II

103D CONGRESS

1ST SESSION S. 1527

To provide for fair trade in financial services.

IN THE SENATE OF THE UNITED STATES

OCTOBER 7 (legislative day, SEPTEMBER 27), 1993

Mr. RIEGLE (for himself, Mr. D’AMATO, Mr. BRYAN, Mr. KERRY, Mr. DOMENICI, Mr. SASSER, Mr. SHELBY, Mr. CAMPBELL, Mrs. BOXER, Mrs.

MURRAY, and Mr. SARBANES) introduced the following bill; which was

read twice and referred to the Committee on Banking, Housing, and

Urban Affairs

A BILL

To provide for fair trade in financial services.

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; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Fair Trade in Financial Services Act of 1993’’.

6 (b) TABLE OF CONTENTS.—The table of contents for

7 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Effectuating the principle of national treatment for banking organizations.

Sec. 3. Effectuating the principle of national treatment for securities organizations.

Sec. 4. Financial interdependence study.

Sec. 5. Conforming amendments.
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1 SEC. 2. EFFECTUATING THE PRINCIPLE OF NATIONAL

2 TREATMENT FOR BANKING ORGANIZATIONS.

3 The International Banking Act of 1978 (12 U.S.C.

4 3101 et seq.) is amended by adding at the end the follow5 ing new section:

6 ‘‘SEC. 18. NATIONAL TREATMENT.

7 ‘‘(a) PURPOSE.—The purpose of this section is to en8 courage foreign countries to accord national treatment to

9 United States banking organizations that operate or seek

10 to operate in those countries.

11 ‘‘(b) IDENTIFYING COUNTRIES THAT DENY NA12 TIONAL TREATMENT TO UNITED STATES BANKS OR

13 BANK HOLDING COMPANIES.—The Secretary shall iden14 tify the extent to which foreign countries deny national

15 treatment to United States banking organizations—

16 ‘‘(1) according to the most recent report under

17 section 3602 of the Omnibus Trade and Competi18 tiveness Act of 1988 (or update thereof); or

19 ‘‘(2) based on more recent information that the

20 Secretary deems appropriate.

21 ‘‘(c) DETERMINING WHETHER DENIAL OF NA22 TIONAL TREATMENT HAS SIGNIFICANT ADVERSE EF23 FECT.—

24 ‘‘(1) IN GENERAL.—The Secretary shall deter25 mine whether the denial of national treatment to

26 United States banking organizations by a foreign
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1 country identified under subsection (b) has a signifi2 cant adverse effect on such organizations.

3 ‘‘(2) FACTORS TO BE CONSIDERED.—In deter4 mining whether and to what extent a foreign country

5 denies national treatment to United States banking

6 organizations, and in determining the effect of any

7 such denial on such banking organizations, the Sec8 retary shall consider appropriate factors, including—

9 ‘‘(A) the size of the foreign country’s mar10 kets for the financial services involved, and the

11 extent to which United States banking organi12 zations operate or seek to operate in those mar13 kets;

14 ‘‘(B) the extent to which United States

15 banking organizations may participate in devel16 oping regulations, guidelines, or other policies

17 regarding new products, services, and markets

18 in the foreign country;

19 ‘‘(C) the extent to which the foreign coun20 try issues written regulations, guidelines, or

21 other policies applicable to United States bank22 ing organizations operating or seeking to oper23 ate in the foreign country that are—

24 ‘‘(i) prescribed after adequate notice

25 and opportunity for comment;
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1 ‘‘(ii) readily available to the public;

2 and

3 ‘‘(iii) prescribed in accordance with

4 objective standards that effectively prevent

5 arbitrary and capricious determinations;

6 ‘‘(D) the extent to which United States

7 banking organizations may offer foreign ex8 change services in the foreign country; and

9 ‘‘(E) the effects of the regulatory policies

10 of the foreign country on—

11 ‘‘(i) the lending policies of the central

12 bank of that country;

13 ‘‘(ii) capital requirements applicable

14 in that country;

15 ‘‘(iii) the regulation of deposit interest

16 rates by that country;

17 ‘‘(iv) restrictions on the operation and

18 establishment of branches in that country;

19 and

20 ‘‘(v) restrictions on access to auto21 mated teller machine networks in that

22 country.

