‘‘(1) CONTENTS OF REPORT.—Not later than
December 1, 1994, and biennially thereafter, the
Secretary shall submit to the Congress a report
that—
‘‘(A) specifies the foreign countries identi-
fied under subsection (b);
‘‘(B) if a determination under subsection
(d)(1) is in effect with respect to the foreign
country, provides the reasons therefor;
‘‘(C) if the Secretary has not made or has
rescinded such a determination with respect to
the foreign country, provides the reasons there-
for;
‘‘(D) describes the results of any negotia-
tions conducted under subsection (g)(1) with
the foreign country; and
‘‘(E) discusses the effectiveness of this sec-
tion in achieving the purpose of this section.
‘‘(2) SUBMISSION OF REPORT.—The report re-
quired by paragraph (1) may be submitted as part
of a report or update submitted under section 3602
of the Omnibus Trade and Competitiveness Act of
1988.
‘‘(i) DEFINITIONS.—For purposes of this section, the
following definitions shall apply:
‘‘(1) APPROPRIATE FEDERAL BANKING AGEN-
CY.—The term ‘appropriate Federal banking agen-
cy’—
‘‘(A) in the case of a noninsured State
bank or branch, means the Board of Governors
of the Federal Reserve System; and
‘‘(B) in any other case, has the same
meaning as in section 3 of the Federal Deposit
Insurance Act.
‘‘(2) 
BANKING
ORGANIZATION.—The 
term
‘banking organization’ means a bank, including a
branch or subsidiary thereof, or a bank holding com-
pany.
‘‘(3) NATIONAL TREATMENT.—A foreign coun-
try accords ‘national treatment’ to United States
banking organizations if it offers them the same
competitive opportunities (including effective market
access) as are available to its domestic banking orga-
nizations.
‘‘(4) PERSON OF A FOREIGN COUNTRY.—The
term ‘person of a foreign country’ means—
‘‘(A) a person organized under the laws of
the foreign country;
‘‘(B) a person that has its principal place
of business in the foreign country;
‘‘(C) an individual who is—
‘‘(i) a citizen of the foreign country,
or
‘‘(ii) domiciled in the foreign country;
and
‘‘(D) a person that is directly or indirectly
controlled by a person described in subpara-
graph (A) or (B), or by an individual described
in subparagraph (C).
‘‘(5) SECOND BANKING DIRECTIVE.—The term
‘Second Banking Directive’ means the Second Coun-
cil Directive of December 15, 1989, on the Coordi-
nation of Laws, Regulations, and Administrative
Provisions Relating to the Taking Up and Pursuit of
the Business of Credit Institutions and Amending
Directive 77/780/EEC (89/646/EEC).
‘‘(6) SECRETARY.—The term ‘Secretary’ means
the Secretary of the Treasury.’’.
SEC. 3. EFFECTUATING THE PRINCIPLE OF NATIONAL
TREATMENT 
FOR 
SECURITIES 
ORGANIZA-
TIONS.
(a) PURPOSE.—The purpose of this section is to en-
courage foreign countries to accord national treatment to
United States securities organizations that operate or seek
to operate in those countries.
(b) IDENTIFYING COUNTRIES THAT DENY NATIONAL
TREATMENT TO UNITED STATES SECURITIES ORGANIZA-
TIONS.—The Secretary shall identify whether and to what
extent foreign countries deny national treatment to United
States securities organizations—
(1) according to the most recent report under
section 3602 of the Omnibus Trade and Competi-
tiveness Act of 1988 (or update thereof); or
(2) based upon more recent information that
the Secretary deems appropriate.
(c) DETERMINING WHETHER DENIAL OF NATIONAL
TREATMENT HAS SIGNIFICANT ADVERSE EFFECT.—The
Secretary shall determine whether the denial of national
treatment to United States securities organizations by a
foreign country identified under subsection (b) has a sig-
nificant adverse effect on such organizations.
(d) DETERMINATION.—
(1) PUBLICATION.—If the Secretary determines
that the denial of national treatment to United
States securities organizations by a foreign country
has a significant adverse effect on such organiza-
tions, the Secretary—
(A) may, after initiating negotiations in ac-
cordance with subsection (g), and after con-
sultation with the United States Trade Rep-
resentative, the Secretary of State, and any
other department or agency that the Secretary
deems appropriate, publish that determination
in the Federal Register; and
(B) shall, not less frequently than annu-
ally, in consultation with any department or
agency that the Secretary deems appropriate,
review each such determination to determine
whether it should be rescinded.
(2) EXCEPTION
FOR
COUNTRIES
THAT
ARE
PARTIES TO CERTAIN AGREEMENTS GOVERNING FI-
NANCIAL SERVICES.—Paragraph (1) shall not apply
to a foreign country to the extent that a determina-
tion under that paragraph with respect to the for-
eign country would permit action to be taken under
this section that would be inconsistent with a bilat-
eral or multilateral agreement that governs financial
services that the President entered into with that
country and the Senate and the House of Represent-
atives approved, before the date of enactment of this
section.
