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F ederal R eserve B ank
OF DALLAS
HELEN E. HOLCOMB
FIRST VICE PR ES ID EN T AND
C H IE F O P E R A T I N G O F F I C E R

.

-J Q Q / T

DALLAS, TEXAS
75265-5906

A U gU St ZO, LyyO

Notice 96-85

TO:

The Chief Operating Officer of
each financial institution in the
Eleventh Federal Reserve District

SUBJECT
Proposed Amendments to Regulation S
(Reimbursement to Financial Institutions for Assembling
or Providing Financial Records)
DETAILS

The Board of Governors of the Federal Reserve System is proposing an
am endment to Subpart B of Regulation S (Reimbursement to Financial Institutions for
Assembling or Providing Financial Records). Subpart B cross-references the substantive
provisions of a joint rule adopted by the Board and the D epartm ent of the Treasury
relating to the recordkeeping requirements for funds transfers and transmittals of funds.
The proposed am endm ent would clarify that Regulation S does not apply to any person
or transaction or class of persons or transactions that the Treasury has exempted from
the joint rule.
The Board must receive comments by September 20, 1996. Please address
comments to William W. Wiles, Secretary, Board of Governors of the Federal Reserve
System, 20th Street and Constitution Avenue, N.W., Washington, D.C. 20551. All
comments should refer to Docket No. R-0934.
ATTACHMENT

A copy of the Board’s notice (Federal Reserve System Docket No. R-0934) is
attached.

For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal
Reserve Bank of Dallas: Dallas Office (800) 333 -4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012; Houston
Branch Intrastate (800) 392-4162, Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810.

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

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MORE INFORMATION
For m ore information, please contact James D ean at (214) 922-6237. For
additional copies of this Bank’s notice, please contact the Public Affairs D epartm ent at
(214) 922-5254.
Sincerely,

AUG 1 5 1996
FEDERAL RESERVE SYSTEM
12 CFR Part 219
[Regulation S; Docket No. R-0934]
Reimbursement for Providing Financial Records; Recordkeeping Requirements for
Certain Financial Records

AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Proposed rule.
SUMMARY: The Board is proposing an amendment to subpart B of its Regulation S.
Subpart B cross-references the substantive provisions of a joint rule adopted by the Board and
the Department of the Treasury relating to the recordkeeping requirements for funds transfers
and transmittals of funds. The proposed amendment would clarify that Regulation S does not
apply to any person or transaction or class of persons or transactions that the Treasury has
exempted from the joint rule.
DATES: Comments must be submitted on or before [insert date 30 days after publication in
the Federal Register].
ADDRESSES: Comments, which should refer to Docket No. R-0934, may be mailed to Mr.
William W. Wiles, Secretary, Board of Governors of the Federal Reserve System, 20th Street
and Constitution Avenue, N.W., Washington, D.C. 20551. Comments addressed to Mr. Wiles
also may be delivered to the Board’s mail room between 8:45 a.m. and 5:15 p.m. and to the
security control room outside of those hours. Both the mail room and the security control
room are accessible from the courtyard entrance on 20th Street between Constitution Avenue
and C Street, N.W. Comments may be inspected in Room MP-500 between 9:00 a.m. and
5:00 p.m.

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FOR FURTHER INFORMATION CONTACT: Louise Roseman, Associate Director,
(202/452-2789), Division of Reserve Bank Operations and Payment Systems; Oliver Ireland,
Associate General Counsel (202/452-3625), or Elaine Boutilier, Senior Counsel (202/ 4522418); Legal Division. For the hearing impaired only, contact Dorothea Thompson,
Telecommunications Device for the Deaf (TDD) (202/452-3544), Board of Governors of the
Federal Reserve System, 20th and C Streets, N.W., Washington, D.C. 20551.
SUPPLEMENTARY INFORMATION: The Bank Secrecy Act,f7 as amended by the
Annunzio-Wylie Anti-Money-Laundering Act of 1992,^ authorizes, and in some cases
requires, the Secretary of the Treasury- and the Board to prescribe recordkeeping rules for
domestic and international funds transfers and money transmittals. The Board and the
Treasury issued a joint rule,*' effective May 28, 1996, that sets forth recordkeeping and
reporting requirements for funds transfers and money transmittals by banks and nonbank
financial institutions. These requirements are intended to assist in the investigation and
prosecution of money-laundering activities. In promulgating these rules, the Board and the
Treasury determined that the requirements would have a high degree of usefulness in
criminal, tax, or regulatory investigations or proceedings. The substance of the joint rule is

