The scale of the process must be
                appropriate to the nature, size, complexity, and scope of the covered
                company's operations. The covered company must review its process
                periodically and update it as necessary to ensure its continued
                effectiveness. The covered company shall describe its process and how
                it is applied as part of its corporate governance relating to
                resolution planning under Sec. __.5(d)(1). The covered company must
                conduct the process described in this paragraph (a)(1) sufficiently in
                advance of its next resolution plan submission so that the covered
                company is prepared to submit the information required under Sec. Sec.
                __.5 through __.7 for each identified critical operation.
                 (ii) The process required under paragraph (a)(1)(i) of this section
                must include a methodology for evaluating the covered company's
                participation in activities and markets that may be critical to the
                financial stability of the United States. The methodology must be
                designed, taking into account the nature, size, complexity, and scope
                of
                [[Page 21623]]
                the covered company's operations, to identify and assess:
                 (A) The economic functions engaged in by the covered company;
                 (B) The markets and activities through which the covered company
                engages in those economic functions;
                 (C) The significance of those markets and activities with respect
                to the financial stability of the United States; and
                 (D) The significance of the covered company as a provider or other
                participant in those markets and activities.
                 (2) Waiver requests. In connection with the submission of a
                resolution plan, a covered company that has previously submitted a
                resolution plan under this part and does not currently have an
                identified critical operation under this part may request a waiver of
                the requirement to have a process and methodology under paragraph
                (a)(1) of this section in accordance with this paragraph (a)(2).
                 (i) Each waiver request shall be divided into a public section and
                a confidential section. A covered company shall segregate and
                separately identify the public section from the confidential section. A
                covered company shall include in the confidential section of a waiver
                request its rationale for why a waiver of the requirement would be
                appropriate, including an explanation of why the process and
                methodology are not likely to identify any critical operation given its
                business model, operations, and organizational structure. A covered
                company shall describe in the public section of a waiver request that
                it is seeking to waive the requirement.
                 (ii) Any waiver request must be made in writing at least 15 months
                before the date on which the covered company is required to submit the
                resolution plan.
                 (iii) The Board and Corporation may jointly deny a waiver request
                in their discretion. Unless the Board and the Corporation have jointly
                denied a waiver request, the waiver request will be deemed approved on
                the date that is 9 months prior to the date that the covered company is
                required to submit the resolution plan to which the waiver request
                relates.
                 (b) Joint identification of critical operations by the Board and
                the Corporation. (1) The Board and the Corporation shall, not less
                frequently than every six years, jointly review the operations of
                covered companies to determine whether to jointly identify critical
                operations of any covered company in accordance with paragraph (b)(2)
                of this section, or to jointly rescind any currently effective joint
                identification in accordance with paragraph (b)(3) of this section.
                 (2) If the Board and the Corporation jointly identify a covered
                company's operation as a critical operation, the Board and the
                Corporation shall jointly notify the covered company in writing. A
                covered company is not required to include the information required
                under Sec. Sec. __.5 through __.7 for the identified critical operation
                in any resolution plan that the covered company is required to submit
                within 180 days after the joint notification unless the operation had
                been identified by the covered company as a critical operation prior to
                when the Board and the Corporation jointly notified the covered
                company.
                 (3) The Board and the Corporation may jointly rescind a joint
                identification under paragraph (b)(2) of this section by providing the
                covered company with joint notice of the rescission. Upon the
                notification, the covered company is not required to include the
                information regarding the operation required for identified critical
                operations under Sec. Sec. __.5 through __.7 in any subsequent
                resolution plan unless:
                 (i) The covered company identifies the operation as a critical
                operation; or
                 (ii) The Board and the Corporation subsequently provide a joint
                notification under paragraph (b)(2) of this section to the covered
                company regarding the operation.
                 (4) A joint notification provided by the Board and the Corporation
                to a covered company before [effective date of final rule] that
                identifies any of its operations as a critical operation and not
                previously jointly rescinded is deemed to be a joint identification
                under paragraph (b)(2) of this section.
                 (c) Request for reconsideration of jointly identified critical
                operations. A covered company may request that the Board and the
                Corporation reconsider a joint identification under paragraph (b)(2) of
                this section in accordance with this paragraph (c).
                 (1) Written request for reconsideration. The covered company must
                submit a written request for reconsideration to the Board and the
                Corporation that includes a clear and complete statement of all
                arguments and all relevant, material information that the covered
                company expects to have considered. If a covered company has previously
                requested reconsideration regarding the operation, the written request
                must also describe the material differences between the new request and
                the most recent prior request.
                 (2) Timing. (i) A covered company shall submit a request for
                reconsideration sufficiently before its next resolution plan to provide
                the Board and the Corporation with a reasonable period of time to
                reconsider the joint identification.
                 (ii) If a covered company submits a request for reconsideration at
                least 270 days before the date on which it is required to submit its
                next resolution plan, the Board and the Corporation will complete their
                reconsideration at least 180 days before the date on which the covered
                company is required to submit its next resolution plan, except the
                Board and the Corporation may jointly extend the period for their
                reconsideration by no more than 90 days. If the Board and the
                Corporation jointly find that additional information from the covered
                company is required to complete their reconsideration, the Board and
                the Corporation will jointly request in writing the additional
                information from the covered company. The Board and the Corporation
                will then complete their reconsideration no later than 90 days after
                receipt of all additional information from the covered company.
                 (iii) If a covered company submits a request for reconsideration
                less than 270 days before the date on which it is required to submit
                its next resolution plan, the Board and the Corporation may, in their
                discretion, defer reconsideration of the joint identification until
                after the submission of that resolution plan, with the result that the
                covered company must include the identified critical operation in that
                resolution plan.
                 (3) Joint communication following reconsideration. The Board and
                the Corporation will communicate jointly the results of their
                reconsideration in writing to the covered company.
                 (d) De-identification by covered company of self-identified
                critical operations. A covered company may cease to include in its
                resolution plans the information required under Sec. Sec. __.5 through
                __.7 regarding an operation previously identified only by the covered
                company (and not also jointly by the Board and the Corporation) as a
                critical operation only in accordance with this paragraph (d).