23 ‘‘(d) DETERMINATION.—

24 ‘‘(1) PUBLICATION.—If the Secretary deter25 mines that the denial of national treatment to
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1 United States banking organizations by a foreign

2 country has a significant adverse effect on such or3 ganizations, the Secretary—

4 ‘‘(A) may, after initiating negotiations in

5 accordance with subsection (g), and after con6 sultation with the United States Trade Rep7 resentative, the Secretary of State, and any

8 other department or agency that the Secretary

9 deems appropriate, publish that determination

10 in the Federal Register;

11 ‘‘(B) shall, not less frequently than annu12 ally, in consultation with any department or

13 agency that the Secretary deems appropriate,

14 review each such determination to determine

15 whether it should be rescinded; and

16 ‘‘(C) shall inform State bank supervisors

17 of the publication of that determination.

18 ‘‘(2) EXCEPTION FOR COUNTRIES THAT ARE

19 PARTIES TO CERTAIN AGREEMENTS GOVERNING FI20 NANCIAL SERVICES.—Paragraph (1) shall not apply

21 to a foreign country to the extent that a determina22 tion under that paragraph with respect to the for23 eign country would permit action to be taken under

24 this section that would be inconsistent with a bilat25 eral or multilateral agreement that governs financial
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1 services that the President entered into with that

2 country and the Senate and the House of Represent3 atives approved, before the date of enactment of this

4 section.

5 ‘‘(e) SANCTIONS.—

6 ‘‘(1) ACTION BY FEDERAL BANKING AGENCY.—

7 If a determination under subsection (d)(1) is in ef8 fect with respect to a foreign country and a publica9 tion of that determination has been made in accord10 ance with subsection (d)(1)(A), in evaluating an

11 application or notice filed by a person of that foreign

12 country, the appropriate Federal banking agency—

13 ‘‘(A) shall consider the determination and

14 the conclusions of—

15 ‘‘(i) the reports required under section

16 3602 of the Omnibus Trade and Competi17 tiveness Act of 1988 (and updates there18 to); and

19 ‘‘(ii) the reports submitted in accord20 ance with subsection (h);

21 ‘‘(B) shall consult with the Secretary con22 cerning such determination and conclusions;

23 and

24 ‘‘(C) may, only with the concurrence of the

25 Secretary, deny the application or disapprove
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1 the notice, based on the determination under

2 subsection (d)(1).

3 ‘‘(2) PREVENTING EXISTING ENTITIES FROM

4 BEING USED TO EVADE THIS SECTION.—

5 ‘‘(A) IN GENERAL.—If a determination has

6 been published in accordance with subsection

7 (d)(1)(A) with respect to a foreign country, a

8 bank, foreign bank described in section 8(a),

9 branch, agency, commercial lending company,

10 or other affiliated entity that is a person of that

11 country shall not, without prior approval of the

12 appropriate Federal banking agency, after con13 sultation with the State bank supervisor, di14 rectly or indirectly, in the United States—

15 ‘‘(i) commence any line of business in

16 which the person was not engaged as of

17 the date the determination was published

18 in the Federal Register; or

19 ‘‘(ii) conduct business from any loca20 tion at which the person did not conduct

21 business as of that date.

22 ‘‘(B) EXCEPTION.—Subparagraph (A)

23 shall not apply with respect to companies de24 scribed in section 2(h)(2) of the Bank Holding

25 Company Act of 1956.
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1 ‘‘(f) EXEMPTIONS FROM SANCTIONS.—

2 ‘‘(1) IN GENERAL.—Subsection (e) does not

3 apply to the subsidiaries in the United States of a

4 person of a foreign country if the Secretary deter5 mines that the banking laws and regulations of the

6 foreign country, as actually applied, meet or ex7 ceed—

8 ‘‘(A) the standards for treatment of sub9 sidiaries of United States banking organizations

10 contained in the Second Banking Directive, and

11 in any amendment to the Second Banking Di12 rective, if the Secretary determines that such

13 amendment—

14 ‘‘(i) does not restrict any operation,

15 activity, or authority to expand any oper16 ation or activity, permitted under those

17 standards, of any subsidiary in the foreign

18 country of any such bank or bank holding

19 company; or

20 ‘‘(ii) is in accordance with national

21 treatment of subsidiaries of such banking

22 organizations; or

23 ‘‘(B) any set of standards that, taken as a

24 whole, is no less favorable to United States
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1 banking organizations than the standards re2 ferred to in subparagraph (A).

