Annual Daylight Overdraft Capital Report for U.S. Branches and Agencies of Foreign Banks

Reporting Instructions for the
Annual Daylight Overdraft Capital Report for
U.S. Branches and Agencies of Foreign Banks (FR 2225)
Public reporting burden for this collection of information is
estimated to average 1.0 hour per response, including the time
to gather and maintain data in the required form and to review
instructions and complete the information collection. Send
comments regarding this burden estimate or any other aspect
of this collection of information, including suggestions for
reducing this burden, to: Secretary, Board of Governors of the
Federal Reserve System, 20th and Constitution Avenue, N.W.,
Washington, D.C. 20551; and to the Office of Management
and Budget, Paperwork Reduction Project (7100-0216),
Washington, D.C. 20503.

that are FHCs or are ranked SOSA 1 or SOSA 2 and wish to
establish a non-zero net debit cap for their U.S. branches and
agencies, U.S. capital equivalency is a fraction of the capital
base reported as Item 3. FBOs that are ranked SOSA 3 and
wish to establish a non-zero net debit cap for their U.S.
branches and agencies will have their U.S. capital equivalency
based on their “Net due to related depository institutions” as
reported on the Report of Assets and Liabilities of U.S.
Branches and Agencies of Foreign Banks (FFIEC 002),
Schedule RAL, Item 5.a, Column A, for the most recent
quarter.
When to Report - This report is due 90 days after the bank’s
fiscal year-end in order to maintain its net debit cap.

General Instructions
Who Should Report - The FR 2225 is required for foreign
banking organizations (FBOs) that are ranked SOSA 11 or
SOSA 2 or hold a financial holding company (FHC)2
designation and that wish to establish a non-zero net debit cap
for their U.S. branches and agencies.

In addition to the fiscal year-end filing, banks may complete
the report at anytime (whether or not it coincides with the
annual reporting period) if their bank’s capital figure has
changed materially, or if they wish to change their reporting
option. Otherwise, the capital figure most recently reported
will continue to be used until 90 days after the end of the fiscal
year for calculating the net debit cap for the foreign bank
family.

If an FBO has more than one U.S. branch or agency, the office
designated to handle daylight overdrafts for the bank in
accordance with the Federal Reserve’s payments system risk
(PSR) policy would report to its Administrative Reserve
Bank3 on behalf of the foreign bank family. For this purpose,
the term “foreign bank family” is defined as all U.S. branches
and agencies of the same foreign bank.

Where to Report - The U.S. office designated to handle
daylight overdraft matters for the foreign bank family should
submit this report to its Administrative Federal Reserve Bank
responsible for daylight overdraft monitoring and counseling.

Use of the Report and Definitions - For the purpose of
calculating an FBO’s net debit cap for the Federal Reserve’s
PSR policy, an FBO’s administrative Reserve Bank must first
determine the FBO’s U.S. capital equivalency. U.S. capital
equivalency is the amount that the Board of Governors of the
Federal Reserve System has determined may be used by an
FBO’s U.S. branches and agencies as the equivalent capital
measure for U.S. chartered depository institutions. For FBOs

Does the FBO request confidential treatment for any
portion of the report? - Once submitted, a reporter’s RR Y2225 report becomes a Federal Reserve Board (Board) record
and is available to the public upon request on an individual
basis pursuant to the Freedom of Information Act, 5 U.S.C. §
552 (FOIA). FOIA provides that board records generally must
be disclosed in response to a FOIA request, though records
containing categories of information are exempt from
disclosure in whole or in part.

1

The Strength of Support Assessment (SOSA) ranking is composed of four
factors, including the FBO’s financial condition and prospects, the system of
supervision in the FBO’s home country, the record of the home country’s
government in support of the banking system or other sources of support for
the FBO; and transfer risk concerns. Transfer risk relates to the FBO’s ability
to access and transmit U.S. dollars, which is an essential factor in determining
whether an FBO can support its U.S. operations. The SOSA ranking is based
on a scale of 1 through 3, with 1 representing the lowest level of supervisory
concern.
2
The Gramm-Leach-Bliley Act (Public Law 106-102, 113 Stat. 1338 (1999))
defines a financial holding company as a bank holding company that meets
certain eligibility requirements. In order for a bank holding company to
become a financial holding company and be eligible to engage in the new
activities authorized under the Gramm-Leach-Bliley Act, the Act requires that
all depository institutions controlled by the bank holding company be well
capitalized and well managed. With regard to a foreign bank that operates a
branch or agency or owns or controls a commercial lending company in the
United States, the Act requires the Board to apply comparable capital and
management standards that give due regard to the principle of national
treatment and equality of competitive opportunity.
3
The Administrative Reserve Bank is responsible for daylight overdraft
monitoring and counseling.

