I
103D CONGRESS
1ST SESSION
H. R. 3565
To provide regulatory incentives to promote national treatment by foreign
countries to United States providers of certain financial and communica-
tions services, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 19, 1993
Mr. MARKEY introduced the following bill; which was referred to the
Committee on Energy and Commerce
A BILL
To provide regulatory incentives to promote national treat-
ment by foreign countries to United States providers
of certain financial and communications services, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Fair Trade in Services
Act of 1993’’.
TITLE I—FINANCIAL SERVICES
SEC. 101. EFFECTUATING THE PRINCIPLE OF NATIONAL
TREATMENT FOR SECURITIES BROKERS AND
DEALERS.
The Securities Exchange Act of 1934 (15 U.S.C. 78a
et seq.) is amended by adding at the end the following
new section:
‘‘NATIONAL TREATMENT
‘‘SEC. 36. (a) PURPOSE.—This section is intended to
encourage foreign countries to accord national treatment
to United States brokers and dealers that operate or seek
to operate in those countries, and thereby end discrimina-
tion against United States brokers and dealers.
‘‘(b) REPORTS REQUIRED.—The Secretary of the
Treasury shall, not later than December 1, 1994, and bi-
ennially thereafter, submit to the Congress a report—
‘‘(1) identifying any foreign country—
‘‘(A) that does not accord national treat-
ment to United States brokers and dealers; and
‘‘(B) with respect to which no notice under
subsection (e)(1) is in effect;
‘‘(2) explaining why the Secretary has not pub-
lished, or has rescinded, such a notice with respect
to that country; and
‘‘(3) describing the results of any negotiations
conducted pursuant to subsection (d)(1) with respect
to that country.
‘‘(c) DISCRETIONARY DETERMINATIONS.—The Sec-
retary may, at any time, publish in the Federal Register
a determination that a foreign country does not accord
national treatment to United States brokers or dealers.
‘‘(d) NEGOTIATIONS REQUIRED.—
‘‘(1) IN
GENERAL.—The Secretary of the
Treasury shall initiate negotiations with any foreign
country in which, according to the report under sub-
section (b) or any determination under subsection
(c), there is a significant failure to accord national
treatment to United States brokers or dealers, to en-
sure that such country accords national treatment to
United States brokers and dealers.
‘‘(2) NEGOTIATIONS
NOT
REQUIRED.—Para-
graph (1) does not require the Secretary of the
Treasury to initiate negotiations with a foreign
country if the Secretary—
‘‘(A) determines that such negotiations
would be fruitless or would impair national eco-
nomic interests; and
‘‘(B) gives written notice of that deter-
mination to the chairman and ranking minority
member of the Committee on Banking, Hous-
ing, and Urban Affairs of the Senate and of the
Committee on Energy and Commerce of the
House of Representatives.
‘‘(e) SANCTIONS.—
‘‘(1) SECRETARY’S
NOTICE.—If negotiation
pursuant to subsection (d) with a foreign country
identified pursuant to subsection (b)(1) or (c) has
not attained national treatment for United States
brokers and dealers within 2 years after the date of
such identification, the Secretary of the Treasury
shall publish in the Federal Register a notice that
a foreign country does not accord national treatment
to United States brokers or dealers and that nego-
tiation has failed to attain such national treatment.
‘‘(2) ACTIONS
BY
COMMISSION.—If the Sec-
retary of the Treasury has published in the Federal
Register (and has not rescinded) a notice under
paragraph (1) with respect to a foreign country, the
Commission shall, based upon the determination
concerning national treatment—
‘‘(A) deny any application filed by a person
of that foreign country, or
‘‘(B) prohibit any acquisition for which a
notice is required under paragraph (3) by a
person of that foreign country,
unless the Commission, in consultation with the Sec-
retary, determines, on the record after notice and
hearing, that such denial or prohibition is contrary
to the public interest.
