57725Federal Register / Vol. 79, No. 187 / Friday, September 26, 2014 / Rules and Regulations
COMPATIBILITY TABLE FOR DIRECT FINAL RULE
Section Change Subject Compatibility
Existing New
70.50(c)(2) ............................ Amend ................................. Reporting requirements ..................................................... C ............ C
70.74(b) ................................ Amend ................................. Additional reporting requirements ...................................... NRC ....... NRC
Appendix A ........................... Amend ................................. Reportable safety events ................................................... * ............. NRC
* Appendix A compatibility was not previously designated. As it is directly related to § 70.74 it is now designated as NRC.
XIII. Voluntary Consensus Standards
The National Technology Transfer
and Advancement Act of 1995 (Pub. L.
104–113), requires that Federal agencies
use technical standards that are
developed or adopted by voluntary
consensus standards bodies unless the
use of such a standard is inconsistent
with applicable law or otherwise
impractical. In this direct final rule, the
NRC will revise the time allowed to
submit a written follow-up report from
within 30 days to within 60 days after
the initial report of an event, change the
reporting framework for certain
situations, and remove redundant
reporting requirements. This action does
not constitute the establishment of a
standard that establishes generally
applicable requirements.
List of Subjects in 10 CFR Part 70
Criminal penalties, Hazardous
materials transportation, Material
control and accounting, Nuclear
materials, Packaging and containers,
Radiation protection, Reporting and
recordkeeping requirements, Scientific
equipment, Security measures, Special
nuclear material.
For the reasons set out in the
preamble and under the authority of the
Atomic Energy Act of 1954, as amended;
the Energy Reorganization Act of 1974,
as amended; and 5 U.S.C. 552 and 553;
the NRC is adopting the following
amendments to 10 CFR Part 70.
PART 70—DOMESTIC LICENSING OF
SPECIAL NUCLEAR MATERIAL
■ 1. The authority citation for part 70
continues to read as follows:
Authority: Atomic Energy Act secs. 51, 53,
161, 182, 183, 193, 223, 234 (42 U.S.C. 2071,
2073, 2201, 2232, 2233, 2243, 2273, 2282,
2297f); secs. 201, 202, 204, 206, 211 (42
U.S.C. 5841, 5842, 5845, 5846, 5851);
Government Paperwork Elimination Act sec.
1704 (44 U.S.C. 3504 note); Energy Policy Act
of 2005, Pub. L. No. 109–58, 119 Stat. 194
(2005).
Sections 70.1(c) and 70.20a(b) also issued
under secs. 135, 141, Pub. L. 97–425, 96 Stat.
2232, 2241 (42 U.S.C. 10155, 10161).
Section 70.21(g) also issued under Atomic
Energy Act sec. 122 (42 U.S.C. 2152). Section
70.31 also issued under Atomic Energy Act
sec. 57(d) (42 U.S.C. 2077(d)). Sections 70.36
and 70.44 also issued under Atomic Energy
Act sec. 184 (42 U.S.C. 2234). Section 70.81
also issued under Atomic Energy Act secs.
186, 187 (42 U.S.C. 2236, 2237). Section
70.82 also issued under Atomic Energy Act
sec. 108 (42 U.S.C. 2138).
■ 2. In § 70.50, revise the first sentence
of the introductory text of paragraph
(c)(2) to read as follows:
§ 70.50 Reporting requirements.
* * * * *
(c) * * *
(2) Written report. Each licensee that
makes a report required by paragraph (a)
or (b) of this section shall submit a
written follow-up report within 30 days
of the initial report. * * *
* * * * *
■ 3. In § 70.74, revise paragraph (b) to
read as follows:
§ 70.74 Additional reporting requirements.
* * * * *
(b) Written reports. Each licensee that
makes a report required by paragraph
(a)(1) of this section shall submit a
written follow-up report within 60 days
of the initial report. The written report
must be sent to the NRC’s Document
Control Desk, using an appropriate
method listed in § 70.5(a), with a copy
to the appropriate NRC regional office
listed in appendix D to part 20 of this
chapter. The reports must include the
information as described in
§ 70.50(c)(2)(i) through (iv).