                 (1) Notice of de-identification. If a covered company ceases to
                identify an operation as a critical operation, the covered company must
                notify the Board and the Corporation of its de-identification. The
                notice must be in writing and include a clear and complete explanation
                of:
                 (i) Why the covered company previously identified the operation as
                a critical operation; and
                 (ii) Why the covered company no longer identifies the operation as
                a critical operation.
                [[Page 21624]]
                 (2) Timing. Notwithstanding a covered company's de-identification,
                and unless otherwise notified in writing jointly by the Board and the
                Corporation, a covered company shall include the applicable information
                required under Sec. Sec. __.5 through __.7 regarding an operation
                previously identified by the covered company as a critical operation in
                any resolution plan the covered company is required to submit during
                the period ending 12 months after the covered company notifies the
                Board and the Corporation in accordance with paragraph (d)(1) of this
                section.
                 (3) No effect on joint identifications. Neither a covered company's
                de-identification nor notice thereof under paragraph (d)(1) of this
                section rescinds a joint identification made by the Board and the
                Corporation under paragraph (b)(2) of this section.
                Sec. __.4 Resolution plan required.
                 (a) Biennial filers--(1) Group members. Biennial filer means:
                 (i) Any global systemically important BHC; and
                 (ii) Any nonbank financial company supervised by the Board that has
                not been jointly designated a triennial full filer by the Board and
                Corporation under paragraph (a)(2) of this section or that has been
                jointly re-designated a biennial filer by the Board and the Corporation
                under paragraph (a)(2) of this section.
                 (2) Nonbank financial companies. The Board and the Corporation may
                jointly designate a nonbank financial company supervised by the Board
                as a triennial full filer in their discretion, taking into account
                facts and circumstances that each of the Board and the Corporation in
                its discretion determines to be relevant. The Board and the Corporation
                may in their discretion jointly re-designate as a biennial filer a
                nonbank financial company that the Board and the Corporation had
                previously designated as a triennial filer, taking into account facts
                and circumstances that each of the Board and the Corporation in its
                discretion determines to be relevant.
                 (3) Frequency of submission. Biennial filers shall each submit a
                resolution plan to the Board and the Corporation every two years.
                 (4) Submission date. Biennial filers shall submit their plans by
                July 1 of each year in which a plan is due.
                 (5) Type of plan required to be submitted. Biennial filers shall
                alternate submitting a full resolution plan and a targeted resolution
                plan.
                 (6) New covered companies that are biennial filers. A company that
                becomes a covered company and a biennial filer after [effective date of
                final rule] shall submit a full resolution plan on the next date on
                which other biennial filers are required to submit resolution plans
                pursuant to paragraph (a)(4) of this section that occurs no earlier
                than 12 months after the date on which the company became a covered
                company. The company's subsequent plans shall be of the type required
                to be submitted by the other biennial filers.
                 (b) Triennial full filers--(1) Group members. Triennial full filer
                means:
                 (i) Any category II banking organization;
                 (ii) Any category III banking organization; and
                 (iii) Any nonbank financial company supervised by the Board that is
                jointly designated a triennial full filer by the Board and Corporation
                under paragraph (a)(2) of this section.
                 (2) Frequency of submission. Triennial full filers shall each
                submit a resolution plan to the Board and the Corporation every three
                years.
                 (3) Submission date. Triennial full filers shall submit their plans
                by July 1 of each year in which a plan is due.
                 (4) Type of plan required to be submitted. Triennial full filers
                shall alternate submitting a full resolution plan and a targeted
                resolution plan.
                 (5) New covered companies that are triennial full filers. A company
                that becomes a covered company and a triennial full filer after
                [effective date of final rule] shall submit a full resolution plan on
                the next date on which other triennial full filers are required to
                submit resolution plans pursuant to paragraph (b)(3) of this section
                that occurs no earlier than 12 months after the date on which the
                company became a covered company. The company's subsequent plans shall
                be of the type required to be submitted by the other triennial full
                filers.
                 (c) Triennial reduced filers--(1) Group members. Triennial reduced
                filer means any covered company that is not a global systemically
                important BHC, nonbank financial company supervised by the Board,
                category II banking organization, or category III banking organization.
                 (2) Frequency of submission. Triennial reduced filers shall each
                submit a resolution plan to the Board and the Corporation every three
                years.
                 (3) Submission date. Triennial reduced filers shall submit their
                plans by July 1 of each year in which a plan is due.
                 (4) Type of plan required to be submitted. Triennial reduced filers
                shall submit a reduced resolution plan.
                 (5) New covered companies that are triennial reduced filers. A
                company that becomes a covered company and a triennial reduced filer
                after [effective date of final rule] shall submit a full resolution
                plan on the next date on which other triennial reduced filers are
                required to submit resolution plans pursuant to paragraph (c)(3) of
                this section that occurs no earlier than 12 months after the date on
                which the company became a covered company. The company's subsequent
                plans shall be reduced resolution plans.
                 (d) General--(1) Changing filing groups. If a covered company that
                is a member of a filing group specified in paragraphs (a) through (c)
                of this section (``original group filer'') becomes a member of a
                different filing group specified in paragraphs (a) through (c) of this
                section (``new group filer''), then the covered company shall submit
                its next resolution plan as follows:
                 (i) If the next date on which the original group filers are
                required to submit their next resolution plans is the same date on
                which the other new group filers are required to submit their next
                resolution plans and:
                 (A) That date is less than 12 months after the covered company
                became a new group filer, the covered company shall submit its next
                resolution plan on that date. The resolution plan may be the type of
                plan that the original group filers are required to submit on that date
                or the type of plan that the other new group filers are required to
                submit on that date.
                 (B) That date is 12 months or more after the covered company became
                a new group filer, the covered company shall submit on that date the
                type of resolution plan the other new group filers are required to
                submit on that date.
