I

103D CONGRESS

2D SESSION H. R. 4261

To establish the Commission on International Coordination of Financial

Regulation, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

APRIL 20, 1994

Mr. GONZALEZ introduced the following bill; which was referred to the

Committee on Banking, Finance and Urban Affairs

A BILL

To establish the Commission on International Coordination

of Financial Regulation, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Commission on Inter5 national Coordination of Financial Regulation Act’’.

6 SEC. 2. FINDINGS AND PURPOSE.

7 (a) FINDINGS.—The Congress hereby finds the fol8 lowing:

9 (1) Innovation in financial services and prod10 ucts is outpacing the ability of regulatory bodies to
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1 monitor and control the stability of the international

2 financial system.

3 (2) The rapid growth and integration of inter4 national capital markets has resulted in a volume of

5 financial transactions that exceeds the resources of

6 any single country and any single regulatory body.

7 (3) Although most countries have regulatory

8 bodies that govern the operation of each such coun9 try’s financial markets and participants, the

10 globalization of the financial markets requires better

11 efforts to coordinate international regulation and su12 pervision.

13 (4) Financial regulators in the United States

14 pursue separate strategies for dealing with inter15 national financial issues, including derivative finan16 cial instruments, often with inadequate communica17 tion among themselves and their foreign counter18 parts.

19 (5) Given the increased globalization of finan20 cial markets, it is imperative that regulators estab21 lish an effective system of crisis management to deal

22 with any shock to international financial markets.

23 (6) As market participants continue to globalize

24 their operations, financial regulatory bodies must de25 velop a coordinated approach to enforcement actions.
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1 (7) Large differences in the operations of the

2 world’s major clearing and settlement systems, in

3 terms of both efficiency and risk, pose a threat to

4 the stability of the international financial system.

5 (8) Because financial assets directed through

6 so-called ‘‘off-shore tax havens’’ are growing, such

7 off-shore tax havens need to be identified and their

8 role in the international financial system, the rea9 sons for their growth, and the effect of their unre10 stricted growth on the international financial system

11 need to be fully examined.

12 (b) PURPOSE.—It is the purpose of this Act to pro13 vide for the United States to play a leadership role in—

14 (1) ensuring a stable and efficient international

15 financial system; and

16 (2) enhancing cooperation among financial reg17 ulatory bodies around the world.

18 SEC. 3. COMMISSION ON INTERNATIONAL COORDINATION

19 OF FINANCIAL REGULATION.

20 There is hereby established the Commission on Inter21 national Coordination of Financial Regulation, an advi22 sory committee under the Federal Advisory Committee

23 Act, hereafter in this Act referred to as the ‘‘Commis24 sion’’.
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1 SEC. 4. DUTIES.

2 The duties of the Commission are as follows:

3 (1) Identify the various regulatory bodies and

4 mechanisms that are used to regulate and supervise

5 international capital markets, including mechanisms

6 that governments employ to manage international

7 capital market instability.

8 (2) Appraise the adequacy of the cooperation

9 between the various regulatory entities and mecha10 nisms referred to in paragraph (1).

11 (3) Propose solutions for improving cooperation

12 among the various regulatory bodies and mecha13 nisms, including a proposal, if feasible, for establish14 ing a single international body or mechanism with

15 responsibility for coordinating international regula16 tion and promoting the stability of the international

17 financial system.

18 (4) Identify the various enforcement methods

19 which countries use to enforce laws and regulations

20 relating to capital markets and the extent and ade21 quacy of cooperation among regulators in taking en22 forcement actions.

23 (5) Propose solutions for improving global en24 forcement of laws and regulations relating to capital

25 markets and other aspects of the international finan26 cial system.
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1 (6) Analyze the major clearing and settlement

2 systems and the differences among those systems in

3 terms of volume, risk, and efficiency and evaluate

4 the impact each system has on the stability of the

5 other major payments and settlements systems.

6 (7) Propose solutions for improving coordina7 tion among the major clearing and settlement sys8 tems, including programs to raise the quality of the

9 weaker systems.

10 (8) Identify all so-called ‘‘off-shore tax havens’’

11 and analyze their role in the international capital

12 markets and the reasons for their growth.

13 (9) Propose solutions for minimizing any ad14 verse effect the growth of the ‘‘tax havens’’ may

15 have on the international financial system, including,

16 if warranted, a proposal for curbing the growth of

17 such havens.

18 SEC. 5. MEMBERSHIP.

19 (a) NUMBER AND APPOINTMENT.—The Commission

20 shall consist of 15 members as follows:

21 (1) The Chairman of the Board of Governors of

22 the Federal Reserve System or the Chairman’s des23 ignee.

24 (2) The Secretary of the Treasury or the Sec25 retary’s designee.
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1 (3) The Chairman of the Securities and Ex2 change Commission or the Chairman’s designee.

3 (4) 6 members appointed by the President.

4 (5) 3 members appointed by the Speaker and

5 the minority leader of the House of Representatives,

6 acting jointly, not more than 2 of whom may be

7 members of the same political party.

8 (6) 3 members appointed by the majority leader

9 and the minority leader of the Senate, acting jointly,

10 not more than 2 of whom may be members of the

11 same political party.

12 (b) QUALIFICATIONS OF APPOINTED MEMBERS.—

13 The members appointed pursuant to paragraphs (4), (5),

14 and (6) of subsection (a) shall be appointed from among

15 individuals who—

16 (1) are specially qualified to serve on the Com17 mission by reason of their education, training, and

18 experience in international finance and business, ac19 counting, currency transactions, the international

20 payment system, trade matters, banking, or securi21 ties; and

22 (2) have a broad understanding of the global

23 economy.