3 ‘‘(2) STANDARDS FOR EXERCISE OF DISCRE4 TION.—In exercising any discretion under this sub5 section, the Federal banking agencies, after

6 consultation with the Secretary, shall consider, with

7 respect to a bank, foreign bank, branch, agency,

8 commercial lending company, or other affiliated en9 tity that is a person of a foreign country and is op10 erating in the United States—

11 ‘‘(A) the extent to which the foreign coun12 try is progressing toward according national

13 treatment to United States banking organiza14 tions; and

15 ‘‘(B) whether the foreign country permits

16 United States banking organizations to expand

17 their activities in that country, even if that

18 country determined that the United States did

19 not accord national treatment to the banking

20 organizations of that country.

21 ‘‘(g) NEGOTIATIONS.—

22 ‘‘(1) IN GENERAL.—The Secretary—

23 ‘‘(A) shall initiate negotiations with any

24 foreign country with respect to which a deter-
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1 mination made under subsection (d)(1) is in

2 effect; and

3 ‘‘(B) may initiate negotiations with any

4 foreign country which denies national treatment

5 to United States banking organizations to en6 sure that the foreign country accords national

7 treatment to such organizations.

8 ‘‘(2) EXCEPTIONS.—Paragraph (1) does not re9 quire the Secretary to initiate negotiations with a

10 foreign country if the Secretary—

11 ‘‘(A) determines that the negotiations—

12 ‘‘(i) would be so unlikely to result in

13 progress toward according national treat14 ment to United States banking organiza15 tions as to be a waste of effort; or

16 ‘‘(ii) would impair the economic inter17 ests of the United States; and

18 ‘‘(B) gives written notice of that deter19 mination to the chairperson and the ranking

20 minority member of the Committee on Banking,

21 Housing, and Urban Affairs of the Senate and

22 of the Committee on Banking, Finance and

23 Urban Affairs of the House of Representatives.

24 ‘‘(h) REPORT.—
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1 ‘‘(1) CONTENTS OF REPORT.—Not later than

2 December 1, 1994, and biennially thereafter, the

3 Secretary shall submit to the Congress a report

4 that—

5 ‘‘(A) specifies the foreign countries identi6 fied under subsection (b);

7 ‘‘(B) if a determination under subsection

8 (d)(1) is in effect with respect to the foreign

9 country, provides the reasons therefor;

10 ‘‘(C) if the Secretary has not made or has

11 rescinded such a determination with respect to

12 the foreign country, provides the reasons there13 for;

14 ‘‘(D) describes the results of any negotia15 tions conducted under subsection (g)(1) with

16 the foreign country; and

17 ‘‘(E) discusses the effectiveness of this sec18 tion in achieving the purpose of this section.

19 ‘‘(2) SUBMISSION OF REPORT.—The report re20 quired by paragraph (1) may be submitted as part

21 of a report or update submitted under section 3602

22 of the Omnibus Trade and Competitiveness Act of

23 1988.

24 ‘‘(i) DEFINITIONS.—For purposes of this section, the

25 following definitions shall apply:
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1 ‘‘(1) APPROPRIATE FEDERAL BANKING AGEN2 CY.—The term ‘appropriate Federal banking agen3 cy’—

4 ‘‘(A) in the case of a noninsured State

5 bank or branch, means the Board of Governors

6 of the Federal Reserve System; and

7 ‘‘(B) in any other case, has the same

8 meaning as in section 3 of the Federal Deposit

9 Insurance Act.

10 ‘‘(2) BANKING ORGANIZATION.—The term

11 ‘banking organization’ means a bank, including a

12 branch or subsidiary thereof, or a bank holding com13 pany.

14 ‘‘(3) NATIONAL TREATMENT.—A foreign coun15 try accords ‘national treatment’ to United States

16 banking organizations if it offers them the same

17 competitive opportunities (including effective market

18 access) as are available to its domestic banking orga19 nizations.