                 (ii) If the next date on which the original group filers are
                required to submit their next resolution plan is different from the
                date on which the new group filers are required to submit their next
                resolution plans, the covered company shall submit its next resolution
                plan on the next date on which the other new group filers are required
                to submit a resolution plan that occurs no earlier than 12 months after
                the date on which the covered company became a new group filer. The
                covered company shall submit the type of resolution plan that the other
                new group filers are required to submit on the date the covered company
                must submit its next resolution plan.
                 (iii) Notwithstanding paragraph (d)(1)(i) or (ii) of this section,
                any triennial reduced filer that becomes a biennial filer or a
                triennial full filer
                [[Page 21625]]
                shall submit a full resolution plan no later than the next date on
                which the other new group filers are required to submit their next
                resolution plans that occurs no earlier than 12 months after the date
                on which the covered company became a new group filer. After submitting
                a full resolution plan, the covered company shall submit, on the next
                date that the other new group filers are required to submit their next
                resolution plans, the type of resolution plan the other new group
                filers are required to submit on that date.
                 (2) Altering submission dates. Notwithstanding anything to the
                contrary in this part, the Board and Corporation may jointly determine
                that a covered company shall file its resolution plan by a date other
                than as provided in paragraphs (a) through (d) of this section. The
                Board and the Corporation shall provide a covered company with written
                notice of a determination under this paragraph (d)(2) no later than 180
                days prior to the date on which the Board and Corporation jointly
                determined to require the covered company to submit its resolution
                plan, unless the covered company has not previously submitted a
                resolution plan, in which case the Board and Corporation shall provide
                the written notice no later than 12 months prior to the date on which
                the Board and Corporation jointly determined to require the covered
                company to submit its resolution plan.
                 (3) Authority to require interim updates. The Board and the
                Corporation may jointly require that a covered company file an update
                to a resolution plan submitted under this part, within a reasonable
                amount of time, as jointly determined by the Board and Corporation. The
                Board and the Corporation shall notify the covered company of its
                requirement to file an update under this paragraph (d)(3) in writing,
                and shall specify the portions or aspects of the resolution plan the
                covered company shall update.
                 (4) Notice of extraordinary events--(i) In general. Each covered
                company shall provide the Board and the Corporation with a notice no
                later than 45 days after any material merger, acquisition of assets, or
                similar transaction or fundamental change to the covered company's
                resolution strategy. Such notice should describe the event and explain
                how the event would affect the resolvability of the covered company.
                The covered company shall address any event with respect to which it
                has provided notice pursuant to this paragraph (d)(4)(i) in the
                following resolution plan submitted by the covered company.
                 (ii) Exception. A covered company shall not be required to file a
                notice under paragraph (d)(4)(i) of this section if the date on which
                the covered company would be required to submit the notice under
                paragraph (d)(3)(i) of this section would be within 90 days prior to
                the date on which the covered company is required to file a resolution
                plan under this section.
                 (5) Authority to require a full resolution plan submission.
                Notwithstanding anything to the contrary in this part, the Board and
                Corporation may jointly require that a covered company submit a full
                resolution plan within a reasonable period of time.
                 (6) Waivers--(i) Authority to waive requirements. The Board and the
                Corporation may jointly waive one or more of the resolution plan
                requirements of Sec. __.5, Sec. __.6, or Sec. __.7 for one or more
                covered companies for any number of resolution plan submissions. A
                request pursuant to paragraph (d)(6)(ii) of this section is not
                required for the Board and Corporation to take action pursuant to this
                paragraph (d)(6)(i).
                 (ii) Waiver requests by covered companies. In connection with the
                submission of a full resolution plan, a covered company that has
                previously submitted a resolution plan under this part may request a
                waiver of one or more of the informational content requirements of
                Sec. __.5 in accordance with this paragraph (d)(6)(ii).
                 (A) A requirement to include any of the following information is
                not eligible for a waiver at the request of a covered company:
                 (1) Information specified in section 165(d)(1)(A) through (C) of
                the Dodd-Frank Act (12 U.S.C. 5365(d)(1)(A) through (C));
                 (2) Any core element;
                 (3) Information required to be included in the public section of a
                full resolution plan under Sec. __.11(c)(2);
                 (4) Information about the remediation of any previously identified
                deficiency or shortcoming unless the Board and the Corporation have
                jointly determined that the covered company has satisfactorily remedied
                the deficiency or addressed the shortcoming prior to the covered
                company's submission of the waiver request; or
                 (5) Information about changes to the covered company's last
                submitted resolution plan resulting from any:
                 (i) Change in law;
                 (ii) Change in regulation;
                 (iii) Guidance from the Board and the Corporation; or
                 (iv) Feedback from the Board and the Corporation, or any material
                change experienced by the covered company since the covered company
                submitted that resolution plan.
                 (B) Each waiver request shall be divided into a public section and
                a confidential section. A covered company shall segregate and
                separately identify the public section from the confidential section. A
                covered company shall include in the confidential section of a waiver
                request a clear and complete explanation of why:
                 (1) Each requirement sought to be waived is not a requirement
                described in paragraph (d)(6)(ii)(A) of this section;
                 (2) The information sought to be waived would not be relevant to
                the Board's and Corporation's review of the covered company's next full
                resolution plan; and
                 (3) A waiver of each requirement would be appropriate. A covered
                company shall include in the public section of a waiver request a list
                of the requirements that the covered company is requesting be waived.
                 (C) A covered company may not make more than one waiver request for
                any full resolution plan submission and any waiver request must be made
                in writing at least 15 months before the date on which the covered
                company is required to submit the full resolution plan.
                 (D) The Board and Corporation may jointly deny a waiver request in
                their discretion. Unless the Board and the Corporation have jointly
                denied a waiver request, the waiver request will be deemed approved on
                the date that is 9 months prior to the date that the covered company is
                required to submit the full resolution plan to which the waiver request
                relates.