‘‘(3) NOTICE REQUIRED TO ACQUIRE BROKER
OR DEALER.—
‘‘(A) IN GENERAL.—If the Secretary of the
Treasury has published in the Federal Register
(and has not rescinded) a notice under para-
graph (1) with respect to a foreign country, no
person of that foreign country, acting directly
or indirectly, shall acquire control of any reg-
istered broker or dealer unless—
‘‘(i) the Commission has been given
notice 60 days in advance of the acquisi-
tion, in such form as the Commission shall
prescribe by rule and containing such in-
formation as the Commission requires by
rule or order; and
‘‘(ii) the Commission has not prohib-
ited the acquisition.
‘‘(B) COMMISSION
MAY
EXTEND
60-DAY
PERIOD.—The Commission may, by order, ex-
tend the notice period during which an acquisi-
tion may be prohibited under subparagraph (A)
for an additional 180 days.
‘‘(C) EFFECTIVE
DATE.—The require-
ments of subparagraph (A) shall apply to any
acquisition of control that is completed on or
after the date on which the notice under para-
graph (1) is published, irrespective of when the
acquisition was initiated.
‘‘(4) REVIEW.—The Secretary of the Treasury
may, at any time, and shall, annually, review any
notice under paragraph (1) and decide whether that
notice should be rescinded.
‘‘(f) NATIONAL TREATMENT DEFINED.—A foreign
country accords national treatment to United States bro-
kers and dealers if it offers them the same competitive
opportunities (including effective market access) as are
available to its domestic brokers and dealers.
‘‘(g) PERSONS OF A FOREIGN COUNTRY DEFINED.—
A person of a foreign country is a person that—
‘‘(1) is organized under the laws of that
country;
‘‘(2) has its principal place of business in that
country;
‘‘(3) in the case of an individual—
‘‘(A) is a citizen of that country; or
‘‘(B) is domiciled in that country; or
‘‘(4) is directly or indirectly controlled by a per-
son described in paragraph (1), (2), or (3).
‘‘(h) EXERCISE OF DISCRETION.—In exercising dis-
cretion under this section, the Secretary of the Treasury
and the Commission shall act in a manner consistent with
the obligations of the United States under a bilateral or
multilateral agreement governing financial services en-
tered into by the President and approved and implemented
by the Congress.’’.
SEC. 102. EFFECTUATING THE PRINCIPLE OF NATIONAL
TREATMENT FOR INVESTMENT ADVISERS.
The Investment Advisers Act of 1940 (12 U.S.C.
80b–1 et seq.) is amended by adding at the end the follow-
ing new section:
‘‘NATIONAL TREATMENT
‘‘SEC. 223. (a) PURPOSE.—This section is intended
to encourage foreign countries to accord national treat-
ment to United States investment advisers that operate
or seek to operate in those countries, and thereby end dis-
crimination against United States investment advisers.
‘‘(b) REPORTS REQUIRED.—The Secretary of the
Treasury shall, not later than December 1, 1994, and bi-
ennially thereafter, submit to the Congress a report—
‘‘(1) identifying any foreign country—
‘‘(A) that does not accord national treat-
ment to United States investment advisers; and
‘‘(B) with respect to which no notice under
subsection (e)(1) is in effect;
‘‘(2) explaining why the Secretary has not pub-
lished, or has rescinded, such a notice with respect
to that country; and
‘‘(3) describing the results of any negotiations
conducted pursuant to subsection (d)(1) with respect
to that country.
‘‘(c) DISCRETIONARY DETERMINATIONS.—The Sec-
retary may, at any time, publish in the Federal Register
a determination that a foreign country does not accord
national treatment to United States investment advisers.
‘‘(d) NEGOTIATIONS REQUIRED.—
‘‘(1) IN
GENERAL.—The Secretary of the
Treasury shall initiate negotiations with any foreign
country in which, according to the report under sub-
section (b) or any determination under subsection
(c), there is a significant failure to accord national
treatment to United States investment advisers, to
ensure that such country accords national treatment
to United States brokers or dealers.
‘‘(2) NEGOTIATIONS
NOT
REQUIRED.—Para-
graph (1) does not require the Secretary of the
Treasury to initiate negotiations with a foreign
country if the Secretary—
‘‘(A) determines that such negotiations
would be fruitless or would impair national eco-
nomic interests; and
‘‘(B) gives written notice of that deter-
mination to the chairman and ranking minority
member of the Committee on Banking, Hous-
ing, and Urban Affairs of the Senate and of the
Committee on Energy and Commerce of the
House of Representatives.