20 ‘‘(4) PERSON OF A FOREIGN COUNTRY.—The

21 term ‘person of a foreign country’ means—

22 ‘‘(A) a person organized under the laws of

23 the foreign country;

24 ‘‘(B) a person that has its principal place

25 of business in the foreign country;
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1 ‘‘(C) an individual who is—

2 ‘‘(i) a citizen of the foreign country,

3 or

4 ‘‘(ii) domiciled in the foreign country;

5 and

6 ‘‘(D) a person that is directly or indirectly

7 controlled by a person described in subpara8 graph (A) or (B), or by an individual described

9 in subparagraph (C).

10 ‘‘(5) SECOND BANKING DIRECTIVE.—The term

11 ‘Second Banking Directive’ means the Second Coun12 cil Directive of December 15, 1989, on the Coordi13 nation of Laws, Regulations, and Administrative

14 Provisions Relating to the Taking Up and Pursuit of

15 the Business of Credit Institutions and Amending

16 Directive 77/780/EEC (89/646/EEC).

17 ‘‘(6) SECRETARY.—The term ‘Secretary’ means

18 the Secretary of the Treasury.’’.

19 SEC. 3. EFFECTUATING THE PRINCIPLE OF NATIONAL

20 TREATMENT FOR SECURITIES ORGANIZA21 TIONS.

22 (a) PURPOSE.—The purpose of this section is to en23 courage foreign countries to accord national treatment to

24 United States securities organizations that operate or seek

25 to operate in those countries.
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1 (b) IDENTIFYING COUNTRIES THAT DENY NATIONAL

2 TREATMENT TO UNITED STATES SECURITIES ORGANIZA3 TIONS.—The Secretary shall identify whether and to what

4 extent foreign countries deny national treatment to United

5 States securities organizations—

6 (1) according to the most recent report under

7 section 3602 of the Omnibus Trade and Competi8 tiveness Act of 1988 (or update thereof); or

9 (2) based upon more recent information that

10 the Secretary deems appropriate.

11 (c) DETERMINING WHETHER DENIAL OF NATIONAL

12 TREATMENT HAS SIGNIFICANT ADVERSE EFFECT.—The

13 Secretary shall determine whether the denial of national

14 treatment to United States securities organizations by a

15 foreign country identified under subsection (b) has a sig16 nificant adverse effect on such organizations.

17 (d) DETERMINATION.—

18 (1) PUBLICATION.—If the Secretary determines

19 that the denial of national treatment to United

20 States securities organizations by a foreign country

21 has a significant adverse effect on such organiza22 tions, the Secretary—

23 (A) may, after initiating negotiations in ac24 cordance with subsection (g), and after con25 sultation with the United States Trade Rep-
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1 resentative, the Secretary of State, and any

2 other department or agency that the Secretary

3 deems appropriate, publish that determination

4 in the Federal Register; and

5 (B) shall, not less frequently than annu6 ally, in consultation with any department or

7 agency that the Secretary deems appropriate,

8 review each such determination to determine

9 whether it should be rescinded.

10 (2) EXCEPTION FOR COUNTRIES THAT ARE

11 PARTIES TO CERTAIN AGREEMENTS GOVERNING FI12 NANCIAL SERVICES.—Paragraph (1) shall not apply

13 to a foreign country to the extent that a determina14 tion under that paragraph with respect to the for15 eign country would permit action to be taken under

16 this section that would be inconsistent with a bilat17 eral or multilateral agreement that governs financial

18 services that the President entered into with that

19 country and the Senate and the House of Represent20 atives approved, before the date of enactment of this

21 section.

22 (e) SANCTIONS.—

23 (1) RECOMMENDATION BY THE SECRETARY.—

24 If a determination under subsection (d)(1) is in ef25 fect with respect to a foreign country, the Secretary
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1 may, after consultation with the United States

2 Trade Representative, the Secretary of State, and

3 any other department or agency that the Secretary

4 deems appropriate, and subject to the specific direc5 tion of the President (if any), recommend to the

6 Commission that the Commission deny any applica7 tion or notice filed by a person of that foreign coun8 try.

9 (2) ACTION BY COMMISSION.—If a determina10 tion under subsection (d)(1) is in effect with respect

11 to a foreign country and a publication of that deter12 mination has been made in accordance with sub13 section (d)(1)(A), in evaluating any application or

14 notice filed by a person of that foreign country con15 cerning which the Commission has received a rec16 ommendation from the Secretary under paragraph

17 (1), the Commission—

18 (A) shall consider—

19 (i) the recommendation of the Sec20 retary; and

21 (ii) the determination and the conclu22 sions of the reports and updates under sec23 tion 3602 of the Omnibus Trade and Com24 petitiveness Act of 1988 and the reports
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1 submitted in accordance with subsection

2 (g);

3 (B) shall consult with the Secretary con4 cerning the determinations and conclusions re5 ferred to in subparagraph (A)(ii); and

6 (C) may deny the application or disapprove

7 the notice, unless the Commission determines

8 that the denial or disapproval would be incon9 sistent with the public interest and the protec10 tion of investors.