                 (e) Access to information. In order to allow evaluation of a
                resolution plan, each covered company must provide the Board and the
                Corporation such information and access to personnel of the covered
                company as the Board and the Corporation jointly determine during the
                period for reviewing the resolution plan is necessary to assess the
                credibility of the resolution plan and the ability of the covered
                company to implement the resolution plan. In order to facilitate review
                of any waiver request by a covered company under Sec. __.3(a)(2) or
                paragraph (d)(6)(ii) of this section, or any joint identification of a
                critical operation of a covered company under Sec. __.3(b), each
                covered company must provide such information and access to personnel
                of the covered company as the Board and the Corporation jointly
                determine is necessary to evaluate the waiver request or whether the
                operation is a critical operation. The Board and the
                [[Page 21626]]
                Corporation will rely to the fullest extent possible on examinations
                conducted by or on behalf of the appropriate Federal banking agency for
                the relevant company.
                 (f) Board of directors approval of resolution plan. Prior to
                submission of a resolution plan under paragraphs (a) through (c) of
                this section, the resolution plan of a covered company shall be
                approved by:
                 (1) The board of directors of the covered company and noted in the
                minutes; or
                 (2) In the case of a foreign-based covered company only, a delegee
                acting under the express authority of the board of directors of the
                covered company to approve the resolution plan.
                 (g) Resolution plans provided to the Council. The Board shall make
                the resolution plans and updates submitted by the covered company
                pursuant to this section available to the Council upon request.
                 (h) Required and prohibited assumptions. In preparing its
                resolution plan, a covered company shall:
                 (1) Take into account that the material financial distress or
                failure of the covered company may occur under the severely adverse
                economic conditions provided to the covered company by the Board
                pursuant to 12 U.S.C. 5365(i)(1)(B);
                 (2) Not rely on the provision of extraordinary support by the
                United States or any other government to the covered company or its
                subsidiaries to prevent the failure of the covered company, including
                any resolution actions taken outside the United States that would
                eliminate the need for any of a covered company's U.S. subsidiaries to
                enter into resolution proceedings; and
                 (3) With respect to foreign banking organizations, not assume that
                the covered company takes resolution actions outside of the United
                States that would eliminate the need for any U.S. subsidiaries to enter
                into resolution proceedings.
                 (i) Point of contact. Each covered company shall identify a senior
                management official at the covered company responsible for serving as a
                point of contact regarding the resolution plan of the covered company.
                 (j) Incorporation of previously submitted resolution plan
                information by reference. Any resolution plan submitted by a covered
                company may incorporate by reference information from a resolution plan
                previously submitted by the covered company to the Board and the
                Corporation, provided that:
                 (1) The resolution plan seeking to incorporate information by
                reference clearly indicates:
                 (i) The information the covered company is incorporating by
                reference; and
                 (ii) Which of the covered company's previously submitted resolution
                plan(s) originally contained the information the covered company is
                incorporating by reference and the specific location of the information
                in the covered company's previously submitted resolution plan; and
                 (2) The covered company certifies that the information the covered
                company is incorporating by reference remains accurate in all respects
                that are material to the covered company's resolution plan.
                Sec. __.5 Informational content of a full resolution plan.
                 (a) In general--(1) Domestic covered companies. A full resolution
                plan of a covered company that is organized or incorporated in the
                United States shall include the information specified in paragraphs (b)
                through (h) of this section with respect to the subsidiaries and
                operations that are domiciled in the United States as well as the
                foreign subsidiaries, offices, and operations of the covered company.
                 (2) Foreign-based covered companies. A full resolution plan of a
                covered company that is organized or incorporated in a jurisdiction
                other than the United States (other than a bank holding company) or
                that is a foreign banking organization shall include:
                 (i) The information specified in paragraphs (b) through (h) of this
                section with respect to the subsidiaries, branches and agencies, and
                identified critical operations and core business lines, as applicable,
                that are domiciled in the United States or conducted in whole or
                material part in the United States. With respect to the information
                specified in paragraph (g) of this section, the resolution plan of a
                foreign-based covered company shall also identify, describe in detail,
                and map to legal entity the interconnections and interdependencies
                among the U.S. subsidiaries, branches, and agencies, and between those
                entities and:
                 (A) The identified critical operations and core business lines of
                the foreign-based covered company; and
                 (B) Any foreign-based affiliate; and
                 (ii) A detailed explanation of how resolution planning for the
                subsidiaries, branches and agencies, and identified critical operations
                and core business lines of the foreign-based covered company that are
                domiciled in the United States or conducted in whole or material part
                in the United States is integrated into the foreign-based covered
                company's overall resolution or other contingency planning process.
                 (b) Executive summary. Each full resolution plan of a covered
                company shall include an executive summary describing:
                 (1) The key elements of the covered company's strategic plan for
                rapid and orderly resolution in the event of material financial
                distress at or failure of the covered company;
                 (2) A description of each material change experienced by the
                covered company since the filing of the covered company's previously
                submitted resolution plan;
                 (3) Changes to the covered company's previously submitted
                resolution plan resulting from any:
                 (i) Change in law or regulation;
                 (ii) Guidance or feedback from the Board and the Corporation; or
                 (iii) Material change described pursuant to paragraph (b)(2) of
                this section; and
                 (4) Any actions taken by the covered company since filing of the
                previous resolution plan to improve the effectiveness of the covered
                company's resolution plan or remediate or otherwise mitigate any
                material weaknesses or impediments to effective and timely execution of
                the resolution plan.
