Bank Capital Plans and Stress Tests: Federal Reserve Proposes Attestation Requirement for Intermediate Holding Companies of Foreign Banking Organizations

Sullivan & Cromwell LLP - August 4, 2016

On July 28, 2016, the Federal Reserve published in the Federal Register a proposal (the Proposal) that would modify certain aspects of Forms FR Y-14A, FR Y-14Q and FR Y-14M (collectively, the FR Y-14 Forms) applicable to top-tier bank holding companies (BHCs) and U.S. intermediate holding companies (IHCs) of foreign banking organizations with $50 billion or more in total consolidated assets. Most notably, the Proposal would require the chief financial officer or person performing an equivalent function (CFO) of those IHCs that are expected to be subject to the Federal Reserve’s Large Institution Supervision Coordinating Committee (LISCC) framework (LISCC IHCs) to make attestations regarding reports on the FR Y-14 Forms. Implementation of this attestation requirement for LISCC IHCs will follow a phased approach similar to the approach finalized for domestic BHC LISCC respondents in January of this year, but allowing an additional year for LISCC IHCs to implement the first attestation. The first attestation for LISCC IHCs would be submitted with reports as of December 31, 2017 (attesting to the effectiveness of internal controls for the as-of date and not for submissions throughout the year), and would be fully phased in with reports submitted as of December 31, 2018 (attesting to the effectiveness of internal controls through the previous year).