Revised 2005
Approval Expires April 2008

The exempt categories include trade secrets, privileged or
confidential commercial or financial information, and
information that if disclosed would constitute a clearly
unwarranted invasion of personal privacy. A reporting FBO
may request confidential treatment for portions of the report if
the FBO is of the opinion that disclosure of certain financial
information in the report would likely result in substantial
harm to its (or its subsidiaries’) competitive position.
To request confidential treatment, submit a letter concurrent
with submission of the FR 2225. The letter must discuss the
legal justification for the request and must describe the
specific nature of the harm that would result from disclosure
of the information. Unsupported conclusory statements that
disclosure will cause competitive harm or is an invasion of
privacy are insufficient to justify confidential treatment. In

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Reporting Instructions for the
Annual Daylight Overdraft Capital Report for
U.S. Branches and Agencies of Foreign Banks (FR 2225)
addition, label as “Confidential” each item for which
confidential treatment is sought and submit under a separate
cover page marked “Confidential.”

deducted. This item is equivalent to core capital under the
Basle Capital Accord.
OR

If a determination is made to release any of the confidential
information pursuant to a judicial order or other determination,
the Federal Reserve Bank will inform the FBO prior to release
of the information. For further information, consult the
Board’s Rules Regarding Availability of Information, 12 CFR
part 261, including 12 CFR § 261.15, which governs requests
for confidential treatment.

Total Qualifying Capital - The amount qualifying
for total capital (Tier I plus Tier II) under the Basle Capital
Accord in the foreign bank’s home country (or its equivalent
as described in the section “Use of the Report and
Definitions”). For either option the foreign bank family should
be willing and able to document the value reported in Item 1.a.
to U.S. bank examiners.

Foreign exchange conversion rate used in calculating Item
1.a. and Item 4. – The exchange rate to be used for this
conversion are either the 10:00 a.m. rates quoted for major
currencies by the Federal Reserve Bank of New York, or the
noon buying rates certified by the Federal Reserve Bank of
New York for customs purposes, or some other consistent
series of exchange rate quotations. (If deposits are issued in
European Currency Unity (ECU) or some other currency
basket, consistent series of exchange rate quotations either
from the basket unit of for the corresponding individual
exchange rates may be used.)

Item 2. Less: Adjustments to avoid double counting - Enter
the total amount of capital included in Item 1.a. of this report
that was used by any direct or indirect subsidiary of this bank
to calculate its own net debit cap. The value should equal the
foreign bank’s carrying value of its investments in such
subsidiaries. The amount entered in Item 2 relates to only
majority-owned subsidiaries of this reporting bank that have
their own U.S. offices that incur overdrafts. Types of
subsidiaries covered by this adjustment include:
1.

ITEM INSTRUCTIONS
Item 1.a. Amount of worldwide capital of the reporting
bank (in U.S. dollars––based on the exchange rate as of the
date of the financial statement) - Enter the U.S. dollar
equivalent of the worldwide capital of the reporter’s foreign
bank. (If the reporter’s foreign bank, in turn, is owned by
another bank or nonbank, use only the reporting bank’s
capital.) A foreign bank that meets the criteria indicated in the
“Use of the Report and Definitions” section may choose
EITHER of the options listed below. (The first is smaller but
may be easier to report.) A foreign bank that does not meet the
criteria must choose the “Equity Only” option.

2.
3.

The purpose of this adjustment is to avoid double counting of
capital figures for banking organizations with more than one
entity participating directly on Fedwire. Accordingly, the
intent of this adjustment is to subtract only the amount of
capital of such other participating entities that is included in
Item 1.

Item 1.b. Reporting option (One of the following two
options must be chosen):
Equity Only - The amount of foreign bank tangible
equity capital (or comparable figure for government-owned
banks) as published in the bank’s most recent annual, semiannual, or quarterly reports (as appropriate) or, if the bank
does not release such figures to the public, as submitted to the
home-country supervisory authorities.

Item 3. Equals: Daylight overdraft capital base for the U.S.
branch and agency family - Subtract Item 2 from Item 1.a.
and enter the amount on Item 3. This amount is the worldwide
capital base of the foreign bank that is used to calculate the net
debit cap for the foreign bank family.
Item 4. Amount of worldwide total assets of the reporting
bank (in U.S. dollars––based on the exchange rate as of the
date of the financial statement) - Enter the worldwide total
assets of the reporter’s foreign bank, on either a consolidated
or combined basis, as of the date of the financial statement
from which the capital figure reported in Item 1 was derived.
This figure should be consistent with the definition of
worldwide assets used in the instructions for the Annual

For this purpose, the term “tangible equity capital” includes
common stock, preferred stock, surplus, undivided profits,
contingency and other capital reserves (or the home-country
version of these balances). However, it does NOT include any
valuation reserves. All goodwill, other intangibles, and any
deferred losses that are included in its total assets must be

Revised 2005
Approval Expires April 2008

U.S. commercial or savings bank or savings
association, including any Edge or Agreement
Corporation majority owned by that U.S. subsidiary
and consolidated in its financial statements;
Edge or Agreement Corporation owned directly by
this reporting foreign bank (i.e. not owned through a
subsidiary U.S. bank); and
Non-U.S. bank that has a U.S. branch or agency
office or an Edge or Agreement Corporation
subsidiary of its own.

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Reporting Instructions for the
Annual Daylight Overdraft Capital Report for
U.S. Branches and Agencies of Foreign Banks (FR 2225)
Report of Foreign Banking Organizations (FR Y-7) Item 4,
Section C. This figure must:
1. use either a consolidated or a combined basis;
2. include the total assets of all companies in which the
foreign bank owns 50 percent or more of the voting
shares; and
3. include the total assets of companies in which the
foreign bank owns 25 percent or more of the voting
shares if all such companies are included.

Revised 2005
Approval Expires April 2008

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