SPST-0210 FBO Guidance Resolution Plans - 12-22-2020

SUPPORTING STATEMENT
Reporting Requirements Associated with Resolution Planning
(OMB Control No. 3064-0210)
INTRODUCTION
This submission is being made by the Federal Deposit Insurance Corporation (FDIC) in
connection with the issued Final Guidance for Resolution Plan Submissions of Certain ForeignBased Covered Companies published in the Federal Register 1 (Final Guidance). The Final
Guidance has been issued to assist certain foreign banking organizations (FBOs) for the 2021
and subsequent resolution plan submissions. The Final Guidance is meant to assist these firms in
developing their resolution plans, which are required to be submitted pursuant to Section 165(d)
of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
As a result, the FDIC is requesting approval from the OMB for the change in its PRA burden as a
result of the Final Guidance.
A.

JUSTIFICATION
1. Circumstances that make the collection necessary:
To promote financial stability, section 165(d) of the Dodd-Frank Act requires
certain companies to periodically submit a plan for such company’s rapid and
orderly resolution under the Bankruptcy Code in the event of the company’s
material financial distress or failure.
On November 1, 2011, the agencies published the Rule in the Federal Register
(76 FR 67323), to implement the resolution plan requirement set forth in section
165(d)(1) of the Dodd-Frank Act. The effective date for the Rule was November
30, 2011, and the first set of resolution plans were submitted in July 2012, as
required by the regulation.
On November 1, 2019, the agencies amended the Rule in the Federal Register
(84 FR 59194). The effective date for the amended Rule was December 31, 2019.
Resolution plans filed under section 165(d) and the Rule assist covered
companies and regulators in conducting advance resolution planning for a
covered company. Through the FDIC’s experience in failed bank resolutions, as
well as the Board’s and the FDIC’s experience in the most recent financial crisis,
it became apparent that advance planning has the potential to improve the
efficient resolution of a covered company. Advance planning has long been a
component of resiliency and recovery planning by financial companies. The
resolution plan required of covered companies under the Rule supports the
FDIC’s planning for the exercise of its resolution authority under the Dodd-Frank

1

Guidance for Resolution Plan Submissions of Certain Foreign-Based Covered Companies, 85 FR 83557 (Dec. 22,
2020). The Final Guidance was issued by the FDIC and the Board of Governors of the Federal Reserve System (the
Board).

