FRY12_FRY12A_20231217_omb

Supporting Statement for the
Consolidated Holding Company Report of Equity Investments in Nonfinancial Companies
and
Annual Report of Merchant Banking Investments Held for an Extended Period
(FR Y-12 and FR Y-12A; OMB No. 7100-0300)
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 Consolidated Holding Company Report of Equity Investments in Nonfinancial
Companies (FR Y-12; OMB No. 7100-0300) and Annual Report of Merchant Banking
Investments Held for an Extended Period (FR Y-12A; OMB No. 7100-0300). The FR Y-12
report collects information from certain domestic bank holding companies (BHCs), savings and
loan holding companies (SLHCs), and U.S. intermediate holding companies (IHCs) (collectively,
holding companies)1 on their equity investments in nonfinancial companies. The FR Y-12A
report is filed by financial holding companies (FHCs)2 with merchant banking investments that
are approaching the end of the holding periods permissible under the Board’s Regulation Y Bank Holding Companies and Change in Bank Control (12 CFR Part 225), as described in the
Respondent Panel section below.3
The Board revised the FR Y-12 and FR Y-12A instructions by 1) specifying when
respondents should submit their reports if the submission deadline falls on a weekend or holiday,
2) modifying and clarifying the recordkeeping requirements of the submitted forms, 3) clarifying
what must be included in the reported amount of a firm’s aggregate nonfinancial equity
investment, 4) clarifying in the FR Y-12 instructions which columns are applicable to Schedules
A and C, and 5) aligning the submission deadline of the FR Y-12A to be consistent with the
FR Y-12 submission deadline. The revisions take effect for the December 31, 2023, as of date.
There are no revisions to the FR Y-12 and FR Y-12A report forms.
The current estimated total annual burden for the FR Y-12 and FR Y-12A is 1,955 hours,
and would increase to 2,021 hours. The revisions would result in an increase of 66 hours. The
forms and instructions are available on the Board’s public website at
https://www.federalreserve.gov/apps/reportingforms.

1

The FR Y-12 must be filed by (1) each top-tier domestic holding company that files a Consolidated Financial
Statements for Holding Companies (FR Y-9C; OMB No. 7100-0128) and has aggregate nonfinancial equity
investments that equal or exceed the lesser of $100 million or 10 percent of the holding company’s consolidated
Tier 1 capital as of the report date and (2) each top-tier domestic holding company that files a Parent Company Only
Financial Statements for Small Holding Companies (FR Y-9SP; OMB No. 7100-0128) and has aggregate
nonfinancial equity investments that equal or exceed 10 percent of the holding company’s total capital as of the
report date.
2
As used in this supporting statement, the term FHC refers both to BHCs that are FHCs and to SLHCs and foreign
banks that have made an effective election to be treated as FHCs.
3
See 12 CFR 225.172(b)(1), (4) and 225.173(c)(1)-(2).

Background and Justification
FR Y-12
The Bank Holding Company Act of 1956 (BHC Act) generally prohibits a BHC from
making investments in non-banking organizations. However, the BHC Act permits BHCs to
make certain nonfinancial equity investments, such as investments in companies that engage in
activities the Board has determined to be closely related to banking.4 Similar activities
limitations apply to foreign banking organizations (FBOs), including those with IHCs.5 In
addition, the Home Owners’ Loan Act (HOLA) permits an SLHC to engage in many activities
the Board has determined to be permissible for a BHC.6
Holding company investments in nonfinancial companies contribute significantly to
earnings and the gain/loss received from the equity investments in nonfinancial companies will
flow through retained earnings or accumulated other comprehensive income at institutions
actively involved in this business line. Equity investments also contribute to the volatility of
earnings and capital, and increase some institutions’ risk profiles.
The FR Y-12 collects information from holding companies on their equity investments in
nonfinancial companies. The information collected allows the Board to monitor the growth in
equity investments in nonfinancial companies and their contributions to capital, profitability,
risk, and volatility. The FR Y-12 provides more timely information than can be obtained through
periodic supervisory reviews of this business line and serves to identify institutions that are
significantly changing their risk profiles in this business line or devoting significant resources to
investments in nonfinancial companies.
FR Y-12A
A BHC that makes an effective election to become an FHC, as well as an SLHC or
foreign bank that makes an effective election to be treated as an FHC, may invest in a company
that engages in activities that are financial in nature.7 Additionally, under merchant banking
authority, such an entity may make investments of any amount, in any type of nonfinancial
company, subject to certain requirements.8
The Board’s Regulation Y generally authorizes an FHC to own or control a merchant
banking investment for no longer than 10 years. However, merchant banking investments made
in, or held through, a private equity fund may be held for the duration of the fund, up to a