(e) SANCTIONS.—
(1) RECOMMENDATION BY THE SECRETARY.—
If a determination under subsection (d)(1) is in ef-
fect with respect to a foreign country, the Secretary
may, after consultation with the United States
Trade Representative, the Secretary of State, and
any other department or agency that the Secretary
deems appropriate, and subject to the specific direc-
tion of the President (if any), recommend to the
Commission that the Commission deny any applica-
tion or notice filed by a person of that foreign coun-
try.
(2) ACTION BY COMMISSION.—If a determina-
tion under subsection (d)(1) is in effect with respect
to a foreign country and a publication of that deter-
mination has been made in accordance with sub-
section (d)(1)(A), in evaluating any application or
notice filed by a person of that foreign country con-
cerning which the Commission has received a rec-
ommendation from the Secretary under paragraph
(1), the Commission—
(A) shall consider—
(i) the recommendation of the Sec-
retary; and
(ii) the determination and the conclu-
sions of the reports and updates under sec-
tion 3602 of the Omnibus Trade and Com-
petitiveness Act of 1988 and the reports
did not accord national treatment to securities
organizations of that country.
(f) NEGOTIATIONS.—
(1) IN GENERAL.—The Secretary—
(A) shall initiate negotiations with any for-
eign country with respect to which a determina-
tion under subsection (d)(1) is in effect; and
(B) may initiate negotiations with any for-
eign country which denies national treatment to
United States securities organizations to ensure
that the foreign country accords national treat-
ment to such organizations.
(2) EXCEPTIONS.—Paragraph (1) does not re-
quire the Secretary to initiate negotiations with a
foreign country if the Secretary—
(A) determines that the negotiations—
(i) would be so unlikely to result in
progress toward according national treat-
ment to United States securities organiza-
tions as to be a waste of effort; or
(ii) would impair the economic inter-
ests of the United States; and
(B) gives written notice of that determina-
tion to the chairperson and the ranking minor-
ity member of the Committee on Banking,
Housing, and Urban Affairs of the Senate and
of the Committee on Energy and Commerce of
the House of Representatives.
(g) REPORT.—
(1) CONTENTS
OF
REPORT.—Not later than
December 1, 1994, and biennially thereafter, the
Secretary shall submit to the Congress a report
that—
(A) specifies the foreign countries identi-
fied under subsection (b);
(B) if a determination under subsection
(d)(1) is in effect with respect to the foreign
country, provides the reasons therefor;
(C) if the Secretary has not made, or has
rescinded, a determination under subsection
(d)(1) with respect to the foreign country, pro-
vides the reasons therefor;
(D) describes the results of any negotia-
tions conducted under subsection (f)(1) with the
foreign country; and
(E) discusses the effectiveness of this sec-
tion in achieving the purpose of this section.
(2) SUBMISSION OF REPORT.—The report re-
quired by paragraph (1) may be submitted as part
of a report or update submitted under section 3602
of the Omnibus Trade and Competitiveness Act of
1988.
(h) DEFINITIONS.—For purposes of this section, the
following definitions shall apply:
(1) BROKER.—The term ‘‘broker’’ has the same
meaning as in section 3(a)(4) of the Securities Ex-
change Act of 1934.
(2) DEALER.—The term ‘‘dealer’’ has the same
meaning as in section 3(a)(5) of the Securities Ex-
change Act of 1934.
(3) COMMISSION.—The term ‘‘Commission’’
means the Securities and Exchange Commission.
(4) INVESTMENT ADVISER.—The term ‘‘invest-
ment adviser’’ has the same meaning as in section
202(a)(11) of the Investment Advisers Act of 1940.
(5) NATIONAL TREATMENT.—A foreign country
accords ‘‘national treatment’’ to United States secu-
rities organizations if it offers them the same com-
petitive opportunities (including effective market ac-
cess) as are available to its domestic securities orga-
nizations.
(6) PERSON
OF
A
FOREIGN
COUNTRY.—The
term ‘‘person of a foreign country’’ means—
(A) a person organized under the laws of
the foreign country;
(B) a person that has its principal place of
business in the foreign country;
(C) an individual who is—
(i) a citizen of the foreign country; or
(ii) domiciled in the foreign country;
and
(D) a person that is directly or indirectly
controlled by a person described in subpara-
graph (A) or (B), or by an individual described
in subparagraph (C).
(7) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of the Treasury.
(8) SECURITIES
ORGANIZATION.—The term
‘‘securities organization’’ means a broker, a dealer,
or an investment adviser.
(i) OTHER AUTHORITY NOT AFFECTED.—This sec-
tion does not limit the authority of the Commission, the
Secretary, or any other department or agency under any
other provision of Federal law.
SEC. 4. FINANCIAL INTERDEPENDENCE STUDY.
