[Federal Register: May 12, 1997 (Volume 62, Number 91)]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
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.
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EFFECTIVE DATE: This Uniform Guideline is rescinded May 12, 1997.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,
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
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