11 (3) NOTICE REQUIRED TO ACQUIRE REG12 ISTERED SECURITIES ORGANIZATION.—

13 (A) IN GENERAL.—If a determination

14 under subsection (d)(1) is in effect with respect

15 to a foreign country, no person of that foreign

16 country, acting directly or indirectly, may ac17 quire control of any registered securities organi18 zation, unless—

19 (i) the Commission has been given no20 tice not less than 90 days in advance of

21 the acquisition, in such form as the Com22 mission shall prescribe by rule and contain23 ing such information as the Commission

24 may require by rule or order; and
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1 (ii) the Commission has not dis2 approved the notice under paragraph

3 (2)(C).

4 (B) NOTIFYING SECRETARY.—The Com5 mission shall promptly notify the Secretary of

6 any notice received under subparagraph (A).

7 (C) EXTENDING 90-DAY PERIOD.—The

8 Commission may, by order, extend for an addi9 tional 180 days the period during which the

10 Commission may disapprove a notice received

11 under subparagraph (A).

12 (4) STANDARDS FOR EXERCISE OF DISCRE13 TION.—In exercising any discretion under this sub14 section, the Secretary and the Commission shall con15 sider, with respect to a securities organization that

16 is a person of a foreign country and is operating in

17 the United States—

18 (A) the extent to which the foreign country

19 is progressing toward according national treat20 ment to United States securities organizations;

21 and

22 (B) whether the foreign country permits

23 United States securities organizations to ex24 pand their activities in that country, even if

25 that country determined that the United States
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1 did not accord national treatment to securities

2 organizations of that country.

3 (f) NEGOTIATIONS.—

4 (1) IN GENERAL.—The Secretary—

5 (A) shall initiate negotiations with any for6 eign country with respect to which a determina7 tion under subsection (d)(1) is in effect; and

8 (B) may initiate negotiations with any for9 eign country which denies national treatment to

10 United States securities organizations to ensure

11 that the foreign country accords national treat12 ment to such organizations.

13 (2) EXCEPTIONS.—Paragraph (1) does not re14 quire the Secretary to initiate negotiations with a

15 foreign country if the Secretary—

16 (A) determines that the negotiations—

17 (i) would be so unlikely to result in

18 progress toward according national treat19 ment to United States securities organiza20 tions as to be a waste of effort; or

21 (ii) would impair the economic inter22 ests of the United States; and

23 (B) gives written notice of that determina24 tion to the chairperson and the ranking minor25 ity member of the Committee on Banking,
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1 Housing, and Urban Affairs of the Senate and

2 of the Committee of Energy and Commerce of

3 the House of Representatives.

4 (g) REPORT.—

5 (1) CONTENTS OF REPORT.—Not later than

6 December 1, 1994, and biennially thereafter, the

7 Secretary shall submit to the Congress a report

8 that—

9 (A) specifies the foreign countries identi10 fied under subsection (b);

11 (B) if a determination under subsection

12 (d)(1) is in effect with respect to the foreign

13 country, provides the reasons therefor;

14 (C) if the Secretary has not made, or has

15 rescinded, a determination under subsection

16 (d)(1) with respect to the foreign country, pro17 vides the reasons therefor;

18 (D) describes the results of any negotia19 tions conducted under subsection (f)(1) with the

20 foreign country; and

21 (E) discusses the effectiveness of this sec22 tion in achieving the purpose of this section.

23 (2) SUBMISSION OF REPORT.—The report re24 quired by paragraph (1) may be submitted as part

25 of a report or update submitted under section 3602
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1 of the Omnibus Trade and Competitiveness Act of

2 1988.

3 (h) DEFINITIONS.—For purposes of this section, the

4 following definitions shall apply:

5 (1) BROKER.—The term ‘‘broker’’ has the same

6 meaning as in section 3(a)(4) of the Securities Ex7 change Act of 1934.