Subtitle G of title III of the Omnibus Trade and
Competitiveness Act of 1988 (22 U.S.C. 5351 et seq.) is
amended by adding at the end the following new section:
‘‘SEC. 3605. FINANCIAL INTERDEPENDENCE STUDY.
‘‘(a) INVESTIGATION REQUIRED.—The Secretary, in
consultation and coordination with the Securities and Ex-
change Commission, the Federal banking agencies, and
any other appropriate Federal department or agency des-
ignated by the Secretary, shall conduct an investigation
to determine—
‘‘(1) the extent of the interdependence of the fi-
nancial services sectors of the United States and for-
eign countries—
‘‘(A) whose financial services institutions
provide financial services in the United States;
or
‘‘(B) whose persons have substantial own-
ership interests in United States financial serv-
ices institutions; and
‘‘(2) the economic, strategic, and other con-
sequences of that interdependence for the United
States.
‘‘(b) REPORT.—
‘‘(1) REPORT
REQUIRED.—Not later than 3
years after the date of enactment of this section, the
Secretary shall submit a report on the results of the
investigation under subsection (a) to the President,
the Congress, the Securities and Exchange Commis-
sion, the Federal banking agencies, and any other
appropriate Federal agency or department, as des-
ignated by the Secretary.
‘‘(2) CONTENTS OF REPORT.—The report re-
quired under paragraph (1) shall—
‘‘(A) describe the activities and estimate
the scope of financial services activities con-
ducted by United States financial services insti-
tutions in foreign markets (differentiated ac-
cording to major foreign markets);
‘‘(B) describe the activities and estimate
the scope of financial services activities con-
ducted by foreign financial services institutions
in the United States (differentiated according
to the most significant home countries or
groups of home countries);
‘‘(C) estimate the number of jobs created
in the United States by financial services activi-
ties conducted by foreign financial services in-
stitutions and the number of jobs created in
foreign countries by financial service activities
conducted by United States financial services
institutions;
‘‘(D) estimate the additional jobs and reve-
nues (both foreign and domestic) that would be
created by the activities of United States finan-
cial services institutions in foreign countries if
those countries offered such institutions the
same competitive opportunities (including effec-
tive market access) as are available to the do-
mestic financial services institutions of those
countries;
‘‘(E) describe the extent to which foreign
financial 
services 
institutions 
discriminate
against United States persons in procurement,
employment, the provision of credit or other fi-
nancial services, or otherwise;
‘‘(F) describe the extent to which foreign
financial services institutions and other persons
from foreign countries purchase or otherwise fa-
cilitate the marketing from the United States of
government and private debt instruments and
private equity instruments;
‘‘(G) describe how the interdependence of
the financial services sectors of the United
States and foreign countries affects the auton-
omy and effectiveness of United States mone-
tary policy;
‘‘(H) describe the extent to which United
States companies rely on financing by or
through foreign financial services institutions
and the consequences of such reliance (includ-
ing disclosure of proprietary information) for
the industrial competitiveness and national se-
curity of the United States;
‘‘(I) describe the extent to which foreign fi-
nancial services institutions, in purchasing high
technology products such as computers and
telecommunications equipment, favor manufac-
turers from their home countries over United
States manufacturers; and
‘‘(J) contain other appropriate information
relating to the results of the investigation re-
quired by subsection (a).
‘‘(c) DEFINITIONS.—For purposes of this section the
following definitions shall apply:
‘‘(1) DEPOSITORY
INSTITUTION
AND
DEPOSI-
TORY INSTITUTION HOLDING COMPANY.—The terms
‘depository institution’ and ‘depository institution
holding company’ have the same meanings as in sec-
tion 3 of the Federal Deposit Insurance Act.
‘‘(2) FEDERAL BANKING AGENCY.—The term
‘Federal banking agencies’ has the same meaning as
in section 3 of the Federal Deposit Insurance Act.
‘‘(3) FINANCIAL SERVICES INSTITUTION.—The
term ‘financial services institution’ means—
‘‘(A) a broker, dealer, underwriter, clearing
agency, transfer agent, or information processor
with respect to securities, including government
and municipal securities;
‘‘(B) an investment company, investment
manager, investment adviser, indenture trustee,
or any depository institution, insurance com-
pany, or other organization operating as a fidu-
ciary, trustee, underwriter, or other financial
services provider;
‘‘(C) any depository institution or deposi-
tory institution holding company; and
‘‘(D) any other entity providing financial
services.
‘‘(4) SECRETARY.—The term ‘Secretary’ means
the Secretary of the Treasury.’’.
SEC. 5. CONFORMING AMENDMENTS.
(a) REPORTS ON FOREIGN TREATMENT OF UNITED
STATES FINANCIAL INSTITUTIONS.—Section 3602 of the
Omnibus Trade and Competitiveness Act of 1988 (22
U.S.C. 5352) is amended—
(1) in the first sentence, by inserting ‘‘with up-
dates on significant developments every 2 years fol-
lowing the study conducted in 1994,’’ before ‘‘the
Secretary of the Treasury’’; and