                 (c) Strategic analysis. Each full resolution plan shall include a
                strategic analysis describing the covered company's plan for rapid and
                orderly resolution in the event of material financial distress or
                failure of the covered company. Such analysis shall:
                 (1) Include detailed descriptions of the:
                 (i) Key assumptions and supporting analysis underlying the covered
                company's resolution plan, including any assumptions made concerning
                the economic or financial conditions that would be present at the time
                the covered company sought to implement such plan;
                 (ii) Range of specific actions to be taken by the covered company
                to facilitate a rapid and orderly resolution of the covered company,
                its material entities, and its identified critical operations and core
                business lines in the event of material financial distress or failure
                of the covered company;
                 (iii) Funding, liquidity and capital needs of, and resources
                available to, the covered company and its material entities, which
                shall be mapped to its identified critical operations and core business
                lines, in the ordinary course of business and in the event of material
                [[Page 21627]]
                financial distress at or failure of the covered company;
                 (iv) Covered company's strategy for maintaining operations of, and
                funding for, the covered company and its material entities, which shall
                be mapped to its identified critical operations and core business
                lines;
                 (v) Covered company's strategy in the event of a failure or
                discontinuation of a material entity, core business line or identified
                critical operation, and the actions that will be taken by the covered
                company to prevent or mitigate any adverse effects of such failure or
                discontinuation on the financial stability of the United States;
                provided, however, if any such material entity is subject to an
                insolvency regime other than the Bankruptcy Code, a covered company may
                exclude that entity from its strategic analysis unless that entity
                either has $50 billion or more in total assets or conducts an
                identified critical operation; and
                 (vi) Covered company's strategy for ensuring that any insured
                depository institution subsidiary of the covered company will be
                adequately protected from risks arising from the activities of any
                nonbank subsidiaries of the covered company (other than those that are
                subsidiaries of an insured depository institution);
                 (2) Identify the time period(s) the covered company expects would
                be needed for the covered company to successfully execute each material
                aspect and step of the covered company's plan;
                 (3) Identify and describe any potential material weaknesses or
                impediments to effective and timely execution of the covered company's
                plan;
                 (4) Discuss the actions and steps the covered company has taken or
                proposes to take to remediate or otherwise mitigate the weaknesses or
                impediments identified by the covered company, including a timeline for
                the remedial or other mitigatory action; and
                 (5) Provide a detailed description of the processes the covered
                company employs for:
                 (i) Determining the current market values and marketability of the
                core business lines, identified critical operations, and material asset
                holdings of the covered company;
                 (ii) Assessing the feasibility of the covered company's plans
                (including timeframes) for executing any sales, divestitures,
                restructurings, recapitalizations, or other similar actions
                contemplated in the covered company's resolution plan; and
                 (iii) Assessing the impact of any sales, divestitures,
                restructurings, recapitalizations, or other similar actions on the
                value, funding, and operations of the covered company, its material
                entities, identified critical operations and core business lines.
                 (d) Corporate governance relating to resolution planning. Each full
                resolution plan shall:
                 (1) Include a detailed description of:
                 (i) How resolution planning is integrated into the corporate
                governance structure and processes of the covered company;
                 (ii) The covered company's policies, procedures, and internal
                controls governing preparation and approval of the covered company's
                resolution plan;
                 (iii) The identity and position of the senior management
                official(s) of the covered company that is primarily responsible for
                overseeing the development, maintenance, implementation, and filing of
                the covered company's resolution plan and for the covered company's
                compliance with this part; and
                 (iv) The nature, extent, and frequency of reporting to senior
                executive officers and the board of directors of the covered company
                regarding the development, maintenance, and implementation of the
                covered company's resolution plan;
                 (2) Describe the nature, extent, and results of any contingency
                planning or similar exercise conducted by the covered company since the
                date of the covered company's most recently filed resolution plan to
                assess the viability of or improve the resolution plan of the covered
                company; and
                 (3) Identify and describe the relevant risk measures used by the
                covered company to report credit risk exposures both internally to its
                senior management and board of directors, as well as any relevant risk
                measures reported externally to investors or to the covered company's
                appropriate Federal regulator.
                 (e) Organizational structure and related information. Each full
                resolution plan shall:
                 (1) Provide a detailed description of the covered company's
                organizational structure, including:
                 (i) A hierarchical list of all material entities within the covered
                company's organization (including legal entities that directly or
                indirectly hold such material entities) that:
                 (A) Identifies the direct holder and the percentage of voting and
                nonvoting equity of each legal entity and foreign office listed; and
                 (B) The location, jurisdiction of incorporation, licensing, and key
                management associated with each material legal entity and foreign
                office identified;
                 (ii) A mapping of the covered company's identified critical
                operations and core business lines, including material asset holdings
                and liabilities related to such identified critical operations and core
                business lines, to material entities;
                 (2) Provide an unconsolidated balance sheet for the covered company
                and a consolidating schedule for all material entities that are subject
                to consolidation by the covered company;
                 (3) Include a description of the material components of the
                liabilities of the covered company, its material entities, identified
                critical operations and core business lines that, at a minimum,
                separately identifies types and amounts of the short-term and long-term
                liabilities, the secured and unsecured liabilities, and subordinated
                liabilities;
                 (4) Identify and describe the processes used by the covered company
                to:
                 (i) Determine to whom the covered company has pledged collateral;
                 (ii) Identify the person or entity that holds such collateral; and
                 (iii) Identify the jurisdiction in which the collateral is located,
                and, if different, the jurisdiction in which the security interest in
                the collateral is enforceable against the covered company;
                 (5) Describe any material off-balance sheet exposures (including
                guarantees and contractual obligations) of the covered company and its
                material entities, including a mapping to its identified critical
                operations and core business lines;
                 (6) Describe the practices of the covered company, its material
                entities and its core business lines related to the booking of trading
                and derivatives activities;
                 (7) Identify material hedges of the covered company, its material
                entities, and its core business lines related to trading and derivative
                activities, including a mapping to legal entity;
                 (8) Describe the hedging strategies of the covered company;
                 (9) Describe the process undertaken by the covered company to
                establish exposure limits;
                 (10) Identify the major counterparties of the covered company and
                describe the interconnections, interdependencies and relationships with
                such major counterparties;
                 (11) Analyze whether the failure of each major counterparty would
                likely have an adverse impact on or result in the material financial
                distress or failure of the covered company; and
                 (12) Identify each trading, payment, clearing, or settlement system
                of which the covered company, directly or indirectly, is a member and
                on which
                [[Page 21628]]
                the covered company conducts a material number or value amount of
                trades or transactions. Map membership in each such system to the
                covered company's material entities, identified critical operations and
                core business lines.
