FR2064_20180823_omb

Supporting Statement for the
Recordkeeping Requirements Associated with Changes in Foreign Investments
(Made Pursuant to Regulation K)
(FR 2064; OMB No. 7100-0109)
Summary
The Board of Governors of the Federal Reserve System (Board), under delegated
authority from the Office of Management and Budget (OMB), proposes to extend for three years,
without revision, the Recordkeeping Requirements Associated with Changes in Foreign
Investments (Made Pursuant to Regulation K) (FR 2064; OMB No. 7100-0109). Internationally
active U.S. banking organizations (member banks, Edge Act and agreement corporations, and
bank holding companies) are required to maintain adequate internal records that demonstrate
compliance with the investment provisions contained in Subpart A of Regulation K International Banking Operations (12 CFR Part 211).1 There is no reporting form for this
recordkeeping requirement. The estimated annual burden for this recordkeeping requirement is
160 hours.
Background and Justification
Effective September 1, 2001, the Board eliminated the collection of the FR 2064
reporting form, and replaced it with a recordkeeping requirement. This recordkeeping
requirement is used to fulfill the Board’s supervisory responsibilities and monitor compliance by
banking organizations with relevant sections of the Federal Reserve Act (FRA) and
Regulation K, including compliance with the general consent provisions of Regulation K.2
Monitoring the level of international investments is necessary in order to ensure compliance with
relevant banking laws and regulations, and to ensure that banking organizations do not expose
themselves to undue risk.
Although the FR 2064 reporting form has been eliminated, the Board has a continuing
need to monitor compliance with the FRA and sections 211.8 through 211.10 of Regulation K.
Organizational structure information previously collected in the FR 2064 report is now being
collected through the Report of Changes in Organizational Structure (FR Y-10; OMB No. 71000297) and the Annual Report of Holding Companies (FR Y-6; OMB No. 7100-0297). Banking
organizations must maintain records for other information previously collected on the FR 2064
as detailed in the SR Letter 02-2 published February 7, 2002. Internationally active U.S. banking
organizations are also expected to maintain adequate internal records to allow examiners to
review compliance with the investment provisions of Regulation K.

1

See Letter SR 02-2 published February 7, 2002.
The Board has granted its general consent to U.S. banking organizations to make foreign investments without
prior notice to the Board if the investment meets certain criteria. The criteria relate to the dollar amount of the
investment, whether the investment is in a subsidiary or a joint venture, or is a portfolio investment, and whether the
investor is a bank holding company, a member bank, or an Edge Act or agreement corporation that is well
capitalized and well managed.
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Description of Information Collection
For each investment made under Subpart A of Regulation K, internal records must be
maintained regarding the type of investment, for example, equity (voting shares, nonvoting
shares, partnerships, interests conferring ownership rights, participating loans), binding
commitments, capital contributions, and subordinated debt; the amount of the investment; the
percentage ownership; activities conducted by the company and the legal authority for such
activities; and whether the investment was made under general consent, prior notice, or specific
consent authority. With respect to investments made under general consent authority,
information also must be maintained that demonstrates compliance with the various limits set out
in section 211.9 of Regulation K.
Time Schedule for Information Collection
This recordkeeping information maintained by the banking organization must be made
available to the Federal Reserve, upon request, during the course of on-site examinations and
pursuant to other supervisory requests. The Board does not require that such information be
maintained in a specific format.
Legal Status
This collection of information is authorized pursuant to section 5(c) of the BHC Act (12
U.S.C. 1844(c)) and sections 25 and 25A of the FRA (12 U.S.C. 602 and 625). The
recordkeeping requirements are mandatory. Because the Board does not collect these records, an
issue of confidentiality under the Freedom of Information Act (FOIA) is unlikely to arise. FOIA,
however, may be implicated if the Federal Reserve’s examiners retain a copy of the records in
their examination or supervision of the institution. Any such records would be exempt from
disclosure pursuant to exemption 8 of FOIA (5 U.S.C. 552(b)(8)). Exemption 4 to FOIA, which
protects confidential financial information, may also be applicable (5 U.S.C. 552(b)(4)).
Consultation Outside the Agency
On May 22, 2018, the Board published an initial notice in the Federal Register
(83 FR 23682) requesting public comment for 60 days on the extension, without revision, of the
FR 2064. The comment period for this notice expired on July 23, 2018. The Board did not
receive any comments. On August 23, 2018, the Board published a final notice in the Federal
Register (83 FR 42651).
Estimate of Respondent Burden
The Board estimates the annual burden hours for the FR 2064 to be 160 hours. The
Board estimates that the effort associated with the recordkeeping requirements will take an
average of two hours per quarter. These recordkeeping requirements represent less than 1
percent of the Board’s total annual paperwork burden.

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FR 2064

Number of
respondents3

Annual
frequency

Estimated
average hours
per response

Estimated
annual burden
hours

20

4

2

160

The total annual cost to the public is estimated to be $8,968.4
Sensitive Questions
There are no questions of a sensitive nature in this report, as defined by OMB guidelines.
Estimate of Cost to the Federal Reserve System
Because the Federal Reserve does not collect these records, the cost to the system is
negligible.

3

Of these respondents, none are considered small entities as defined by the Small Business Administration (i.e.,
entities with less than $550 million in total assets) www.sba.gov/document/support--table-size-standards.
4
Total cost to the public was estimated using the following formula: percent of staff time, multiplied by annual
burden hours, multiplied by hourly rates (30% Office & Administrative Support at $18, 45% Financial Managers at
$69, 15% Lawyers at $68, and 10% Chief Executives at $94). Hourly rates for each occupational group are the
(rounded) mean hourly wages 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. Occupations are defined using
the BLS Occupational Classification System, www.bls.gov/soc/.

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