‘‘(e) SANCTIONS.—
‘‘(1) SECRETARY’S
NOTICE.—If negotiations
pursuant to subsection (d) with a foreign country
identified pursuant to subsection (b)(1) or (c) has
not attained national treatment for United States
investment advisers within 2 years after the date of
such identification, the Secretary of the Treasury
shall publish in the Federal Register a notice that
a foreign country does not accord national treatment
to United States investment advisers and that nego-
tiation has failed to attain such national treatment.
‘‘(2) ACTIONS
BY
COMMISSION.—If the Sec-
retary of the Treasury has published in the Federal
Register (and has not rescinded) a notice under
paragraph (1) with respect to a foreign country, the
Commission shall, based upon the determination
concerning national treatment—
‘‘(A) deny any application filed by a person
of that foreign country, or
‘‘(B) prohibit any acquisition for which a
notice is required under paragraph (3) by a
person of that foreign country,
unless the Commission, in consultation with the Sec-
retary, determines, on the record after notice and
hearing, that such denial or prohibition is contrary
to the public interest.
‘‘(3) NOTICE REQUIRED TO ACQUIRE INVEST-
MENT ADVISER.—
‘‘(A) IN GENERAL.—If the Secretary of the
Treasury has published in the Federal Register
(and has not rescinded) a notice under para-
graph (1) with respect to a foreign country, no
person of that foreign country, acting directly
or indirectly, shall acquire control of any reg-
istered investment adviser unless—
‘‘(i) the Commission has been given
notice 60 days in advance of the acquisi-
tion, in such form as the Commission shall
prescribe by rule and containing such in-
formation as the Commission requires by
rule or order; and
‘‘(ii) the Commission has not prohib-
ited the acquisition.
‘‘(B) COMMISSION
MAY
EXTEND
60-DAY
PERIOD.—The Commission may, by order, ex-
tend the notice period during which an acquisi-
tion may be prohibited under subparagraph (A)
for an additional 180 days.
‘‘(C) EFFECTIVE
DATE.—The require-
ments of subparagraph (A) shall apply to any
acquisition of control that is completed on or
after the date on which the notice under para-
graph (1) is published, irrespective of when the
acquisition was initiated.
‘‘(4) REVIEW.—The Secretary of the Treasury
may, at any time, and shall, annually, review any
notice under paragraph (1) and decide whether that
notice should be rescinded.
‘‘(f) NATIONAL TREATMENT DEFINED.—A foreign
country accords national treatment to United States in-
vestment advisers if it offers them the same competitive
opportunities (including effective market access) as are
available to its domestic investment advisers.
‘‘(g) PERSONS OF A FOREIGN COUNTRY DEFINED.—
A person of a foreign country is a person that—
‘‘(1) is organized under the laws of that coun-
try;
‘‘(2) has its principal place of business in that
country;
‘‘(3) in the case of an individual—
‘‘(A) is a citizen of that country; or
‘‘(B) is domiciled in that country; or
‘‘(4) is directly or indirectly controlled by a per-
son described in paragraph (1), (2), or (3).
‘‘(h) EXERCISE OF DISCRETION.—In exercising dis-
cretion under this section, the Secretary of the Treasury
and the Commission shall act in a manner consistent with
the obligations of the United States under a bilateral or
multilateral agreement governing financial services en-
tered into by the President and approved and implemented
by the Congress.’’.
SEC. 103. FINANCIAL INTERDEPENDENCE STUDY.
(a) INVESTIGATION REQUIRED.—The Securities and
Exchange Commission, in consultation and coordination
with the Secretary of the Treasury, and any other appro-
priate Federal agency or department to be designated by
the Securities and Exchange Commission, shall conduct
an investigation to determine the extent of the inter-
dependence of the securities industry and related financial
services sector of the United States and foreign countries,
and the economic, strategic, and other consequences of
that interdependence for the United States.
