I

106TH CONGRESS

1ST SESSION H. R. 2204

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 HOUSE OF REPRESENTATIVES

JUNE 15, 1999

Mr. BACHUS introduced the following bill; which was referred to the Committee on Commerce, and in addition to the Committees on International

Relations, Banking and Financial Services, and Education and the Workforce, for a period to be subsequently determined by the Speaker, in each

case for consideration of such provisions as fall within the jurisdiction of

the committee concerned

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 1999’’.
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1 (b) DEFINITIONS.—For purposes of this Act—

2 (1) the term ‘‘Commission’’ means the Securi3 ties and Exchange Commission;

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

5 the Office of National Security established under

6 this Act;

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

8 same meaning as in section 3 of the Federal Deposit

9 Insurance Act;

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

11 meaning as in section 1 of the International Bank12 ing Act of 1978;

13 (5) the term ‘‘Office’’ means the Office of Na14 tional Security established under this Act;

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

16 meaning as in section 3 of the Securities Exchange

17 Act of 1934; and

18 (7) the term ‘‘securities offering’’ has the mean19 ing given that term by the Commission.

20 SEC. 2. ESTABLISHMENT OF OFFICE.

21 There is established within the Securities and Ex22 change Commission the Office of National Security.
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1 SEC. 3. DIRECTOR.

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

3 the Commission, in consultation with the appropriate com4 mittees of Congress.

5 SEC. 4. FUNCTIONS.

6 (a) SECURITIES ACTIVITIES OF FOREIGN OR FOR7 EIGN CONTROLLED ENTITIES.—The functions of the Of8 fice shall be to review and monitor securities offerings by

9 foreign governments and by any person or entity that the

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

11 in whole or in part, directly or indirectly, by a foreign gov12 ernment or any political subdivision of a foreign govern13 ment.

14 (b) REPORTS TO CONGRESS.—

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

16 quarterly report to the Committees on Banking,

17 Housing, and Urban Affairs and Foreign Relations

18 of the Senate and the Select Committee on Intel19 ligence of the Senate, and the Committees on Bank20 ing and Financial Services and International Rela21 tions of the House of Representatives and the Per22 manent Select Committee on Intelligence of the

23 House of Representatives regarding the amount of

24 securities offerings by foreign governments and

25 other persons and entities described in subsection

26 (a) that have occurred during the preceding quarter,
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1 or are planned to be offered in the next occurring

2 quarter.

3 (2) ACCESSIBILITY OF INFORMATION.—The Of4 fice may, by rule, regulation, or order, take such ac5 tion as may be necessary to collect information nec6 essary to complete the reports required under para7 graph (1).

8 (c) NOTIFICATION TO CHAIRMAN.—The Director

9 shall promptly notify the Chairman of the Commission of

10 any information that the Director has reason to believe

11 indicates a violation or possible violation of the securities

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

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

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

15 shall prepare and submit to the appropriate committees

16 of Congress an annual report regarding the number of for17 eign banks operating in the United States that the agency

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

19 directly or indirectly, by a foreign government or any polit20 ical subdivision of a foreign government.

21 (b) ACCESSIBILITY OF INFORMATION.—The Federal

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

23 such action as may be necessary to collect information nec24 essary to complete the reports required under subsection

25 (a).
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1 SEC. 6. ANNUAL REPORT BY PENSION BENEFIT GUARANTY

2 CORPORATION.

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

4 Corporation shall prepare and submit to the appropriate

5 committees of Congress an annual report regarding the

6 extent of United States pension fund assets that represent

7 interests in any person, entity, or foreign government de8 scribed in section 4(a).

9 (b) ACCESSIBILITY TO INFORMATION.—The Pension

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

11 order, take such action as may be necessary to collect in12 formation necessary to complete the reports required

13 under subsection (a).

14 SEC. 7. INTERNATIONAL NEGOTIATIONS.

15 The Secretary of State and the Secretary of the

16 Treasury are directed to enter into negotiations to con17 clude agreements with other nations that are allied with

18 the United States, including Japan and members of the

19 European Union, to institute in those nations reporting

20 requirements similar to those imposed by this Act. Within

21 one year from the date of enactment, the State Depart22 ment and the Treasury Department shall report to Con23 gress on the progress of negotiations required pursuant

24 to this section.

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