FRY1_20230228_omb

Supporting Statement for the
Reporting Requirements Associated with Regulation Y
(Extension of Time to Conform to the Volcker Rule)
(FR Y-1; OMB No. 7100-0333)
Summary
The Board of Governors of the Federal Reserve System (Board), under authority
delegated by the Office of Management and Budget (OMB), has extended for three years, with
revision, the Reporting Requirements Associated with Regulation Y (Extension of Time to
Conform to the Volcker Rule) (FR Y-1; OMB No. 7100-0333). The Board’s Regulation Y Bank Holding Companies and Change in Bank Control (12 CFR Part 225, Subpart K) provides
that a banking entity or Board-supervised nonbank financial company may, under certain
circumstances, request an extension of time to conform its activities to the requirements of
section 13 of the Bank Holding Company Act of 1956 (BHC Act), 1 also known as the Volcker
Rule.2
The Board revised the FR Y-1 to no longer include a provision related to extended
transition periods for illiquid funds for banking entities since they were required to completely
divest from such funds by July 21, 2022.3
The current estimated total annual burden for the FR Y-1 is 12 hours, and would remain
unchanged with the revisions. There are no required reporting forms associated with this
information collection.
Background and Justification
Section 13 of the BHC Act generally prohibits any banking entity from engaging in
proprietary trading or from investing in, sponsoring, or having certain relationships with a hedge
fund or private equity fund (together, a covered fund). Section 13 of the BHC Act also provides
that nonbank financial companies designated by the Financial Stability Oversight Council
(Council) that engage in proprietary trading activities or make investments in covered funds may
be made subject by rule to additional capital requirements, quantitative limits, or other
restrictions.4
Newly formed banking entities and existing companies that become a banking entity
1

12 U.S.C. § 1851.
The term “banking entity” is defined in section 13(h)(1) of the BHC Act (12 U.S.C. § 1851(h)(1)). The term means
any insured depository institution (other than certain limited-purpose trust institutions and any insured depository
institution that has, and if every company that controls it has, total consolidated assets of $10 billion or less and total
trading assets and trading liabilities, on a consolidated basis, that are 5 percent or less of total consolidated assets),
any company that controls such an insured depository institution, any company that is treated as a bank holding
company for purposes of section 8 of the International Banking Act of 1978 (12 U.S.C. § 3106), and any affiliate or
subsidiary of any of the foregoing.
3
See Procedures for a Banking Entity to Request an Extended Transition Period for Illiquid Funds, SR Letter 16 -18
(December 9, 2016), available at https://www.federalreserve.gov/supervisionreg/srletters/sr1618.pdf.
4
12 U.S.C. §§ 1851(a)(2) and (f)(4).
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(collectively, new banking entities) generally must bring their activities and investments into
compliance with the requirements of the Volcker Rule and implementing regulations 5 within two
years after the date on which the company becomes a banking entity. Similarly, a nonbank
financial company supervised by the Board generally must come into compliance with the
Volcker Rule and implementing regulations within two years after the date the company
becomes a nonbank financial company supervised by the Board. Section 13 of the BHC Act
permits the Board to extend, by rule or order, the conformance period for compliance with the
Volcker Rule for not more than one year at a time, for up to three years in the aggregate, if, in the
judgment of the Board, an extension is consistent with the purposes of the Volcker Rule and
would not be detrimental to the public interest.6 In addition, the Board may further extend the
conformance period during which a banking entity may acquire or retain an interest in, or
otherwise provide additional capital to, a covered fund that is an illiquid fund and the acquisition
or retention of such interest, or provision of additional capital, is necessary to fulfill a contractual
obligation of the banking entity that was in effect on May 1, 2010. 7
In 2011, the Board adopted a final rule to implement the statutory Volcker Rule
conformance provisions.8 Section 225.181(c) of Regulation Y permits (1) a new banking entity
to request an extension of time to conform its activities to the Volcker Rule and (2) a banking
entity to request an extension of time to conform certain illiquid funds. A new banking entity
may receive three separate one-year conformance period extensions, and banking entity with
illiquid funds may receive one extension of time, not to exceed five years, to conform its illiquid
funds. Any banking entity, regardless of its primary federal regulator, may submit a request to
the Board for an extension of time to conform its activities to the Volcker Rule or to conform
illiquid funds pursuant to section 225.181(c).9
On December 9, 2016, the Board issued SR Letter 16-18, which provided banking
entities with information on the procedures for submitting a request for an extended transition
period for illiquid funds. The Board had previously given banking entities until July 21, 2017, to
conform covered fund investments with the requirements of the Volcker Rule. The SR Letter
noted that applications for extended transition periods for illiquid funds had to be filed on or
before January 20, 2017. The five-year conformance period for such illiquid funds that were
granted extensions pursuant to the SR Letter expired July 21, 2022.
This information is not available from other sources.
5