24 (c) TERMS.—Members shall be appointed for the life

25 of the Commission.
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1 (d) INITIAL APPOINTMENTS.—The initial members of

2 the Commission shall be appointed before the end of the

3 30-day period beginning on the date of the enactment of

4 this Act.

5 (e) VACANCY.—A vacancy on the Commission shall

6 be filled in the manner in which the original appointment

7 was made.

8 (f) REMOVAL.—An appointed member of the Com9 mission may be removed only for malfeasance in office.

10 (g) QUORUM.—5 members shall constitute a quorum.

11 (h) CHAIRPERSON.—The President shall designate a

12 chairperson of the Commission from among members ap13 pointed under paragraph (4), (5), or (6) of subsection (a).

14 (i) MEETINGS.—The Commission shall meet at the

15 call of the Chairperson or a majority of the members.

16 (j) POLICY ACTIONS.—No action establishing a policy

17 or recommendation of the Commission may be adopted

18 without the approval of at least 8 members.

19 (k) TRAVEL AND PER DIEM.—Members of the Com20 mission shall be paid actual travel expenses and per diem

21 in lieu of subsistence expenses in accordance with section

22 5703 of title 5, United States Code.

23 SEC. 6. DIRECTOR AND STAFF.

24 (a) DIRECTOR.—The principal administrative officer

25 of the Commission shall be a director who shall—
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1 (1) be appointed by the Commission;

2 (2) be paid at a rate not to exceed the maxi3 mum rate payable under section 5376 of title 5,

4 United States Code; and

5 (3) serve on a full-time basis.

6 (b) STAFF.—

7 (1) IN GENERAL.—With the approval of the

8 Commission, the director may appoint and fix the

9 pay of such personnel as the director determines to

10 be appropriate.

11 (2) APPLICABILITY OF CERTAIN CIVIL SERVICE

12 LAWS.—The staff of the Commission shall be ap13 pointed subject to the provisions of title 5, United

14 States Code, governing appointments in the competi15 tive service, and shall be paid in accordance with the

16 provisions of chapter 51 and subchapter III of chap17 ter 53 of that title relating to classification and Gen18 eral Schedule pay rates.

19 (3) TEMPORARY STAFF.—With the approval of

20 the Commission, the director may appoint such em21 ployees as may be necessary to carry out the func22 tions of the Commission for a period of not more

23 than 1 year, without regard to the provisions of title

24 5, United States Code, governing appointments in

25 the competitive service, and without regard to the
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1 provisions of chapter 51 and subchapter III of chap2 ter 53 of such title, except that the rates of pay for

3 such temporary staff shall not exceed the maximum

4 rate payable under section 5376 of title 5, United

5 States Code.

6 (c) EXPERTS AND CONSULTANTS.—With the ap7 proval of the Commission, the director may procure tem8 porary and intermittent services under section 3109(b) of

9 title 5, United States Code at rates for individuals not

10 to exceed the maximum rate payable under section 5376

11 of title 5, United States Code.

12 (d) STAFF OF FEDERAL AGENCIES.—Upon the re13 quest of the Commission, the head of any Federal depart14 ment or agency may detail any of the personnel of that

15 department or agency to the Commission to assist the

16 Commission in carrying out its duties under this Act.

17 SEC. 7. POWERS OF THE COMMISSION.

18 (a) HEARINGS AND SESSIONS.—The Commission

19 may, for the purpose of carrying out this Act—

20 (1) hold hearings, sit and act at times and

21 places, take testimony, and receive evidence as the

22 Commission considers appropriate; and

23 (2) administer oaths or affirmations to wit24 nesses appearing before the Commission.

25 (b) OBTAINING OFFICIAL DATA.—
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1 (1) IN GENERAL.—The Commission may secure

2 directly from any department or agency of the

3 United States information necessary to enable it to

4 carry out this Act.

5 (2) PROVISION OF INFORMATION.—Upon the

6 request of the Chairperson of the Commission, the

7 head of any department or agency of the United

8 States shall furnish that information to the Commis9 sion.

10 (c) GIFTS, BEQUESTS, AND DEVISES.—

11 (1) IN GENERAL.—The Commission may ac12 cept, use, and dispose of gifts, bequests, or devises

13 of services or property, both real and personal, for

14 the purpose of aiding or facilitating the work of the

15 Commission.

16 (2) DEPOSIT AND DISBURSEMENT.—Gifts, be17 quests, or devises of money and proceeds from sales

18 of other property received as gifts, bequests, or de19 vises shall be deposited in the Treasury and shall be

20 available for disbursement upon order of the Com21 mission.

22 (d) ADMINISTRATIVE SUPPORT SERVICES.—Upon

23 the request of the Commission, the Administrator of Gen24 eral Services shall provide to the Commission, on a reim25 bursable basis, the administrative support services nec-
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1 essary for the Commission to carry out its responsibilities

2 under this Act.

3 (e) MAILS.—The Commission may use the United

4 States mails in the same manner and under the same con5 ditions as other departments and agencies of the United

6 States.

7 SEC. 8. REPORT

8 (a) REPORT REQUIRED.—The Commission shall sub9 mit a final report to the President and the Congress before

10 the end of the 18-month period beginning on the date of

11 the enactment of this Act.

12 (b) CONTENTS OF REPORT.—The report shall con13 tain a detailed statement of the findings and conclusions

14 of the Commission, together with the Commission’s rec15 ommendations for such legislative and administrative ac16 tions as the Commission considers appropriate.

17 SEC. 9. TERMINATION.

18 The Commission shall terminate 30 days after sub19 mitting the report pursuant to section 8.

20 SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

21 There is authorized to be appropriated for the fiscal

22 years 1995 and 1996 not to exceed $2,000,000 to carry

23 out the purposes of this Act.

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