4

See e.g., 12 U.S.C. § 1843(c)(8); 12 U.S.C. § 1843(c)(6) (investments of less than five percent of the outstanding
voting shares of a company). A BHC includes a foreign banking organization and an IHC subsidiary of a foreign
banking organization. 12 CFR 225.2(c)(2).
5
See 12 U.S.C. § 3106(a) (applying the provisions of the BHC Act to FBOs); 12 CFR 225.2(c)(2) (defining BHCs
to include FBOs for purposes of subpart C, Nonbanking Activities and Acquisitions by Bank Holding Companies, of
Regulation Y).
6
12 U.S.C. §§ 1467a(c)(2)(F), (H).
7
12 U.S.C. § 1843(k)(1)(A).
8
12 U.S.C. § 1843(k)(4)(H).

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maximum of 15 years. An FHC must obtain the Board’s approval to own or hold a merchant
banking investment beyond these holding periods.
In order to monitor compliance with these holding period restrictions, the FR Y-12A
requires each FHC to report annually merchant banking investments that the FHC has held for
longer than 8 years (or 13 years in the case of an investment held through a qualifying private
equity fund). The FR Y-12A data allows bank examiners to monitor merchant banking
investments that are approaching the end of their applicable holding period. Because merchant
banking investments are investments by a holding company in a nonfinancial company,
information regarding these investments is also included as part of the aggregate investment
totals reported on the FR Y-12 report.
The information collected by the FR Y-12 and FR Y-12A is not available from other
sources. If this information were not collected or were collected less frequently, the Board would
not be able to effectively monitor the growth in equity investments in nonfinancial companies
and their contributions to capital, profitability, risk, and volatility; or to effectively monitor
investments that are approaching the end of their applicable holding periods.
Description of Information Collection
FR Y-12
The FR Y-12 collects financial data on nonfinancial equity investments by type of
investment, type of security, type of entity within the banking organization, and nonfinancial
investment transactions during the reporting period. The FR Y-12 reporting form comprises four
schedules. The Board understands that respondents use information technology to gather data for
and to submit the FR Y-12 electronically.9
Schedule A - Type of Investments
This schedule collects information on the acquisition cost, net unrealized holding gains
(losses) on equity securities not held for trading, carrying value, and publicly quoted value for
direct investments made in public entities, nonpublic entities, and all indirect investments. The
memoranda items collect information on the number of companies in which investments are
made for the entire portfolio, amount of investments made under the merchant banking authority,
the pre-tax impact on net income of certain investments, amount of investments managed for
others, and the pre-tax impact of management fee income.
Schedule B - Type of Security
This schedule collects information on the acquisition cost and carrying value of each type
of security (common stock, convertible debt and convertible preferred stock, and other equity

9

See https://www.frbservices.org/central-bank/reporting-central/. A respondent that is required to file this form with
the Federal Reserve System should contact its district Federal Reserve Bank if it believes it may not be able to
submit the form electronically.