■ Appendix A to Part 70—[Amended]
■ 4. Amend appendix A to part 70 by:
■ a. In the introductory text to
paragraph (a), removing the number
‘‘30’’ and adding, in its place, the
number ‘‘60’’;
■ b. Removing paragraph (a)(5);
■ c. In the introductory text to
paragraph (b), removing the number
‘‘30’’ and adding, in its place, the
number ‘‘60’’; and
■ d. Removing paragraph (b)(5).
Dated at Rockville, Maryland, this 15th day
of September, 2014.
For the Nuclear Regulatory Commission.
Mark A. Satorius,
Executive Director for Operations.
[FR Doc. 2014–22866 Filed 9–25–14; 8:45 am]
BILLING CODE 7590–01–P
DEPARTMENT OF TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 3
[Docket ID OCC–2014–0008]
RIN 1557–AD81
FEDERAL RESERVE SYSTEM
12 CFR Part 217
[Regulation Q Docket No. R–1487]
RIN 7100–AD16
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 324
RIN 3064–AE12
Regulatory Capital Rules: Regulatory
Capital, Revisions to the
Supplementary Leverage Ratio
AGENCY: Office of the Comptroller of the
Currency, Treasury; the Board of
Governors of the Federal Reserve
System; and the Federal Deposit
Insurance Corporation.
ACTION: Final rule.
SUMMARY: In May 2014, the Office of the
Comptroller of the Currency (OCC), the
Board of Governors of the Federal
Reserve System (Board), and the Federal
Deposit Insurance Corporation (FDIC)
(collectively, the agencies) issued a
notice of proposed rulemaking (NPR or
proposed rule) to revise the definition of
the denominator of the supplementary
leverage ratio (total leverage exposure)
that the agencies adopted in July 2013
as part of comprehensive revisions to
the agencies’ regulatory capital rules
(2013 revised capital rule). The agencies
are adopting the proposed rule as final
(final rule) with certain revisions and
clarifications based on comments
received on the proposed rule.
The final rule revises total leverage
exposure as defined in the 2013 revised
capital rule to include the effective
notional principal amount of credit
derivatives and other similar
instruments through which a banking
VerDate Sep<11>2014 17:52 Sep 25, 2014 Jkt 232001 PO 00000 Frm 00023 Fmt 4700 Sfmt 4700 E:\FR\FM\26SER1.SGM 26SER1
asabaliauskas on DSK5VPTVN1PROD with RULES
COMPATIBILITY TABLE FOR DIRECT FINAL RULE
Section Change Subject Compatibility
Existing New
70.50(c)(2) ............................ Amend ................................. Reporting requirements ..................................................... C ............ C
70.74(b) ................................ Amend ................................. Additional reporting requirements ...................................... NRC ....... NRC
Appendix A ........................... Amend ................................. Reportable safety events ................................................... * ............. NRC
* Appendix A compatibility was not previously designated. As it is directly related to § 70.74 it is now designated as NRC.
XIII. Voluntary Consensus Standards
The National Technology Transfer
and Advancement Act of 1995 (Pub. L.
104–113), requires that Federal agencies
use technical standards that are
developed or adopted by voluntary
consensus standards bodies unless the
use of such a standard is inconsistent
with applicable law or otherwise
impractical. In this direct final rule, the
NRC will revise the time allowed to
submit a written follow-up report from
within 30 days to within 60 days after
the initial report of an event, change the
reporting framework for certain
situations, and remove redundant
reporting requirements. This action does
not constitute the establishment of a
standard that establishes generally
applicable requirements.
List of Subjects in 10 CFR Part 70
Criminal penalties, Hazardous
materials transportation, Material
control and accounting, Nuclear
materials, Packaging and containers,
Radiation protection, Reporting and
recordkeeping requirements, Scientific
equipment, Security measures, Special
nuclear material.