                 (f) Management information systems. (1) Each full resolution plan
                shall include:
                 (i) A detailed inventory and description of the key management
                information systems and applications, including systems and
                applications for risk management, accounting, and financial and
                regulatory reporting, used by the covered company and its material
                entities. The description of each system or application provided shall
                identify the legal owner or licensor, the use or function of the system
                or application, service level agreements related thereto, any software
                and system licenses, and any intellectual property associated
                therewith;
                 (ii) A mapping of the key management information systems and
                applications to the material entities, identified critical operations
                and core business lines of the covered company that use or rely on such
                systems and applications;
                 (iii) An identification of the scope, content, and frequency of the
                key internal reports that senior management of the covered company, its
                material entities, identified critical operations and core business
                lines use to monitor the financial health, risks, and operation of the
                covered company, its material entities, identified critical operations
                and core business lines; and
                 (iv) A description of the process for the appropriate supervisory
                or regulatory agencies to access the management information systems and
                applications identified in paragraph (f) of this section; and
                 (v) A description and analysis of:
                 (A) The capabilities of the covered company's management
                information systems to collect, maintain, and report, in a timely
                manner to management of the covered company, and to the Board, the
                information and data underlying the resolution plan; and
                 (B) Any gaps or weaknesses in such capabilities, and a description
                of the actions the covered company intends to take to promptly address
                such gaps, or weaknesses, and the time frame for implementing such
                actions.
                 (2) The Board will use its examination authority to review the
                demonstrated capabilities of each covered company to satisfy the
                requirements of paragraph (f)(1)(v) of this section. The Board will
                share with the Corporation information regarding the capabilities of
                the covered company to collect, maintain, and report in a timely manner
                information and data underlying the resolution plan.
                 (g) Interconnections and interdependencies. To the extent not
                provided elsewhere in this part, each full resolution plan shall
                identify and map to the material entities the interconnections and
                interdependencies among the covered company and its material entities,
                and among the identified critical operations and core business lines of
                the covered company that, if disrupted, would materially affect the
                funding or operations of the covered company, its material entities, or
                its identified critical operations or core business lines. Such
                interconnections and interdependencies may include:
                 (1) Common or shared personnel, facilities, or systems (including
                information technology platforms, management information systems, risk
                management systems, and accounting and recordkeeping systems);
                 (2) Capital, funding, or liquidity arrangements;
                 (3) Existing or contingent credit exposures;
                 (4) Cross-guarantee arrangements, cross-collateral arrangements,
                cross-default provisions, and cross-affiliate netting agreements;
                 (5) Risk transfers; and
                 (6) Service level agreements.
                 (h) Supervisory and regulatory information. Each full resolution
                plan shall:
                 (1) Identify any:
                 (i) Federal, state, or foreign agency or authority (other than a
                Federal banking agency) with supervisory authority or responsibility
                for ensuring the safety and soundness of the covered company, its
                material entities, identified critical operations and core business
                lines; and
                 (ii) Other Federal, state, or foreign agency or authority (other
                than a Federal banking agency) with significant supervisory or
                regulatory authority over the covered company, and its material
                entities and identified critical operations and core business lines.
                 (2) Identify any foreign agency or authority responsible for
                resolving a foreign-based material entity and identified critical
                operations or core business lines of the covered company; and
                 (3) Include contact information for each agency identified in
                paragraphs (h)(1) and (2) of this section.
                Sec. __.6 Informational content of a targeted resolution plan.
                 (a) In general. A targeted resolution plan is a subset of a full
                resolution plan and shall include core elements of a full resolution
                plan and information concerning key areas of focus as set forth in this
                section.
                 (b) Targeted resolution plan content. Each targeted resolution plan
                of a covered company shall include:
                 (1) The core elements;
                 (2) Such targeted information as the Board and Corporation may
                jointly identify pursuant to paragraph (c) of this section;
                 (3) A description of each material change experienced by the
                covered company since the filing of the covered company's previously
                submitted resolution plan; and
                 (4) A description of changes to the covered company's previously
                submitted resolution plan resulting from any;
                 (i) Change in law or regulation;
                 (ii) Guidance or feedback from the Board and the Corporation; or
                 (iii) Material change described pursuant to paragraph (b)(3) of
                this section.
                 (c) Targeted information requests. No less than 12 months prior to
                the date a covered company's targeted resolution plan is due, the Board
                and Corporation may jointly identify resolution-related key areas of
                focus, questions and issues that must also be addressed in the covered
                company's targeted resolution plan.
                 (d) Deemed incorporation by reference. If a covered company does
                not include in its targeted resolution plan a description of changes to
                any information set forth in section 165(d)(1)(A), (B), or (C) of the
                Dodd-Frank Act (12 U.S.C. 5365(d)(1)(A), (B), or (C)) since its
                previously submitted plan, such information from its previously
                submitted plan are incorporated by reference into its targeted
                resolution plan.
                Sec. __.7 Informational content of a reduced resolution plan.
                 (a) Reduced resolution plan content. Each reduced resolution plan
                of a covered company shall include:
                 (1) A description of each material change experienced by the
                covered company since the filing of the covered company's previously
                submitted resolution plan; and
                 (2) A description of changes to the strategic analysis that was
                presented in the covered company's previously submitted resolution plan
                resulting from any:
                 (i) Change in law or regulation;
                 (ii) Guidance or feedback from the Board and the Corporation; or
                 (iii) Material changes described pursuant to paragraph (a)(1) of
                this section.
                 (b) Deemed incorporation by reference. If a covered company does
                [[Page 21629]]
                not include in its reduced resolution plan a description of changes to
                any information set forth in section 165(d)(1)(A), (B), or (C) of the
                Dodd-Frank Act (12 U.S.C. 5365(d)(1)(A), (B), or (C)) since its
                previously submitted plan, such information from its previously
                submitted plan are incorporated by reference into its reduced
                resolution plan.
                Sec. __.8 Review of resolution plans; resubmission of deficient
                resolution plans
                 (a) Review of resolution plans. The Board and Corporation will seek
                to coordinate their activities concerning the review of resolution
                plans, including planning for, reviewing, and assessing the resolution
                plans, as well as such activities that occur during the periods between
                plan submissions.