8 (2) DEALER.—The term ‘‘dealer’’ has the same

9 meaning as in section 3(a)(5) of the Securities Ex10 change Act of 1934.

11 (3) COMMISSION.—The term ‘‘Commission’’

12 means the Securities and Exchange Commission.

13 (4) INVESTMENT ADVISER.—The term ‘‘invest14 ment adviser’’ has the same meaning as in section

15 202(a)(11) of the Investment Advisers Act of 1940.

16 (5) NATIONAL TREATMENT.—A foreign country

17 accords ‘‘national treatment’’ to United States secu18 rities organizations if it offers them the same com19 petitive opportunities (including effective market ac20 cess) as are available to its domestic securities orga21 nizations.

22 (6) PERSON OF A FOREIGN COUNTRY.—The

23 term ‘‘person of a foreign country’’ means—

24 (A) a person organized under the laws of

25 the foreign country;
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1 (B) a person that has its principal place of

2 business in the foreign country;

3 (C) an individual who is—

4 (i) a citizen of the foreign country; or

5 (ii) domiciled in the foreign country;

6 and

7 (D) a person that is directly or indirectly

8 controlled by a person described in subpara9 graph (A) or (B), or by an individual described

10 in subparagraph (C).

11 (7) SECRETARY.—The term ‘‘Secretary’’ means

12 the Secretary of the Treasury.

13 (8) SECURITIES ORGANIZATION.—The term

14 ‘‘securities organization’’ means a broker, a dealer,

15 or an investment adviser.

16 (i) OTHER AUTHORITY NOT AFFECTED.—This sec17 tion does not limit the authority of the Commission, the

18 Secretary, or any other department or agency under any

19 other provision of Federal law.

20 SEC. 4. FINANCIAL INTERDEPENDENCE STUDY.

21 Subtitle G of title III of the Omnibus Trade and

22 Competitiveness Act of 1988 (22 U.S.C. 5351 et seq.) is

23 amended by adding at the end the following new section:
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1 ‘‘SEC. 3605. FINANCIAL INTERDEPENDENCE STUDY.

2 ‘‘(a) INVESTIGATION REQUIRED.—The Secretary, in

3 consultation and coordination with the Securities and Ex4 change Commission, the Federal banking agencies, and

5 any other appropriate Federal department or agency des6 ignated by the Secretary, shall conduct an investigation

7 to determine—

8 ‘‘(1) the extent of the interdependence of the fi9 nancial services sectors of the United States and for10 eign countries—

11 ‘‘(A) whose financial services institutions

12 provide financial services in the United States;

13 or

14 ‘‘(B) whose persons have substantial own15 ership interests in United States financial serv16 ices institutions; and

17 ‘‘(2) the economic, strategic, and other con18 sequences of that interdependence for the United

19 States.

20 ‘‘(b) REPORT.—

21 ‘‘(1) REPORT REQUIRED.—Not later than 3

22 years after the date of enactment of this section, the

23 Secretary shall submit a report on the results of the

24 investigation under subsection (a) to the President,

25 the Congress, the Securities and Exchange Commis26 sion, the Federal banking agencies, and any other
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1 appropriate Federal agency or department, as des2 ignated by the Secretary.

3 ‘‘(2) CONTENTS OF REPORT.—The report re4 quired under paragraph (1) shall—

5 ‘‘(A) describe the activities and estimate

6 the scope of financial services activities con7 ducted by United States financial services insti8 tutions in foreign markets (differentiated ac9 cording to major foreign markets);

10 ‘‘(B) describe the activities and estimate

11 the scope of financial services activities con12 ducted by foreign financial services institutions

13 in the United States (differentiated according

14 to the most significant home countries or

15 groups of home countries);

16 ‘‘(C) estimate the number of jobs created

17 in the United States by financial services activi18 ties conducted by foreign financial services in19 stitutions and the number of jobs created in

20 foreign countries by financial service activities

21 conducted by United States financial services

22 institutions;

23 ‘‘(D) estimate the additional jobs and reve24 nues (both foreign and domestic) that would be

25 created by the activities of United States finan-
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1 cial services institutions in foreign countries if

2 those countries offered such institutions the

3 same competitive opportunities (including effec4 tive market access) as are available to the do5 mestic financial services institutions of those