For the reasons set out in the
preamble and under the authority of the
Atomic Energy Act of 1954, as amended;
the Energy Reorganization Act of 1974,
as amended; and 5 U.S.C. 552 and 553;
the NRC is adopting the following
amendments to 10 CFR Part 70.
PART 70—DOMESTIC LICENSING OF
SPECIAL NUCLEAR MATERIAL
■ 1. The authority citation for part 70
continues to read as follows:
Authority: Atomic Energy Act secs. 51, 53,
161, 182, 183, 193, 223, 234 (42 U.S.C. 2071,
2073, 2201, 2232, 2233, 2243, 2273, 2282,
2297f); secs. 201, 202, 204, 206, 211 (42
U.S.C. 5841, 5842, 5845, 5846, 5851);
Government Paperwork Elimination Act sec.
1704 (44 U.S.C. 3504 note); Energy Policy Act
of 2005, Pub. L. No. 109–58, 119 Stat. 194
(2005).
Sections 70.1(c) and 70.20a(b) also issued
under secs. 135, 141, Pub. L. 97–425, 96 Stat.
2232, 2241 (42 U.S.C. 10155, 10161).
Section 70.21(g) also issued under Atomic
Energy Act sec. 122 (42 U.S.C. 2152). Section
70.31 also issued under Atomic Energy Act
sec. 57(d) (42 U.S.C. 2077(d)). Sections 70.36
and 70.44 also issued under Atomic Energy
Act sec. 184 (42 U.S.C. 2234). Section 70.81
also issued under Atomic Energy Act secs.
186, 187 (42 U.S.C. 2236, 2237). Section
70.82 also issued under Atomic Energy Act
sec. 108 (42 U.S.C. 2138).
■ 2. In § 70.50, revise the first sentence
of the introductory text of paragraph
(c)(2) to read as follows:
§ 70.50 Reporting requirements.
* * * * *
(c) * * *
(2) Written report. Each licensee that
makes a report required by paragraph (a)
or (b) of this section shall submit a
written follow-up report within 30 days
of the initial report. * * *
* * * * *
■ 3. In § 70.74, revise paragraph (b) to
read as follows:
§ 70.74 Additional reporting requirements.
* * * * *
(b) Written reports. Each licensee that
makes a report required by paragraph
(a)(1) of this section shall submit a
written follow-up report within 60 days
of the initial report. The written report
must be sent to the NRC’s Document
Control Desk, using an appropriate
method listed in § 70.5(a), with a copy
to the appropriate NRC regional office
listed in appendix D to part 20 of this
chapter. The reports must include the
information as described in
§ 70.50(c)(2)(i) through (iv).
■ Appendix A to Part 70—[Amended]
■ 4. Amend appendix A to part 70 by:
■ a. In the introductory text to
paragraph (a), removing the number
‘‘30’’ and adding, in its place, the
number ‘‘60’’;
■ b. Removing paragraph (a)(5);
■ c. In the introductory text to
paragraph (b), removing the number
‘‘30’’ and adding, in its place, the
number ‘‘60’’; and
■ d. Removing paragraph (b)(5).
Dated at Rockville, Maryland, this 15th day
of September, 2014.
For the Nuclear Regulatory Commission.
Mark A. Satorius,
Executive Director for Operations.
[FR Doc. 2014–22866 Filed 9–25–14; 8:45 am]
BILLING CODE 7590–01–P
DEPARTMENT OF TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 3
[Docket ID OCC–2014–0008]
RIN 1557–AD81
FEDERAL RESERVE SYSTEM
12 CFR Part 217
[Regulation Q Docket No. R–1487]
RIN 7100–AD16
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 324
RIN 3064–AE12
Regulatory Capital Rules: Regulatory
Capital, Revisions to the
Supplementary Leverage Ratio
AGENCY: Office of the Comptroller of the
Currency, Treasury; the Board of
Governors of the Federal Reserve
System; and the Federal Deposit
Insurance Corporation.
ACTION: Final rule.