rPub. L. 91-508, codified at 12 U.S.C. 1829b and 1951-1959, and 31 U.S.C. 5311-5329.
rPub. L. 102-550, title XV.
.-The Secretary of the Treasury has delegated the authority to administer the Bank Secrecy
Act to the Director of the Financial Crimes Enforcement Network.
*'60 FR 231 (January 3, 1995), as amended by 60 FR 44144 (August 24, 1995) and 61 FR
14382 (April 1, 1996).

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codified with the Treasury’s Bank Secrecy Act regulations in 31 CFR part 103.- At the same
time, the Board added subpart B to its Regulation S (12 CFR part 219) to cross-reference the
joint rule.
Under its general Bank Secrecy Act regulations, the Treasury may make
exceptions or grant exemptions from the requirements in 31 CFR part 103 for particular
persons or classes of persons or particular transactions or classes of transactions.- The Board
has no similar exemptive provisions in Regulation S. The Board recognizes the possibility
that the Treasury could grant an exception or exemption for a person or transaction subject to
the joint rule. Therefore, to avoid confusion and to ensure consistent application of the joint
rule and subpart B of Regulation S, the Board requests comment on an amendment to
Regulation S to clarify that Subpart B does not apply to a particular person or class of persons
or particular transaction or class of transactions to the extent that the Treasury has determined
that the joint rule does not apply to that person, transaction, or class of persons or
transactions.
Initial Regulatory Flexibility Analysis

The Regulatory Flexibility Act (5 U.S.C. 601-612) requires an agency to
publish an initial regulatory flexibility analysis with any notice of proposed rulemaking. Two
of the requirements of an initial regulatory flexibility analysis (5 U.S.C. 603(b)), a description
of the reasons why action by the agency is being considered and a statement of the objectives
of, and legal basis for, the proposed rule, are contained in the supplementary material above.

7 31

CFR 103.11 and 103.33 (e) and (f).

- See 31 CFR § 103.45.

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The proposed rule requires no additional reporting or recordkeeping requirements and does
not overlap with other federal rules. Rather, the proposal clarifies the relationship between
the Regulation S and the joint rule. Another requirement for the initial regulatory flexibility
analysis is a description of and, where feasible, an estimate of the number of small entities to
which the proposed rule will apply. The proposal will apply to all institutions subject to the
regulation, regardless of size, but would not result in any increased compliance or other
burden for affected institutions, and may result in reduced compliance burden to the extent
that the Treasury exempts persons or transactions that would otherwise be subject to
Regulation S.
Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Ch. 3506;
5 CFR 1320 Appendix A.l), the Board reviewed the proposed rule under the authority
delegated to the Board by the Office of Management and Budget. No collections of
information pursuant to the Paperwork Reduction Act are contained in the proposed rule.
List of Subjects in 12 CFR Part 219

Banks, banking, Currency, Reporting and recordkeeping requirements, Foreign
banking.
For the reasons set out in the preamble, 12 CFR part 219 is proposed to be
amended as set forth below.
PART 219 - REIMBURSEMENT FOR PROVIDING FINANCIAL RECORDS;
RECORDKEEPING REQUIREMENTS FOR CERTAIN FINANCIAL RECORDS
(REGULATION S)

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Subpart B — Recordkeeping and Reporting Requirements for Funds Transfers and
Transmittals of Funds

1. The authority citation for subpart B is revised to read as follows:
Authority: 12 U.S.C. 1829b(b)(2) and (3).

2. In § 219.21, the first word of the last sentence is revised to read "These" and a new
sentence is added immediately preceding the last sentence to read as follows:
§ 219.21. Authority, purpose, and scope.

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* This subpart does not apply to a particular person or class of persons

or a particular transaction or class of transactions to the extent that the Treasury has
determined that 31 CFR 103.33(e) and (f) do not apply to that person, transaction, or class of
persons or transactions. *

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By order of the Board of Governors of the Federal Reserve System, August 15,
1996.

Jennifer J. Johnson
Deputy Secretary of the Board
BILLING CODE 6210-01-P


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102