3

instruments) held by the reporting institution. The memorandum items collect information on
unused equity commitments and warrant activity.
Schedule C - Type of Entity within the Banking Organization
This schedule identifies the type of entity within the holding company structure through
which the investments reported in schedules A and B are held (for example, broker-dealers) and
collects information on the acquisition cost, net unrealized holding gains (losses) on equity
securities not held for trading, and carrying value. The memoranda items collect information on
the amount of domestic and foreign investments.
Schedule D - Nonfinancial Investment Transactions During Reporting Period
This schedule collects information on all merchant banking activity of the holding
company, on an aggregate basis, for the reporting period. Columns A and B collect acquisition
cost and carrying value for all purchases, returns of capital, and net changes in valuation made
for all direct public investments. Columns C and D collect acquisition cost and carrying value for
all transactions involving all direct nonpublic investments. Columns E and F collect information
on the same items for all transactions involving indirect (fund) investments. These data provide
valuable insight into the scope of activity on a transaction basis and, when reviewed over time,
provide critical trend data useful for holding company supervisory oversight as well as provide
valuable information to facilitate industry studies.
FR Y-12A
The FR Y-12A report is filed annually by any FHC with investments held under the
merchant banking authority for a period that exceeds the applicable reporting period for the
investment (8 years, or 13 years in the case of an investment held through a qualifying private
equity fund). The FR Y-12A collects the following information on such investments:
• The legal name and location of the corporate entity within the FHC organization that
holds the covered investment,
• The date the FHC acquired the covered investment,
• The holding period expiration date of the covered investment,
• The legal name and location of the company held,
• The primary activity of the company held (using the North American Industry
Classification System (NAICS) activity codes for commonly reported activities wherever
possible). FHCs provide a text description of the primary activity of the company held
only if it is unable to identify a five- or six-digit NAICS code corresponding to the
activity,
• The type of interest held by the FHC (for example, common stock),
• The percentage of ownership held by the FHC (both voting and non-voting),
• The FHC’s acquisition cost of the covered investment,
• The value at which the covered investment currently is carried on the FHC’s books
(carrying value), and
• A brief narrative explanation of the FHC’s plan and schedule for disposition of a covered
investment.
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The Board understands that respondents use information technology to gather data for
and to submit the FR Y-12A electronically.10
Respondent Panel
The FR Y-12 panel comprises a subset of top-tier domestic holding companies that file
the FR Y-9C or the FR Y-9SP. A holding company that files the FR Y-9C must file the FR Y-12
if it has aggregate nonfinancial equity investments that equal or exceed the lesser of $100 million
or 10 percent of the holding company’s consolidated Tier 1 capital as of the report date. A
holding company that files the FR Y-9SP must file the FR Y-12 if it has aggregate nonfinancial
equity investments that equal or exceed 10 percent of the holding company’s total capital as of
the report date.
As noted, FHCs generally have to submit an FR Y-12A if they hold merchant banking
investments for longer than 8 years (or 13 years in the case of an investment held through a
qualifying private equity fund). The applicable reporting periods (8 or 13 years) for merchant
banking investments are less than the permissible holding periods (10 or 15 years) for the
investments so that the Board can monitor investments that are approaching the end of the
holding periods generally permitted under Regulation Y.
Frequency and Time Schedule
The FR Y-12 is submitted quarterly for holding companies that file the FR Y-9C and
semiannually for those holding companies that file the FR Y-9SP. The FR Y-12A is submitted
annually. The FR Y-12 is filed quarterly for holding companies that file the FR Y-9C, as of the
end of March, June, September, and December, and semiannually for those holding companies
that file the FR Y-9SP, as of the end of June and December. The FR Y-12 must be submitted
within 45 calendar days of the reporting date. The FR Y-12A is filed annually by an FHC with
merchant banking investments they have held for longer than 8 years (or 13 years in the case of
an investment held through a qualifying private equity fund). The report must be submitted by
February 15th of the following calendar year. For example, if, as of December 31, 2022, an FHC
owns a covered investment, the FHC must submit an FR Y-12A for the investment by February
15, 2023.
Revisions to the FR Y-12 and FR Y-12A
The Board revised the FR Y-12 and FR Y-12A instructions to specify when respondents
should submit their reports when the submission deadline falls on a weekend or holiday. The
instructions have been revised to state the following: “If the submission deadline falls on a
weekend or holiday, the report must be received on the first business day after the Saturday,
Sunday, or holiday. Earlier submission aids the Federal Reserve in reviewing and processing the
reports and is encouraged. The reports are due by the end of the reporting day on the submission
date (5:00 P.M. at each district Reserve Bank.)”. The Board also modified and clarified the
10

See https://www.frbservices.org/central-bank/reporting-central/. A respondent that is required to file this form
with the Federal Reserve System should contact its district Federal Reserve Bank if it believes it may not be able to
submit the form electronically.