SUMMARY: In May 2014, the Office of the
Comptroller of the Currency (OCC), the
Board of Governors of the Federal
Reserve System (Board), and the Federal
Deposit Insurance Corporation (FDIC)
(collectively, the agencies) issued a
notice of proposed rulemaking (NPR or
proposed rule) to revise the definition of
the denominator of the supplementary
leverage ratio (total leverage exposure)
that the agencies adopted in July 2013
as part of comprehensive revisions to
the agencies’ regulatory capital rules
(2013 revised capital rule). The agencies
are adopting the proposed rule as final
(final rule) with certain revisions and
clarifications based on comments
received on the proposed rule.
The final rule revises total leverage
exposure as defined in the 2013 revised
capital rule to include the effective
notional principal amount of credit
derivatives and other similar
instruments through which a banking
VerDate Sep<11>2014 17:52 Sep 25, 2014 Jkt 232001 PO 00000 Frm 00023 Fmt 4700 Sfmt 4700 E:\FR\FM\26SER1.SGM 26SER1
asabaliauskas on DSK5VPTVN1PROD with RULES
57726 Federal Register / Vol. 79, No. 187 / Friday, September 26, 2014 / Rules and Regulations
1 The Board and the OCC published a joint final
rule in the Federal Register on October 11, 2013 (78
FR 62018) and the FDIC published in the Federal
Register a substantially identical final rule on April
14, 2014 (79 FR 20754).
2 12 CFR 3.10(a)(5) (OCC); 12 CFR 217.10(a)(5)
(Board); and 12 CFR 324.10(a)(5) (FDIC).
3 The eSLR standards were finalized by the
agencies on May 1, 2014 (79 FR 24528).
4 79 FR 24596 (May 1, 2014).
5 See BCBS, ‘‘Basel III leverage ratio framework
and disclosure requirements’’ (January 2014),
available at http://www.bis.org/publ/bcbs270.htm.
See also BCBS, ‘‘Revised Basel III leverage ratio
framework and disclosure requirements—
consultative document’’ (June 2013), available at
http://www.bis.org/publ/bcbs251.htm.
organization provides credit protection
(sold credit protection); modifies the
calculation of total leverage exposure for
derivative and repo-style transactions;
and revises the credit conversion factors
applied to certain off-balance sheet
exposures. The final rule also changes
the frequency with which certain
components of the supplementary
leverage ratio are calculated and
establishes the public disclosure
requirements of certain items associated
with the supplementary leverage ratio.
The final rule applies to all banks,
savings associations, bank holding
companies, and savings and loan
holding companies (banking
organizations) that are subject to the
agencies’ advanced approaches risk-
based capital rules, as defined in the
2013 revised capital rule (advanced
approaches banking organizations),
including advanced approaches banking
organizations that are subject to the
enhanced supplementary leverage ratio
standards that the agencies finalized in
May 2014 (eSLR standards). Consistent
with the 2013 revised capital rule,
advanced approaches banking
organizations will be required to
disclose their supplementary leverage
ratios beginning January 1, 2015, and
will be required to comply with a
minimum supplementary leverage ratio
capital requirement of 3 percent and, as
applicable, the eSLR standards
beginning January 1, 2018.
DATES: The final rule is effective January
1, 2015.
FOR FURTHER INFORMATION CONTACT:
OCC: Margot Schwadron, Senior Risk
Expert, (202) 649–6982; or Nicole
Billick, Risk Expert, (202) 649–7932,
Capital Policy; or Carl Kaminski,
Counsel; or Henry Barkhausen,
Attorney, Legislative and Regulatory
Activities Division, (202) 649–5490, for
persons who are deaf or hard of hearing,
TTY (202) 649–5597, Office of the
Comptroller of the Currency, 400 7th
Street SW., Washington, DC 20219.