6 countries;

7 ‘‘(E) describe the extent to which foreign

8 financial services institutions discriminate

9 against United States persons in procurement,

10 employment, the provision of credit or other fi11 nancial services, or otherwise;

12 ‘‘(F) describe the extent to which foreign

13 financial services institutions and other persons

14 from foreign countries purchase or otherwise fa15 cilitate the marketing from the United States of

16 government and private debt instruments and

17 private equity instruments;

18 ‘‘(G) describe how the interdependence of

19 the financial services sectors of the United

20 States and foreign countries affects the auton21 omy and effectiveness of United States mone22 tary policy;

23 ‘‘(H) describe the extent to which United

24 States companies rely on financing by or

25 through foreign financial services institutions
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1 and the consequences of such reliance (includ2 ing disclosure of proprietary information) for

3 the industrial competitiveness and national se4 curity of the United States;

5 ‘‘(I) describe the extent to which foreign fi6 nancial services institutions, in purchasing high

7 technology products such as computers and

8 telecommunications equipment, favor manufac9 turers from their home countries over United

10 States manufacturers; and

11 ‘‘(J) contain other appropriate information

12 relating to the results of the investigation re13 quired by subsection (a).

14 ‘‘(c) DEFINITIONS.—For purposes of this section the

15 following definitions shall apply:

16 ‘‘(1) DEPOSITORY INSTITUTION AND DEPOSI17 TORY INSTITUTION HOLDING COMPANY.—The terms

18 ‘depository institution’ and ‘depository institution

19 holding company’ have the same meanings as in sec20 tion 3 of the Federal Deposit Insurance Act.

21 ‘‘(2) FEDERAL BANKING AGENCY.—The term

22 ‘Federal banking agencies’ has the same meaning as

23 in section 3 of the Federal Deposit Insurance Act.

24 ‘‘(3) FINANCIAL SERVICES INSTITUTION.—The

25 term ‘financial services institution’ means—
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1 ‘‘(A) a broker, dealer, underwriter, clearing

2 agency, transfer agent, or information processor

3 with respect to securities, including government

4 and municipal securities;

5 ‘‘(B) an investment company, investment

6 manager, investment adviser, indenture trustee,

7 or any depository institution, insurance com8 pany, or other organization operating as a fidu9 ciary, trustee, underwriter, or other financial

10 services provider;

11 ‘‘(C) any depository institution or deposi12 tory institution holding company; and

13 ‘‘(D) any other entity providing financial

14 services.

15 ‘‘(4) SECRETARY.—The term ‘Secretary’ means

16 the Secretary of the Treasury.’’.

17 SEC. 5. CONFORMING AMENDMENTS.

18 (a) REPORTS ON FOREIGN TREATMENT OF UNITED

19 STATES FINANCIAL INSTITUTIONS.—Section 3602 of the

20 Omnibus Trade and Competitiveness Act of 1988 (22

21 U.S.C. 5352) is amended—

22 (1) in the first sentence, by inserting ‘‘with up23 dates on significant developments every 2 years fol24 lowing the study conducted in 1994,’’ before ‘‘the

25 Secretary of the Treasury’’; and
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1 (2) by adding at the end the following: ‘‘For

2 purposes of this section, a foreign country denies na3 tional treatment to United States entities unless the

4 foreign country offers such entities the same com5 petitive opportunities (including effective market ac6 cess) as are available to the domestic entities of the

7 foreign country.’’.

8 (b) NEGOTIATIONS TO PROMOTE FAIR TRADE IN FI9 NANCIAL SERVICES.—Section 3603(a)(1) of the Omnibus

10 Trade and Competitiveness Act of 1988 (22 U.S.C.

11 5353(a)(1)) is amended by inserting ‘‘effective’’ before

12 ‘‘access’’.

13 (c) PRIMARY DEALERS IN GOVERNMENT DEBT IN14 STRUMENTS.—Section 3502(b)(1) of the Omnibus Trade

15 and Competitiveness Act of 1988 (22 U.S.C. 5342(b)(1))

16 is amended—

17 (1) by striking ‘‘does not accord to’’ and insert18 ing ‘‘does not offer’’; and

19 (2) by striking ‘‘as such country accords to’’

20 and inserting ‘‘(including effective market access) as

21 are available to’’.

Æ