5

FR Y-12 and FR Y-12A instructions to require paper and electronic filers to maintain in their
files a physical or electronic scanned copy of the manually signed and attested FR Y-12 and
FR Y-12A submissions for a period of three years after submission. Currently, the instructions
for the FR Y-12 and FR Y-12A require respondents to maintain these records but do not specify
the duration of the recordkeeping requirement. The Board also clarified in the FR Y-12
instructions that Column B, “Unrealized Holding Gains (Losses) on Equity Securities Not Held
for Trading” and Column C, “All Other Unrealized Holding Gains (Losses) on Equity
Securities” are only applicable to Schedules A and C.
Additionally, the Board revised the submission deadline of the FR Y-12A. The
FR Y-12A submission deadline would be revised to instruct holding companies to submit their
FR Y-12A reports within 45 calendar days of the December 31st as of date, rather than the
current deadline of February 15th (which is 46 calendar days after December 31st). The Board
made this change to align the submission deadlines of the FR Y-12 and FR Y-12A and to reduce
confusion regarding the due dates. Finally, the Board revised the FR Y-12 instructions to clarify
that the aggregate nonfinancial equity investment amount includes both the amount of any
investments that the holding company has made or has committed to make in the future. All of
the revisions mentioned above would have an effective date of December 31, 2023.
Public Availability of Data
Data reported on the FR Y-12 and FR Y-12A reports are not published. With certain
exceptions, microdata are considered public information and are available through the Board’s
Freedom of Information Office.
Legal Status
The Board is authorized to collect information on the FR Y-12 and FR Y-12A from
BHCs and SLHCs pursuant to its reporting authorities, which are located in section 5(c) of the
BHC Act (12 U.S.C. § 1844(c)(1)(A)) for BHCs and section 10(b)(2) of the HOLA (12 U.S.C. §
1467a(b)(2)) for SLHCs. The Board is authorized to collect information on the FR Y-12 from
IHCs pursuant to section 5(c) of the BHC Act (12 U.S.C. § 1844(c)(1)(A)) and sections
102(a)(1) and 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (DoddFrank Act) (12 U.S.C. §§ 5311(a)(1) and 5365).11 The Board is also authorized to collect
information on the FR Y-12A report by section 4(k)(7)(A) of the BHC Act (12 U.S.C. §
1843(k)(7)(A)), which authorizes the Board and the Treasury Department to jointly develop

Section 165(b)(2) of the Dodd-Frank Act (12 U.S.C. § 5365(b)(2)) refers to “foreign-based bank holding
company.” Section 102(a)(1) of the Dodd-Frank Act (12 U.S.C. § 5311(a)(1)) defines “bank holding company” for
purposes of Title I of the Dodd-Frank Act to include foreign banking organizations that are treated as bank holding
companies under section 8(a) of the International Banking Act of 1978 (12 U.S.C. § 3106(a)). The Board has
required, pursuant to section 165(b)(1)(B)(iv) of the Dodd-Frank Act (12 U.S.C. § 5365(b)(1)(B)(iv)), certain of the
foreign banking organizations that are subject to section 165 of the Dodd-Frank Act to form U.S. intermediate
holding companies. Accordingly, the parent foreign-based organization of a U.S. IHC is treated as a BHC for
purposes of the BHC Act and section 165 of the Dodd-Frank Act. Because section 5(c) of the BHC Act authorizes
the Board to require reports from subsidiaries of BHCs, section 5(c) provides additional authority to require U.S.
IHCs to report the information contained in the FR Y-12 report.
11