Board: Constance M. Horsley,
Assistant Director, (202) 452–5239;
Thomas Boemio, Manager, (202) 452–
2982; Sviatlana Phelan, Supervisory
Financial Analyst, (202) 912–4306; or
Holly Kirkpatrick, Supervisory
Financial Analyst, (202) 452–2796,
Capital and Regulatory Policy, Division
of Banking Supervision and Regulation;
or April C. Snyder, Senior Counsel,
(202) 452–3099; Christine E. Graham,
Counsel (202) 452–3005; or Mark
Buresh, Attorney, (202) 452–5270, Legal
Division, Board of Governors of the
Federal Reserve System, 20th and C
Streets NW., Washington, DC 20551. For
the hearing impaired only,
Telecommunication Device for the Deaf
(TDD), (202) 263–4869.
FDIC: Bobby R. Bean, Associate
Director, bbean@fdic.gov; Ryan
Billingsley, Chief, Capital Policy
Section, rbillingsley@fdic.gov; Karl
Reitz, Chief, Capital Markets Strategies
Section, kreitz@fdic.gov; Capital
Markets Branch, Division of Risk
Management Supervision,
regulatorycapital@fdic.gov or (202) 898–
6888; or Michael Phillips, Counsel,
mphillips@fdic.gov; or Rachel Ackmann,
Senior Attorney, rackmann@fdic.gov; or
Grace Pyun, Senior Attorney, gpyun@
fdic.gov; Supervision Branch, Legal
Division, Federal Deposit Insurance
Corporation, 550 17th Street NW.,
Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
I. Background
The Office of the Comptroller of the
Currency (OCC), the Board of Governors
of the Federal Reserve System (Board),
and the Federal Deposit Insurance
Corporation (FDIC) (collectively, the
agencies) adopted the supplementary
leverage ratio in July 2013 as part of
comprehensive revisions to the
agencies’ regulatory capital rule (2013
revised capital rule).1 Under the 2013
revised capital rule, a minimum
supplementary leverage ratio
requirement of 3 percent applies to all
banking organizations that are subject to
the agencies’ advanced approaches risk-
based capital rule (advanced approaches
banking organizations).2 The
supplementary leverage ratio in the
2013 revised capital rule is generally
consistent with the international
leverage ratio introduced by the Basel
Committee on Banking Supervision
(BCBS) in 2010 (Basel III leverage ratio).
Under the enhanced supplementary
leverage ratio standards (eSLR
standards) finalized by the agencies in
May 2014, U.S. top-tier bank holding
companies (BHCs) with more than $700
billion in consolidated total assets or
more than $10 trillion in assets under
custody must maintain a leverage buffer
greater than 2 percentage points above
the minimum supplementary leverage
ratio requirement of 3 percent, for a total
of more than 5 percent, to avoid
restrictions on capital distributions and
discretionary bonus payments.3 Insured
depository institution (IDI) subsidiaries
of such BHCs must maintain at least a
6 percent supplementary leverage ratio
to be considered ‘‘well-capitalized’’
under the agencies’ prompt corrective
action framework.
On May 1, 2014, the agencies
published in the Federal Register, for
public comment, a notice of proposed
rulemaking (NPR or proposed rule) to
revise the definition of the denominator
of the supplementary leverage ratio
(total leverage exposure).4 The proposed
rule would have revised the
supplementary leverage ratio, consistent
with the January 2014 BCBS revisions to
the Basel III leverage ratio (BCBS 2014
revisions), to incorporate in total
leverage exposure the effective notional
principal amount of credit derivatives or
similar instruments through which a
banking organization provides credit
protection (sold credit protection),
modify the measure of exposure for
derivative and repo-style transactions,
and revise the credit conversion factors
(CCFs) for certain off-balance sheet
exposures.5 It would have required total
leverage exposure to be calculated as the
mean of total leverage exposure,
calculated daily, and would have
required public disclosure of certain
items associated with the
supplementary leverage ratio. In
general, the proposed changes were
designed to strengthen the
supplementary leverage ratio by more
appropriately capturing the exposure of
a banking organization’s on- and off-
balance sheet items.
As discussed further below, the
agencies are adopting the proposed rule
as final (final rule) with certain
revisions and clarifications based on
comments received on the proposed
rule. In addition, the agencies are
revising the calculation of total leverage
exposure to provide that the on-balance
sheet portion of total leverage exposure
will be calculated as the average of each
day of the reporting quarter, but the off-
balance sheet portion of total leverage
exposure will be calculated as the
average of the three month-end amounts
of the most recent three months.