(b) REPORT.—The Securities and Exchange Commis-
sion shall transmit a report on the results of the investiga-
tion under subsection (a) within 2 years after the date
of enactment of this section to the President, the Con-
gress, the Secretary of the Treasury, and any other appro-
priate Federal agency or department as designated by the
Securities and Exchange Commission. The report shall—
(1) describe the activities and estimate the
scope of securities and related financial activities
conducted by United States firms in foreign mar-
kets (differentiated according to major foreign mar-
kets);
(2) describe the activities and estimate the
scope of securities and related financial activities
conducted by foreign firms in the United States (dif-
ferentiated according to the most significant home
countries or groups of home countries);
(3) estimate the number of jobs created in the
United States by securities and related financial ac-
tivities conducted by foreign firms and the number
of jobs created in foreign countries by securities and
related financial activities conducted by United
States firms;
(4) estimate the additional jobs and revenues
(both foreign and domestic) that would be created
by the securities and related financial activities of
United States firms in foreign countries if those
countries offered such firms the same competitive
opportunities (including effective market access) as
are available to those countries’ domestic firms;
(5) describe the extent to which foreign firms
engaged in securities and related financial services
activities discriminate against United States persons
in procurement, employment, providing credit, or
other securities or related financial services, or oth-
erwise;
(6) describe the extent to which foreign firms
and other persons from foreign countries purchase
or otherwise facilitate the marketing from the Unit-
ed States of government and private debt instru-
ments and private equity instruments;
(7) describe how the interdependence of the se-
curities industry and related financial services sec-
tors of the United States and foreign countries af-
fects the autonomy and effectiveness of United
States monetary policy;
(8) describe the extent to which United States
companies rely on financing by or through foreign
firms, and the consequences of such reliance (includ-
ing disclosure of proprietary information) for the in-
dustrial competitiveness and national security of the
United States;
(9) describe the extent to which foreign firms
engaged in securities and related financial services
activities, in purchasing high technology products
such as computers and telecommunications equip-
ment, favor manufacturers from their home coun-
tries over United States manufacturers; and
(10) contain other appropriate information re-
lating to the results of the investigation under sub-
section (a).
TITLE 
II—TELECOMMUNICA-
TIONS PRODUCTS AND SERV-
ICES
SEC. 201. EFFECTUATING THE PRINCIPLE OF NATIONAL
TREATMENT 
FOR 
PROVIDERS 
OF 
TELE-
COMMUNICATIONS 
PRODUCTS 
AND 
SERV-
ICES.
The Communications Act of 1934 (47 U.S.C. 151 et
seq.) is amended by inserting after section 8 the following
new section:
‘‘NATIONAL TREATMENT
‘‘SEC. 9. (a) PURPOSE.—This section is intended to
encourage foreign countries to accord national treatment
to United States providers of telecommunications products
and services that operate or seek to operate in those coun-
tries, and thereby end discrimination against United
States providers of telecommunications products and serv-
ices.
‘‘(b) NOTICE.—If—
‘‘(1) by the conclusion of the negotiating period
determined under section 1376(c) of the Omnibus
Trade and Competitiveness Act of 1988, the Presi-
dent is unable to enter into an agreement under sub-
title A of title I of such Act which achieves the gen-
eral negotiating objectives described in section
1375(b) of that Act (as defined by the specific objec-
tives established by the President for that country);
or
‘‘(2) the United States Trade Representative
has determined, under section 1377(a)(2) of that
Act, that any act, policy, or practice of a foreign
country that has entered into an agreement de-
scribed in section 1377(a)(1) of that Act—
‘‘(A) is not in compliance with the terms of
such agreement, or
‘‘(B) otherwise denies, within the context
of the terms of such agreement, to tele-
communications products and services of Unit-
ed States firms mutually advantageous market
opportunities in that foreign country;
the United States Trade Representative shall publish a no-
tice in the Federal Register identifying the foreign country
and stating the objective which was not achieved (as de-
scribed in paragraph (1)) or the act, policy, or practice
which is not in such compliance or which denies such mar-
ket opportunities (as described in paragraph (2)).
‘‘(c) ACTIONS BY COMMISSION.—If the United States
Trade Representative has published in the Federal Reg-
ister (and has not rescinded) a notice under subsection
(b) with respect to a foreign country, the Commission