SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Financial Services Act of 1993''.

SEC. 2. AUTHORIZATION FOR A SUBSIDIARY OF A NATIONAL BANK TO UNDERWRITE 
              SHARES OF AND SPONSOR INVESTMENT COMPANIES.

    Section 5136 of the Revised Statutes of the United States (12 
U.S.C. 24) is amended by adding at the end the following new paragraph:
            ``(11) Mutual funds.--
                    ``(A) In general.--Notwithstanding the restrictions 
                and limitations in the paragraph designated `Seventh', 
                to engage in the business of dealing in, underwriting, 
                and distributing the shares of any investment company 
                (as defined in section 3 of the Investment Company Act 
                of 1940) and to organize, sponsor, manage, or control 
                such an investment company if such activities are 
                conducted through a nonbank subsidiary of the bank.
                    ``(B) Coordination with other provisions.--The 
                activities authorized by this paragraph are in addition 
                to any other activity in which a national bank may 
                engage directly pursuant to another provision of law, 
                or as otherwise authorized by the Comptroller of the 
                Currency, and this paragraph shall not be construed as 
                prohibiting a national bank from engaging in such other 
                activity directly.
                    ``(C) Subsidiary defined.--For purposes of this 
                paragraph, the term `subsidiary' means a corporation 
                more than 25 percent of the voting stock of which is 
                owned by a national bank. Such a corporation may be a 
                subsidiary of more than 1 national bank.''.

SEC. 3. AUTHORIZATION FOR A SUBSIDIARY OF A STATE MEMBER BANK TO 
              UNDERWRITE SHARES OF AND SPONSOR INVESTMENT COMPANIES.

    The 20th undesignated paragraph of section 9 of the Federal Reserve 
Act (12 U.S.C. 335) is amended by inserting before the period at the 
end the following: ``, and to the same exception to such limitations 
and conditions as is applicable to national banks under paragraph (11) 
of such section''.

SEC. 4. DISCLOSURE REQUIREMENTS APPLICABLE TO SUBSIDIARIES OF NATIONAL 
              AND STATE MEMBER BANKS.

    The Federal Reserve Act is amended by inserting after section 9A of 
the Federal Reserve Act (12 U.S.C. 339) the following new section:

``SEC. 9B. DISCLOSURE REQUIREMENTS.

    ``(a) In General.--If a nonbank subsidiary of a national bank or 
State member bank engages in activities pursuant to section 5136(11) of 
the Revised Statutes of the United States or the 20th undesignated 
paragraph of section 9 of this Act, the subsidiary shall--
            ``(1) provide a 1-time written disclosure to each customer 
        that--
                    ``(A) the subsidiary is not an insured depository 
                institution;
                    ``(B) the subsidiary is a separate corporate entity 
                from any insured depository institution which is an 
                affiliate of the subsidiary; and
                    ``(C) any product sold, offered, or recommended by 
                the subsidiary is not insured by the Federal Deposit 
                Insurance Corporation, is not guaranteed by an insured 
                depository institution, and is not otherwise an 
                obligation of an insured depository institution; and
            ``(2) obtain a 1-time written acknowledgement from each 
        customer that the disclosures described in paragraph (1) have 
        been received.
    ``(b) Regulation of Method of Disclosures.--Any disclosures under 
subsection (a) shall be made in accordance with such regulations as may 
be prescribed--
            ``(1) by the Comptroller of the Currency, in the case of a 
        subsidiary of a national bank; or
            ``(2) by the Board, in the case of a subsidiary of a State 
        member bank.
    ``(c) Exceptions and Additional Information.--The Comptroller of 
the Currency, in the case of a subsidiary of a national bank, and the 
Board, in the case of a subsidiary of a State member bank, may--
            ``(1) require additional information to be disclosed under 
        subsection (a) by the subsidiary; and
            ``(2) grant any exception to the disclosure requirement 
        under subsection (a) which is consistent with the purposes of 
        such subsection.''.

SEC. 5. AUTHORIZATION FOR A MEMBER BANK TO BE AFFILIATED WITH A COMPANY 
              WHICH UNDERWRITES SHARES OF AND SPONSORS INVESTMENT 
              COMPANIES.

    The 1st sentence of section 20 of the Banking Act of 1933 (12 
U.S.C. 377) is amended by striking ``securities: Provided, That nothing 
in this paragraph'' and inserting ``, except to the extent such 
affiliate is engaged in activities in accordance with section 5136(11) 
of the Revised Statutes of the United States, the 20th undesignated 
paragraph of section 9 of the Federal Reserve Act, or section 4(c)(15) 
of the Bank Holding Company Act of 1956. Nothing in this paragraph''.