                 (b) Joint determination regarding deficient resolution plans. If
                the Board and Corporation jointly determine that the resolution plan of
                a covered company submitted under Sec. __.4 is not credible or would
                not facilitate an orderly resolution of the covered company under the
                Bankruptcy Code, the Board and Corporation shall jointly notify the
                covered company in writing of such determination. Any joint notice
                provided under this paragraph (b) shall identify the deficiencies
                identified by the Board and Corporation in the resolution plan. A
                deficiency is an aspect of a covered company's resolution plan that the
                Board and Corporation jointly determine presents a weakness that
                individually or in conjunction with other aspects could undermine the
                feasibility of the covered company's resolution plan.
                 (c) Resubmission of a resolution plan. Within 90 days of receiving
                a notice of deficiencies issued pursuant to paragraph (b) of this
                section, or such shorter or longer period as the Board and Corporation
                may jointly determine, a covered company shall submit a revised
                resolution plan to the Board and Corporation that addresses the
                deficiencies jointly identified by the Board and Corporation, and that
                discusses in detail:
                 (1) The revisions made by the covered company to address the
                deficiencies jointly identified by the Board and the Corporation;
                 (2) Any changes to the covered company's business operations and
                corporate structure that the covered company proposes to undertake to
                facilitate implementation of the revised resolution plan (including a
                timeline for the execution of such planned changes); and
                 (3) Why the covered company believes that the revised resolution
                plan is credible and would result in an orderly resolution of the
                covered company under the Bankruptcy Code.
                 (d) Extensions of time. Upon their own initiative or a written
                request by a covered company, the Board and Corporation may jointly
                extend any time period under this section. Each extension request shall
                be supported by a written statement of the covered company describing
                the basis and justification for the request.
                 (e) Joint determination regarding shortcomings in resolution plans.
                The Board and Corporation may also jointly identify one or more
                shortcomings in a covered company's resolution plan. A shortcoming is a
                weakness or gap that raises questions about the feasibility of a
                covered company's resolution plan, but does not rise to the level of a
                deficiency for both the Board and Corporation. If a shortcoming is not
                satisfactorily explained or addressed in or prior to the submission of
                the covered company's next resolution plan, it may be found to be a
                deficiency in the covered company's next resolution plan. The Board and
                the Corporation may identify an aspect of a covered company's
                resolution plan as a deficiency even if such aspect was not identified
                as a shortcoming in an earlier resolution plan submission.
                Sec. __.9 Failure to cure deficiencies on resubmission of a resolution
                plan
                 (a) In general. The Board and Corporation may jointly determine
                that a covered company or any subsidiary of a covered company shall be
                subject to more stringent capital, leverage, or liquidity requirements,
                or restrictions on the growth, activities, or operations of the covered
                company or the subsidiary if:
                 (1) The covered company fails to submit a revised resolution plan
                under Sec. __.8(c) within the required time period; or
                 (2) The Board and the Corporation jointly determine that a revised
                resolution plan submitted under Sec. __.8(c) does not adequately
                remedy the deficiencies jointly identified by the Board and the
                Corporation under Sec. __.8(b).
                 (b) Duration of requirements or restrictions. Any requirements or
                restrictions imposed on a covered company or a subsidiary thereof
                pursuant to paragraph (a) of this section shall cease to apply to the
                covered company or subsidiary, respectively, on the date that the Board
                and the Corporation jointly determine the covered company has submitted
                a revised resolution plan that adequately remedies the deficiencies
                jointly identified by the Board and the Corporation under Sec.
                __.8(b).
                 (c) Divestiture. The Board and Corporation, in consultation with
                the Council, may jointly, by order, direct the covered company to
                divest such assets or operations as are jointly identified by the Board
                and Corporation if:
                 (1) The Board and Corporation have jointly determined that the
                covered company or a subsidiary thereof shall be subject to
                requirements or restrictions pursuant to paragraph (a) of this section;
                and
                 (2) The covered company has failed, within the 2-year period
                beginning on the date on which the determination to impose such
                requirements or restrictions under paragraph (a) of this section was
                made, to submit a revised resolution plan that adequately remedies the
                deficiencies jointly identified by the Board and the Corporation under
                Sec. __.8(b); and
                 (3) The Board and Corporation jointly determine that the
                divestiture of such assets or operations is necessary to facilitate an
                orderly resolution of the covered company under the Bankruptcy Code in
                the event the company was to fail.
                Sec. __.10 Consultation.
                 Prior to issuing any notice of deficiencies under Sec. __.8(b),
                determining to impose requirements or restrictions under Sec. __.9(a),
                or issuing a divestiture order pursuant to Sec. __.9(c) with respect
                to a covered company that is likely to have a significant impact on a
                functionally regulated subsidiary or a depository institution
                subsidiary of the covered company, the Board--
                 (a) Shall consult with each Council member that primarily
                supervises any such subsidiary; and
                 (b) May consult with any other Federal, state, or foreign
                supervisor as the Board considers appropriate.
                Sec. __.11 No limiting effect or private right of action;
                confidentiality of resolution plans
                 (a) No limiting effect on bankruptcy or other resolution
                proceedings. A resolution plan submitted pursuant to this part shall
                not have any binding effect on:
                 (1) A court or trustee in a proceeding commenced under the
                Bankruptcy Code;
                 (2) A receiver appointed under title II of the Dodd-Frank Act (12
                U.S.C. 5381 et seq.);
                [[Page 21630]]
                 (3) A bridge financial company chartered pursuant to 12 U.S.C.
                5390(h); or
                 (4) Any other authority that is authorized or required to resolve a
                covered company (including any subsidiary or affiliate thereof) under
                any other provision of Federal, state, or foreign law.
                 (b) No private right of action. Nothing in this part creates or is
                intended to create a private right of action based on a resolution plan
                prepared or submitted under this part or based on any action taken by
                the Board or the Corporation with respect to any resolution plan
                submitted under this part.
                 (c) Form of resolution plans--(1) Generally. Each full, targeted,
                and reduced resolution plan of a covered company shall be divided into
                a public section and a confidential section. Each covered company shall
                segregate and separately identify the public section from the
                confidential section.