See 12 CFR Part 248; 12 CFR Part 225, Subpart K.
12 U.S.C. § 1851(c)(2).
7
12 U.S.C. § 1851(c)(3). The term illiquid fund means a hedge fund or private equity fund that (1) as of May 1,
2010, was principally invested in, or was invested and contractually committed to principally invest in, illiquid
assets, such as portfolio companies, real estate investments, and venture capital investments and (2) makes all
investments pursuant to, and consistent with, an investment strategy to principally invest in illiquid assets. 12 U.S.C.
§ 1851(h)(7).
8
Conformance Period for Entities Engaged in Prohibited Proprietary Trading or Private Equity Fund or Hedge Fund
Activities, 76 FR 8265 (February 14, 2021).
9
Although the Volcker Rule is jointly administered by the Board, Office of the Comptroller of the Currency,
Federal Deposit Insurance Corporation, Securities and Exchange Commission, and Commodities Futures Trading
Commission (each with respect to their functionally regulated entities), the Board has sole authority to implement
the conformance provisions of the Volcker Rule and process conformance period extension requests. 12 U.S.C. §
1851(c)(2).
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Description of Information Collection
Conformance Period for Banking Entities Engaged in Prohibited Proprietary Trading or
Private Fund Activities - Approval Required to Hold Interests in Excess of Time Limit
(Section 225.181(c))
Section 225.181(c) requires an application for an extension by or with respect to a new
banking entity or an extension of the transition period for illiquid funds to (1) be submitted in
writing to the Board at least 180 days prior to the expiration of the applicable time period,
(2) provide the reasons why the banking entity believes the extension should be granted, and
(3) provide a detailed explanation of the banking entity’s plan for divesting or conforming the
activity or investment(s). A request by a banking entity also must address the relevant factors
governing Board determinations set out in sections 225.181(d). 10
Conformance Period for Nonbank Financial Companies Supervised by the Federal
Reserve Engaged in Proprietary Trading or Private Fund Activities - Approval Required
to Hold Interests in Excess of Time Limit (Section 225.182(c))
Section 225.182(c) requires an application for an extension by a nonbank financial
company supervised by the Board11 to (1) be submitted in writing to the Board at least 180 days
prior to the expiration of the applicable time period, (2) provide the reasons why the nonbank
financial company supervised by the Board believes the extension should be granted, and
(3) provide a detailed explanation of the company’s plan for coming into compliance with the
requirements of the Volcker Rule.
Respondent Panel
The FR Y-1 panel comprises insured depository institutions (other than certain limited purpose trust institutions and any insured depository institution that has, and if every company
that controls it has, total consolidated assets of $10 billion or less and total trading assets and
trading liabilities, on a consolidated basis, that are 5 percent or less of total consolidated assets),
any company that controls such an insured depository institution, any company that is treated as
a bank holding company for purposes of section 8 of the International Banking Act of 1978
(12 U.S.C. § 3106), and any affiliate or subsidiary of any of the foregoing, and nonbank financial
companies designated by the Council that engage in proprietary trading activities or make
investments in covered funds.
Frequency
The FR Y-1 is submitted on an event-generated basis.