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Act by providing the FDIC with an understanding of the covered companies’
structures and complexity, as well as their resolution strategies and processes.
The resolution plans also keep the agencies apprised of relevant changes to the
covered companies’ structure, complexity, and other factors that may affect
resolvability. In addition, these plans enhance the agencies’ understanding of the
U.S. operations of foreign banking organizations and improve efforts to develop a
comprehensive and coordinated resolution strategy for a foreign banking
organization.
The Rule requires each resolution plan to contain certain information, including
information regarding the manner and extent to which any insured depository
institution affiliated with the covered company is adequately protected from risks
arising from the activities of nonbank subsidiaries of the company; descriptions of
the ownership structure, assets, liabilities, and contractual obligations of the
company; identification of the cross-guarantees tied to different securities;
identification of major counterparties; a process for determining to whom the
collateral of the company is pledged; and other information that the Board and the
FDIC jointly require by rule or order. The Rule also requires a strategic analysis
by the covered company of how it can be resolved under the Bankruptcy Code
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. Since the implementation of the Rule in
2011, the agencies have provided additional guidance to covered companies
regarding the information that should be included in, or that can be omitted from,
a company’s resolution plan.
The information collected under the Rule has been helpful for identifying
obstacles to a rapid and orderly resolution under the Bankruptcy Code. The
agencies have used this information to provide feedback to covered companies
concerning improvements to their resolution plans and planning processes. The
resolution plan submissions have also provided information about covered
companies’ structure and operations that have been useful to the FDIC in
planning for any actions it would take with respect to its authority under the
Dodd-Frank Act.
2. Use of the information:
As stated above, the resolution plans required of covered companies under the Rule
support the FDIC’s planning for the exercise of its resolution authority under the
Dodd-Frank Act and the Federal Deposit Insurance Act (FDI Act) by providing the
FDIC with an understanding of the covered companies’ structures and complexity, as
well as their resolution strategies and processes. The resolution plans also keep the
agencies apprised of relevant changes to the covered companies’ structure,
complexity, and other factors that may affect resolvability.
The reporting requirements are found in sections 381.3, 381.4, 381.5, 381.6, 381.7,
381.8, 381.11 of the Rule. Compliance with the information collection is mandatory.
No other federal law mandates these reporting requirements.
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General Requirements
Section 381.3 - In connection with the submission of a resolution plan, certain
covered companies are required to establish and implement a process and
methodology to identify each of its critical operations. Certain covered companies,
including those that have previously submitted a resolution plan under this part and
do not currently have an identified critical operation under this part would be able to
request a waiver of the requirement to have a process and methodology under
381.3(a)(1).
Section 381.4 - Resolution plan required sets forth a staggered schedule for
submission of initial resolution plans by firms that become covered companies and
become subject to the Rule, and requires that covered companies submit an updated
resolution plan on the July 1 of each year in which a plan is due. In addition, section
381.4 establishes a requirement that a covered company provide notice to the Board
and FDIC of extraordinary events that have the potential to affect its resolvability.
Section 381.4 allows the FDIC and the Board to jointly modify a covered company’s
resolution plan submission deadline, and to jointly require a covered company to
submit an interim update to its resolution plan. Additionally, a covered company that
submits a request to waive certain informational content requirements from its full
resolution plan, as permitted under section 381.4, is required to submit certain
information supporting its request for a waiver.
Section 381.5 – This section describes the informational content of a full
resolution plan.
Section 381.6 – This section describes the informational content of a targeted
resolution plan.
Section 381.7 – This section describes the informational content of a reduced
resolution plan.
Section 381.8 – This section requires that, if the Board and FDIC jointly
determine that a resolution plan of a covered company is not credible or would
not facilitate an orderly resolution of the covered company under the Bankruptcy
Code, a covered company is required to resubmit a revised plan within 90 days of
receiving notice of deficiencies the agencies jointly identified in the resolution
plan (or such other period as the agencies jointly determine). A covered company
would also be able to submit a written request for an extension of time to resubmit
a revised resolution plan.
Section 381.11 – This section describes the informational content of the public
section of a full resolution plan, a targeted resolution plan, and a reduced
resolution plan.
Guidance for the Industry
Final Guidance – The Final Guidance is intended for FBOs that are Category II
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firms according to their combined U.S. operations under the Board’s tailoring rule
and are required to have a U.S. intermediate holding company (IHC) under the
Board’s Regulation YY (the Specified FBOs) as published in 84 FR 59032
(November 1, 2019). In addition to the three firms (Barclays PLC, Credit Suisse
Group AG, and Deutsche Bank AG (the Proposed FBOs) that would have been
within the scope of application under the methodology utilized in the proposed
guidance, one additional firm, Mitsubishi UFJ Financial Group, Inc. (MUFG), is
within the scope for application of the Final Guidance at the time of its issuance.
Consequently, MUFG will have a transition period to consider the application of
the Final Guidance to its resolution plan submission, as further described below.
The Final Guidance describes the agencies’ expectations regarding a number of
key vulnerabilities in plans for an orderly resolution under the U.S. Bankruptcy
Code (i.e., capital, liquidity, governance mechanisms, operational, branches, legal
entity rationalization, and derivatives and trading activities). The Final Guidance
modifies and clarifies certain aspects of the proposed guidance based on the
agencies’ consideration of comments to the proposed guidance, additional
analysis, and further assessment of the business and risk profiles of the U.S.
operations of large and complex FBOs.
3. Consideration of the use of improved information technology:
Covered companies may use technology to the extent feasible and/or desirable or
appropriate to make the required reports. Generally, at the direction of the Board and
the FDIC, covered companies have used a secure electronic portal to submit their
resolution plans in digital format.
4. Effort to identify duplication:
The reporting requirements are found in sections 381.3, 381.4, 381.5, 381.6, 381.7,
381.8, 381.11 of the Rule. Compliance with the information collection is mandatory.
No other federal law mandates these reporting requirements and therefore the
reporting requirements are not otherwise duplicated.
5. Methods used to minimize burden if the collection has a significant impact on a
substantial number of small entities:
This Final Guidance will not have a significant impact on a substantial number of
small entities. In particular, the Final Guidance is useful for covered companies,
which would include only bank holding companies and foreign banks that are or are
treated as a bank holding company (foreign banking organization), in both cases with
at least $100 billion in total consolidated assets. The assets of a covered company
substantially exceed the $600 million asset threshold at which a banking organization
is considered a “small entity” under the Small Business Administration’s regulations.
In addition, the 12 CFR 381 applies to a nonbank financial company designated by
the FSOC 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
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be designated by the FSOC for supervision by the Board, it is an important
consideration. It is therefore unlikely that a financial firm that is at or below the $660
million asset threshold would be designated by the FSOC 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.
Therefore, the Final Guidance is not likely to apply to any company with assets of
$600 million or less.
6. Consequences to the Federal program if the collection were conducted less frequently:
Resolution plans filed under section 165(d) and the Rule assist covered companies
and regulators in conducting advance resolution planning for a covered company.
Through the FDIC’s experience in failed bank resolutions, as well as the Board’s and
the FDIC’s experience in the most recent financial crisis, it became apparent that
advance planning has the potential to improve the efficient resolution of a covered
company. Advance planning has long been a component of resiliency and recovery
planning by financial companies. The resolution plan required of covered companies
under the Rule supports the FDIC’s planning for the exercise of its resolution
authority under the Dodd-Frank Act by providing the FDIC with an understanding of
the covered companies’ structures and complexity as well as their resolution
strategies and processes. The resolution plans also keep the agencies apprised of
relevant changes to the covered companies’ structure, complexity, and other factors
that may affect resolvability. The resolvability of firms changes as markets change
and as firms’ activities, structures, and risk profiles change. Less frequent collection
of information could impede the FDIC’s advance resolution planning.
7. Special circumstances necessitating collection inconsistent with 5 CFR 1320.5(d)(2):
None. This information collection is conducted in accordance with the guidelines in
5 CFR 1320.5(d)(2).
8. Efforts to consult with persons outside the agency:
On March 18, 2020, the FDIC issued the proposed guidance in the Federal Register
(85 FR 15449) seeking comment on any reporting, recordkeeping, or third-party
disclosure requirements under the PRA. No comments were received with respect to
the PRA.
9. Payment or gift to respondents:
None.
10. Any assurance of confidentiality:
Information collected is kept private to the extent allowed by law. All required records
are subject to the confidentiality requirements of the Privacy Act. In addition, any
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information deemed to be of a confidential nature is exempt from public disclosure in
accordance with the provisions of the Freedom of Information Act (5 U.S.C. 552).
11. Justification for questions of a sensitive nature:
No questions of a sensitive nature are included in the collection.
12. Estimate of Hour Burden:
The FDIC’s estimated burden 2 for the respondents for complying with the collection
of information is 203,332 hours.

