II

105TH CONGRESS

1ST SESSION S. 1315

To establish an Office of National Security within the Securities and Exchange Commission, provide for the monitoring of the extent of foreign

involvement in United States securities markets, financial institutions,

and pension funds, and for other purposes.

IN THE SENATE OF THE UNITED STATES

OCTOBER 24, 1997

Mr. FAIRCLOTH introduced the following bill; which was read twice and

referred to the Committee on Banking, Housing, and Urban Affairs

A BILL

To establish an Office of National Security within the Securities and Exchange Commission, provide for the monitoring of the extent of foreign involvement in United States

securities markets, financial institutions, and pension

funds, 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; DEFINITIONS.

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

5 ‘‘U.S. Market Security Act of 1997’’.

6 (b) DEFINITIONS.—For purposes of this Act—
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1 (1) the term ‘‘Commission’’ means the Securi2 ties and Exchange Commission;

3 (2) the term ‘‘Director’’ means the director of

4 the Office of National Security established under

5 this Act;

6 (3) the term ‘‘Federal banking agency’’ has the

7 same meaning as in section 3 of the Federal Deposit

8 Insurance Act;

9 (4) the term ‘‘foreign bank’’ has the same

10 meaning as in section 1 of the International Bank11 ing Act of 1978;

12 (5) the term ‘‘Office’’ means the Office of Na13 tional Security established under this Act;

14 (6) the term ‘‘securities laws’’ has the same

15 meaning as in section 3 of the Securities Exchange

16 Act of 1934; and

17 (7) the term ‘‘securities offering’’ has the mean18 ing given that term by the Commission.

19 SEC. 2. ESTABLISHMENT OF OFFICE.

20 There is established within the Securities and Ex21 change Commission the Office of National Security.

22 SEC. 3. DIRECTOR.

23 The Office shall be headed by a Director, selected by

24 the Commission, in consultation with the appropriate com25 mittees of Congress.
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1 SEC. 4. FUNCTIONS.

2 (a) SECURITIES ACTIVITIES OF FOREIGN OR FOR3 EIGN CONTROLLED ENTITIES.—The functions of the Of4 fice shall be to review and monitor securities offerings by

5 foreign governments and by any person or entity that the

6 Office has reason to believe is an agent for or is controlled,

7 in whole or in part, directly or indirectly, by a foreign gov8 ernment or any political subdivision of a foreign govern9 ment.

10 (b) REPORTS TO CONGRESS.—

11 (1) IN GENERAL.—The Office shall submit a

12 quarterly report to the Committees on Banking,

13 Housing, and Urban Affairs and Foreign Relations

14 of the Senate and the Select Committee on Intel15 ligence of the Senate, and the Committees on Bank16 ing and Financial Services and International Rela17 tions of the House of Representatives and the Per18 manent Select Committee on Intelligence of the

19 House of Representatives regarding the amount of

20 securities offerings by foreign governments and

21 other persons and entities described in subsection

22 (a) that have occurred during the preceding quarter,

23 or are planned to be offered in the next occurring

24 quarter.

25 (2) ACCESSIBILITY OF INFORMATION.—The Of26 fice may, by rule, regulation, or order, take such ac-
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1 tion as may be necessary to collect information nec2 essary to complete the reports required under para3 graph (1).

4 (c) NOTIFICATION TO CHAIRMAN.—The Director

5 shall promptly notify the Chairman of the Commission of

6 any information that the Director has reason to believe

7 indicates a violation or possible violation of the securities

8 laws by any person or entity described in subsection (a).

9 SEC. 5. ANNUAL REPORT BY FEDERAL BANKING AGENCIES.

10 (a) IN GENERAL.—Each Federal banking agency

11 shall prepare and submit to the appropriate committees

12 of Congress an annual report regarding the number of for13 eign banks operating in the United States that the agency

14 has reason to believe is controlled, in whole or in part,

15 directly or indirectly, by a foreign government or any polit16 ical subdivision of a foreign government.

17 (b) ACCESSIBILITY OF INFORMATION.—The Federal

18 banking agencies may, by rule, regulation, or order, take

19 such action as may be necessary to collect information nec20 essary to complete the reports required under subsection

21 (a).

22 SEC. 6. ANNUAL REPORT BY PENSION BENEFIT GUARANTY

23 CORPORATION.

24 (a) IN GENERAL.—The Pension Benefit Guaranty

25 Corporation shall prepare and submit to the appropriate
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1 committees of Congress an annual report regarding the

2 extent of United States pension fund assets that represent

3 interests in any person, entity, or foreign government de4 scribed in section 4(a).

5 (b) ACCESSIBILITY TO INFORMATION.—The Pension

6 Benefit Guaranty Corporation may, by rule, regulation, or

7 order, take such action as may be necessary to collect in8 formation necessary to complete the reports required

9 under subsection (a).

10 SEC. 7. INTERNATIONAL NEGOTIATIONS.

11 The Secretary of State and the Secretary of the

12 Treasury are directed to enter into negotiations to con13 clude agreements with other nations that are allied with

14 the United States, including Japan and members of the

15 European Union, to institute in those nations reporting

16 requirements similar to those imposed by this Act.

17 Within one year from the date of enactment, the

18 State Department and the Treasury Department shall re19 port to Congress on the progress of negotiations required

20 pursuant to this section.

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