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FDIC Federal Register Citations

[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EFFECTIVE DATE: This Uniform Guideline is rescinded May 12, 1997.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 08/13/1999 regs@fdic.gov