FDIC’s ½ of
Burden Hours 3
Triennial Reduced
Triennial Full:
Complex Foreign
Complex Foreign
(new)
Foreign and
Domestic

Number of
Respondents

Annual
Frequency

Estimated average
hours per response

Estimated
annual burden
hours

26

1

20

520

1

1

9,916

9,916

1

1

9,767

9,767

4

1

5,667

22,668

4

1

40,115

160,460

1

1

1

1

Biennial Filers
Domestic
Waivers
FDIC’s Total

203,332 hours

13. Estimate of Start-up Costs to Respondents:
None.
14. Estimate of annualized costs to the government:
None.
2

Historically, the Board and the FDIC have split the respondents for purposes of PRA clearances. As such, the
agencies will split the change in burden as well. The FDIC has agreed to take the burden of the new triennial full
complex filer and one Proposed FBO whereas the Board will take the burden for the remaining two Proposed FBOs.
Specially, as a result of this split and these revisions, there will be a net decrease in the overall estimated burden of
6,438 hours for the Board and 6,587 hours for the FDIC. Therefore, the total Board estimated burden for its entire
information collection (7100-0346) is 209,168 hours and the total FDIC estimated burden for its entire information
collection (3064-0210) is 203,332 hours.
3
The Estimated average hours per response, estimated annual burden hours, and total are based on one-half of the
total amounts for all resolution plan filers.

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15. Analysis of change in burden:
The proposed guidance stated that the proposed changes to the 2018 FBO guidance
would not revise the reporting provisions that have been previously cleared by the
OMB under the Board’s control number 7100-0346 and the FDIC’s control number
3064-0210. The agencies did not receive any comments on the PRA determination in
the proposed guidance. However, as indicated above, the Final Guidance includes
certain modifications and clarifications to the proposed guidance. In particular, the
scope, capital, liquidity, governance mechanisms, PCS, and derivatives and trading
activities sections of the Final Guidance reflect changes from the proposal. Other
sections or sub-sections, such as group resolution plan, management information
systems, QFCs, separability, and mapping of branch activities, were determined not
to be necessary as they are duplicative of existing regulatory requirements or not
reflective of the Specified FBOs’ current business models and accordingly have been
eliminated from the guidance. The Final Guidance also eliminates expectations for
information that, in the agencies’ experience, may be obtained through other existing
and effective mechanisms.
As a result of these changes, the Final Guidance reduces the existing estimated
burden for a triennial full complex filer from 13,135 hours to 9,916 hours per year.
This reduction is driven mainly by significant reductions in the burdens related to
capital, liquidity, separability, and governance mechanisms. These burden savings
are borne by the Proposed FBOs.
One FBO is no longer classified as a triennial full complex filer and thus saves the
total burden associated with filing a triennial full complex resolution plan. However,
another FBO is newly classified as a triennial full complex filer and must bear the
burden. The agencies estimate the annual burden for this new triennial full complex
filer as 9,767 hours per year. This estimate differs from the burden for the Proposed
FBOs for primarily two reasons: (1) the agencies estimate that the new triennial full
complex filer will incur some start-up costs in preparing its first full resolution plan
that is subject to the Final Guidance; and (2) the agencies estimate that the burden for
the new triennial full complex filer’s 2021 targeted resolution plan will be less than
the burdens for the three Proposed FBOs because the new triennial complex filer will
not be expected to consider the Final Guidance for its 2021 targeted resolution plan
(unlike the three other covered companies).
Specifically, as a result of this split and these revisions, there will be a net decrease in
the overall estimated burden of 6,438 hours for the Board and 6,587 hours for the
FDIC.
16. Information regarding collections whose results are planned to be published for
statistical use:
The results of this collection will not be published for statistical use.

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17. Display of Expiration Date
This information collection is contained in a regulation.
18. Exceptions to Certification Statement
None.
B.

STATISTICAL METHODS
Statistical methods are not employed in these collections.

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