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

Board of Governors of the Federal Reserve System

Instructions for the Preparation of

Annual Daylight Overdraft Capital Report for U.S. Branches
and Agencies of Foreign Banks
Reporting Form FR 2225
Effective October 2020

INSTRUCTIONS FOR PREPARATION OF

Annual Daylight Overdraft Capital
Report for U.S. Branches
and Agencies of Foreign Banks
FR 2225

General Instructions
Who Should Report
The FR 2225 is required for foreign banking organizations (FBOs) that wish to, and are eligible to, establish
a non-zero net debit cap for their U.S. branches and
agencies under the Federal Reserve Policy on Payment
System Risk (PSR policy).
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 PSR policy would
report to its Administrative Reserve Bank1 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.

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 that 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.

When to Report
This report is due 90 days after the bank’s fiscal yearend in order to maintain its net debit cap.
1. The Administrative Reserve Bank is responsible for daylight overdraft monitoring and counseling.

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.

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 Reserve Bank responsible
for daylight overdraft monitoring and counseling.

Does the FBO request confidential
treatment for any portion of the report?
Once submitted, a reporter’s FR 2225 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 (FOIA),
5 U.S.C. § 552. However, a reporting FBO may request
confidential treatment for data items the FBO believes
fall under an exemption under the FOIA, 5 U.S.C.
§ 552(b).2
A request for confidential treatment must be submitted
in writing concurrently with the submission of the
FR 2225 report. This written request for confidential
treatment must identify the specific data for which con2. Under the FOIA, Board records generally must be publicly disclosed in response to a FOIA request, however, records containing certain categories of information may be exempt from disclosure in whole
or in part under the FOIA. For example, one exemption under the
FOIA protects trade secrets, and privileged or confidential commercial
or financial information (5 U.S.C. § 552(b)(4)), which an institution
both actually and customarily treats as confidential, and which the federal agency has assured the submitter will be treated as confidential.

GEN-1
FR 2225

October 2020

General Instructions

fidential treatment is sought and must provide the legal
justification for the confidentiality request, as provided
in the Board’s Rules Regarding Availability of Information (12 CFR part 261). In addition, label as “Confidential” each item for which confidential treatment is
sought and submit this information under a separate
cover page marked “Confidential.”
The Federal Reserve will review each confidentiality
request on a case-by-case basis to determine if confidential treatment is appropriate. The Federal Reserve
may subsequently release information for which confidential treatment was granted, if (1) disclosure of such
information is required by law (other than 5 U.S.C.
§ 552); (2) the request for confidential treatment (CTR)
was made by the FBO pursuant to 5 U.S.C.
§ 552(b)(4) and more than 10 years have passed since
the CTR; or (3) less than 10 years have passed since the
CTR, but the Board believes that the information can-

not be withheld from disclosure under 5 U.S.C.
§ 552(b)(4), and the reporting FBO is provided with
written notice of the Board’s views and with an opportunity to object to the Board’s disclosure of the information pursuant to 12 CFR 261.15 and 261.16.

Foreign exchange conversion rate used in
calculating Item 1.a. and Item 4.
For major currencies, the exchange rate to be used for
this conversion is the rate quoted by the Federal
Reserve Board of Governors, or some other consistent
series of exchange rate quotations. (If deposits are
issued in a currency basket, consistent series of
exchange rate quotations either from the basket unit or
for the corresponding individual exchange rates may be
used.)

GEN-2
October 2020

FR 2225

INSTRUCTIONS FOR PREPARATION OF

Annual Daylight Overdraft Capital
Report for U.S. Branches
and Agencies of Foreign Banks
FR 2225

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.) 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.
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 governmentowned banks) as published in the bank’s most recent
annual, semi-annual, 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.
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 deducted.
This item is equivalent to core capital under the Basel
Capital Accord.
OR

Total Qualifying Capital —The amount qualifying for
total capital (Tier I plus Tier II) under the Basel Capital
Accord in the foreign bank’s home country (or its
equivalent as described in the section “Use of the
Report and Definitions”).
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 majorityowned subsidiaries of this reporting bank that have
their own U.S. offices that incur overdrafts. Types of
subsidiaries covered by this adjustment include:

(1) 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;
(2) Edge or Agreement Corporation owned directly
by this reporting foreign bank (i.e. not owned
through a subsidiary U.S. bank); and
(3) Non-U.S. bank that has a U.S. branch or agency
office or an Edge or Agreement Corporation
subsidiary of its own.
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 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
ITEM-1

FR 2225

October 2020

Item Instructions

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 world-

wide assets used in the instructions for the Annual
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.

ITEM-2
October 2020

FR 2225