Consistent with the 2013 revised capital
rule, advanced approaches banking
organizations will be required to
disclose their supplementary leverage
ratios beginning January 1, 2015, and
will be required to comply with the
minimum supplementary leverage ratio
VerDate Sep<11>2014 17:52 Sep 25, 2014 Jkt 232001 PO 00000 Frm 00024 Fmt 4700 Sfmt 4700 E:\FR\FM\26SER1.SGM 26SER1
asabaliauskas on DSK5VPTVN1PROD with RULES
1 The Board and the OCC published a joint final
rule in the Federal Register on October 11, 2013 (78
FR 62018) and the FDIC published in the Federal
Register a substantially identical final rule on April
14, 2014 (79 FR 20754).
2 12 CFR 3.10(a)(5) (OCC); 12 CFR 217.10(a)(5)
(Board); and 12 CFR 324.10(a)(5) (FDIC).
3 The eSLR standards were finalized by the
agencies on May 1, 2014 (79 FR 24528).
4 79 FR 24596 (May 1, 2014).
5 See BCBS, ‘‘Basel III leverage ratio framework
and disclosure requirements’’ (January 2014),
available at http://www.bis.org/publ/bcbs270.htm.
See also BCBS, ‘‘Revised Basel III leverage ratio
framework and disclosure requirements—
consultative document’’ (June 2013), available at
http://www.bis.org/publ/bcbs251.htm.
organization provides credit protection
(sold credit protection); modifies the
calculation of total leverage exposure for
derivative and repo-style transactions;
and revises the credit conversion factors
applied to certain off-balance sheet
exposures. The final rule also changes
the frequency with which certain
components of the supplementary
leverage ratio are calculated and
establishes the public disclosure
requirements of certain items associated
with the supplementary leverage ratio.
The final rule applies to all banks,
savings associations, bank holding
companies, and savings and loan
holding companies (banking
organizations) that are subject to the
agencies’ advanced approaches risk-
based capital rules, as defined in the
2013 revised capital rule (advanced
approaches banking organizations),
including advanced approaches banking
organizations that are subject to the
enhanced supplementary leverage ratio
standards that the agencies finalized in
May 2014 (eSLR standards). Consistent
with the 2013 revised capital rule,
advanced approaches banking
organizations will be required to
disclose their supplementary leverage
ratios beginning January 1, 2015, and
will be required to comply with a
minimum supplementary leverage ratio
capital requirement of 3 percent and, as
applicable, the eSLR standards
beginning January 1, 2018.
DATES: The final rule is effective January
1, 2015.
FOR FURTHER INFORMATION CONTACT:
OCC: Margot Schwadron, Senior Risk
Expert, (202) 649–6982; or Nicole
Billick, Risk Expert, (202) 649–7932,
Capital Policy; or Carl Kaminski,
Counsel; or Henry Barkhausen,
Attorney, Legislative and Regulatory
Activities Division, (202) 649–5490, for
persons who are deaf or hard of hearing,
TTY (202) 649–5597, Office of the
Comptroller of the Currency, 400 7th
Street SW., Washington, DC 20219.
Board: Constance M. Horsley,
Assistant Director, (202) 452–5239;
Thomas Boemio, Manager, (202) 452–
2982; Sviatlana Phelan, Supervisory
Financial Analyst, (202) 912–4306; or
Holly Kirkpatrick, Supervisory
Financial Analyst, (202) 452–2796,
Capital and Regulatory Policy, Division
of Banking Supervision and Regulation;
or April C. Snyder, Senior Counsel,
(202) 452–3099; Christine E. Graham,
Counsel (202) 452–3005; or Mark
Buresh, Attorney, (202) 452–5270, Legal
Division, Board of Governors of the
Federal Reserve System, 20th and C
Streets NW., Washington, DC 20551. For
the hearing impaired only,
Telecommunication Device for the Deaf
(TDD), (202) 263–4869.
