FRB proposes amendments to FR Y-14 reports, CFO attestation requirement for LISCC IHCs

Posted by Dmitriy Gutman, Advisory Managing Director, Deloitte & Touche LLP, Irena Gecas-McCarthy, Advisory Principal, Deloitte & Touche LLP,  Chris Spoth, Advisory Managing Director, Deloitte & Touche LLP, Ken Lamar, Independent Senior Advisor to Deloitte & Touche LLP,  and Alex LePore, Advisory Senior Consultant, Deloitte & Touche LLP on July 29, 2016

Less than a month after large foreign banking organizations (FBOs) established their intermediate holding companies (IHCs), the largest of these firms must now prepare to meet a new requirement: an attestation by their CFOs to the accuracy of their reports for capital assessments and stress testing.

On July 28, 2016, the Federal Reserve Board (FRB) published a proposal1 in the Federal Register that, among other changes, would amend the FR Y-14A/Q/M reports to apply the CFO attestation requirement to IHCs in the FRB’s Large Institution Supervision Coordinating Committee (LISCC) portfolio beginning with the reports as of December 31, 2017 and becoming fully effective with the reports as of December 31, 2018.

Earlier this year, the FRB applied this requirement to US bank holding companies (BHCs) in the LISCC portfolio, reflecting its ongoing concerns with data quality, governance, controls, and accountability over reporting.  The extension of this requirement to IHCs—which have not yet participated in the FRB’s annual Comprehensive Capital Analysis and Review (CCAR) program and related stress tests—is a further indication of increased regulatory expectations on accuracy and control environment for these data.
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FRB finalizes regulatory reporting requirements for IHCs, clarifies that IHC subsidiaries of LISCC FBOs are not yet subject to CFO attestation requirement

Reporting
Posted by Craig Brown, Deloitte Advisory managing director, Deloitte & Touche LLP, on June 2, 2016

As large foreign banking organizations (FBOs) prepare for the July 1, 2016 compliance date to establish their intermediate holding companies (IHCs) under Regulation YY, regulatory reporting has become a key area of focus.  Regulators have increased their expectations with respect to governance, controls, data, and ownership over reporting, especially in connection with the FR Y-14 reports related to capital assessments and stress testing.  Although many IHCs will be subject to certain of the Federal Reserve Board’s (FRB) regulatory reports for the first time, these firms should be prepared to meet regulators’ heightened expectations across their US operations.

On May 31, 2016, the FRB finalized the initial application of several regulatory reports to IHCs—including the FR Y-14 series, the FR Y-9C (Consolidated Financial Statements for Holding Companies), and the FR Y-15 (Banking Organization Systemic Risk Report)—beginning with the reporting period ending on September 30, 2016.  In addition, IHCs must comply with the information collections associated with applicable regulatory capital rules beginning on the July 1, 2016 IHC compliance date.

Although the FRB adopted the regulatory reporting framework for IHCs largely as proposed in February 2016, there are certain key changes and clarifications that IHCs should understand now.

Continue reading “FRB finalizes regulatory reporting requirements for IHCs, clarifies that IHC subsidiaries of LISCC FBOs are not yet subject to CFO attestation requirement”