In SR Letter 16-18, the Director of the Board’s Division of Supervision and Regulation provided additional
information about requests for an extended transition period for illiquid funds.
11
There are currently no nonbank financial companies supervised by the Board.
10

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Revisions to the FR Y-1
The Board revised the FR Y-1 to no longer include a provision related to extended
transition periods for illiquid funds for banking entities since they were required to completely
divest from such funds by July 21, 2022.
Time Schedule for Information Collection
The reporting requirements described above are event-generated and must be submitted
to the appropriate Federal Reserve Bank within the time period established by the regulation as
discussed above.
Public Availability of Data
There is no data related to this information collection available to the public.
Legal Status
The Volcker Rule specifically authorizes the Board to issue rules to permit entities
covered by the Volcker Rule to seek conformance period extensions (12 U.S.C. § 1851(c)(6)).
The Board also has the authority to require reports from bank holding companies (12 U.S.C. §
1844(c)), savings and loan holding companies (12 U.S.C. §§ 1467a(b) and (g)), and state
member banks (12 U.S.C. §§ 248(a) and 324). The information collections in the FR Y-1 are
required for covered entities that decide to seek an extension of time to conform their activities
or investments to the Volcker Rule. The obligation to respond, therefore, is required to obtain a
benefit.
To the extent that information submitted in response to the FR Y-1 constitutes nonpublic
commercial or financial information, which is both customarily and actually treated as private by
the respondent, it may be kept confidential under exemption 4 of the Freedom of Information Act
(5 U.S.C. § 552(b)(4)). Exemption 4 protects “trade secrets and commercial or financial
information obtained from a person and privileged or confidential.”
Consultation Outside the Agency
There has been no consultation outside the Federal Reserve System.
Public Comments
On October 18, 2022, the Board published an initial notice in the Federal Register (87
FR 63069) requesting public comment for 60 days on the extension, with revision, of the
FR Y-1. The comment period for this notice expired on December 19, 2022. The Board did not
receive any comments. The Board adopted the extension, with revision, of the FR Y-1 as
originally proposed. On February 28, 2023, the Board published a final notice in the Federal
Register (88 FR 12680).

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Estimate of Respondent Burden
As shown in the table below, the estimated total annual burden for FR Y-1 is 12 hours,
and would remain unchanged with the revisions. The Board estimates that one respondent would
take an average of 12 hours to prepare and submit an application for extension based on the
Federal Reserve’s experience with these filings. These reporting requirements represent less than
1 percent of the Board’s total paperwork burden.

FR Y-1
Sections 225.181(c) and
225.182(c)

Estimated
number of
respondents12

Estimated
annual
frequency

Estimated
average hours
per response

Estimated
annual burden
hours

1

1

12

12

The estimated total annual cost to the public for the FR Y-1 is $725.13
Sensitive Questions
This collection of information contains no questions of a sensitive nature, as defined by
OMB guidelines.
Estimate of Cost to the Federal Reserve System
The estimated cost to the Federal Reserve System for collecting and processing this
report is negligible.

12

Of these respondents, none are considered small entities as defined by the Small Business Administration (i.e.,
entities with less than $850 million in total assets), https://www.sba.gov/document/support-table-size-standards.
13
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 $21, 45% Financial Managers at
$74, 15% Lawyers at $71, and 10% Chief Executives at $102). Hourly rates for each occupational group are the
(rounded) mean hourly wages from the Bureau of Labor Statistics (BLS), Occupational Employment and Wages,
May 2021, published March 31, 2022, https://www.bls.gov/news.release/ocwage.t01.htm. Occupations are defined
using the BLS Standard Occupational Classification System, https://www.bls.gov/soc/.

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