FDIC: Bobby R. Bean, Associate
Director, bbean@fdic.gov; Ryan
Billingsley, Chief, Capital Policy
Section, rbillingsley@fdic.gov; Karl
Reitz, Chief, Capital Markets Strategies
Section, kreitz@fdic.gov; Capital
Markets Branch, Division of Risk
Management Supervision,
regulatorycapital@fdic.gov or (202) 898–
6888; or Michael Phillips, Counsel,
mphillips@fdic.gov; or Rachel Ackmann,
Senior Attorney, rackmann@fdic.gov; or
Grace Pyun, Senior Attorney, gpyun@
fdic.gov; Supervision Branch, Legal
Division, Federal Deposit Insurance
Corporation, 550 17th Street NW.,
Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
I. Background
The Office of the Comptroller of the
Currency (OCC), the Board of Governors
of the Federal Reserve System (Board),
and the Federal Deposit Insurance
Corporation (FDIC) (collectively, the
agencies) adopted the supplementary
leverage ratio in July 2013 as part of
comprehensive revisions to the
agencies’ regulatory capital rule (2013
revised capital rule).1 Under the 2013
revised capital rule, a minimum
supplementary leverage ratio
requirement of 3 percent applies to all
banking organizations that are subject to
the agencies’ advanced approaches risk-
based capital rule (advanced approaches
banking organizations).2 The
supplementary leverage ratio in the
2013 revised capital rule is generally
consistent with the international
leverage ratio introduced by the Basel
Committee on Banking Supervision
(BCBS) in 2010 (Basel III leverage ratio).
Under the enhanced supplementary
leverage ratio standards (eSLR
standards) finalized by the agencies in
May 2014, U.S. top-tier bank holding
companies (BHCs) with more than $700
billion in consolidated total assets or
more than $10 trillion in assets under
custody must maintain a leverage buffer
greater than 2 percentage points above
the minimum supplementary leverage
ratio requirement of 3 percent, for a total
of more than 5 percent, to avoid
restrictions on capital distributions and
discretionary bonus payments.3 Insured
depository institution (IDI) subsidiaries
of such BHCs must maintain at least a
6 percent supplementary leverage ratio
to be considered ‘‘well-capitalized’’
under the agencies’ prompt corrective
action framework.
On May 1, 2014, the agencies
published in the Federal Register, for
public comment, a notice of proposed
rulemaking (NPR or proposed rule) to
revise the definition of the denominator
of the supplementary leverage ratio
(total leverage exposure).4 The proposed
rule would have revised the
supplementary leverage ratio, consistent
with the January 2014 BCBS revisions to
the Basel III leverage ratio (BCBS 2014
revisions), to incorporate in total
leverage exposure the effective notional
principal amount of credit derivatives or
similar instruments through which a
banking organization provides credit
protection (sold credit protection),
modify the measure of exposure for
derivative and repo-style transactions,
and revise the credit conversion factors
(CCFs) for certain off-balance sheet
exposures.5 It would have required total
leverage exposure to be calculated as the
mean of total leverage exposure,
calculated daily, and would have
required public disclosure of certain
items associated with the
supplementary leverage ratio. In
general, the proposed changes were
designed to strengthen the
supplementary leverage ratio by more
appropriately capturing the exposure of
a banking organization’s on- and off-
balance sheet items.
As discussed further below, the
agencies are adopting the proposed rule
as final (final rule) with certain
revisions and clarifications based on
comments received on the proposed
rule. In addition, the agencies are
revising the calculation of total leverage
exposure to provide that the on-balance
sheet portion of total leverage exposure
will be calculated as the average of each
day of the reporting quarter, but the off-
balance sheet portion of total leverage
exposure will be calculated as the
average of the three month-end amounts
of the most recent three months.
Consistent with the 2013 revised capital
rule, advanced approaches banking
organizations will be required to
disclose their supplementary leverage
ratios beginning January 1, 2015, and
will be required to comply with the
minimum supplementary leverage ratio
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asabaliauskas on DSK5VPTVN1PROD with RULES