                 (2) Public section of full and targeted resolution plans. The
                public section of a full or targeted resolution plan shall consist of
                an executive summary of the resolution plan that describes the business
                of the covered company and includes, to the extent material to an
                understanding of the covered company:
                 (i) The names of material entities;
                 (ii) A description of core business lines;
                 (iii) Consolidated or segment financial information regarding
                assets, liabilities, capital and major funding sources;
                 (iv) A description of derivative activities and hedging activities;
                 (v) A list of memberships in material payment, clearing and
                settlement systems;
                 (vi) A description of foreign operations;
                 (vii) The identities of material supervisory authorities;
                 (viii) The identities of the principal officers;
                 (ix) A description of the corporate governance structure and
                processes related to resolution planning;
                 (x) A description of material management information systems; and
                 (xi) A description, at a high level, of the covered company's
                resolution strategy, covering such items as the range of potential
                purchasers of the covered company, its material entities, and its core
                business lines.
                 (3) Public section of reduced resolution plans. The public section
                of a reduced resolution plan shall consist of an executive summary of
                the resolution plan that describes the business of the covered company
                and includes, to the extent material to an understanding of the covered
                company:
                 (i) The names of material entities;
                 (ii) A description of core business lines;
                 (iii) The identities of the principal officers; and
                 (iv) A description, at a high level, of the covered company's
                resolution strategy, referencing the applicable resolution regimes for
                its material entities.
                 (d) Confidential treatment of resolution plans. (1) The
                confidentiality of resolution plans and related materials shall be
                determined in accordance with applicable exemptions under the Freedom
                of Information Act (5 U.S.C. 552(b)), 12 CFR part 261 (the Board's
                Rules Regarding Availability of Information), and 12 CFR part 309 (the
                Corporation's Disclosure of Information rules).
                 (2) Any covered company submitting a resolution plan or related
                materials pursuant to this part that desires confidential treatment of
                the information under 5 U.S.C. 552(b)(4), 12 CFR part 261 (the Board's
                Rules Regarding Availability of Information), and 12 CFR part 309 (the
                Corporation's Disclosure of Information rules) may file a request for
                confidential treatment in accordance with those rules.
                 (3) To the extent permitted by law, information comprising the
                Confidential Section of a resolution plan will be treated as
                confidential.
                 (4) To the extent permitted by law, the submission of any nonpublic
                data or information under this part shall not constitute a waiver of,
                or otherwise affect, any privilege arising under Federal or state law
                (including the rules of any Federal or state court) to which the data
                or information is otherwise subject. Privileges that apply to
                resolution plans and related materials are protected pursuant to
                Section 18(x) of the Federal Deposit Insurance Act, 12 U.S.C. 1828(x).
                Sec. __.12 Enforcement
                 The Board and Corporation may jointly enforce an order jointly
                issued by the Board and Corporation under Sec. __.9(a) or (c). The
                Board, in consultation with the Corporation, may take any action to
                address any violation of this part by a covered company under section 8
                of the Federal Deposit Insurance Act (12 U.S.C. 1818).
                [END OF COMMON TEXT]
                List of Subjects
                12 CFR Part 243
                 Administrative practice and procedure, Banks, Banking, Holding
                companies, Reporting and recordkeeping requirements, Securities.
                12 CFR Part 381
                 Administrative practice and procedure, Banks, Banking, Holding
                companies, Reporting and recordkeeping requirements, Resolution plans.
                Adoption of the Common Rule Text
                 The adoption of the common rules by the agencies, as modified by
                agency-specific text, is set forth below:
                BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
                12 CFR Chapter II
                Authority and Issuance
                 For the reasons set forth in the preamble, the Board of Governors
                of the Federal Reserve System proposes to revise part 243 to 12 CFR
                chapter II as set forth in the text of the common rule at the end of
                the preamble and further amend 12 CFR part 243 as follows:
                PART 243--RESOLUTION PLANS (REGULATION QQ)
                0
                1. The authority citation for part 243 continues to read as follows:
                 Authority: 12 U.S.C. 5365.
                0
                2. The heading of part 243 is revised to read as set forth above.
                0
                3. Amend Sec. 243.1(a) by adding a sentence at the end of the
                paragraph to read as follows:
                Sec. 243.1 Authority and scope.
                 (a) * * * The Board is also issuing this part pursuant to section
                165(a)(2)(C) of the Dodd-Frank Act.
                * * * * *
                0
                4. Add Sec. 243.13 to read as follows:
                Sec. 243.13 Additional covered companies.
                 An additional covered company is any bank holding company or any
                foreign bank or company that is a bank holding company or is treated as
                a bank holding company under section 8(a) of the International Banking
                Act of 1978 (12 U.S.C. 3106(a)) that is:
                 (a) Identified as a category II banking organization pursuant to
                Sec. 252.5 of this title;
                 (b) Identified as a category III banking organization pursuant to
                Sec. 252.5 of this title; or
                 (c) Made subject to this part by order of the Board.
                FEDERAL DEPOSIT INSURANCE CORPORATION
                12 CFR Chapter III
                Authority and Issuance
                 For the reasons set forth in the preamble, the Federal Deposit
                Insurance Corporation proposes to revise part 381
                [[Page 21631]]
                to 12 CFR chapter III as set forth in the text of the common rule at
                the end of the preamble and further amend 12 part 381 as follows:
                PART 381--RESOLUTION PLANS
                0
                5. The authority citation for part 381 continues to read as follows:
                 Authority: 12 U.S.C.5365 (d).
                Sec. 381.2 [Amended]
                0
                6. In Sec. 381.2(j)(1)(v), add the words ``of this title'' after the
                phrase ``pursuant to Sec. 243.13''.
                 By order of the Board of Governors of the Federal Reserve
                System.
                Ann E. Misback,
                Secretary of the Board.
                 Dated at Washington, DC, on April 16, 2019.
                 By order of the Board of Directors.
                Federal Deposit Insurance Corporation.
                Valerie J. Best,
                Assistant Executive Secretary.
                [FR Doc. 2019-08478 Filed 5-9-19; 8:45 am]
                 BILLING CODE 6210-01-P; 6714-01-P
                

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