SEC. 6. AUTHORIZATION FOR A MEMBER BANK AND AN AFFILIATE ENGAGED IN 
              INVESTMENT COMPANY ACTIVITIES TO HAVE MANAGEMENT 
              INTERLOCKS.

    Section 32 of the Banking Act of 1933 (12 U.S.C. 78) is amended--
            (1) by inserting ``(a) General Prohibition and Exception.--
        '' before ``No officer,''; and
            (2) by adding at the end the following new subsection:
    ``(b) Exception for Affiliates Engaged in Investment Company 
Activities.--Subsection (a) shall not apply so as to prohibit an 
officer, director, or employee of a nonbank subsidiary of a national 
bank, State member bank, or bank holding company which is engaged in 
activities in accordance with section 5136(11) of the Revised Statutes 
of the United States, the 20th undesignated paragraph of section 9 of 
the Federal Reserve Act, or section 4(c)(15) of the Bank Holding 
Company Act of 1956 from serving at the same time as an officer, 
director, or employee of such bank, the bank holding company, a member 
bank which is an affiliate of such bank, or an investment company that 
is organized, sponsored, managed, or controlled by a subsidiary of such 
bank or holding company.''.

SEC. 7. AUTHORIZATION FOR A BANK HOLDING COMPANY TO ESTABLISH A COMPANY 
              WHICH UNDERWRITES SHARES OF AND SPONSORS INVESTMENT 
              COMPANIES.

    (a) In General.--Section 4(c) of the Bank Holding Company Act of 
1956 (12 U.S.C. 1843(c)) is amended--
            (1) by striking ``or'' at the end of paragraph (13);
            (2) by striking the period at the end of paragraph 
        (14)(H)(ii) and inserting ``; or''; and
            (3) by inserting after paragraph (14)(H)(ii) the following 
        new paragraph:
            ``(15) shares of any company engaged in dealing in, 
        underwriting, or distributing the shares of any investment 
        company (as defined in section 3 of the Investment Company Act 
        of 1940), or organizing, sponsoring, managing, or controlling 
        such investment company.''.
    (b) Disclosure Requirements.--Section 4 of the Bank Holding Company 
Act of 1956 (12 U.S.C. 1843) is amended by adding at the end the 
following new subsection:
    ``(j) Disclosure Requirements for Subsection (c)(15) Activities.--
            ``(1) In general.--Any bank holding company which controls 
        a company described in subsection (c)(15) shall require such 
        company to--
                    ``(A) provide a 1-time written disclosure to each 
                customer that--
                            ``(i) the company is not an insured 
                        depository institution;
                            ``(ii) the company is a separate corporate 
                        entity from any insured depository institution 
                        which is an affiliate of the company; and
                            ``(iii) any product sold, offered, or 
                        recommended by the company is not insured by 
                        the Federal Deposit Insurance Corporation, is 
                        not guaranteed by an insured depository 
                        institution, and is not otherwise an obligation 
                        of an insured depository institution; and
                    ``(B) obtain a 1-time written acknowledgement from 
                each customer that the disclosures described in 
                subparagraph (A) have been received.
            ``(2) Regulation of method of disclosures.--Any disclosures 
        under paragraph (1) shall be made in accordance with such 
        regulations as the Board may prescribe.
            ``(3) Exceptions and additional information.--The Board 
        may--
                    ``(A) require additional information to be 
                disclosed by the company under paragraph (1); and
                    ``(B) grant any exception to the disclosure 
                requirement under paragraph (1) which is consistent 
                with the purposes of such subsection.''.
Financial Services Act of 1993 - Amends the Revised Statutes of the United States to permit national banks to engage in mutual fund dealing, underwriting, distribution, and sponsorship, if such activities are conducted through nonbank subsidiaries. 
Amends the Federal Reserve Act to set forth certain disclosure requirements for nonbank subsidiaries of State or national member banks engaged in mutual fund activities, including a one-time written disclosure to each customer that neither the subsidiary nor its investment products are insured. 
Amends the Banking Act of 1933 (Glass-Steagall Act) to permit:  (1) a member bank, including a national bank, to be affiliated with a company engaged in investment company activities; and (2) management interlocks between either a member bank, or a bank holding company, and their respective affiliates engaged in investment company activities.  (Current law proscribes such interlocks.) 
Amends the Bank Holding Company Act of 1956 to permit a bank holding company to acquire investment company securities.  (Current law prohibits such acquisition.)  Sets forth one-time disclosure requirements regarding such acquisitions which reflect the disclosure requirements applicable to national and State banks under this Act.
Financial Services Act of 1993