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Federal Register / Vol. 86, No. 37 / Friday, February 26, 2021 / Rules and Regulations entities on each calendar day during the previous 15-month period, and such total amounts would be used to determine whether the surviving entity meets the quantitative thresholds of the activities-based test. The Board did not receive any responsive comments on this clarification and is adopting the clarification as proposed.
The Board also proposed to add language to clarify, consistent with its current understanding, that the previous 15-month period described in the activities-based test includes the day on which a person evaluates whether it meets the relevant thresholds in the quantitative component of the activities-based test. Specifically, the Board proposed to add the words at such time to proposed 231.3a1
and a2 to clarify that a person can qualify as a financial institution under the activities-based test if 1 the persons positions exceeded one of the quantitative threshold on any prior day within the previous 15-month period or 2 the persons positions exceed one of the quantitative thresholds on the day the person evaluates its status as a financial institution. One commenter requested that the Board confirm that the proposed clarification is not intended to modify the settled understanding that the previous 15month period includes the day on which a party evaluates its status as a financial institution. The Board is adopting the proposed clarification, and confirms that a person can qualify as a financial institution under the activitiesbased test if the persons positions exceed one of the quantitative thresholds on the day the person evaluates its status as a financial institution.
A commenter also requested clarification that satisfying the qualitative component of the activitiesbased test which requires that a person represent , orally or in writing, that it will engage in financial contracts as a counterparty on both sides of one or more financial markets 20 does not affect a persons regulatory status for any other purpose. The Board confirms that satisfying the qualitative component of the activities-based test does not affect a persons regulatory status for any other purpose.
20 12 CFR 231.3a. Regulation EE generally defines the term financial contract by reference to the term qualified financial contract under section 11e8D of the Federal Deposit Insurance Act, 12 U.S.C. 1821e8D. 12 CFR 231.2c.

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IV. Regulatory Analysis A. Paperwork Reduction Act In accordance with the Paperwork Reduction Act PRA of 1995 44 U.S.C.
3506; 5 CFR part 1320, Appendix A.1, the Board may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a valid Office of Management and Budget OMB control number. The Board reviewed the final rule under the authority delegated to the Board by the OMB and determined that it contains no collections of information under the PRA.21 Accordingly, there is no paperwork burden associated with the rule.
B. Regulatory Flexibility Act In accordance with section 4 of the Regulatory Flexibility Act RFA, 5
U.S.C. 601 et seq., the Board is publishing a final regulatory flexibility analysis for the final rule. The RFA
generally requires an agency to assess the impact a rule is expected to have on small entities. The RFA requires an agency either to provide a regulatory flexibility analysis or to certify that the final rule will not have a significant economic impact on a substantial number of small entities. The Small Business Administration SBA has adopted small entity size standards which generally provide that financial entities are small entities only if they have 1 at most, $41.5 million or less in annual receipts or 2 for depository institutions and credit card issuers, $600 million or less in assets.22
The Board did not receive any comments on its initial regulatory flexibility analysis. The Board certifies that the final rule will not have a significant economic impact on a substantial number of small entities.
The final rule extends the financial institution definition to swap dealers, security-based swap dealers, MSPs, MSBSPs, DCOs, clearing agencies, QCCPs, bridge institutions, Federal Reserve Banks, foreign central banks, and the BIS.23
The Board has previously determined that designated financial market utilities are not small entities; 24 the CFTC has previously determined that swap dealers, MSPs, and DCOs are not small entities; 25 and the SEC has previously 21 See
44 U.S.C. 35023.
CFR 121.201, sector 52 SBA small entity size standards for finance and insurance entities.
23 As explained above, the final rule also codifies the Boards existing view that foreign banks are financial institutions.
24 79 FR 65543, 65556 Nov. 5, 2014.
25 See, e.g., 81 FR 80563, 80565 Nov. 16, 2016;
76 FR 69334, 69428 Nov. 8, 2011.
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determined that security-based swap dealers, MSBSPs, and clearing agencies are not small entities.26 The Federal Reserve Banks are not small entities.27
Similarly, the Board does not believe that foreign central banks or the BIS
would be small entities. All domestic QCCPs are registered as DCOs and/or clearing agencies and, accordingly, are not small entities. Certain foreign-based QCCPs are not registered as DCOs or clearing agencies, but these foreignbased QCCPs function similarly to DCOs and clearing agencies andlike DCOs and clearing agenciesare unlikely to be small entities.
Similarly, a bridge financial company would not be a small entity.28 Under U.S. law, the Federal Deposit Insurance Corporation FDIC can establish a bridge financial company when it acts as receiver for a failing financial company. In order for the FDIC to be appointed as receiver for a financial company, the Secretary of the Treasury must determine that, inter alia, the failure of the financial company and its resolution under otherwise applicable Federal or State law would have serious adverse effects on financial stability in the United States. 29 The failure of a financial company that is a small entity would not affect financial stability in the United States.30
Accordingly, the FDIC would not act as receiverand would not form a bridge financial companyfor a small entity. It is therefore unlikely that a bridge financial company would be a small entity. Similarly, it is unlikely that a foreign bridge institution established to facilitate the resolution of a foreign 26 See, e.g., 81 FR 29959, 30142 May 3, 2016; 81
FR 70744, 70784 Oct. 13, 2016.
27 None of the industry codes in the SBAs small entity size standards necessarily apply to the Federal Reserve Banks per se, but the SBAs size standards for commercial depository institutions are instructive. Generally, the SBAs size standards provide that depository institutions are small entities if they have $600 million or less in assets.
13 CFR 121.201, sector 52. Each of the Federal Reserve Banks holds significantly more than $600
million in assets. See the Statement of Condition of Each Federal Reserve Bank, https
www.federalreserve.gov/releases/h41/current/
h41.htmh41tab10a.
28 A bridge depository institution might be a small entity, but this final rule would not affect the status of bridge depository institutions under FDICIA because as noted above such institutions qualify as financial institutions under FDICIAs statutory definition.
29 12 U.S.C. 5383b2.
30 See 13 CFR 121.201, sector 52 Small Business Administration small entity size standards for finance and insurance entities, which generally provides that financial entities are small entities only if they have 1 at most, $41.5 million or less in annual receipts or 2 for depository institutions and credit card issuers, $600 million or less in assets.

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