6

implementing regulations governing merchant banking activities.12 The obligation to respond to
the FR Y-12 and FR Y-12A reports is mandatory.
The completed version of the FR Y-12 is generally available to the public upon request.
To the extent a respondent submits nonpublic commercial or financial information in
connection with the FR Y-12, which is both customarily and actually treated as private by the
respondent, the respondent may request confidential treatment pursuant to exemption 4 of the
Freedom of Information Act (FOIA) (5 U.S.C. § 552(b)(4)).
The Board generally considers the information collected on the FR Y-12A to be
confidential because it is expected to be confidential commercial or financial information that is
both customarily and actually treated as private by the institution, and thus may be kept
confidential pursuant to exemption 4 of the FOIA.
Consultation Outside the Agency
There has been no consultation outside the Federal Reserve System.
Public Comments
On July 19, 2023, the Board published an initial notice in the Federal Register (88 FR
46161) requesting public comment for 60 days on the extension, with revision, of the FR Y-12
and FR Y-12A. The comment period for this notice expired on September 18, 2023. The Board
did not receive any comments. The Board adopted the extension, with revision, of the FR Y-12
and FR Y-12A as originally proposed. On December 5, 2023, the Board published a final notice
in the Federal Register (88 FR 84327).
Estimate of Respondent Burden
As shown in the table below, the estimated total annual burden for the FR Y-12 and
FR Y-12A is 1,955 hours, and would increase to 2,021 hours with the revisions. The number of
FR Y-12 (quarterly and semiannual) respondents is based on the number of respondents that
submitted data for the June 30, 2022, as of date and the number of FR Y-12A respondents is
based on the number of respondents that submitted data for the December 31, 2021, as of date.
These reporting and recordkeeping requirements represent less than 1 percent of the Board’s
total paperwork burden.

12

See 12 U.S.C. § 1467a(c)(2)(H) and 12 U.S.C. § 3106(a).

7

FR Y-12 and FR Y-12A

Estimated
number of
respondents13

Estimated
Estimated
annual
average hours
frequency per response

Estimated
annual burden
hours

Current
Reporting
FR Y-12 (Quarterly)
FR Y-12 (Semiannual)
FR Y-12A
Current Total
Proposed
Reporting
FR Y-12 (Quarterly)
FR Y-12 (Semiannual)
FR Y-12A
Recordkeeping
FR Y-12 (Quarterly)
FR Y-12 (Semiannual)
FR Y-12A

23
8
23

4
2
1

16.5
16.5
7.5

1,518
264
173
1,955

23
8
23

4
2
1

16.5
16.5
7.5

1,518
264
173

23
8
23

4
2
1

0.5
0.5
0.5

46
8
12

Proposed Total

2,021

Change

66

The estimated total annual cost to the public for the FR Y-12 and FR Y-12A is $129,519,
and would increase to $133,891 with the revisions.14
Sensitive Questions
This collection of information contains no questions of a sensitive nature, as defined by
OMB guidelines.
13

Of these respondents, 0 FR Y-12 (Quarterly), 0 FR Y-12 (Semiannual), and 10 FR Y-12A are considered small
entities as defined by the Small Business Administration (i.e., entities with less than $850 million in total assets).
Size standards effective March 17, 2023. See https://www.sba.gov/document/support-table-size-standards. There are
no special accommodations given to mitigate the burden on small institutions.
14
Total cost to the responding public is estimated using the following formula: total burden hours, multiplied by the
cost of staffing, where the cost of staffing is calculated as a percent of time for each occupational group multiplied
by the group’s hourly rate and then summed (30% Office & Administrative Support at $22, 45% Financial
Managers at $80, 15% Lawyers at $79, and 10% Chief Executives at $118). Hourly rates for each occupational
group are the (rounded) mean hourly wages from the Bureau of Labor Statistics (BLS), Occupational Employment
and Wages, May 2022, published April 25, 2023, https://www.bls.gov/news.release/ocwage.t01.htm. Occupations
are defined using the BLS Standard Occupational Classification System, https://www.bls.gov/soc/.

8

Estimate of Cost to the Federal Reserve System
The estimated cost to the Federal Reserve System for collecting and processing the
FR Y-12 and FR Y-12A is $21,700.

9