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FIL-51-97 Attachment

[Federal Register: May 12, 1997 (Volume 62, Number 91)]

[Notices]

[Page 25949-25950]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr12my97-93]


 

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FEDERAL DEPOSIT INSURANCE CORPORATION



 

Uniform Guideline on Internal Control for Foreign Exchange

Activities in Commercial Banks; Rescission of Uniform Guideline


 

AGENCY: Federal Deposit Insurance Corporation (FDIC).


 

ACTION: Rescission of Adoption of Uniform Guideline.


 

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SUMMARY: As part of the FDIC's systematic review of its regulations and

written policies under section 303(a) of the Riegle Community

Development and Regulatory Improvement Act of 1994 (CDRI Act), the FDIC

is rescinding its adoption of the Uniform Guideline on Internal Control

for Foreign Exchange Activities in Commercial Banks (Uniform

Guideline). The Uniform Guideline was originally adopted by the FDIC's

Board of Directors in June 13, 1980, in conjunction with the issuance

of the Uniform Guideline by the member agencies of the Federal

Financial Institutions Examination Council (FFIEC). The FDIC is

rescinding the Uniform Guideline because it is outmoded and

duplicative. In addition, this FDIC Board action supports the FFIEC's

recent withdrawal of the Uniform Guideline on February 27, 1997.


 

EFFECTIVE DATE: This Uniform Guideline is rescinded May 12, 1997.


 

FOR FURTHER INFORMATION CONTACT: Christie A. Sciacca, Assistant

Director, (202/898-3671), Joseph Duffy, Senior Banking Analyst, (212/

704-1323), Division of Supervision; Michael B. Phillips, Counsel, (202/

898-3581), Legal Division, FDIC, 550 17th Street, N.W., Washington,

D.C. 20429.


 

SUPPLEMENTARY INFORMATION: The FDIC is conducting a systematic review

of its regulations and written policies. Section 303(a) of the CDRI Act

(12 U.S.C. 4803(a)) requires the FDIC, the Office of the Comptroller of

the Currency, and the Board of Governors of the Federal


 

[[Page 25950]]


 

Reserve System (Federal banking agencies), in addition to the Office of

Thrift Supervision, to each streamline and modify its regulations and

written policies in order to improve efficiency, reduce unnecessary

costs, and eliminate unwarranted constraints on credit availability.

Section 303(a) also requires each of the Federal banking agencies to

remove inconsistencies and outmoded and duplicative requirements from

its regulations and written policies.

As part of this review, the FDIC has determined that the Uniform

Guideline is outmoded and duplicative, and that the FDIC's written

policies can be streamlined by its elimination.

Through an issuance from the FFIEC dated February 27, 1997, the

Federal banking agencies stated their withdrawal of the joint FFIEC

guideline entitled ``Interagency Policy Statement Regarding Uniform

Guidelines on Internal Control for Foreign Exchange in Commercial

Banks,'' dated May 22, 1980. (See 62 FR 9767 (March 4, 1997.) This

document is identical to the Uniform Guideline which the FDIC Board

adopted on June 13, 1980.

The FFIEC developed the Uniform Guideline to provide general

supervisory guidance to insured depository institutions with respect to

(i) policy documentation, (ii) internal accounting controls, and (iii)

audit documentation. In addition, the Uniform Guideline sets forth

minimum standards concerning the internal control for foreign exchange

activities in commercial banks. Each of the Federal banking agencies

adopted the Uniform Guideline, with the FDIC Board's adoption taking

place on June 13, 1980. (See 45 FR 42376 (June 24, 1980).)

The Uniform Guideline has become outdated in view of trading

activities according to specific product lines, various changes in the

capital markets, and bank foreign exchange activities that have taken

place subsequent to 1980, including: the scope and depth of foreign

exchange trading activities in banks, new product developments,

significant improvements in automated trading systems, and the

management of foreign exchange trading activities according to specific

product lines. Subsequent to 1980, the respective Federal banking

agencies have issued policy letters and circulars to bank examiners

concerning the risk management of capital market activities, including

foreign exchange activities, in addition to further enhancements to

their respective examination procedures. The FDIC has incorporated

guidance on internal controls for foreign exchange activities into its

Capital Markets Examination Handbook.

Section 303(a) of the CDRI Act also requires the Federal banking

agencies to work jointly towards uniformity of guidelines implementing

common supervisory policies. FFIEC through the federal banking agencies

has determined that the Uniform Guideline is no longer necessary for

the aforementioned reasons, and the other Federal banking agencies will

also take action to rescind their adoption of the Uniform Guideline.

For the above reasons, the FDIC Board's adoption of the Uniform

Guideline is rescinded.


 

By order of the Board of Directors.


 

Dated at Washington, D.C. this 29th day of April, 1997.


 

Federal Deposit Insurance Corporation.

Robert E. Feldman,

Deputy Executive Secretary.

[FR Doc. 97-12285 Filed 5-9-97; 8:45 am]

BILLING CODE 6714-01-P

Last Updated: March 24, 2024